The Council’s end of year report, which explains how it has spent its budget from April 2023 to March 2024, has, with a £1.8m contribution from reserves, reached a balanced position.
The position has been reached despite the Local Authority facing an £8.5m shortfall when it last reported its financial position in December 2023.
This Revenue and Capital Outturn Report for 2023 and 2024 will be discussed at the Council’s Cabinet on 9 July.
The report sets out the Council’s, revenue and capital outturn position for 2023/24, and performance against its prudential indicators for the year. The City Council set a revenue budget for the year of £260.5m and has a revised Capital Programme of £137.1m.
Cllr Richard Brown, Cabinet Member responsible for finance, believes that the Council has only achieved the balanced position because it has had to make really difficult decisions in the past, and with the support of its finance team, has maintained prudent financial management of its budget.
Cllr Brown said:
“Per head of population, we remain one of the lowest funded councils, both nationally and in the West Midlands, to the tune of more than £30m.
“But despite this, we were able to offset the £8.5m financial gap because of strict financial controls and better returns on commercial investments.
“It’s a constant battle to manage rising demand and inflationary pressures, and this isn’t going to change in the coming months – especially in terms of social care and housing.
“For 2024 and 2025 we must deliver £30m savings and this was explained when we set our latest budget. Work is underway to meet those savings plans, so the work is non-stop.
“Our strong balance sheet is crucial to the city’s future, and that can also be said for our capital programme, which remains ambitious. It is these building and development schemes that help to generate investment and growth in the city, and create jobs for the future.”
The Report also recommends approval to retrospectively switch £5.9m of revenue funded capital projects, to capital receipts funded, in order to create a revenue financial risk contingency.
The Council continues to ensure that it maintains a prudent approach going forward. The final revenue outturn picture for 2023/24 is balanced only after a year-end contribution of £1.8m from unearmarked reserve balances.
The need yet again to draw down from reserves to balance the budget in-year continues to reflect a serious position for the Council although this has improved from the £8.5m revenue overspend forecast at Quarter 3 through one off income.
Although the Council continues to face a challenging financial position, the overall level of overspend has reduced somewhat since the early quarter forecast and this is a result of in-year management actions including vacancy control and removal of discretionary budget. In addition to this the Council has taken proactive steps previously to maintain a strong balance sheet position, including robust reserve balances, which have enabled it to manage some of the adverse budget variations encountered.
The report states that: “The underlying position for future years continues to be very challenging and the Council needs to continue to identify ways to manage its medium-term financial position which will come under continued pressure without further support from Government for the wider Local Government sector. The Council’s strong financial planning approach has taken account of the risk of volatility across a range of budgets such as those in Children’s Services, Adult Services, and inflationary pressures.”
The Council has also secured a higher dividend income from Council owned companies.
Highlights in the report, include:
- An overspend of £4.9m in Adults’ Social Care reflecting an increased number of high-cost complex cases.
- An overspend of £4.7m within Streetscene and Regulatory Services representing a reduction in income generation in several areas such as planning applications, car parking in parks and bereavement services and pressures within urban forestry due to remedial works on trees.
- An overspend of £2.8m within Children's Services reflecting high placement costs and staffing pressures in Help and Protection (Area Teams) due to high levels of cases which require additional workers and agency staff.
- An overspend of £2.5m on Housing and Homelessness due to an increase in people seeking support and being placed in temporary accommodation (TA), combined with an increase in TA fees.
- An overspend of £1.4m on Transport & Highways relates to increased costs in highways maintenance to address highways defects, as well as continuing high costs of energy for street lighting.
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