Agenda item

Financial Performance Report 2024-25 Quarter 4

This report sets of the outturn position for the 2024/25 financial year.

Purpose

That the Committee scrutinises the report and agrees any recommendations it wishes to submit to Cabinet on 9 July 2025.

Cabinet Member

Councillor Patrick Coleman

Lead Officer

David Stanley – Deputy Chief Executive

Michelle Burge – Chief Accountant

Minutes:

The purpose of the report was to set out of the outturn position for the 2024/25 financial year.

The report was introduced and the follow points made:

The final outturn showed a surplus of £778,000, £262,000 above the budgeted surplus of £516,000. This exceeded earlier projections of £250,000 at Q2 and £435,000 at Q3.
There was significant movement in housing benefit overpayment figures, with an additional £236,000 income recorded. This was mainly due to adjustments ensuring overpayments were accurately identified and recovered via the financial and Civica housing benefit systems.
There was also an improvement in Trinity Road service charges, with some energy generated from the solar panels and core costs recovered
Treasury management showed a £60,000 adverse movement between Q3 and outturn.
It was reported that the total in-year cost of Phase 1 of the Publica transition was below the £182,000 provision included in the budget.

Across the period, 2023-24 and 2022-23, the Council drew a total £1.852 million from the Financial Resilience Reserve to support its revenue budget. Following a November 2023 motion, the Council committed to replenishing this reserve. With the current £778,000 surplus, £516,000 of which would be returned, and the planned budget for the current year, it was anticipated that £1.874 million would be restored to the reserve.

The expected outcome of the Fair Funding Review 2.0 was that the Council was likely to face reduced funding in future years. This aligned with the Medium Term Financial Strategy (MTFS), which forecasted a “cliff edge” funding cut around 2026-27. The current outturn position was more favourable, enabling the Council to retain more in earmarked reserves to help mitigate these challenges.

Of the overall surplus, £516,000 was transferred to the Financial Resilience Reserve. The remaining £262,000 was recommended for transfer to the Transformation Reserve, which currently held £200,000, to support broader transformation activities.

The capital outturn showed slippage and underspend totalling £428,000, slightly above the Q3 forecast. This was mainly due to lower spending on Disabled Facilities Grants and delays in the ORC-funded off-street residential parking scheme for electric vehicle chargers.

In questioning and discussion it was noted that:

The £170,000 adverse variance relating to commercial property income was mainly due to the former Wilko store in Tipton being vacant for the financial year, causing lost rent and additional costs. A new lease with Worley Stores Ltd commenced in July, including a six-month rent-free period; however, the tenant was responsible for business rates, with annual rent around £80,000 as reflected in the 2024/25 budget. Additional variance resulted from reduced rental income after lease renewals in Seaford (Tesco) and Hereford (Superdrug), reflecting market conditions.

A £33,000 shortfall in income from public conveniences was reported. A review was planned for September, that would provide an update of the rolling out of charging to all facilities or a review of the fee to ensure cost recovery along with the review of cash-less charging provision.

Overall car park fee income remained on budget. However, shortfalls were noted in income from permits and penalty charge notices. Enforcement was strengthened by recruiting 2.6 full-time equivalent officers following earlier staff resignations. No specific localised issues with car park income were identified.

The Deputy CEO confirmed that car parking enforcement did not cover all seven chargeable days. Recruitment was underway to ensure adequate staff coverage across all district car parks and chargeable days.

Card payment issues had occurred due to connectivity problems with car park ticket machines and a temporary lapse in the Council’s payment processing contract. These issues had been resolved, with the Pay by Phone app remaining available. A project to replace all 31 machines was underway, funded through the capital programme. The new machines would improve usability and address connectivity issues. An automatic refund process for duplicate payments had been in place since April.

In regard to the accuracy of budget forecasting over time and whether any trends of improvement or decline had been identified, it was confirmed that significant variances in outturn reports would inform future budget planning. With the transfer of services from Publica to Cotswold District Council, the current reliance on agency staff in planning services was acknowledged as unsustainable and a contributor to significant overspend. The Director for Communities and Place was actively reviewing resource needs.

It was noted that the Council used an incremental budgeting approach rather than zero-based budgeting. With a projected funding gap of £1.6 million in 2026/27, rising to £4.9 million, transformation in service delivery and funding was necessary.

It was confirmed that the Government’s current timetable for Local Government Reorganisation set Vesting Day as 1 April 2028. If implementation was delayed causing financial detriment, it was noted that representations would likely be made to Government to seek mitigation. The more immediate financial risk identified was from the Fair Funding Review 2.0, expected to redistribute resources away from lower-tier authorities like Cotswold to areas with higher need. The Government had provided three-year funding allocations to support future financial planning.

There were concerns that EV bays in Moreton-in-Marsh had been unused for months, leading to lost income and underutilised space. The reputational risk and impact on EV adoption were highlighted, with a request for review and resolution, which the Cabinet Member agreed to.

Officers were seeking to better align financial outcomes and delivery against the Council’s priorities and objectives.

Responsibility for addressing underperformance lay with Budget Holders, Heads of Service, and Directors. Issues with expenditure or income were reported in quarterly financial performance reports, which underwent pre-scrutiny before Cabinet consideration. The reports included proposed actions, with Cabinet determining their sufficiency and authority to request alternative measures.

Planning fees were increased by 10% two years ago, with provisions for annual inflationary rises, leading to a 1.7% increase in statutory fees this year. The Committee would review the Planning Advisory Service outcome to assess cost recovery of discretionary services and consider potential fee changes or use of Planning Performance Agreements.

Given that there were no scheduled elections within the next 12 months, the continuation of the use of tablets would depend on the Returning Officer and Election Services Manager assessing their value if elections were called.

It was confirmed that Gloucestershire County Council’s plans to install on-street EV charging points in Chipping Campden were entirely separate from the Council’s ORC funded scheme.

A significant rise in printing and postage costs was noted and opportunities to reduce these costs (e.g. paper-light committee meetings) were being explored.

The Council needed to borrow to support its 2026-27 capital programme. With borrowing costs at 5.99%, a review was underway to identify capital receipts from asset sales and reassess expenditure timing. Approximately £4 million in capital receipts was held, which was insufficient to cover the programme.

Supporting documents:

Agenda item

Financial Performance Report 2024-25 Quarter 4

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