Agenda item

The Head of Finance and Customer Services presented the Combined Financial Outturn and Quarter 4 Financial Monitoring Report (Including Update on the Fleet) for Cabinet’s consideration.

During the presentation of the report, the following matters were highlighted for Members’ consideration:

·             The report highlighted a projected overspend of £453,000 by the end of the 2023/24 financial year.  This was a higher level of overspend than had been anticipated in the third quarter.

·             The main reason for this increase in projected overspend related to costs arising from maintenance of the Council’s vehicle fleet.

·             The Council had spent £4 million of the authority’s £11.1 million capital budget, primarily on the Levelling Up projects.

·             Earmarked reserves, as detailed in the report, were considered to be at a reasonable level.

·             The Council still needed to submit accounts for the 2021/22 and 2022/23 financial years.  Once these had been audited, it was possible that the financial figures projected for the 2023/24 financial year would change.

·             The original approach of the Council to updating the fleet had been to maintain the existing vehicle fleet and replace second-hand parts.  However, this approach had become increasingly expensive for the Council and therefore Officers were now proposing to replace the Council’s vehicle fleet in batches over the following three-year period, starting with 10 vehicles replaced in the first year.

Once the report had been presented, Members discussed a number of points in detail:

·             The previous approach to updating the existing vehicle fleet that had been adopted by the Council and the fact that the authority had now ceased to take this approach due to the cost implications.

·             The implications, in terms of Council insurance, arising from the Council’s approach to managing the vehicle fleet.  Members noted that insurance costs had increased for Council vehicles and this had financial implications for the authority.

·             The potential for the Council to share vehicles in the fleet with Redditch Borough Council.  Officers clarified that the Councils would adopt a shared approach to procurement of new vehicles, but each authority would own their own vehicles.  There were also reported to be synergies, in terms of delivery of services in partnership with Redditch Borough Council to ensure that these were delivered in the most cost effective manner possible.

·             The Finance and Budget Working Group’s recent discussions in respect of the update on the vehicle fleet and the questions that had been raised by Members about the reasons for delaying making a decision on replacement of the fleet until this point.

·             The types of fuel that could be used by vehicles in the fleet and the higher financial costs associated with some energy efficient sources of fuel, such as hydrogenated oil.

·             The difficulties that had been encountered by the Council under the previous policy of maintaining the existing fleet, particularly as there was no budget available to hire other vehicles when a vehicle was unavailable due to maintenance work.  This had impacted on the financial costs of the project.

·             The competition nationally for staff with suitable skills and qualifications to drive waste vehicles.

·             The non-compliance with procurement rules that had been listed for the Council’s previous approach to maintaining the existing vehicle fleet in the commentary within the report on legal implications.  Officers were asked to provide clarification after the meeting about the potential implications of this non-compliance for the authority.

·             The figures that had been recorded for Bereavement Services and the extent to which these reflected an increase in costs.  Officers undertook to provide further information outside the meeting regarding the financial implications to the Council in respect of Bereavement Services costs.

·             The reasons for the large underspend on ICT purchases and what this entailed.  Officers clarified that this related to provision of replacement ICT kit to staff and Members rather than to obtaining updated ICT software.

·             The £152,000 savings that had been recorded for staffing in Community Housing and what this entailed.  Members were advised that this related to savings arising from staff vacancies.

·             The extent to which the savings recorded for Community Housing could be incorporated as permanent savings into the Council’s budget.  It was suggested that these savings were likely to be temporary and related to staff vacancies at the time.  There had subsequently been a service review, however, Members were advised that additional information would be requested and circulated for Members’ consideration after the meeting.

·             The financial costs associated with ending the shared service arrangements with Wyre Forest District Council for the former North Worcestershire Economic Regeneration and Development (NWeDR) service.  Officers clarified that the NWeDR service had ceased to exist at the end of June 2024 and a new service had been established which would have a new Assistant Director funded by ongoing Council budgets.

·             The underspend that had been recorded for the Public Realm works in Bromsgrove and what this entailed.  The Leader clarified that the Public Realm works formed part of the Levelling Up Project.  The Council had contracted Worcestershire County Council to deliver these public realm works and there was an underspend in relation to these works which had been recorded in the report.

In concluding their discussions in respect of this matter, Members were asked to note that it was likely an urgent decision would be required in respect of the additional funding that would be recommended for the Council’s vehicle fleet.  This would ensure that action could be taken as soon as necessary, rather than having to wait until the next Council meeting took place in October.  It was noted that this would be helpful as there was a six-month waiting list for new waste fleet vehicles nationally and the Council would be competing with other authorities to procure new vehicles.

RESOLVED to NOTE:

1)          That the 2023/24 provisional outturn position in relation to revenue budgets is a projected revenue overspend of £453,000 after applying £351,000 from the Utilities Reserve as approved at Quarter 1.

2)          That the 2023/24 provisional outturn position in relation to capital expenditure is £4.0 million against a total of an approved programme of £11.1 million.

3)          The provisional outturn position in respect of the General Fund Reserves.

4)          The provisional outturn position in respect of Earmarked Reserves.

5)          That at the time of writing, the Council is yet to formally close its accounts for the 2020/21, 2021/22 and 2022/23 financial years. This could therefore result in adjustments to actual income and expenditure in those years and could have a consequential impact on the 2023/24 accounts.

RESOLVED that (subject to Council approving the overall funding)

6)          The revised Fleet Replacement Programme be approved.

RECOMMENDEDthat:

7)          The reprofiling of the Capital Fleet Replacement budget, relating to the Domestic Waste Collection Service, be approved.