Agenda item

The Deputy Chief Executive presented the Quarter 2 Finance and Performance Monitoring report.

 

Members were informed that the purpose of this report was to set out the Council’s draft Revenue and Capital Outturn position for the second quarter of the financial year July 2024 – September 2024 and associated performance data. This report presented:-

 

·       The Council’s forecast outturn revenue monitoring position for 2024/25 based on data to the end of Quarter 2.

·       The position in respect of balance sheet monitoring as requested by the Audit, Governance and Standards Committee.

·       The spending as of Q2 of Ward Budget Funds.

·       The updated procurement pipeline of Council projects to be delivered over the next 12 months in order to properly plan for the delivery of these projects.

·       The organisations performance against the strategic priorities outlined in the Council Plan Addendum, including operational measures to demonstrate how the council was delivering its services to customers.

 

Financial Performance

 

The draft position was a £343k overspend position, up from the £103k position set out in the Q1 report. As this was expenditure at Q2 it was important to note that, at this stage in the financial year there were a number of instances where annual expenditure or accruals may distort the profiling as reflected in the Q2 actual. The above profiles had assumed support services and grant were adjusted to budgetary levels and accruals were netted out of the figures.

 

Detail of the overspends were set out in paragraph 3.5. The overspends (£1.364m) were offset by additional income (£1.02m) in Corporate Financing from additional grant income together with increased investment interest receivable and lower interest payable. It should be noted that in the Planning, Regeneration and Leisure area there were £385k of additional UKSPF costs. These needed to be assessed at this should be grant funded. This would bring the overspend position back to parity.

 

As set out in the MTFP report, additional funding had been added for the level of the Pay Award made recently, which was above the 4% allowed for in the 2024/5 budget.

 

Cash Management

 

Borrowing - As of the 30th September 2024, there was no short-term borrowings. The Council had no long-term borrowings.

 

Investments - On 30^th September 2024 there were £4.5m short-term investments held.

 

Capital Monitoring

 

A capital programme of £7.1m was approved in the Budget for 2024/25 in April 2024. The table in 3.9 and the detail in Appendix A set out the Capital Programme schemes that were approved for the MTFP time horizon.

 

The outturn spend was £1.994m against a capital budget totalling £7.069m and was detailed in Appendix A. It should be noted that as per the budget decision carry forwards of £7.166m would be rolled forward from 2023/24 into 2024/25 to take account of slippage from 2023/24.

 

Included in this funding the Council also had the following Grant Funded Schemes which were being delivered in 2024/25:

 

·       The two Levelling Up schemes – Old Fire Station and Market which were funded via £14.5m of Government Funding, and the Council was funding £1.6m of works.

 

·       With the Market Hall, the Council had agreed the final works contract with Kier in October. A report went to Cabinet in September to approve the overall budget for the works. The Council did have a 6-month extension until the 30^th September 2025 to “spend” government funding on this project. After this point it would become the Council’s responsibility for the payment.

·       The Windsor Street demolition tender had been awarded to City Demolition and they were now on site starting the demolition process.

·       Public Realm work was under way and expected to be completed before the end of the calendar year.

·       The report in September set out that there would be an overspend position on the overall projects of circa £1.1m although there was scope to bring this down by £300-£500k. To mitigate this position the Council could either fund through debt financing or use other potential funding routes. One of these was the former GBSLEP. The Council could claim up to £2.45m although this would require the final costs as a complete application process needed to be followed.

 

UK Shared Prosperity Schemes totalling £2.8m (although it should be noted that these grants funded schemes were a mix of capital and revenue) needed to be completely spend by the end of the 2024/5 financial year.

 

 Earmarked Reserves

 

The updated position, taking account of the now submitted draft accounts for 2020/21 and 2021/22 as well as the reported outturn positions for 2022/23 and 2023/4 were set out in Appendix B. As part of the MTFP all reserves were thoroughly reviewed for their requirement and additional reserves set up for inflationary pressures such as utility increases. At the 30th June 2024, the Council held £10.867m of Earmarked Reserves.

 

Cabinet were asked to consider allocating £40,000 from the earmarked reserves to support community hubs (following the recent allocation to support Cost of Living initiatives there was £50,000 remaining in this reserve. The cost would be around £120,000 – and it was proposed that this was funded a third by the Council , a third from other partners and a third via VCS funding bids. A PTC was operating in Malvern District Council, with a £50k contribution from the Council.

 

Ward Budgets

 

This report was the first quarterly report to show what had been spent to date on Ward budgets. Each Ward Member had £2,000 to spend on Ward Initiatives subject to the rules of the Scheme which were approved by Council in February. To date, there had been 13 approved applications totalling £5,579. This year’s funding allocations must be spent by the 31^st March. The full detail was set out in Appendix C.

 

Balance Sheet Monitoring Position

 

This initial balance sheet reporting was set out as the Q2 Treasury Report which was attached as Appendix D. This report sets out the Councils debt and borrowing position for Q2 2024/5. Included in this was how the Council was using its working capital as well as measurement of the Councils Prudential Indicators. It should be noted that one indicator was not compliant. This was a short term loan between Redditch and Bromsgrove undertaken at year end which was repaid at the start of Quarter 2 2024/5. As reporting on the half yearly treasury position was a Statutory Requirement, this appendix would need to be noted and approved that Council note the position.

 

Procurement Pipeline

 

The Procurement pipeline was shown in Appendix E. The Council’s Procurement Pipeline included details of contracts expected to be reprocured and new procurement projects expected to be undertaken in the future. Those happening in the next 12 months would need to be within the next 12 Months and over £200k would need to be put on the forward Plan. The pipeline would be refreshed quarterly.

 

·       There were 16 contracts between the old threshold of £50k and the new threshold of £200k.

·       There were 7 contracts that were over the key decision threshold of £200k.

·       There were no new contracts procured by Redditch Bromsgrove on behalf of Bromsgrove.

 

Performance

 

The first section of this report showed the organisations performance against the strategic priorities outlined in the Council Plan Addendum. Additional comments and updates had been provided for the success measures to explain progress/activity. The final section of the report included some operational measures to demonstrate how the council was delivering its services to customers. This was Quarter 2 of a new financial year, and as this year moved forward these indicators would link to business plans and the requirements of the new Council Plan which was approved at Cabinet and Council in July.

 

The process of performance reporting would develop iteratively; however, this document was a snapshot in time and very much a temperature check of the organisation, the layout comprised:-

 

·       Strategic Priorities – success measures

·       Operational Measures – by service area

·       Financial Data

·       Corporate Projects (by exception)

 

These measures were the same as what was reported in the 2023/4 financial year and were shown in Appendix F.

 

New performance indicators required by the Council Plan approved in July were set out in Appendix Gfor reference. These would be incorporated into the Q3 Performance Report along with updated performance measures from departmental business plans.

 

At the invitation of the Leader, Councillor P. M. McDonald stated that with regards to Community Hubs, that this had been brought to the attention of the Overview and Scrutiny Board. A number of organisations did their best and the Overview and Scrutiny Board Members would be scrutinising projects and their funding, as some funding was being spent on projects in Evesham.

 

Councillor McDonald further referred to the Poverty Truth Commission in Bromsgrove, as he had never heard of this.

 

In response the Leader and Chief Executive suggested that it would prove useful if the Bromsgrove and Redditch Partnership Manager be asked to provide an all Member Briefing on the Poverty Truth Commission in Bromsgrove.

 

Following a query from the Overview and Scrutiny Board with regards to one of the performance measures, as follows:-

 

“Increased number of sustainable transport projects being progressed or implemented across the district.”

 

The Deputy Chief Executive agreed to look into this. The Chief Executive commented that this performance measure may have originally come from the Corporate Plan.

 

In response to Councillor McDonald, in respect of the Planning Appeal costs, the Assistant Director Planning and Leisure Services confirmed that information on Planning Appeal costs was reported to the Planning Committee.

 

RESOLVED that

1)    the current Revenue overspend position of £344k and actions the Council were taking to mitigate this position be noted;

2)    the current Capital spending of £1.99m against a budget of £7.07m be noted;

3)    the Ward Budget allocation position to date was 13 approved allocations at £5,759;

4)    there was an updated procurements position set out in the appendix, with any new items over £200k to be included on the forward plan; and  

5)    the Q2 Performance data for the Period July to September 2024 be noted.

 

RECOMMENDED that

 

6)    Council approve the £40,000 from the Community Hub earmarked reserves to be allocated to contribute to a Poverty Truth Commission in Bromsgrove;

7)    The Balance Sheet Monitoring Position for Q2 be noted – which was the Treasury Monitoring Report and required to be reported to Council; and

8)    the £50,000 be transferred to earmarked Reserves from the General Fund for Planning Appeal costs.