Agenda item

To receive a report from the Deputy Chief Executive (S151) Officer and the Head of Finance, Property and Climate Resilience on the 2024/2025 Quarter 3 Monitoring Report.

Cabinet had before it a report * from the Deputy Chief Executive (S151) and the Head of Finance, Property and Climate Resilience on the 2024/2025 Quarter 3 Monitoring report.

The Cabinet Member for Governance, Finance and Risk outlined the contents of the report with particular reference to the following:

·         The report provided a comprehensive overview of the Council’s financial position as they approached year-end, highlighting key variances, challenges, and opportunities.

General Fund & Financial Resilience

·         The Council continued to maintain a strong and stable financial position, with the projected year-end outturn now forecasting a £293k underspend. This remained a significant improvement on budget and compared to the financial position in previous years, and was a testament to the Council’s sound financial management and fiscal responsibility. Importantly, it allowed the Council to build resilience for the future.

·         If this forecast held, the General Fund reserve would increase to £2.318m, well above the Council’s agreed minimum balance of £2m. This was not just about ending the year in a good position—it was about preparing for the future.

·         As outlined in the Council’s recently approved Medium-Term Financial Plan (MTFP), the financial landscape ahead remained uncertain. With ongoing pressures, potential changes to local government funding, and no clear long-term settlement from Westminster, it was essential that the Council strengthened their reserves now—essentially, fixing the roof while the sun was shining, (to weather any financial storms that may be heading their way).

Income & Expenditure

·         The Council’s income performance remained a mixed picture—some areas were exceeding expectations, while others faced economic headwinds. Planning and Building Control income continued to be affected by a stagnant housing market, but those shortfalls were more than offset by strong performance in Waste and Leisure, where recyclate prices remained high and membership numbers had grown.

·         On the expenditure side, staff costs remained the most significant driver of variances.

·         The Council had managed budgets prudently in departments like Finance, HR, and Legal, creating underspends.

·         However, challenges in key areas such as ICT and Environmental Enforcement had resulted in overspends.

·         In some services, the Council were still reliant on agency staff due to difficulties filling long-term vacancies, particularly in Finance, Legal, and Planning Enforcement. Encouragingly, though, overall reliance on agency staffing continued to decline year-on-year.

Housing Revenue Account (HRA)

·         The HRA remained in a healthy position, with a forecast underspend of £174k. However, this was lower than in Quarter 2, reflecting the financial impact of the historic rent calculation error. While tenant income had been affected, significant underspends in staffing and lower-than-expected borrowing costs had helped to maintain an overall positive financial outlook. That said, the Council were closely monitoring investment yields and the rising costs associated with void properties.

Capital Programme

·         The Council’s capital programme forecasted a £12.7m variance, primarily due to the slippage of £10.1m for the Cullompton Town Centre Relief Road. With funding now secured, the project was progressing well.

·         Other key variances included:

o   Further details on service variances, income, and staffing trends were outlined in Appendices B, C, and D.

3Rivers Update

·         The formal closure of 3Rivers was completed on 26 November 2024. Meanwhile, work at St George’s Court was nearing completion, with the first over-60s community residents moving in. However, progress at Bampton remained slow, despite price reductions stimulating new interest. While viewings had increased, no offers had been received yet, and the Council continued to assess the best course of action.

Conclusion

·         In summary, Mid Devon’s finances remained in a robust position despite external economic pressures. The Council’s prudent management meant that the Council were not just balancing the books—they were building resilience for the future, ensuring that the Council were well-placed to handle economic shocks, funding uncertainties, and the ever-changing landscape of local government finance.

·         The Council could not predict the future, but it could prepare for it—and that responsible approach ensured that the Council did exactly that.

RESOLVED that:

a)    The financial monitoring information for the income and expenditure for the nine months to 31 December 2024 and the projected outturn position be NOTED;

b)    The use of Waivers for the Procurement of goods and services as included in Section 8 be NOTED;

c)    The completion of the closure of 3Rivers Developments Ltd be NOTED.

d)    The revisions to the 2024/25 Treasury and Prudential Code Indicators (para 6.1.1 and 6.1.2) be APPROVED.

(Proposed by Cllr J Buczkowski and seconded by Cllr S Clist)

Reason for Decision:

Good financial management and administration underpinned the entire document. A surplus or deficit on the Revenue Budget would impact on the Council’s General Fund balances. The Council’s financial position was constantly reviewed to ensure its continued financial health.

Note * Report previously circulated.