Decision details

1.

Title of Item/Report

Financial Update and MTFP

2.

Record of the Decision

Consideration was given to a report that summarised the Council’s financial performance and position at the end of the first quarter of the 2024/25 financial year.   Members were aware from the budget report in February 2024 that the Council had a budget gap of £1.9m in the current financial year rising to £8.1m in 2026/27, with the transformation programme being key to resolve the financial position.

The Powering our Futures programme and associated transformation reviews were well underway and Members were aware that these reviews were addressing the aforementioned budget gap. The reviews were progressing well and an update would be provided at the October Cabinet meeting.

The financial position for the Council for the first quarter of the financial year (to 30th June 2024)  highlighted a projected overspend of £3.9m against the budget, effectively the Council was on target to achieve the transformation savings but further pressures had created a further budget gap. Growing demand for Council services and the increased cost of delivery was putting pressure on several budget headings. An additional £12.5m was added to the budget in February’s budget report, and this overspend was over and above that additional investment. Work was underway to look at ways to mitigate this projected overspend and the position would continue to be closely monitored and managed throughout the remainder of the financial year. As part of the budget process, a number of earmarked reserves were paused to allow the Council to manage future risks and if the pressures materialise as expected, this would need to be met from these reserves.

These challenges were not unique to Stockton and the financial pressures experienced by many councils across the country was well documented. Whilst the Council was able to re-direct earmarked reserves to resolve immediate pressures this was not sustainable, over the medium term and the position needed to be addressed.  Future reports would provide and update to Cabinet and work preparing for the 2025/26 budget and MTFP had commenced. Given the overall position, work exploring options for Phase 2 of the transformation programme would be progressed.

The report also presented an update on the Capital Programme.

RESOLVED that:-

1. The update to the Medium Term Financial Plan and the current level of General Fund balances be noted along with the intention to progress further transformation reviews.

2. The revised Capital Programme at Appendix A of the report be noted.

3.

Reasons for the Decision

To update Members on the Council’s financial performance and the Medium Term Financial Plan.

4.

Alternative Options Considered and Rejected

None

5.

Declared (Cabinet Member) Conflicts of Interest

None

6.

Details of any Dispensations

None

7.

Date and Time by which Call In must be executed

N/A