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Economy, Place, Access and Transport Scrutiny Committee |
22nd October 2024 |
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Report of the Director of Finance |
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2024/25 Finance and Performance Monitor 1
Summary
1. This report sets out the projected 2024/25 financial position and the performance position for the period covering 1 April 2024 to 30 June 2024, together with an overview of any emerging issues. This is the first report of the financial year and assesses performance against budgets, including progress in delivering the Council’s savings programme.
2. This report outlines the Council’s challenging financial position with a forecast overspend for 2024/25 of £3.4m. This is a huge improvement on the £11.4m forecast overspend we have previously seen at this stage in the financial year and is a direct result of the significant work undertaken by officers across all parts of the Council to identify savings and mitigations.
3. However, there is still a forecast overspend and therefore, whilst it is incredibly positive that the position is much improved, there remains a great deal of work still to do. It remains clear that the Council cannot afford to keep spending at this level. The general reserve is £6.9m and, whilst we have other earmarked reserves that we could call on if required, continued overspending will quickly see the Council exhaust its reserves.
4. The existing cost control measures remain in place, and further action is needed to bring spending down to an affordable level, both within the current financial year and over the next 3 years, to safeguard the Council’s financial resilience and stability. The impact that this work is having can be clearly seen in this latest forecast and the Council’s track record of delivering savings, along with robust financial management, provides a sound platform to continue to be able to deal with future challenges.
5. If we continue to take action and make any difficult decisions now, this will ensure the future financial stability of the Council and that we can continue to provide services for our residents. It is vital that mitigations are delivered, and the forecast overspend is reduced.
Financial Summary and Mitigation Strategy
6. The current forecast is that there will be an overspend of £3.4m. This is despite the additional budget allocated through the 2024/25 budget process and ongoing action being taken by managers across the Council to try and reduce expenditure. If the Council continues to spend at the current level, and no action is taken, then we will continue to overspend and will exhaust our reserves and any other available funding. The current level of expenditure is unaffordable and therefore we must continue the work started in the previous financial year to identify and take the necessary actions to reduce expenditure.
7. As outlined in reports to Executive throughout the previous financial year, we have continued to see recurring overspends across both Adult and Children’s Social Care. However, the underspends and mitigations that have allowed us to balance the budget at year end have generally been one off. Whilst the use of reserves to fund an overspend is appropriate as a one-off measure, it does not remove the need to identify ongoing savings to ensure the overall position is balanced. The budget report considered by Executive in February 2024 also included an assessment of risks associated with the budget, which included the need to secure further savings and effectively manage cost pressures.
8. Members will be aware that the financial position of local government is a national challenge and that the pressures being seen across both Adult and Children’s Social Care are not something that is unique to York. Many Councils are experiencing significant financial pressures and struggling to balance their budgets now, so it is vital that we continue the work started last year to reduce our expenditure down to a sustainable level both within the current financial year and over the medium term.
9. Given the scale of the financial challenge, and the expected impact on budgets in future years, it is vital that every effort is made to balance the overall position. It is recognised that this will require difficult decisions to be made to protect services for vulnerable residents.
10. Corporate control measures are in place, but it is unlikely they will deliver the scale of reduction needed within the year. Other savings proposals, including service reductions, may also be needed. Officers will continue to carefully monitor spend, identify further mitigation, and review reserves and other funding to make every effort to reduce this forecast position. However, it is possible that it will not be reduced to the point that the outturn will be within the approved budget. The Council has £6.9m of general reserves that would need to be called on if this were the case. As outlined in previous reports, any use of the general reserve would require additional savings to be made in the following year to replenish the reserve and ensure it remains at the recommended minimum level.
11. The delivery of savings plans continues to be a clear priority for all officers during the year. Corporate Directors and Directors will keep Executive Members informed of progress on a regular basis.
Financial Analysis
12. The Council’s net budget is £149m. Following on from previous years, the challenge of delivering savings continues with c£14m to be achieved to reach a balanced budget. Early forecasts indicate the Council is facing net financial pressures of £3.4m and an overview of this forecast, on a directorate by directorate basis, is outlined in Table 1 below.
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Service area |
Net budget £’000 |
2024/25 Forecast Variation £’000 |
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Children & Education |
28,659 |
1,359 |
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Adult Social Care & Integration |
45,307 |
2,361 |
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Transport, Environment & Planning |
23,464 |
-547 |
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Housing & Communities |
6,614 |
792 |
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Corporate & Central Services |
44,724 |
-69 |
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Sub Total |
148,768 |
3,896 |
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Contingency |
500 |
-500 |
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Target for further mitigation |
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Total including contingency |
149,268 |
3,396 |
Table 1: Finance overview
Directorate Analysis
Transport, Environment and Planning
13. The directorate is forecasting an underspend at quarter 1 of £547k and the table below summarises the latest forecasts by service area.
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2024/25 Budget £’000 |
Forecast Outturn Variance £’000 |
Forecast Outturn Variance % |
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Transport |
7,278 |
-554 |
-7.6 |
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Fleet |
-127 |
36 |
28.3 |
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Highways |
5,258 |
-200 |
-3.8 |
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Parking Services |
-8,348 |
-65 |
-0.8 |
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Waste |
15,033 |
-654 |
-4.4 |
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Public Realm |
3,422 |
-20 |
-0.6 |
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Emergency Planning |
145 |
0 |
0 |
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Planning Services |
39 |
10 |
25.6 |
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Public Protection |
809 |
0 |
0 |
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Community Safety |
715 |
0 |
0 |
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Directorate Savings |
-900 |
+900 |
-100 |
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TOTAL |
23,324 |
-547 |
-2.3 |
14. The Transport. Environment and Planning Directorate is projecting a gross underspend of £1,447k after the first quarter which reduces to £547k once the directorate savings target of £900k is considered. The primary reason for the underspend is continued strong performance from income particularly relating to parking. The two main areas of savings are across Transport and Waste Services. These are detailed further in the paragraphs below.
15. Within Transport there was an underspend of £0.5m across the service. There is a forecast underspend against the Concessionary Fares budget of £520k as numbers of concessionary passengers have not fully returned to pre pandemic levels although the saving is lower than 2023/24.
16. Car park income for the first quarter is within 1% of budget as transactions have reduced by 5% but income per transaction increased by 12%. The has meant total income is c5% higher than 2023/24 in line with budget. This will continue to be monitored closely as the budget is c £2m higher than last year.
17. There is a forecast underspend of (£654k) across waste disposal and collection. Income from selling spare capacity at Allerton Waste Recovery Plan is forecast to be £200k higher than forecast as overall council waste tonnages remain relatively static. There is also additional forecast income from recycling rebates, HWRC commercial waste fees bulky waste fees and gas sales of c £500k.
18. Across Waste Collection operational costs are forecast to be £360k below budget as vehicle repairs and the cost of hire was below budget as the fleet is relatively new.
19. The garden waste subscription service is being introduced from August which is resulting in a reduced charge for the service for the financial year. There is potentially a shortfall of £500k in the year but this will be updated when total subscriber numbers are known. There have been c.30,000 subscribers to end of July.
20. Within the Highways area there is an anticipated underspend of £200k as electricity prices have reduced for unmetered supply to a lower level than assumed in the budget.
21. As part of the budget process a saving of £900k was identified to be delivered across the former Place Directorate. It is proposed that permanent budget reductions are made to the following budget areas reflecting current costs.
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£’000 |
Description |
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Highways |
200 |
Reduced Street Lighting Costs |
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Waste Collection |
300 |
Reduced vehicle hire and maintenance costs |
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Waste Disposal |
200 |
Reduced Yorwaste fixed price charges for Materials Recycling Facility |
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Transport |
200 |
Reduced concessionary fare payments |
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Total |
900 |
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22. Further service reviews will be undertaken in this area in order to deliver savings through future budget rounds.
23. Across City Development Directorate it is assumed that the revenue budget of £710k will be on target. There are no reported variances at Monitor 1.
Performance – Service Delivery
24. This performance report is based upon the city outcome and council delivery indicators included in the Performance Framework for the Council Plan (2023-2027) which was launched in September 2023. Wider or historic strategic and operational performance information is published quarterly on the Council’s open data platform; www.yorkopendata.org.uk
25. The Executive for the Council Plan (2023-2027) agreed a core set of indicators to help monitor the Council priorities and these provide the structure for performance updates in this report. Some indicators are not measured on a quarterly basis and the DoT (Direction of Travel) is calculated on the latest three results whether they are annual or quarterly.
26. A summary of the city outcome and council delivery indicators by council plan theme are shown in the paragraphs below along with the latest data for all of the core indicator set.
28. There are two types of claimant: those in employment and those not. Both types have been gradually increasing in the last 12 months with the number of those not in employment increasing as claimants of health-related legacy benefits (e.g. Employment and Support Allowance) are migrated across to Universal Credit. The increase in the number of those in employment may be attributed to a higher percentage of part time workers (29.1% in York, 26.5% regionally and 23.7% nationally).
29. Earnings gap between the 25 percentile and the median (£) – In York, the latest figures show that this gap has reduced by 7.3%, in 2023, to £152.20. This is the lowest gap since 2018-19. Nationally, there has been an increase of 1.4% to £163.20 and regionally an increase of 4.7% to £139.50. Data for 2024-25 will be available in December 2024.
31. % of vacant city centre shops – Whilst acknowledging that a number of city centre streets and prime commercial locations seem to be experiencing higher vacancy levels than York's average, overall at the end of June 2024, there were 53 vacant shops in the city centre (four more than the number at the end of June 2023), which equates to 8.4% of all city centre shops. This is much lower than the national benchmark in 2022-23 of 13.8%. The York figures have remained stable for a number of years.
32. Business start ups – Figures for 2022-23 showed 870 new business start-ups for York, which is higher than in the previous year (746 in 2021-22). The York figure is at only a slightly lower level to that seen before the pandemic (932 in 2019-20). The year to date figure up to the end of February 2024 of 767 new start ups is at a similar level to last year. The monthly figures for business start ups in York came from a regionally paid for dataset but this has now come to an end. Alternative sources of this information are being sought.
34. % of working age population in employment (16-64) – In 2023-24, 78% of the working age population were in employment, which is higher than the national and regional figures (75.5% and 73.1% respectively) and the York performance gives the city a ranking of second regionally. The figure for 2023-24 in York remains fairly high overall but is lower than the figures seen for the previous two years.
35. % of Total Employees working for an Accredited Living Wage/Good Business Charter employer – 16% of employees worked for an Accredited Living Wage employer and 13% worked for an Accredited Good Business Charter employer in 2022-23, which are both higher than in the previous year (14% and 12% respectively). Data for 2023-24 will be available in October 2024.
36. Survival of Newly Born Businesses post 1 year – In York, 175 businesses were created in Q3 2023-24, up 6% on a year ago. There were 160 business closures in the same quarter, down 8% on the year before. The survival rate post 1 year has been consistently above 94% in York for the last 4 years, with the latest figure of 94.4%. The York figures have been consistently higher than the National and Regional rates. Data for 2023-24 will be available in November 2024.
37. The majority of the indicators in this Transport section are annual indicators, therefore data is not yet available for all indicators for 2023-24. As soon as new data becomes available, narrative will be included in future versions of this report.
38. Area Wide Traffic Levels – Between 2011-12 and 2016-17, the number of vehicles on the city’s roads increased year on year to a high of 2.2 million. Following this, the numbers decreased to a low of 1.75m in 2020-21. However, the covid pandemic brought with it numerous national lockdowns and local restrictions so the decrease in traffic levels was to be expected. Since then, figures have been increasing again to the latest figure of 2.08m in 2022-23. Data for 2023-24 will be available in Summer 2024.
39. Index of Cycling activity – Prior to the pandemic, cycling levels in the city were around 41% (2019) above the baseline taken in 2009. The latest data shows that cycling levels in 2023 were 13% above the baseline. The pandemic had a huge effect on how people travel around, and how much they travel. Other cities with high levels of cycling have also seen falls in activity. In York, cycling levels appear to have fallen because of a decline in commuting (as a result of more working from home), although travel patterns are still settling down. York has a strong walking and cycling heritage, but if we are to achieve our climate and traffic reduction targets and see a long-term, sustainable increase in rates of cycling, we need to enable more people to choose the bicycle as the primary way of getting around. There is much more to be done to encourage even more people towards riding, wheeling and walking in the future, and we have recently carried out an extensive consultation to better understand what changes we can make to help support residents to make the change to cycling, and how we can support our cycling communities. Data for 2024 will be available in early 2025.
40. Index of pedestrians walking to and from the City Centre – From a baseline in 2009-10 (37,278), there has been a 23% increase in the number of pedestrians walking to and from the city centre in 2022-23. This is 19 %pts higher than in 2021-22 and the highest increase seen for a number of years. Data is gathered on an annual basis over the course of one day; it is a count of pedestrians crossing an inner cordon set just beyond the inner ring road and includes off-road routes such as riverside paths. Data for 2023 will be available in Summer 2024.
41. % of customers arriving at York station by sustainable modes of transport – In 2023, 78% of customers arrived at York station by sustainable modes of transport which is an increase from 60% in 2022 (the survey was delayed in 2022 so didn’t take place until January 2023 which may have affected the result, and in addition, two of the usual counting locations were missed which may explain the lower than usual percentage). The data is usually gathered by an annual survey which takes place for a five-hour period in seven locations around the station. Members of the public are asked how they arrive at the station and the results are flow weighted to take into account the split of people arriving at each entrance.
42. The number of CYC electric vehicle recharging points - There were 103 CYC electric recharging points at the end of Q1 2024-25, which is seven fewer than at the same point in the previous year.
43. % of Principal/Non-principal roads where maintenance should be considered – In 2023-24, the percentage of principal roads in York where maintenance should be considered was 11% (the same as in 2021-22). This is considerably higher than the latest benchmarks in 2022-23 (National average 4% and Regional average 3%). The percentage of non-principal roads in York where maintenance should be considered was 25% in 2023-24 (slightly higher than 23% in 2021-22). This is also considerably higher than the latest benchmarks in 2022-23 (National average 6% and Regional average 3%).
44. Net Additional Homes – Between 1st April 2023 and 31st March 2024, a total of 462 net additional homes were completed. This total comprises two elements:
· There has been a total of 529 net housing completions. This represents 69 more completed homes compared to the previous twelve-month monitoring period. The main features of the housing completions that were carried out are:
o 480 homes (90.9%) were completed on housing sites (Use Class 3). Of this, 390 were new build homes (81%).
o 8 homes were demolished during the monitoring period.
o Individual sites that saw the construction of five or less dwellings during the monitoring period contributed just 56 (10.6%) homes.
o Significant sites providing housing completions (Use Class C3) over the monitoring period have been Germany Beck (117), The Cocoa Works, Haxby Road (Phase 1 Blocks B and C) (107), Former Civil Service Club, Boroughbridge Road (79) and the Former Vacant Site, Eboracum Way (62).
o A net total of 29 (5.5%) off campus, privately managed student ‘cluster flats’ were completed at Aubrey House Foss Islands Road.
o 143 (27.1%) net additional homes were a result of changes from other uses to residential homes.
· A loss of 66 net equivalent homes resulted from the closure of three care homes within the authority area during the twelve-month monitoring period.
45. Net Housing Consents – Planning applications determined during the full monitoring period of 1st April 2023 to 31st March 2024 resulted in the approval of 658 net additional homes. This compares to 1,559 net approvals granted the previous year. However, a further 513 homes were approved at Planning Committee during the monitoring period and are still awaiting legal agreement sign off.
46. The main features of the housing approvals are:
· 577 of all net homes consented (87.7%) were granted on housing sites (Use Class C3).
· Significant sites granted approval for housing (Use Class C3) includes Land at New Lane, Huntington (300), Os Field South of & Adjacent to 1 Tadcaster Road, Copmanthorpe (158), Land East of Middlewood Close, Rufforth (21) and Clifton Without County Junior School, Rawcliffe Drive (15).
· 59 homes were approved on sites of 5 or less homes.
· A net total of 33 new homes across three sites were granted ‘prior approval’, the most significant of which was at Gateway 2, Holgate Park Drive (31).
· 44 net new retirement homes were allowed on appeal at 11 The Village, Wigginton.
· A further 513 homes have been approved through a resolution to grant consent at Planning Committee over the last twelve months and are currently subject to the execution of a section 106 legal agreement. These sites include:
o Land to the East of Millfield Industrial Estate, Main Street, Wheldrake (139).
o Enterprise Rent-a-car, 15 Foss Islands Road (133).
o Paddock lying between Park Lodge and Willow Bank, Haxby Road (117).
o Land to the South-East of 51 Moor Lane, Copmanthorpe (75).
o Tramways Club, 1 Mill Street (35).
48. This continues the national trend from 2022-23 which DEFRA suggested was primarily due to weather conditions reducing plant growth coupled with increases in the cost of living reducing expenditure on food and the home and rises in the number of people returning to a place of work maybe further reducing waste generation in the home.
49. % of Talkabout panel satisfied with their local area as a place to live - The first biannual resident satisfaction survey taken by the Talkabout panel took place during Q1 2024-25. Results from the Q1 2024-25 Talkabout survey showed that 85% of the panel were satisfied with York as a place to live, up 5% from the previous survey. 81% were satisfied with their local area, consistent with results from Q3 2023-24. A slight decline in satisfaction with the local area can be seen over recent years but York continues to perform well against the latest national figure of 76% (Community Life Survey 2021-22).
50. Level of CO2 emissions across the city and from council buildings and operations – Carbon emissions across the city have been reducing over recent years, from 936 kilotonnes of carbon dioxide equivalent in 2018, to 816 in 2020. Emissions from councils buildings and operations have also been reducing, from 3,658 tonnes of carbon dioxide equivalent in 2020-21 to 3,462 in 2022-23. Data for 2021 and 2023-24 will be available in October 2024.
51. Number of trees planted (CYC) – During 2023-24, CYC planted 40 standard trees in the city’s parks and on highways. In addition, 1,200 trees (whips) were planted by the council’s ‘York Green Streets’ project, fully funded by a grant from White Rose Forest (secured in February 2024) including three years aftercare to support successful establishment. This forms part of the Council Plan 2023-2028 commitment to support biodiversity and nature by planting 4,000 new trees. The YGS project team is itself 100% externally funded by a £150,000 Forestry Commission grant to 31 March 2025. A further £40,000 has been secured from DEFRA to plant two new micro-woods in York’s urban area in the 2024-25 planting season and site selection is currently underway following a successful resident consultation for site suggestions in January.
52. Full year data for 2024-25 will not be available until May 2025, but numbers are likely to be comparable to last year as York Green Streets planted c1,800 trees (whips and standards) in April 2024.
Consultation
55. Not applicable.
Options
56. Not applicable.
Analysis
57. Not applicable.
Council Plan
58. Not applicable.
Implications
59. The recommendations in the report potentially have implications across several areas. However, at this stage
· Financial implications are contained throughout the main body of the report. The actions and recommendations contained in this report should ensure the continued financial stability and resilience of the Council both in the current year and in future years.
· Human Resources (HR), there are no direct implications related to the recommendations.
· Legal The Council is under a statutory obligation to set a balanced budget on an annual basis. Under the Local Government Act 2003 it is required to monitor its budget during the financial year and take remedial action to address overspending and/or shortfalls of income.
· Procurement, there are no specific procurement implications to this report.
· Health and Wellbeing, there are no direct implications related to the recommendations.
· Environment and Climate action, there are no direct implications related to the recommendations.
· Affordability, there are no direct implications related to the recommendations.
· Equalities and Human Rights, there are no direct implications related to the recommendations.
· Data Protection and Privacy, there are no implications related to the recommendations.
· Communications, there are no direct implications related to the recommendations.
· Economy, there are no direct implications related to the recommendations.
Risk Management
60. An assessment of risks is completed as part of the annual budget setting exercise. These risks are managed effectively through regular reporting and corrective action being taken where necessary and appropriate.
61. The current financial position represents a significant risk to the Council's financial viability and therefore to ongoing service delivery. It is important to ensure that the mitigations and decisions outlined in this paper are delivered and that the overspend is reduced.
Recommendations
62. The Committee is asked to:
a. Note the finance and performance information.
b. Note that work will continue on identifying the savings needed to fully mitigate the forecast overspend.
Reason: to ensure expenditure is kept within the approved budget.
Contact Details
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Author: |
Chief Officer Responsible for the report: |
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Patrick LookerHead of Service FinanceExt 1633
Ian Cunningham Head of Business Intelligence Ext 5749 |
Debbie MitchellDirector of Finance
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Report Approved |
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Date |
10/10/24 |
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Wards Affected: List wards or tick box to indicate all |
All |
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For further information please contact the author of the report |
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Background Papers: None.
Annexes: EPAT Q1 24-25 Scrutiny Committee Scorecard