Agenda item

The Executive Member for Corporate Policy and Resources, and the Deputy Leader and Executive Member for Finance, Governance and Organisation.

The Executive Member for Corporate Policy and Resources, Councillor James King, introduced the report that provided the Executive with an update on the Council’s performance up to the end of Quarter 2 (July to September 2023).

Of the 10 key performance indicators reported on in Q2, eight were on target or within the agreed tolerance. Two indicators were off-target and outside of the agreed tolerance, which were:

·        KPI 6 – net housing completions, and;

·        KPI 7 – affordable housing completions.

Additional detail was provided in the report available at Annex 1.

The report was considered by the Overview and Scrutiny Committee at its meeting on Thursday 7 December. The Committee made no formal observations to the Executive, though some advanced questions were asked, and comments made which were captured in the minutes of the meeting and published as an Addendum.

There were no further questions from Executive Members or Visiting Members.

Deputy Leader and Executive Member for Finance, Governance and Organisation, Councillor Lewanski, then introduced the financial elements of the performance report. This gave the Council’s Revenue and Capital Budget position for Quarter 2 to 30 September. It also included an update on the quarter’s treasury management activities.

Revenue Budget

At Quarter 2 the projected full year outturn is £21.911m against a management budget of £23.194m resulting in an underspend for the year of £1.283m (5.5%). Details of the more significant budget variances were set out in the report. At this stage in the year there were no significant areas of concern, but further work was being carried out to look into the adverse variances.                       

Capital Programme

The full year Capital Programme forecast at the end of Quarter 2 of £27.074m was 26% below the approved Programme for the year. The variance was predominantly as a result of £9.752m slippage. The reasons for the slippage at this stage was primarily because of updated forecasts of the time required to deliver the larger programmes. Capital spending plans were based on information available at the start of 2023 and, six months later, some timescales had been revised.

It was confirmed that the balance of the £30.0 million that was previously approved for investment in Housing schemes remains available but not yet committed.

Treasury Management

The report included Annex 5.1 which provided an update on treasury management performance to the end of September. It confirms that treasury activities are in line with the Strategy that Council approved in July and that was reported to O&S and Executive in June following a Member briefing with our treasury advisors Arlingclose. The return on investments continued to outperform similar authorities and this was a key factor contributing to the favourable revenue budget outturn forecasts.

The report also set out the current position with regard to the Council’s non-treasury (company) investments. These investments were explained in more depth in the Companies Performance Update report later in the agenda pack.

Strategic Financial Risks

Executive noted that feedback was provided at the previous week’s Audit Committee where Members asked questions about Strategic Risk 1 (Financial Sustainability) and whether the Council should now revise the RAG rating for that Risk to amber from red in light of the forecast balanced budget for next year.

Councillor Lewanski advised Executive this this would be considered when reviewing risks at the end of Quarter 3. The Council, however, does need to be mindful that SR2 focuses on the medium term, as well as the immediate future, and looking ahead the prospects for local government funding remain uncertain.

Overview & Scrutiny Committee comments

The comments from Overview & Scrutiny Committee on 7 December 2023 which were published as an Addendum draft minute were noted. Councillor Harrison reported that O&S had looked at the individual items in the Budget review and the positive and negative variances in detail. The Committee was satisfied with what they had reviewed.

RESOLVED – that the Executive:

(i)               Notes the Key Performance Indicators for Q2 2023/24 as detailed in the report and Annex 1;

(ii)             Notes the Revenue Budget and Capital Programme forecasts for Q2 2023/24 as detailed in the report and Annexes 2 and 3;

(iii)           Notes the Quarter 2 Treasury Management Performance Update for 2023/24 at Annex 5.