Agenda item

A presentation will be given in respect of the Corporate Financial Monitoring Report for Quarter 2 2024-2025, with reference to the report being submitted to Cabinet on 10^th December 2024.

Contact: Kevin Mulvaney – Service Director Finance

Kevin Mulvaney, Service Director Finance presented the Corporate Financial Monitoring Report for Quarter 2 2024-2025, with reference to the report submitted to Cabinet on 10^th December 2024.

The report set out:

·       The revenue headlines

·       Revenue monitoring, with a breakdown across each directorate;

·       Key pressures on each directorate and mitigating actions

·       Analysis of Reserves

·       Housing Revenue Account position, variances and revenue pressures

·       Direct Schools Grant headlines including pressures and mitigations

·       Collection Fund

·       Position in respect of the Capital Budget and monitoring for each directorate.

·       The Medium Term Capital Plan;

·       Prudential and treasury management indicators; and

·       An update on savings delivery across all directorates and the Housing Revenue Account (HRA).

The following points were highlighted:

·       The projected outturn of £9.95 million overspend in respect of the Council’s General Fund, which equated to approximately 2.6% of the General Fund Budget.

·       Services had been reminded of the need to balance their budgets and controls remained in place in respect of recruitment and spend.

·       The Finance Team were reviewing the balance sheet items, including earmarked reserves, grant reserves and any balances not used for some time, to try and bring in appropriate one-off income to the revenue account.

·       An overview of the key pressures in each directorate, noting that many of these were addressed within the 2025/25 budget proposals.

·       The position in terms of reserves; noting that if the budget could not be balanced at year end there would need to be a further call on reserves.

·       The projected overspend of £3 million on the HRA, the majority of which related to the calculation for depreciation, and the key pressures on this budget.and the position on reserves.

·       The Capital Plan which had been re-profiled for this year, with further reprofiling being anticipated.

·       The cost of borrowing remained high.

The Portfolio Holder for Finance and Regeneration, Councillor Graham Turner, was also present for the item.

Questions and comments were invited from Committee Members, with the following issues being covered:

·       The conditions for the ‘safety valve agreement’, associated with the Dedicated Schools Grant deficit, were still in place as agreed under the previous Government. The high needs block deficit had risen to £43 million in 2023/24 and was projected to rise to £65 million this year, in line with projections. The Council was in regular contact with the Department for Education (DfE) and they had acknowledged the pressures local authorities faced.  The DfE had recognised the positive progress being made by Kirklees, including two new specialist schools, which would help reduce the deficit. The Government had placed £1 billion into the 2025/2026 budget for the sector and the Council had committed £10 million towards the safety valve agreement, with the 2025/2026 budget proposals including the first contribution of £2.15 million.

·       A question was asked regarding the Extended Producer Responsibility (EPR) scheme. The Council had been notified by Defra of an indicative allocation of £6 million funding for 2025/26 to recognise the cost to the authority of the collection, management, recycling and disposal of packaging waste. The level of funding in the future would be dependent on the volumes of packaging both locally and nationally and it was anticipated that the value would reduce.

·       This funding was generated from organisations that created this waste who paid a levy into a central Government fund which was then distributed to local authorities. The draft budget proposal in relation to smaller bins had not resulted from this funding allocation and these proposals were still under consultation.

·       The Council budgeted for a level of voids and turnover of housing stock and this was typically 1%, in line with other local authorities. Anything above the 1% target would result in a loss of income. There was regular communication with the relevant Portfolio Holder on how the number, and the length of time they were empty, could be reduced.

RESOLVED -

(1)      That the Service Director, Finance and the Portfolio Holder for Finance and Regeneration be thanked for attending the meeting to update the Committee.

(2)      That it be noted that financial monitoring reports would continue to be submitted to the Committee on a regular basis throughout 2025.