Agenda item

[To provide an integrated finance and performance update against the Relighting Our City priorities.  The report which was received by Cabinet on 15 November 2023 is attached]. 

The Chief Operating Officer introduced a presentation on Performance and Budget Monitoring 2023-2024 – Quarter 2.  He commented that budget, performance and risk was considered together.  The report focused on how the Our City, Our Plan was being delivered, alongside the Council’s latest financial position and looking at strategic risk.  The report, as was usual, had been received by the Council’s Cabinet first.  The co-ordinated approach of Budget, Performance and Risk was recognised as good practice. 

The Interim Director of Finance stated that it was clear the Council had managed its finances well and was in a comparatively strong position compared to other Councils.  The Council was expected to set a balanced budget in 2024-2025, it was however likely to require the use of some reserves.  Beyond that timeframe the position became even more challenging for the Council and all other Local Authorities, without changes to the National Funding model for Local Government.  The Council had a prudent level of reserves, with 5% of the current year’s net budget being held in general reserves in line with best practice.  The Reserves in line with best practice had been reviewed by the Resources and Equality Scrutiny Panel on 7 December 2023.   

The Interim Director of Finance commented that the prediction at Quarter 2 was that the budget for 2022-2023 would be £1 million overspent.  Work was continuing to try and bring the cost pressure down. 

The Chief Accountant identified the projected in year cost pressures as being mainly in relation to increased demand and inflationary pressures such as:-

·       Children and Young People due to complex high cost residential placements and inflation.

·       Temporary accommodation and housing subsidy grant.

·       Home to School transport.

·       Waste Services / Recycling Costs.

There was currently no projected growth within Adult Services.  The Pay award had been confirmed on 1 November 2023.  The forecast assumed the provision built into the budget would be required in full.  An update would be provided in Quarter 3, once the pay award had been passed onto Services.

The Head of Data Analytics presented a slide on performance.  There were 52 indicators within the Our City: Our Plan of which 30 had seen improved or sustained performance, 11 had seen a decrease in performance and 11 had yet to be updated in the financial year.   He identified the areas of strength and areas of focus.  The areas of focus were identified as:-

·       Supporting residents into Long-Term employment through delivering our new City Education, Skills and Employment Strategy.

·       Supporting local businesses to thrive trough development of a revised Business Growth Programme, part of Business Growth West Midlands. 

The Chief Operating Officer presented a slide summarising the key points about the Council’s, Strategic Risk Register.  The Council’s Risk Register had been revised with a new covering front page to allow a clearer summary on the scores.  Each risk had a detailed background, including what was being done to mitigate the risk.  The revised Risk Register had been to the Council’s Audit and Risk Committee on 27 November 2023.  The Risk Register had a number of additional risks, some of which were national risks, such as Equal Pay.  Internal Audit reports were focused on the Strategic Risks to provide confidence on the risks.  The Audit and Risk Committee considered a risk at each of their meetings. 

The Cabinet Member for Resources stated that following feedback from the Resources and Equality Scrutiny Panel, in all future quarterly reports an update would also be included on the reserves position, so Members would be fully aware of the extent the Council were using the reserves.  The Vice-Chair agreed it was a good enhancement to have an update on the reserves in each quarterly report.  He referred to the Strategic Risk Register and the risk associated with business support.  He felt it was regrettable that the statistics relating to the number of business closures in the City had been removed since the last iteration of the Strategic Risk Register.  He believed the risk should not be an amber one and should be rated much higher.

The Director of Strategy commented that on the Scrutiny Work Programme there was an item on business support scheduled for the February 2024 Panel meeting.  A wide range of data sets could be used associated with the business support risk.  A Board Member added that the qualitative aspects as to why a business had failed, were important to understand, not just the numbers of businesses which had failed. 

The Cabinet Member for Resources remarked she had met with businesses recently to discuss increasing the consultation on the budget.  A Member of the Board stressed the importance of consultation with the traders.   

The Leader of Council described in detail the financial problems of some Councils across the country and the reasons for their difficulties.  There was a discussion about the national and European position faced by Councils. 

The Cabinet Member for Resources stated that since 2011, over £240 million had been taken out of the Council’s budget in cuts and savings.  90% of the Schools in Wolverhampton were rated by Ofsted as Good or Outstanding.  The budget was rated as a red risk on the register.  One year settlements from Government made it very difficult to plan ahead. 

Resolved: That the Performance and Budget Monitoring 2023-2024 – Quarter 2 report be accepted by Scrutiny Board.