Agenda item

The report presents the revenue and capital outturn for 2023/24, highlighting a material improvement in the position at year end with a minor adverse revenue outturn position of £0.13m after allowing for agreed transfers to/from reserves and carry forwards.  This is an improvement of £1.71m from the reported position in the Quarter 3 forecast.

Cllr Mark Elliott, Cabinet Member for Resources, introduced the item, moved the officer recommendation and made the following statement:

“This report presents the council's final figures for the financial year which ended in April. 

When we talk about "the budget" we really mean two budgets - the Revenue budget for ongoing costs and income, and the Capital Budget for one-off income and spending on assets.

Starting with the Revenue Budget, I'm delighted to say that we finished the year essentially in balance, which really is a fantastic achievement.  In order to recognise how much of an achievement this is, it's worth reminding ourselves of a little history.  This report covers the financial year which started in April 2023.  We were only 6 months on from the disastrous Truss-Kwarteng train crash.  Inflation was still very high, borrowing costs were still rising rapidly, and the impact of inflation on the council's contract spending was severe.  By October 2023 it was clear that, without urgent action, the council would be severely over budget at year end - the projection at that point was for a £6.5m negative position.  At that point we implemented corporate interventions such as recruitment and vacancy controls and controls on all non-essential spend, and we asked Directors to develop mitigation plans for individual departments.  By the end of December, through those actions, the projected position had improved, but we were still looking at a £1.7m negative position by the April year end.  So, pulling it back to being basically on target by the end of the financial year is no mean feat, and all the council officers need congratulating on their joint efforts to achieve this.  It's a position many councils will be very envious of.

However, we cannot be complacent - the reality is, as you can see in the report, that whilst the budget came in balanced overall, the variances between departments were quite large.  Most obviously, social care costs - particularly in Children's Services - face eye-watering rates of increase.  These pressures still seem to be ongoing.  We also need to be vigilant about the overspend in Waste and Fleet management where staffing costs were significantly higher than budgeted, and again there is continued pressure in that department.

That said, we should celebrate the successes - Heritage Services continues to go great guns, with visitor numbers significantly higher than projected.  And with visitor numbers high our Parking income is also up.  I know everyone is aware how important our Heritage Assets and our Tourism Industry is, but I want to emphasise how fortunate we are to have these as council owned assets, meaning that the income that comes in via tourism doesn't just get focused on Bath, but is then redistributed across the authority area, as it is used to help mitigate things like the huge increase in social care costs.  Having highly capable, commercially aware officers running these departments so successfully is one of the reasons why, despite the huge pressures in social care and elsewhere, we're able to balance the books whilst still having the fourth lowest council tax in the south west.

Turning to the Capital Budget, we spent just under £19m less than we had budgeted for in the year.  £63.5m against a budget of £82.2m.  Whilst spending £18.7m less than planned sounds great, what this really represents is mostly projects slipping into this financial year, so whilst it does save the council some money on financing costs, it's not necessarily a good thing.  Ideally, we'd be budgeting for what we are able to spend, rather than over-estimating in the budget and then under-spending.  Spending 77% of the capital budget is an improvement on the previous four years and I'd like to see that trend continue.

There is a genuine underspend of about £1.3m included in in the £18.7 figure, so that is good news.  And I'd also like to highlight that our Capital Financing Requirement is over £121m higher than our borrowing - that's the gap between what, on paper, we could have needed to borrow in order to finance our capital programme, and what we actually borrowed, and that's because of the great work done by our Treasury Management function.

I'd like to reiterate that this really is a "good news" story - "Council Balances Budget" is unlikely to get many headlines, but given the very, very difficult financial landscape we have all experienced over the last couple of years, it really is something to celebrate.”

Cllr Kevin Guy seconded the motion and thanked the Finance Team and Cllr Elliott for the work they have undertaken to address the financial pressures faced by the Council.

Cllr Paul May noted that the Children’s Services budget was under pressure and highlighted the importance of openness when dealing with public money.

RESOLVED (unanimously):

(1)  To note the revenue budget outturn on budget position for 2023/24, after allowing for carry forwards and transfers to reserves.

(2)  To approve the revenue carry forward proposals listed in the tables in paragraph 3.7 of the report.

(3)  To agree that all other over budgets are written-off as an exception to the Budget Management Rules for 2023/24.

(4)  To approve the transfer of £0.13m from corporate earmarked reserves.

(5)  To note the revenue virements for 2023/24 reported for information in Appendix 2(i) of the report.

(6)  To note the reserve positions and the use of flexible capital receipts shown in paragraph 3.21 of the report.

(7)  To note the outturn position of the 2023/24 capital programme in paragraph 3.34, and the funding outlined in paragraph 3.36 of the report.

(8)  To approve the capital rephasing and write-off of net underspends as listed in Appendix 3 of the report. This reflects the outturn spend position on projects against final budgets as detailed in Appendix 4(ii) of the report.