The Group Finance Director submitted a report to note the update to the Cabinet on Finance, Risk and Corporate Performance matters as at 31^st December 2024.

Cabinet is recommended to:

1.    Note the projected financial outturn as well as the current position on risk and performance as at 31^st December 2024.

The agenda order was amended, and this item was taken first, following the Scrutiny reports.

The Group Finance Director had submitted a reportto note the update to the Cabinet on Finance, Risk and Corporate Performance matters as at 31^st December 2024.

Councillor Turner presented the report. He said that in the general fund there is favourable out turn and that the temporary accommodation pressure was well known and represented a significant challenge. He noted that they have tried to provide a realistic forecast in the report. Councillor Turner said that in the HRA the expenditures for repairs were higher than they would like them to be, and that officers and members will need to work towards a balance in this, so that they can have a better grip on this. He said that this was not an existential threat to the HRA, but the current situation was something they need to continue working on. Councillor Turner said that on the Capital Programme, there was further slippage. One of the biggest issues causing this was loans to companies. Councillor Turner suggested that they need to watch this area, for the ways that it could impact future dividend payments.

Councillor Chapman observed that in the section regarding the overspend in the repairs, some of those spends are necessary and will happen no matter what mitigations they undertake. He said he was more concerned about the cost of day-to-day repairs, and he was pleased that there was a plan to get a grip on this and improve clienting and increase transparency. On the void process, Councillor Chapman said they should look at that closely and see if it is as efficient as other authorities and if there are ways that they could make improvements in this area. 

Councillor Hollingsworth asked about the capital programme deadlines. He said that the planning of their finances was more robust that it had been three to four years ago, but asked if there were further messages to be highlighted regarding a sense of direction in the plan for improving the planning of their finances. 

Councillor Brown stated that the housing services issue around temporary accommodation remains as a financial and human concern. She said that this was one of those issues which is close to their hearts, because they are aware of the human misery that accompanies this matter. She stated that this was not a good thing financially or for families. She emphasised their need to continue to work hard to build the housing the city needs, because that is the best solution for families.

Councillor Turner responded that he agreed with Councillor Chapman on the repairs situation. He said that across the Council they need to look at this. He stated that this issue involves clienting, tenancy management, their property team, and they clearly want to work on this, because the current situation is not what they want. He highlighted that they were having good conversations already, but it was one to watch. Councillor Turner suggested that in a year’s time they might not be where they want to be, but maybe in two years.

Councillor Turner responded to Councillor Hollingsworth and said that there were two ways they could plan. One was about realistic project planning and not being overly optimistic, and they have gotten better at that. However, they still get curve balls and need to navigate optimism bias. Councillor Turner emphasised that they are getting better at bearing down on optimism bias and at budget time they pushed back quite hard. He added that their pipeline process was also working quite well. The second part, regarding planning the draw down funds, Councillor Turner said that they now put in a heavy contingency in their budget and treasury planning, assuming that there will be some slippage. He stated that they are now pretty good at that.

Councillor Turner said that in terms of planning, the big numbers in the report are to do with company loans. He advised that they need to take an honest view when they look at business plans going forward. On the temporary accommodation matter, this is an area where officers are working hard, and they have a range of things going to work on this matter. Councillor Turner agreed with Councillor Brown and noted that the immediacy of the housing issue continues and is arguably getting worse, and they need to do everything they can to address this issue. He said that they are responding to governance consultation on homelessness reduction funding. He noted that they need all the support they can get from central government in this area.

Bill Lewis, Financial Accounting Manager, said that on the capital side, the Council is getting better. He noted that there were issues around the phasing, but that a lot of that was outside of the Council’s control. However, it does need to be looked at so that project managers phase according to what is likely to happen. He noted the delays in capital loans and said that when they set the budget, they set it with assumptions. Nonetheless, later quarters experience the knock-on effects of things that happened in earlier quarters. Regardless, he stated that they do make an assessment on the global level of reduced capital financing requirements, however the impact depends on what schemes slip and what the financing methodology was for those schemes. He advised that they are getting better, but there is always rooms for improvement.

Clare Paterson, Strategic Finance Manager, said that the Council is working continually, progressing around its financial forecasting and understanding of overspend areas. She said that they are strengthening work in overspend areas and strengthening their response in those particular areas.

Cabinet resolved to:

1.    Notethe projected financial outturn as well as the current position on risk and performance as at 31^st December 2024.

Councillor Arshad arrived during this item, at 18:21.

Councillor Turner exited the meeting after the discussion of this item.