Agenda item

This report details the final revenue and capital outturn position for the financial year ended 31 March 2025.These figures will form part of the Council’s Statement of Accounts, which will be presented to the Audit Committee following the completion of the External Audit. The report also presents a summary of debts written off during the 2024/25 financial year in line with the constitutional requirement to submit a report to Cabinet on an annual basis setting out details of all debt written off.

Discussion:

The Head of Revenue Accounts introduced the report. The report presented the final capital and revenue position for the 2024-25 financial year and a summary of debts written off during the year.

The final overspend for the 2024-25 financial year had reduced from projections in the previous quarter and had been funded through Exceptional Financial Support (EFS) of c£5.5m, this brought the total EFS for the financial year to £20.2m.

The irrecoverable debt written off during the year totalled £3.6m which accounted for less then 1% of total debt.

The following issues were discussed:

Year-end financial position – Members welcomed the improved financial position, a Member raised concern that Children and Adults Services Department continued to overspend the budget each year.

The Chief Operating Officer stated that the Department was delivering on its savings targets. The Exceptional Financial Support had provided the Council with an opportunity to invest in rightsizing services and promote a more stable workforce. He added that the Financial Improvement and Transformation Plan (FITP) and the range of activity undertaken has given officers much greater confidence in achieving the required savings.

Medpay – in response to a question why Medpay had not been completed, the Chief Operating Officer explained that there had been some delay due to HR workloads, however, he was confident that Medpay would be completed for all roles below Service Manager level by end the of the quarter.

Dedicated School Grant – further information regarding the Dedicated School Grants was requested. The Chief Operating Officer explained that the Council had a robust deficit action plan which had significantly improved the financial situation. The plan was for the deficit to be cleared by the end of the current financial year, at this stage monitoring suggested this would not be quite met and the deficit would stand at £1.5m by the end of 2025-26. Reserves would be in place to meet this need if required. This was a better position than many local authorities and was a testament to the work of officers engaging with schools and the additional work to reduce the backlog in ECHP Plans.

Investment – an update on capital investment was requested, the Chief Operating Officer stated that two properties were in the process of purchase in relation to temporary housing and he believed that the £42m investment may deliver closer to 200 units than the 150 initially planned.

PCN Debt –a Member commented that wider consideration of ensuring repayment of debt to the Council may be useful and in particular any communications which may assist in reducing the amount of debt write offs. The amount of PCN debt written off was noted and it was asked what the causes were for the rise. The Head of Revenue Accounts stated that he would need to discuss with the relevant service and undertook to provide the information following the meeting.

Reserves – The Committee discussed general reserves; the Chief Operating Officer stated that he would target of reserves of 5% of revenue which would align with good financial management in other local authorities. The Medium-Term Financial Outlook would include a reserve strategy.

Exceptional Financial Support – The budget projections provided for further EFS in the current year and for £10m in 2026-27. It was the ambition of Corporate Management Team that no EFS funding would be required in 2026-27. The multi-year settlement from central would assist in achieving this and the assumptions made in the Budget projections in February remained in place.

The Head of Revenue Accounts added that in the current financial year Adult Social Care remained the area of highest risk in budget monitoring.

Decision:

a)              The Committee noted the 2024/25 revenue and capital outturn position as summarised in Section 4 of the report, the Council’s reserves position as summarised in Section 13 of the report and the debts written off against provisions as set out in section 14 of the report.

b)              The Committee noted that on 3 June 2025 the Cabinet agreed to recommend that Council agree to transfer back to General Capital Receipts the unspent balance on the amounts earmarked through the Flexible Use of Capital Receipts Strategy as set out in Section 12 of the report:

·             £544,076 originally earmarked for Children’s Social Care improvement,

·             £148,709 originally earmarked for Adults Social Care Improvement, and

·             £165,230 originally earmarked to support the wider transformation programme.

c)               The Committee noted that on 3 June 2025 the Cabinet agreed to recommend to Council the removal of £34.170million from the Innovation Park Medway Scheme as set out in section 11.3 of the report and as reported to the Cabinet in March 2025 and per decision 45/2025.

d)              The Committee notes that on 3 June 2025 the Cabinet agreed to recommend to Council that £2.400million of the underspend on the Pentagon Future Capital Works scheme be used to fund a new scheme to deliver further improvements to the Pentagon, as set out in section 11.3 of the report including:

·                 Replacement of a section of roof (R14),

·                 Refurbishment of 205 high street,

·                 Upgrades to fire exits and windows to the bus lane,

·                 Repair and resurfacing of the service road, and

·                 Repairs and resurfacing to the car park.

e)              The Committee noted that on 3 June 2025 the Cabinet agreed to recommend that Council agrees to remove the remaining unspent balance of £431,000 from the Pentagon.

f)                The Head of Revenue Accounts to discuss with colleagues and provide further information to the Committee regarding the causes of the rise in PCN related debt.