Agenda item

The Commission considered a report of the Director of Corporate Resources, the purpose of which was provide an update on the 2023/24 revenue budget and capital programme monitoring position as at the end of period 10 (the end of January 2024).  A copy of the report marked ‘Agenda Item 10’ is filed with these minutes.

Arising from discussion, the following points were made:

(i)               Notwithstanding the longer-term financial deficit faced by the Authority, a Member commented that officers should be congratulated for getting this year’s deficit down to £3.2m since the previous quarter.  Service budgets had shown improvement which suggested the actions being taken, which included the introduction of spending controls, were having the required impact.  The improvement in cost inflation was also to be welcomed.

(ii)              Members recognised that cost pressures in children’s and adult’s social care and SEN transport continued unabated.  Demand continued to rise but funding was not increased nationally to accommodate this.  A Member raised concern that locally the Authority could not address this and that change at a national level was needed urgently.

(iii)            Members were pleased to see an increase in forecasted business rates income for 2023/24.  It was noted that the additional income of £12.2m was largely made up of growth in the business rate base, which was more than had been accounted for in the MTFS, and an extra allocation from the Leicester and Leicestershire Business Rates Pool.  It was not yet known what future business rates income would be, as such income could be volatile from year to year.  Also, a government reset of the business rates retention system was overdue.  Though not expected to take place until before 2025/26, this would result in a reduction to business rate growth retained.  A prudent approach each year would be taken given such uncertainty.  Essentially, current growth above the baseline had to be treated with some degree of caution when setting the Council’s MTFS.
 

(iv)            Members noted that the tender process for works to Zouch bridge had been completed.  Officers were currently undertaking the valuation process.  The Director confirmed that the contract for the works should therefore be awarded shortly.

(v)             Whilst there had been slippage (i.e. a delay in delivery) in expenditure for the Ways of Working Programme this did not mean it would become overspent.  Savings were therefore still on target to be delivered.  A Member suggested that this had not been made clear in the report and requested that in future reports more context be provided.

(vi)            Noting the slippage and forecasted increase in costs for the Melton Mowbray Distributor Road NE, a Member questioned if risks had been adequately transferred to the contractor.  Members were assured that standard industry contracts had been used and that the increase in costs had stemmed from unforeseen weather events and archaeological issues which were outside the scope of such contracts. 

(vii)          Members noted that following the recent announcement of Network North Funding allocated by the Government following the cancellation of phase 2b of HS2, the Council would receive £238m under the Local Transport Fund element of that funding.  However, this would be received over a period of 7 years from 2025/26.  The annual allocations had not yet been confirmed and guidance was still awaited.  This was expected at the end of March following which the Council would develop a schedule of priority projects which would be subject to engagement with members, and MPs and other stakeholders. 

(viii)         In response to a question raised, the Director advised that slippage in projects in the capital programme did not have any revenue impacts.

(ix)            The Investing in Leicestershire Programme (IILP) held investments in both property and not direct property investments, such as pooled infrastructure funds and pooled bank risk sharing funds.  The latter added diversity to the Programme.  Members noted the Leicestershire Local Government Pension Fund held similar investments and these were therefore known to have stability and a good track record.  The Director explained that income earnt from the IILP had started lower due to initial investment costs made but that returns would increase year on year.

RESOLVED:

That the update on the 2023/24 revenue budget and capital programme monitoring position as at the end of period 10 (the end of January 2024) be noted.