Agenda item

Report of the Cabinet Member for Finance and Transformation is attached.

Councillor Thorpe, Cabinet Member for Finance and Transformation supported by Council colleagues, Kate Waterhouse, Executive Director Strategy and Transformation and Neil Kissock, Director of Finance provided an overview of the Budget Update Report. The report covered the following items:

• The 2023/24 revenue outturn position.
• An updated Medium-Term Financial Forecast (MTFF) position for 2024/25 to 2026/27.
• The updated Net Budget for 2024/25.
• The final reserves position as of 31 March 2024.
• The 2023/24 capital outturn position
• An update to members on the Finance Improvement Plan
• Sets out the work plan to close the budget gap

Neil Kissock, Executive Director of Finance, reported on the outturn position, indicating significant financial challenges in local government, particularly in children's services. He highlighted that these pressures are in line with national trends and are accounted for in the Medium-Term Financial Strategy and the 2024/25 budget. Despite a substantial budget gap, efforts are ongoing to explore cost-reduction options and reduce reliance on reserve funding.

Addressing questions about finance and transformation, Neil Kissock explained that the September Cabinet update will review the first quarter's revenue and capital programme forecast outturn position. This review will restate the 2024/25 capital delivery programme to reflect slippage from 2023/24 and assess the deliverable scale of the programme for the current financial year. He noted that the slippage had resulted in a revenue underspend due to lower borrowing costs than forecast. The September Cabinet meeting will evaluate in-year performance, while the November meeting will update the Medium-Term Financial Strategy and outline budget proposals for 2025/26.

Councillor Thorpe emphasized the importance of prudent financial management and questioned resource allocation within the reconstructed portfolio. Council Leader Eamon O’Brien highlighted the need for balanced Cabinet roles, focusing on skills, interests, and current needs, and stressed that finance should drive corporate performance with clear, resource-driven strategies.

Councillor Pilkington discussed collaboration opportunities with other authorities on SEND and school transport. Council Leader Eamon O’Brien identified potential in public transport to meet demand, suggesting exploring public ownership of a bus company to provide reliable, cost-effective home-to-school transport. This issue will be raised at the network committee due to persistent overspending in SEND home-to-school transport.

Councillor Pilkington also mentioned challenges in transport arrangements and work patterns, particularly for hard-to-fill roles, suggesting improvements in home-to-school transport and expanding services to other public sectors.

Councillor Moss expressed concerns about the Children and Young People budget, noting the 2024/25 budget's assumption of one hundred and fifteen placements is unrealistic given the current one hundred and twenty-one placements. Members suggested reviewing the forecast for placements and potential overspend, with an update report to be included in the September Cabinet meeting.

In response to a question about the council’s ledger update, it was noted that the current financial system is nearing the end of its life. A business case for a cloud-based ERP Finance Management System is being developed, expected to improve services and financial efficiencies. The proposed implementation timeframe is eighteen months, with a potential go-live date of 1 April 2026, subject to member approval.

Councillor Bayley raised concerns about the security of cloud-based systems compared to traditional methods. It was explained that cloud systems have security benefits, but on-site systems also have advantages if properly managed. Data security will be discussed further in the upcoming audit meeting.

Councillor Marsden inquired about intrusion parameters and responses, citing a recent system outage during a penetration test. The discussion acknowledged hacking risks and disruptions, emphasizing the need for robust security measures and addressing instances of cybercrime, such as email cloning.

It was agreed:

1. The report was clear and informative
2. To get the data regarding potential cyber threats
3. Interested on raising revenue and collection and where income streams coming from and dividends from airport to be included.