Agenda item

RESOLVED that 1) the monitoring position of the General Fund at the end of the second quarter as detailed in Appendix 1 to the report (a net favourable variance of £2.177m against the profiled budget) and the key issues highlighted within the report be noted,

2) the position on the Housing Revenue Account (HRA), the Capital Programme and Treasury Management at the end of the second quarter (Appendices 2, 3, 4, 5 and 6 of the report), be noted.

Executive considered a detailed report, presented by Junior Cabinet Member Councillor Duncan Haywood on behalf of the Portfolio Holder for Resources, which provided an update on the financial position of the Council following the second quarter’s budget monitoring exercise for the General Fund, the Housing Revenue Account (HRA), Capital Programme and Treasury Management activity.

The Council continued to make payments to Dragonfly Management for the provision of services in line with the service level agreement.  The Council made a charge to Dragonfly Development for the support services provided to the whole company.  Budgets from the already approved Medium-Term Financial Plan (MTFP) were paid over to Dragonfly Management to allow them to operate and pay for the Council’s services.

General Fund Revenue Account

The General Fund Revenue Account summary was shown in Appendix 1 to the

report.  The original budget for 2024/25 showed a positive contribution to the NNDR Growth Protection Reserve of £0.188m, a surplus in effect.  The current budget now showed this to be a use of the reserve after adjustments had been made to the business rates figures for the actual 2024/25 NNDR1 return, and the estimated business rates deficit of £0.355m.  However, after the Council tax increase and other small movements were included, the current budget overall was showing a surplus of £0.131m.  As savings were identified and secured, they were moved into the relevant cost centres within the main General Fund Directorates.  Appendix 2 to the report detailed the net cost of each cost centre within the Directorates.

Government Funding Update

As discussed in detail in the Medium-Term Financial Strategy, approved at Council on 9^th of October 2024, there remained a great deal of uncertainty regarding the future funding of local government.  The change in Government after the general election made trying to predict what may be in the Spending Review for 2024, extremely difficult.

Housing Revenue Account (HRA)

The Housing Revenue Account summary for the second quarter of 2024/25 was set out in Appendix 3 to the report.  The original budget for 2024/25 showed a balanced budget with a transfer of £0.363m back to the HRA balance, to re-instate the £2m minimum balance.  The current budget showed this to still be the case. Appendix 4 detailed the net cost of each cost centre within the HRA and gave some detail for the larger variances.  The information on the HRA services transferred into Dragonfly Management was also provided.

Capital Expenditure

The capital programme summary for the second quarter of 2024/25 was provided in Appendix 5 to the report.  In headline terms, the capital programme profiled budget for quarter 2 was £20.937m and the actual spend and known commitments totalled £12.314m, which was £8.623m behind the planned spend position.  The budget for the capital schemes which were managed by Dragonfly Management were paid over in advance once a quarter, so a few of the schemes had actuals that almost matched exactly to the profiled 6-month budget.  The main areas to highlight were listed in the report.

Treasury Management

The treasury management function covered the borrowing and investment of Council money. This included both the management of the Council’s day to day cash balances and the management of its long-term debt. All transactions were conducted in accordance with the Council’s approved strategy and the CIPFA Code of Practice. Good treasury management played an important role in the sound financial management of the Council’s resources.

Moved by Councillor Duncan McGregor and seconded by Councillor John Ritchie

RESOLVED that: 1) the monitoring position of the General Fund at the end of the second quarter as detailed in Appendix 1 to the report (a net favourable variance of £2.177m against the profiled budget) and the key issues highlighted within the report be noted,

2)    the position on the Housing Revenue Account (HRA), the Capital Programme and Treasury Management at the end of the second quarter (Appendices 2, 3, 4, 5 and 6 of the report), be noted.

Reasons for Recommendation

The report summarised the financial position of the Council following the second quarter’s budget monitoring exercise for the General Fund, the Housing Revenue Account, Capital Programme and Treasury Management activity.

The Medium-Term Financial Strategy approved in October 2024, stated that it was the Council’s intention to monitor the budgets of the services transferred into Dragonfly Management as part of the budget monitoring process.

Alternative Options and Reasons for Rejection

The Budget Monitoring report for 2024/25 was primarily a factual report which detailed progress against previously approved budgets.  Accordingly, there were no alternative options to consider.

Having previously declared her interest in the following item of business, Councillor Anne Clarke left the meeting.