Agenda item

This report sets out the financial forecast for the General Fund revenue budget, the Housing Revenue Account, the Dedicated Schools Grant and the Capital Programme, as at Quarter 2 2024-25.

Cabinet RESOLVED:

(1)        To note the new grant funding received in year, the overall financial position and the actions being taken to manage the issues arising as detailed within the Q2 Financial Forecast.

(2)        To note progress on the savings delivery tracker, as detailed in Appendix A of the report.

(3)    To note the prudential indicators for treasury management, as detailed in in Appendix B of the report.

(4)        To approve the virements set out in section 4.7.15 of the report.

Eligible for call-in: Yes

Deadline for submission of call-in: 6pm on Monday 21 October 2024

Councillor Mili Patel (Deputy Leader and Cabinet Member for Finance & Resources) introduced a report which set out the financial forecast for the General Fund revenue budget, the Housing Revenue Account, the Dedicated Schools Grant and the Capital Programme as at Quarter 2 2024-25.

In introducing the report, Councillor Mili Patel highlighted that despite the considerable efforts to maintain financial control, the operating environment and wider economic context faced by the Council remained volatile.  Since 2010, members were reminded that the Council had lost at least £210m from its core budget with the impact having been felt by everyone who lived and worked in the borough.  During the same period the number of Council employees had also reduced by at least 50%.  Whilst recognising the efforts made to innovate, identify efficiencies and generate income members were advised these measures alone would no longer be sufficient over the longer term.  Since the Q1 forecast had been presented to Cabinet in July 2024 the Council’s financial position had worsened with the need (during 2025-26) to identify £16.5m of cuts in order for the Council to be able to continue standing still, with the challenging nature of the additional cuts identified fully acknowledged for residents, staff and members alike.  Without intervention, members were advised the risk of being able to move back to financial sustainability would become more difficult with a fundamental adjustment therefore required in the functions undertaken by the Council and way services were delivered enabling a focus to remain on the most vital and key statutory functions.

In highlighting how local authorities such as Brent had become the government’s emergency provider of last resort delivering more services than ever before and picking up the challenges and costs in relation to areas such as adult social care and the housing crisis, the way in which the financial burden had also been shifted on to residents was also recognised with pressures remaining particularly acute in relation to Children’s and Adult social care packages, and costs associated with the provision of temporary accommodation.

Whilst the government had now changed and the outcome of the Autumn budget was awaited, the challenges and pressures facing the Council remained the same and, it was felt would require a fundamental shift in approach to address.  Given the opportunity members were, however, assured that the Council stood ready to renew and rebuild public services whilst also continuing to lobby for the reforms to local government finance needed and working hard to continue protecting and safeguarding residents.

In considering the report, Cabinet noted the extent of the significant challenges identified in seeking to manage demand and address the pressures identified, with members welcoming the transparent nature of the report in seeking to ensure the public and other key stakeholders remained informed and engaged.  Whilst recognising the financial position inherited by the new government, members remained mindful of the significant financial boost and change in approach that would be required within the Autumn budget in order to safeguard key frontline service with members, in the meantime, committed to continue working with their relevant Corporate Directors to ensure the monitoring and management of budgets in each service area.

As an initial package of continued support members also took the opportunity to welcome the recent announcement of the extension of funding for the Household Support Fund (HSF) for a further period of 12 months (up to 31 March 25).  The initial grant allocated had been £2.8m with a second tranche of funding estimated to be approx. £2.3m all of which would continue to be used to support vulnerable residents through the cost-of-living crisis.

Having noted the update provided Cabinet RESOLVED:

(1)       To note the new grant funding received in year, the overall financial position and the actions being taken to manage the issues arising as detailed within the Q2 Financial Forecast.

(2)       To note progress on the savings delivery tracker, as detailed in Appendix A of the report.

(3)    To note the prudential indicators for treasury management, as detailed in in Appendix B of the report.

(4)       To approve the virements set out in section 4.7.15 of the report.