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Agenda item

Financial Performance Report 2024-25 Quarter Three

Purpose

This report sets out the third budget monitoring position for the 2024/25 financial year.

 

Recommendations

That Cabinet resolves to:

1.     Review and notes the financial position set out in this report.

2.     Approve the transfer of the improved surplus (£0.435m) to the Financial Resilience Reserves, as set out in Paragraph 4.7 of the report.

3.     Approve the revised Capital Programme of £7.550m including additional expenditure of £0.238m on Disabled Facilities following the allocation of additional Disabled Facilities Grant funding provided by Gloucestershire County Council. (para 2.10).

Decision:

The purpose of the report was to update Cabinet on the third budget monitoring position for the 2024/25 financial year and to seek approval for the principle of the transfer of the improved surplus (£0.435m) to the Financial Resilience Reserves, as set out in Paragraph 4.7 of the report. Approval was also sought for the revised Capital Programme of £7.550m including additional expenditure of £0.238m on Disabled Facilities Grants following the allocation of additional Disabled Facilities Grant funding provided by Gloucestershire County Council.

 

Councillor Mick Evemy, Deputy Leader of the Council and Member for Finance and Transformation, introduced the item.

 

The recommendations were proposed by Councillor Mike Evemy and seconded by Councillor Joe Harris, Leader of the Council.

 

RESOLVED that Cabinet:

  1. Noted the financial position set out in the Q3 Financial performance report 2024/25.
  2. Approved the principle to transfer of the improved surplus (£0.435m) to the Financial Resilience Reserves, as set out in Paragraph 4.7 of the report.
  3. Approved the revised Capital Programme of £7.550m including additional expenditure of £0.238m on Disabled Facilities Grants following the allocation of additional Disabled Facilities Grant funding provided by Gloucestershire County Council.

 

Voting record: For 5, Against 0, Abstain 0.

 

Minutes:

The purpose of the report was to update Cabinet on the third quarterly budget monitoring position for the 2024/25 financial year and to seek approval for the principle of the transfer of the improved surplus (£0.435m) to the Financial Resilience Reserves, as set out in Paragraph 4.7 of the report to help address ongoing budgetary pressures.

Approval was also sought for the revised Capital Programme of £7.550m including additional expenditure of £0.238m on Disabled Facilities Grants following the allocation of additional Disabled Facilities Grant funding provided by Gloucestershire County Council.

Councillor Mike Evemy, Deputy Leader of the Council and Member for Finance and Transformation, introduced the item.

The Quarter Three report covered the period from October to December 2024, and highlighted a positive improvement in the financial outturn forecast. The Executive Summary in Section 2 drew attention to a projected year-end surplus of £435,000, which was an increase from previous forecasts. 

The second part of the report addressed the capital outturn. The forecasted outturn was shown to be closely aligned with the latest approved figures, indicating strong budgetary control.

A notable positive variance was the increase of £238,000 for Disabled Facilities Grants (DFGs). This increase followed an additional allocation from Gloucestershire County Council.

David Stanley, Deputy Chief Executive Officer, was invited to speak and noted that Section 3 of the report was slightly outdated due to recent inflation figures showing a 0.2% improvement over projections.  However, this would not affect the 2024/25 financial year. Potential external risks, such as new US tariffs, were also referenced.

It was noted that the report had already been reviewed by the Overview and Scrutiny Committee, where a number of questions had been raised and discussed.

The recent tariffs announced by President Trump were considered as was the possibility that they would lead to higher-than-expected inflation and interest rates.

The Deputy Chief Executive Officer responded with the following key points:

  • The Public Works Loan Board (PWLB) rates had been reviewed as part of the preparation for Overview and Scrutiny, noting that borrowing costs remained high:
    • A 50-year annuity loan stood at 5.96%.
    • A 10-year loan was just over 5%, both higher than the Bank of England base rate of 4.75%.
  • The Council’s Treasury advisors, Arlingclose, forecast further 0.25% reductions in the base rate, with an expected low of 3.75% by the end of 2025.
  • Regarding inflation:
    • CPI had risen to 3%, then slightly decreased to 2.8%.
    • With April’s utility and energy cost increases, inflation was expected to rise again, possibly peaking just under 4%.
    • The US tariffs were too recent to be included in forecasts but presented additional inflationary risk for the new financial year.
  • The Council had budgeted prudently, assuming 3% pay inflation, with extra funds in contingency to manage inflation risk.
  • Due to interest rates remaining "sticky" (slow to fall), the Council had seen an improved position in Q3 Treasury Management.
  • The pay award was lower than expected, resulting in an underspend, which was adjusted in the Medium-Term Financial Strategy (MTFS).

The recommendations were proposed by Councillor Mike Evemy and seconded by Councillor Joe Harris, Leader of the Council.

Voting record: For 5, Against 0, Abstain 0.

 

Supporting documents:

 

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