Report of the Deputy Chief Executive and City Treasurer attached

The Executive considered a report of the Deputy Chief Executive and City Treasurer, which outlined the projected revenue outturn position for 2023/24, based on expenditure and income activity as at the end of September 2023 and future projections.

The Executive Member for Finance and Resources advised that the current budget monitoring forecast was an overspend of £3.5m and there were considerable risks to the position relating to the impact of rising demand and increasing costs. The main pressures were being felt in the social care budgets reflecting the national pressures in the health and social care sector and trends being experienced across most social care providing local authorities.

The Children’s Directorate was facing an overspend of £4.8m due to increased External Residential costs, Home to School Transport demand, workforce and price pressures and overspends in Localities and Fostering workforce budgets. The biggest pressure related to external residential placements and increased complexity of need of the current cohort with placement costs having increased by 47% in the current financial year.

The Adults Services Directorate was forecasting and overspend of £1.6m, driven by long term care placements and cost pressures which were outpacing demand management interventions.   Neighbourhoods Directorate  was also forecasting an overspend of £1.6m in relation to shortfalls of income in markets and car parking as income levels had failed to recover since the pandemic and alternative locations for the Christmas markets had not replaced the losses incurred at Albert Square.

These pressures were partly offset by a forecasted £2m utilities underspend due to the new contract for electricity, underspends of £1m in Public Health, arising from the confirmation of external funding; £1.2m income in Growth and Development due to increased rental income in the investment estate, revised recruitment assumptions and planning fee income and £0.4m in the Corporate Core, mainly due staffing underspends.

Of the £25.2m of savings agreed as part of the 2023/24 budget process, £15.1m (60%) were on track for delivery, £1.5m (6%) were risk rated medium, and £8.5m (34%) rated high risk in terms of the likelihood of delivery. Officers were working to identify alternative savings where original plans might not be achieved or delayed.

It was also reported that the 2023/24 pay award had been agreed and budget allocations would be reported in the next revenue monitoring update.

In addition a small number of Additional Revenue Grants had been awarded since the 2023/24 budget was set and were now reflected in the revised budget position.

The Executive Member for Finance and Resources noted that it was halfway through the financial year, and although significant progress had been made in bringing the position closer to balanced continued vigilance was needed, given there were significant uncertainties and risks to the position as demand and inflationary pressures could increase.  Any overspend this year would be a direct call on the General Fund reserve which would need to be reimbursed in future years. In addition, any ongoing impact of the pressures faced this year would need to be addressed in the 2024/25 budget. It was therefore important mitigations continued to be identified to bring forecasted spend back in line with the available budget.

Councillor Leech queried if there was any potential for economies of scale across  Greater Manchester to address the budget pressures within Children’s Services and whether any consideration had been made to looking to provide additional places at appropriate schools to alleviate the budget pressures on the Home to School transport service.

In relation to car parking income, Councillor Leech sought clarification as to whether it was ever likely that the income would return to pre-covid levels and if not whether it would more appropriate to readjust the budget income for this service rather than continue to use reserves to make up for the shortfall.  He also sought clarification of how likely it was for those proposed savings rated as high risk to be achieved within the current financial year.

Councillor Johnson queried what levers the Council could utilise to help address the challenges that were being faced in recruiting to certain vacant posts in Directorates.

Decisions

The Executive:-

(1)       Note the global forecast outturn position which is showing a £3.5m overspend.

(2)       Approve the use of revenue grant funding as detailed below and outlined in paragraph 2.9 of the report:-

·           Chief Executives – Electoral Integrity Programme - £25k

·           APDS Pilot: Off street car park and kerbside availability project  - £200k

·           Purchase of Assheton archive collection  - £102k

·           Early years supplementary grant - £1.886m