Decision details

RESOLVED:

That the Cabinet:

1)    Note the budget monitoring position and treasury management update as at August 2024 (Month 5), noting the actions proposed by officers as outlined in Part A of this report.

2)    Approve the financial recommendations set out in Part B of this report below:

a.    Agrees the rebasing proposal to process a budget virement and credit the corporate centre with £14.1m to the support Service Operating Budgets.

Reasons for decision

The Cabinet Member for Finance introduced the monthly Council budget monitoring report, addressing the financial position as of 31 August 2024 and a progress update on the zero-based budgeting (ZBB) project.

It was noted in the report there was a projected overspend of £32.4 million, which could be reduced to £6.6 million through identified savings and the release of balance sheet items. The total savings identified so far amounted to £39.6 million, with some savings expected in future financial years. The Cabinet Member emphasised that the savings targeted areas such as streamlining back-office functions, digitisation and income maximisation, without cutting key frontline services. The Cabinet Member acknowledged the substantial financial challenges, in-year budget pressures and shortfalls on income targets. Despite these challenges, the Cabinet Member stated that Hillingdon had managed its cash flow and borrowing effectively.

The Cabinet Member noted that the newly appointed Corporate Director of Finance was leading the ZBB process and that he had also formally instructed the Corporate Director to prepare a financial improvement plan to strengthen operational and financial controls and promote the enhanced use of digital data.

Furthermore, Cabinet was informed that operational improvements had reduced the in-year deficit for the Dedicated Schools Grant, though a significant deficit remained. The Housing Revenue Account was on track, with plans for an enhanced capital programme to increase housing stock and reduce homelessness pressures. 

The Leader of the Council emphasised the importance of acknowledging the financial challenges facing the Council and mentioned a recent meeting with London Council leaders and their finance directors, where they discussed the pressures on local authorities and their expectations from the upcoming Government budget which the Leader hoped would not exacerbate the Council’s financial situation.

Alternative options considered and rejected

None.