Further Details

The Head of Finance provides the routine finance report which outlines the year to date and forecast position for the revenue, capital, and reform budgets.

Appendix A provides the detailed period 7 (P7) finance report.

Revenue
As previously reported, the Q2 net expenditure forecast is £1.9m over budget, fully funded by GiA funding agreed through Autumn (ABR) and Spring Budget Revision (SBR) transfers.

The forecast position is very challenging when considered alongside our financial threats, particularly around ongoing pay award negotiations. The position will be closely monitored along with all other threats and opportunities throughout the remainder of the financial year. These are detailed on the threats and opportunities summary at page 17 (Appendix A).

The year-to-date position is £1.8m under Q2 forecast, consisting of a mixture of real and timing variances: underspends in non-pay costs (£1.5m) and staff costs (£0.2m); an over-recovery of income (£0.5m) offset by an overspend in officer costs (£0.4m).

Year to date underspends and slippage materialising in the Q2 forecast will be used to manage any threats materialising.

The year-to-date actual position versus budget is an underspend of £8.3m.

Capital
The year-to-date position is running £0.4m behind the Q2 forecast.

As previously reported, the capital forecast at Q2 is £69.4m, £3.3m (fully funded) above the budget position of £66.1m. Budgeted slippage of £6.5m had been fully identified by the end of Q2.

As agreed at the outset of the financial year any additional slippage will be allocated to airwave replacement, subject to other emerging requirements.

An overallocation of up to £22m was approved by Capital Investment Group in October to be managed across financial years to mitigate the potential risk of further slippage in 2024-25, an element of which is to cover the commitment to support airwave replacement. These are highlighted in Appendix A (page 13).

Committed and uncommitted spend will continue to be monitored throughout the year and tracking of these is highlighted in Appendix A (page 13).

The year-to-date capital spend at P7 is under budget by £16.7m (net of slippage).

We are anticipating additional IFRS16 ROU assets expenditure due to recent higher-than-expected rental increases in a few properties. This expenditure will be offset with additional SBR funding resulting in a net neutral position.

Reform
The year-to-date position is running £0.2m behind the Q2 forecast.

As previously reported, the reform forecast at Q2 of £25.1m, £0.1m (fully funded) above the budget position of £25.0m.

The Q2 reform forecast has resulted in the reduction of full year slippage of £5.4m, bringing it down to £0.1m from the original budgeted amount of £5.5m.

Committed and uncommitted spend will continue to be monitored throughout the year and tracking of these is highlighted in Appendix A (page 15).

The year-to-date reform spend at P7 is over budget by £0.3m (net of slippage).