This report presents the results of the first round of the Council’s revenue budget monitoring process for 2023/24. The Council’s summary position is presented in section 5, with sections 6-10 providing the detail for each service area.
The Head of Revenue Accounts introduced the report which set out the results of the first round of the Council’s revenue budget monitoring process for 2023/24, projecting an overspend of £17.3m, £2.4m of which related to this Committee’s remit.
Members then raised a number of questions and comments, which included:
· Opportunities for additional funding – in response to a question about whether the Council had exhausted all opportunities for additional funding, officers explained that most in-year grants offered by the Government related to Capital funding. There were sometimes in-year revenue Government grants offered in relation to national pressures, such as the cost of living crisis and previously the pandemic, but otherwise, the only opportunity the Council had to raise additional revenue was by raising fees and charges, which itself had to be balanced against the cost of living crisis and its impact on Medway residents. It was added that the Government intended to provide an additional revenue grant relating to adult social care but the Council was awaiting further guidance on the details and therefore it would not be reflected until later rounds of monitoring.
· Monday free parking – in response to a question about what impact there had been on income from the decision to not charge for parking in 10 town centre Council car parks on a Monday, the Chief Operating Officer confirmed that the decision had been reflected in the budget build set for 2023/24. It had been too early to analyse the impact this decision had had on income, but this was something that the Regeneration, Culture and Environment Overview and Scrutiny Committee could request to be included in latter monitoring reports.
· Corporate Management Team overspend – further information was requested on the references to £200k (expected corporate property rationalisation review), £81k (treasury expenses) and £60k (budgeted miscellaneous receipts). In response, officers explained that the £200k related to one of the measures announced by the previous Leader of the Council in his budget speech in February to reduce the budget gap. This work was ongoing and without any detail or certainty, was shown as a pressure at this stage. The £81k treasury expenses related to an increase in interest rates and a subsequent impact on borrowing. The £60k related to an historic income target relating to unidentified income, which was represented as a pressure as it was yet to become clear if this would be achieved.
· Housing Benefits Subsidy – in response to a query about this £867k projected overspend, officers confirmed that this did not relate to administration costs but largely to payments the Council had to make in accordance with the law for housing benefits claimants in temporary accommodation, those in specified (supported) housing and pensioners (i.e. those claims not transferred to the Department for Work and Pensions under Universal Credit). The Government paid local authorities to administer Housing Benefit for such claims through a subsidy scheme, and some did not attract 100% subsidy, representing a budget pressure for the Council.
· HR income – reference was made to the income target which was forecast to not be achieved. Officers explained that the Council delivered services to schools and third parties but some were choosing to buy services elsewhere as they became parts of bigger academy trusts.
· Legal Services – when asked about the projected overspend in Legal Services, officers confirmed it was largely down to the use of locums. The service was undergoing a Medpay review and restructure to strengthen its position for recruitment and retention, which it hoped would manifest in a reduced overspend than that currently forecast. This led to a further question around staff retention generally and the impact it had. Officers confirmed that Medway did suffer from high staff turnover and therefore work was under way across a number of services to implement a career progression framework. It was added that Medway had high success at early career entry and apprenticeships opportunities.
1) The Committee noted the results of the first round of revenue budget monitoring for 2023/24.
2) The Committee noted that Cabinet approved the virement of £500,000 from the Independent Fostering Agency budget to the internal fostering budget to reflect the increased internal fostering rates.
3) The Committee noted that Cabinet had instructed the Corporate Management Team to implement urgent actions to bring expenditure back within the budget agreed by Full Council.
4) The Committee agreed to receive a report on the Council’s use of locums and related costs at a future meeting.