Agenda item

The Director of Finance submits a report which is the first in the revenue monitoring cycle for 2023/24 and provides early indications of the significant financial pressures the Council is facing this year, and the worsening picture for future years’ budgets. The Overview Select Committee is recommended to consider the overall position presented within the report and make any observations it sees fit.

The Director of Finance submitted a report which was the first in the revenue monitoring cycle for 2023/24 and provided early indication of the significant financial pressures the Council was facing this year, and the worsening picture for future years’ budgets.

The Director of Finance noted that there was currently a £12.7m forecast overspend against the latest approved budget.  She referred to £17m of cost pressures that were partially offset by £4.3m of lower than budgeted costs and additional income.

She reported that the £17m of cost pressures consisted of the following:

-       £9.9m in Education and Children’s Services, of which £9.2m was increased costs of children looked after where placement costs have increased faster than budgeted.

-       £4.9m in City Development and Neighbourhoods, of which £3m was additional costs of temporary accommodation for homeless households and £1.2m was the higher costs of waste management after the use of a provision set aside for this purpose.

-       £2.2m likely additional costs of the local government pay award over and above the budget provision, based on the current pay offer.

The Director of Finance noted that the £4.3m of lower than budgeted costs and additional income related to additional income of £0.3m in Sports Services, an expected £3m lower cost of energy and underspends of £1.0m in corporate budgets.

In response to comments and questions from members, the following were stated:

-       There was a significant overspend on relation to homelessness services.  This had resulted from an increase in the number of families identifying as homelessness and from the deepening cost-of-living crisis.  It was also forecast that temporary accommodation costs were likely to increase.  Further detail on the amount of time people generally spent in temporary accommodation was to be provided.

-       In response to a question around the work being undertaken to ensure that people were safe from domestic abuse and violence (as a result of the cost-of-living crisis) it was agreed that additional information would be provided.

-       Relating to queries re the level of overspend in relation to Looked After Children placements, it was confirmed that this was a significant issue for the City Council and although placement costs had risen rapidly, there was a huge variance in individual placement cost depending on individual need.

-       It was reported that items in relation to the DFE recovery plan, Childrens placement costs and SEND transport to be on the workplan for the relevant scrutiny.

-       In relation to the DFE recovery plan, it was noted that many other local authorities had a level of deficit significantly higher than that of the City Council and officers agreed to provide a list of examples to members separately. 

-       It was agreed that further detail in relation to why a recent application for a free school was rejected by the Department for Education be provided to commission members. 

-       Following concerns raised in relation to recruiting agency staff to fulfil roles within Adult Social Care, it was stated that the authority had launched a number of campaigns to try and attract staff but that it was financially advantageous for individuals to be employed via an agency rather than the City Council directly.  It was acknowledged that many Councils struggled as a result of this and that there had been continued work to invest in our own staff. 

-       That confirmation of the number of employees that work within the Tourism, Culture and Inward Investment service be provided.

-       Levels of school meal uptake had not recovered to the levels experienced pre-pandemic. 

-       It was acknowledged that landfill tax costs were relatively high, but that this was in part as a result of greater levels of waste disposals from home given the surge in the number of people regularly working from home. 

-       Further detail would be provided on the number of HRA properties that were presently vacant.

In response to a question from a youth representative regarding how the authority would respond should it be in a similar financial position to that experienced by Birmingham City Council, the City Mayor stated that a range of factors led to Birmingham’s plight and that the approach Leicester City Council has adopted in managing its finances has allowed the authority to be aware of and be able to respond to the increased financial pressures.  He explained that the challenges ahead for the City Council were significant and that some difficult decisions would be required to be taken to ensure that the authority did not suffer similar consequences to Birmingham.   

AGREED:

1)    That the overall position presented within the report be noted

2)    That as outlined above, further responses be provide in relation to the requests by commission members for additional information.

3)    That the scrutiny commissions continue to examine the detail of the finances relating to those policy areas of particular significance, as outlined in the report and discussed during the consideration of this item.