Agenda item

To consider the report of the Cabinet Member for Performance and Resources presenting the Council’s current financial position against the agreed budgets for the 2023/24 financial year, performance of the Council against certain key financial performance indicators, year-end forecasts, and the financial pressures on the Council during the 3^rd Quarter ended 31^st December 2023.

TO FOLLOW.

108.1  The Cabinet Member for Performance and Resources, Councillor Norman, introduced the report and provided an overview of the main headlines. She advised Members that the forecast year end position was currently a decrease to the Council’s General Fund Balance of £683k against a budgeted decrease of £104k, which was improvement on the Q2 forecast deficit.

108.2  The Chair stated that he was pleased to note that the Council had received a £400k windfall of business rates refunds following a review of the application of business rates to museums by the Valuation Office. In response to his request for further information, the Financial Services Manager stated that this was due to a longstanding national challenge  against the Valuation Office which had been ongoing since 2011. He confirmed that the Valuation Office had this year concluded its review with a  decision that museums should not be rateable which had resulted in a 12-year backdated rebate.

108.3  The Chair referred to 5.5 in the report and the narrative regarding the South West Regional Development Agency (SWRDA) assets. He asked for clarification as to what properties were still in Council ownership. Councillor Norman confirmed that Southgate Moorings Car Park was still in ownership, and that income received from this car park was reserved for regeneration purposes.

108.4  Councillor Wilson noted that the shortfalls in the in the Q3 Financial Monitoring Report and Money Plan recently considered by Council appeared to be different, with a forecast deficit of £349k in the Money Plan and a predicted deficit in the Q3 Financial Monitoring Report of £683k. He asked which document was the most up to date. The Head of Finance and Resources confirmed that both reports should be seen in parallel, with the Financial Monitoring Report providing retrospective figures and the Money Plan looking forward.

108.5  Councillor Wilson asked whether this suggested that the financial situation had deteriorated by £334k, or whether the deficits were not comparable. The Head of Finance and Resources confirmed that the figures were comparable, and that the Council was still expecting the deficit to continue to reduce towards the outturn of the financial year.

108.6  In response to a further question from Councillor Wilson as to whether the forecast deficit in the Money Plan papers was too optimistic, the Head of Finance and Resources confirmed that in his view, the Council was not being too optimistic and that he expected the figures to align more closely in the remaining financial quarter. Councillor Norman further noted that an improved trend had been seen from throughout each Quarterly Financial Monitoring Report and that in previous years, the Council had seen improvements in the final outturn.

108.7  Councillor Pullen referred to the £130k reduction in expected income from Longsmith Street Car Park due to its continued closure, and asked for an update on the current position. He also asked for clarification as to the expected costs needed to reopen the car park. Councillor Norman confirmed that she was still awaiting the final report and costings which would inform a timeline for completion. In response to a further question from Councillor Pullen as to whether the Council intended to reopen the car park. Councillor Norman confirmed that the Council did plan to reopen Longsmith Street car park however she was unable to confirm  the timelines until Officers fully understood the costings involved and the timeline for repairs.

108.8  Councillor A. Chambers asked for clarification on the figures contained at 5.3 regarding the Performance and Resources portfolio. Councillor Norman confirmed that the forecast variance to budget for her portfolio in Q3 was £348k. The Head of Finance and Resources explained that the budgeted costs for this portfolio totalled £123k, and that the year-end forecast was £472k. It was explained that 5.4 in the report provided a breakdown of the pressures, which included the reduction of income from the Longsmith Street Car Park and increased energy costs.

108.9  In response to additional questions from Councillor A. Chambers regarding the Culture and Leisure portfolio, the Head of Finance and Resources clarified that the Council was budgeted to spend £1.948m. The Financial Services Manager confirmed that the Culture and Leisure Service was adverse to budget by £571k, however it was noted that there was a pressure of £630k in the Leisure Service with cultural venues including the Museum, Guildhall and Blackfriars being favourable to budget.

108.10          Councillor A. Chambers requested an update on the safety inspections which had been undertaken on Council buildings. Councillor Norman noted that the wording of the motion approved by Council had been amended to provide a record of the inspections, rather than a report. Councillor A. Chambers requested that the Committee make follow-up enquiries as to when this record was likely to be ready for inspection.

108.11          Councillor Hilton asked for clarification as to the budget variance in the Commercial Property income at 5.3 in the report. Councillor Norman noted that the shortfall was partly due to negotiations around lease renewals, however she confirmed that there was lots of activity in the Asset Management team around investment in Gloucester and it was the expectation that some empty properties in the city would be filled, although this would be dependent on the market.

108.12          In response to a further query from Councillor Hilton, the Head of Finance and Resources noted that it was likely that the commercial property portfolio would expand once the Forum development was completed, and that any preferential rates for the repayment of loans would be a treasury decision.

          RESOLVED – That the Overview and Scrutiny Committee NOTE the report.