Issue - meetings

Purpose of the report

To present the year end forecasts for the financial year 2024/25 as at 30 September 2024 including General Fund Revenue Budget, Housing Revenue Account Budget, and Capital Programmes for the General Fund and Housing Revenue Account.

Decision

Cabinet noted the forecast 2024/25 Outturn projections for: 

• General Fund Revenue 

• General Fund Capital Programme

• Housing Revenue Account Revenue

• Housing Revenue Account Capital Programme 

Alternative options considered and rejected

This was a monitoring report, therefore there were no other options considered.

Reasons for the decision

This was the first report to include forecasting information running to the end of the financial year in 2024/2025. Financial update reports were considered by Cabinet on a quarterly basis, with the next report due in February 2025.

The report confirmed a forecasted underspend for the General Fund and the Housing Revenue Account. This was partly due to prudent financial management, but also due to:

• Lower than budgeted fuel costs
• Lower than budgeted salary costs
• Higher investment income due to the Bank of England base rate and an improved return on investments

Effective budget management was critical to ensuring financial resources were targeted towards the Council’s priorities. Monitoring enabled early identification of variations against the plan and facilitated timely corrective action. 

This report provided an overview of the forecasted 2024/25 financial position for the Council and focused on the position as at the end of September 2024. Appendix B to the report had been corrected prior to the meeting and was appended to these minutes.

This Council would be adversely affected by the removal of the Rural Services Delivery Grant, which would be withdrawn next year. This Grant would be re-purposed and renamed but it was unlikely that South Kesteven District Council would be eligible to receive it. The Council would bolster its reserves cushioning it from future challenges.

Councillor Ben Green left the Chamber and Councillor Murray Turner entered the Chamber at 16.25.

The Finance Update Report: April – September 2024 was presented by the Leader of the Council.

The Leader noted the General Fund Revenue Forecast Outturn Position had amounted to a £725,000 surplus from variants. This had been due to the following:

-       A reduction in predicated inflationary price increases had resulted in a forecast under spend based on modelling at 0.9% increase per week for the remainder of 2024/25. The budget was set using a price of 171p but actual prices had been up to 39% below this.

-       An interim pay award in line with the proposed national award for 2024/25 of:

- £1,290 uplift for pay scales up to and including SK20

- 2.5% uplift for pay scales from SK20A and above

was endorsed by the Employment Committee and paid in July 2024. This had been funded by the approved budgets which were increased by an assumed 5% pay award. SKDC since received confirmation that this was the final approved national award for 2024/25 and as such, no further pay award is due resulting in a forecast underspend.

-       Higher forecast levels of investment income were based on a combination of: more investments being held; and higher average interest achieved on those investments (currently 5.3% compared to 4.75% included in the budget).

The Leader confirmed that Collection Rates had also been positive and highlighted the following:

Council Tax – As of 30 September 2024 collection of £58.772m was on target against an annual debt of £105.848m. South Kesteven had the highest net collectable debt in the county (£105.848m), with the next Councils debt being £102.909m.

Business Rates – As of 30 September 2024, £24.157m had been collected against an annual debt of £43.188m. The collection rate was 0.05% above target. South Kesteven had the highest net collectable debt in the county (£43.188m), with the next Councils debt being £41.611m.

Rent - Collection was £14.969m as of 30 September 2024 against an annual debt of £29.958m. The collection rate was 0.42% above target equating to an increase in the collection of £125k.

During discussions, Members commented on the following:

-       The proportion of expenditure spent on discretionary rather than mandatory services was queried. This was confirmed to be approximately 60% of overall spending with the largest discretionary spending being spent on leisure and arts.

The item was noted by the Committee.