Agenda item

Purpose: To report on the financial performance of the Council’s revenue budgets. This report is Quarter Two for the 2023/24 financial year. The report is highlighting the financial position at each quarter of the financial year and impact on the Council’s General Fund position. This allows the Executive and Scrutiny Commission to consider the implications and the actions being taken to mitigate and manage the position.

Joseph Holmes (Executive Director – Resources) presented the Revenue Financial Performance Report for Quarter Three 2022/23 (Agenda Item 9).

The following points were raised in the debate:

·       Members noted that the forecast savings required for 2024/25 had increased to £14 million, which represented an increase of £11 million over 3 years. Officers highlighted that a report to Executive on 2 November had set out the reasons for the increase, including an increased in demand and forecast model growth for adults’ and children’s social care costs.

·       A question was asked about the £2.3 million flexible use of capital receipts for transformational activity. It was noted that government guidance set out what Councils could use capital receipts for, including to reduce future borrowing requirements and to fund the capital programme. Since 2015, government had allowed councils the flexibility to use capital receipts to fund transformation activity. The definition for this was pretty wide. Previously, the main constraint in West Berkshire had been the lack of capital receipts, because the Council was not rich in capital assets. The emphasis was on invest-to-save projects. The report to Executive had separated planned and new spend. Examples included nearly £1 million for recruitment and retention payments for Children’s Social Care Workers where the aspiration was to reduce agency costs. It was also proposed to use capital receipts against the work of the Projects Team and Digital Team in areas where the Council was seeking to reduce unit cost of delivering services.

·       Members commended the measures that had been taken by officers to manage cost pressures around procurement, staffing and agency costs, and asked about the levels of savings that would be delivered in future years. Officers indicated that it was hard to quantify savings in the long-terms, but agency costs for the most recent four-week period were £580,000 compared with just under £750,000 a year ago. Agency costs were expected to come down further in Q3. The Council had been successful in permanent recruitment to posts, but there were still significant numbers of agency staff in Children’s and Adults’ Social Care.

·       Members noted that the £3.7 million overspend for Children and Family Services, was after use of reserves, mitigations and transformation funding and asked for more detail. It was explained that there had been an investment around enhancing children’s social workers’ package to secure more permanent staff and reduce reliance on agency workers. The flexile use of capital receipts would reduce the overspend position.

·       A question was asked around the seasonality of spend on agency staff. Officers confirmed that there were some peaks and troughs with spend in December being slightly lower due to the additional bank holidays. It was noted that the report made like for like comparisons.

·       Members asked if savings were being achieved from agency staff moving to full-time contracts or just reaching the end of their temporary contracts and not being replaced. Officers indicated that it was a mix of both – 22 agency staff had become permanent.

·       There was discussion around the difference in cost between agency and in-house staff, taking account of on-costs. Officers indicated that this varied, with agency costs being higher in posts where nationally there were large numbers of vacancies, but uplift could be 30% or more.

·       Members asked about the amount spent on posting neighbour notification letters for planning applications to date.

Action: Joseph Holmes to confirm postage costs to Councillor Mackinnon.

·       It was noted that Table 5.3 or the report referred to Executive approving the sale of capital assets, which implied that a decision had been made. 

·       Members sought clarification around whether selling Willows Edge Care Home or having it run by a private provider would save money. It was noted that the figures in the report related to the current year, while those quoted in a recent press release referred to future years.

·       Members asked what was involved in applying for a capital directive and how concerned officers were about the next stage of the process. Officers explained that the Chief Executive would have to write to the Department for Levelling Up, Housing and Communities (DLUHC), requesting a specific amount of funding. The application would be accompanied by answers to standard questions about aspects such as: levels of reserves, benchmarking against other councils, debt levels, the Council’s commercial property portfolio, etc. The next stage would be to get a ’minded to decision’. DLUHC would commission an external review of the Council. If that review was satisfactory, then the funding would be allocated and the report made public. It was noted that West Berkshire Council was in a better position in Q2 than Q1, but it remained below the minimum level of reserves set out in the budget papers. Nevertheless, it was projected to still have a general fund balance. The Medium term Financial Strategy sought to increase the reserve by around £1 million per year. However, that figure may change as Q3 figures were calculated. Officers did not expect any additional funding as a result of the government’s autumn statement.

Resolved to note the report.