Agenda item

Mr Chris Mayo, the Council's Assistant Director Financial Management, advised that this was the first of two opportunities for Members of the Select Committee to consider issues relating to budget planning for 2024/25 and beyond.  At its meeting on 23 January 2024, the Committee would receive a further report presenting specific budget proposals for the relevant services within its remit (which would have already been to Cabinet on 14 December 2023).  Feedback from the Committee would then be included in the final budget report that would be considered by Cabinet at its meeting on 15 February 2024. 

A marginal underspend of £23k had been reported against General Fund revenue budget normal activities as of May 2023.  Almost £2.4m of savings had been identified within the Health and Social Care portfolio in 2023/24 with none identified as being amber status.  However, inflation had added almost £60m to the budget gap and assumptions were being made about the pay awards. 

Demographic growth was at more than 2%, putting additional pressure on services, and an additional £0.7m had been identified in Public Health as service pressure.  However, this was funded within the Public Health Grant ringfence.  Budgeted capital investment in the current programme was the key driver of a £6.5m growth in debt financing and repayment costs over the medium term.  The remaining balance of Corporate Items related to movements in the TfL Concessionary Fare Levy (£4.1m) and use of capital receipts to finance transformation activity (£1,029k), alongside moving the Council Tax Older People’s Discount to being funded from base budget rather than Earmarked Reserves, with funding coming in from Hillingdon First Limited from 2023/24 and 2024/25.

Five ways of identifying savings had been mentioned in the report to achieve best value for money.  As preventative interventions were often best placed to deliver savings later on, Members asked officers to provide the Committee with more detail on how these five initiatives had saved the Council money.  Members also queried how assistive technology would help the Council to make savings. 

Concern was expressed that the inflation levels that officers were working with in forecasting might not be a true reflection and Members asked what would happen if inflation costs were even higher than anticipated.  Mr Andy Goodwin, the Council's Head of Strategic Finance, advised that inflation was being reviewed across a range of sources and that finance officers worked with procurement officers to see what negotiations were coming through.  Between now and Cabinet on 14 December 2023, action would be honed for any shocks in the market.  The approach had been to assume that inflation was running high so that the reserves were the back up. 

Insofar as earmarked reserves were concerned, Mr Goodwin advised that, at the start of the pandemic, the Council's underspend had been allocated to Covid but there had been flexibility for this to be spent on whatever the Council wanted.  The Council had used the Government Covid grants it had received first before using its own funds.  There had been around £1.5m of reserves in 2022/23 and £50k left in Covid reserves which was not a material figure.

Officers would continue to work on assessing the budget gap and exploring ways in which expenditure could be reduced. 

RESOLVED:  That the financial context in which the 2024/25 budget setting process will take place in advance of detailed savings proposals being developed and approved at Cabinet in December 2023 be noted.