Revenue Budget 2024/25 - Update No.4
Perth and Kinross Council · 30 April 2025
Back to Finance and Resources Committee — 30 April 2025 and its agenda
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Our vision is a Perth and Kinross where everyone can live life well, free from poverty and inequality ___________________________________________________________________ Committee or Board: Finance and Resources Committee Date of Meeting: 30 April 2025 Report Title: Revenue Budget 2024/25 – Update No. 4 Report Number: 25/99 (Revised) Report Author: Scott Walker, Chief Finance Officer Organisational Lead: Scott Walker, Chief Finance Officer ___________________________________________________________________ 1. Purpose 1.1 The purpose of this Report is to provide an update on progress with the 2024/25 General Fund Revenue Budget based upon the January 2025 ledger, updated for any subsequent known material movements, and the projected financial position of the Housing Revenue Account. 1.2 The total net projected under spend on the 2024/25 General Fund Management Budget is £2.737 million (see Appendix 1). 1.3 The report also seeks approval for several adjustments to the 2025/26 Revenue Budget approved by Council on 26 February 2025 (Report No 25/36 refers) (see Appendix 9). 1.4 Sections 1. Purpose 2. Recommendations 3. Background 4. 2024/25 Revenue Monitoring 5. 2024/25 Revenue Budget Adjustments 6. 2025/26 Revenue Budget Adjustments 7. Financial Risks 8. Best Value Audit Report 9. Conclusion 10. Impact Value Assessment 11. Appendices
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2. Recommendations It is recommended that the Committee: 2.1 note the contents of the report. 2.2 note the projected outturn for the General Fund set out in Section 4 and Appendix 1 and 2. 2.3 approve the adjustments to 2024/25 General Fund budgets set out in Section 5 and Appendices 1,2,4,5,6 and 7. 2.4 approve the adjustments to the 2025/26 General Fund budgets set out in Section 6. 2.5 note the financial risks set out in Section 7 and Appendix 8. 2.6 confirms the Council’s approach to medium to longer term financial planning set out in Section 8. 3. Background 3.1 This report updates the Committee on progress with the 2024/25 Revenue Budget. Appendix 1 to this report summarises the current projected year end (outturn) position for each Service based upon the January 2025 ledger, updated for any subsequent known material movements. 3.2 The budget reflected in Column 1 of Appendix 1 to this report is that approved by the Council in setting the final 2024/25 Revenue Budget on 28 February 2024 (Report No. 24/63 refers). In addition, adjustments approved by the Finance & Resources Committee on 24 April, 18 September and 20 November 2024 and 5 February 2025 (Report Nos. 24/130, 24/260, 24/318, and 25/24 refer) are reflected in Appendix 1 (Column 2). 4. 2024/25 Revenue Monitoring Service Budgets 4.1 The total net projected under spend on Service budgets, which is summarised in Section 1 of Appendix 1 to this report, is £2.814 million which represents 0.8% of total net Service expenditure. Since the last update, this is a positive movement of £1.703 million. 4.2 Details of variances against individual Service budgets are shown in Appendix 2 to this report with the most significant variances summarised below. 4.3 The management of Service over and under spends are considered throughout the financial year and may also form part of the Revenue Budget strategy for future years.
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4.4 There remains a risk that the Council continues to experience increases in costs over the short to medium term that are higher than budgeted. Going forward, this may continue to have an impact on projected outturns and future years’ budgets. Education and Learning 4.5 The projected outturn for Education and Learning excluding Devolved School Management (DSM) and the Pupil Equity Fund (PEF) is currently anticipated to be £1.152 million or 0.7% less than budget which represents a movement of £1.152 million from the last update. The individual elements contributing to this movement are summarised in the following table with commentary on the significant movements below. Projected Outturn MovementFunction £’000 % £’000 Education & Learning Core Under spend (23) (1.8) - Nursery Sector Under spend (1,573) (6.6) (597) Primary Sector Over spend 878 1.9 (186) Secondary Sector Under spend (677) (13.4) (211) Special Sector Under spend (98) (0.8) (105) Home to School Transport Over spend 341 3.2 (53) TOTAL Under spend 1,152 (0.7) (1,152) 4.6 In the Nursery Sector, there is an increase in the projected under spend of £597,000 due to additional staff slippage and the accelerated delivery of approved savings. 4.7 In the Primary Sector there is a reduction in the projected over spend of £186,000 due to reduced expenditure on supply teachers and additional staff slippage. 4.8 Within the Secondary Sector, there is an increase in the projected under spend of £211,000 due to additional staff slippage across individual schools. 4.9 In the Special Sector, there is a reduction in the projected over spend of £105,000. This is primarily the result of additional staff slippage due to recruitment challenges and the receipt of non-recurring funding. 4.10 In Home to School Transport there is a reduction in the projected over spend of £53,000 following inclusion of savings from the strike days in October 2024 and school closures for weather events. 4.11 The Devolved School Management Scheme is currently projected to under spend by £235,000. However, some schools are experiencing challenges in delivering approved staff slippage targets and facing inflationary pressures against budgets that have been reduced over previous years. The budgets for the Devolved School Management scheme are allocated by financial year (April – March), whereas expenditure is incurred by academic year (August – June).
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4.12 At this stage of the academic year, expenditure met from the Pupil Equity Fund (PEF) is projected to be £150,000 less than the allocation from the Scottish Government of £1.864 million. It is anticipated that the projected under spend on teacher and support costs will be carried forward to 2025/26 to meet commitments. The budgets for the Pupil Equity Fund scheme are allocated by financial year, whereas expenditure is incurred by academic year. Children, Families and Justice 4.13 The projected outturn for Children, Families and Justice is £351,000 or 1.3% less than budget which represents a movement of £36,000 from the last update. The individual elements contributing to this position are summarised in the following table with narrative on the significant variances below. Projected Outturn MovementFunction £’000 % £’000 Children & Families Under spend (332) (1.5) 55 Justice Service Under spend (19) (0.4) (19) TOTAL Under spend (351) (1.3) 36 4.14 In Children and Families, there is a reduction in the projected under spend of £55,000 following an updating of updated projections relating to foster, kinship and adoption payments, partially offset by additional income and residential placements expenditure. 4.15 Within the Justice Service, there is a projected under spend of £19,000 due to additional staff slippage. Economy, Development and Planning 4.16 The projected outturn for Economy, Development and Planning is currently anticipated to be on target against budget which represents a movement of £30,000 from the last update. The individual elements contributing to this position are summarised in the following table with narrative on the significant variances below. Projected Outturn MovementFunction £’000 % £’000 Service Wide Under spend (175) (2.5) - Business and Investment Over spend 105 14.6 - Tourism, Culture and Place Over spend 250 2.3 100 Development Management and Building Standards Under spend (180) - (70) TOTAL On Target - - 30 4.17 In Tourism, Culture and Place, there is an increase in the projected over spend of £100,000 due to a shortfall in income.
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4.18 In Development Management and Building Standards there is an increase in the projected under spend of £70,000 due to additional planning & building warrant income. Environment and Infrastructure 4.19 The projected outturn for Environment and Infrastructure is currently anticipated to be £780,000 or 2.2% less than budget which represents a movement of £300,000 from the last update. The individual elements contributing to this position are summarised in the following table with narrative on the significant variances below. Projected Outturn MovementFunction £’000 % £’000 Service Wide Under spend (300) (1.7) - Traffic & Network Under spend (100) (9.2) (50) Street Lighting Partnership Under spend (100) (4.6) (100) Waste Disposal Under spend (500) (5.8) (150) Refuse Collection Over spend 100 2.2 - Fleet Over spend 120 - - TOTAL Under spend (780) (2.2) (300) 4.20 In Traffic and Network there is an increase in the projected under spend of £50,000 due to additional income from statutory road network charges. 4.21 Across the Street Lighting Partnership there is a projected under spend of £100,000 based on the latest maintenance projections. 4.22 Across Waste Disposal, there is an increase in projected under spend of £150,000. This is due to the receipt of additional income from the sale of recyclates (£200,000) and savings on the twin stream collection service (£50,000) partially offset by costs relating to essential depot and site works (£100,000). Housing and Communities 4.23 The projected outturn for Housing and Communities is currently anticipated to be £235,000 or 1.1% less than budget which represents a movement of £50,000 from the position last reported. The individual elements contributing to this movement are summarised in the following table with commentary on the significant movements below. Projected Outturn MovementFunction £’000 % £’000 Service Wide Under spend (310) (3.5) (100) Housing General Fund Over spend 90 1.1 50 Bereavement Services Over spend 15 1.9 - Public Transport Unit Under spend (30) (0.8) - TOTAL Under spend (235) (1.1) (50)
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4.24 On a Service Wide basis, there is an increase in the projected under spend of £100,000 due to updated staff cost projections. 4.25 In Housing General Fund, there is an increase in the projected over spend of £50,000 arising additional costs in supporting those affected by homelessness. Property Services 4.26 The projected outturn for Property Services is currently anticipated to be £470,000 or 0.7% more than budget which represents a movement of £80,000 from the position last reported. The individual elements contributing to this movement are summarised in the following table with commentary on the significant movements below. Projected Outturn MovementFunction £’000 % £’000 Service Wide Over spend 456 0.7 71 Energy Under spend (355) (4.3) (31) Maintenance Over spend 150 3.2 0 Facilities Management Over spend 389 6.2 50 Catering Under spend (170) (2.2) (170) TOTAL Over spend 470 0.7 (80) 4.27 On a Service Wide basis, there is a net increase in the projected over spend of £71,000 following an update on staff and other costs alongside income projections. 4.28 On Energy, there is an increase in the projected under spend of £31,000 due to updated rates and consumption information. 4.29 In Facilities Management, there is an increase in the projected over spend of £50,000 due to slippage in the implementation of the revised cleaning regime. 4.30 In Catering, there is an increase in the projected under spend of £170,000 due to a fall in the uptake of school meals and net savings from the strikes that took place in October 2024 offset by additional equipment purchases. Legal and Governance 4.31 Within Legal and Governance there is a projected under spend of £10,000 or 0.2% which represents a movement of £1,000. Customer and Digital Services 4.32 The projected outturn for Customer and Digital Services is currently anticipated to be £115,000 or 1.0% more than budget which represents a reduction of £4,000 from the last update. The individual elements contributing to this movement are summarised in the following table with commentary on the significant movements below.
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Projected Outturn Movement £’000 % £’000 IT Over spend 69 1.2 0 Revenues & Benefits Over spend 46 0.8 (4) TOTAL Over spend 115 1.0 (4) 4.33 In Revenues and Benefits there is a net reduction in the projected over spend of £4,000 due to updated projections on staff and income, partially offset by an increase in costs not recoverable from Housing Benefit. Strategic Planning and Performance 4.34 Within Strategic Planning and Performance, there is a projected under spend of £234,000 or 3.8% which represents an increase of £32,000 due to the accelerated delivery of approved savings. Finance and Business Support 4.35 The projected outturn for Finance and Business Support is currently anticipated to be £637,000 or 7.2% less than budget which represents an increase of £130,000 since the last update. The individual elements contributing to this movement are summarised in the following table with commentary on the significant variances below. Projected Outturn MovementFunction £’000 % £’000 Finance Under spend (76) (1.4) (45) Business Support Under spend (561) (15.7) (85) TOTAL Under spend (637) (7.2) (130) 4.36 In Finance, there is an increase in the projected under spend of £45,000 due to additional staff slippage and income. 4.37 Across Business Support, there is an increase in the projected under spends, primarily on staff costs due to the accelerated delivery of approved savings. Corporate Budgets 4.38 Included within Section 2 of Appendix 1 is an update on the Council’s Corporate budgets. More information on variances against individual budget headings are set out below. Health & Social care 4.39 On 19 March 2025, Perth and Kinross Integration Joint Board considered a report on the 2024/25 Financial Position (Report No. G/25/41 refers). After the application of earmarked Reserves and non-recurring funding, this report presented a projected over spend of £1.360 million. This position is consistent with many other integration joint boards who also face significant
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financial challenges in the current financial year. Further information on this position is set out in Appendix 3. 4.40 All of the projected over spend set out above (and in Appendix 3) relates to Health activity. Under the terms of the Integration Scheme, the Council is only exposed to the projected over spend in relation to Social Care. Therefore, all the projected over spend falls to NHS Tayside. 4.41 In addition, there is a projected over spend of £50,000 on non-delegated functions which is reflected in Appendix 1. This is primarily due to not achieving the slippage target and additional expenditure on IT related activity. Council Tax Reduction Scheme 4.42 The application of the Council Tax Reduction Scheme is a statutory function for the Council. The promotion and encouragement of take up is a key responsibility for the Council, particularly when households are facing significant pressures on the cost of living. 4.43 The level of expenditure incurred by the Council is dependent upon two main drivers, firstly, the average number of weekly caseload and, secondly, the average value of weekly entitlements. 4.44 In the current financial year, the Council is supporting approximately 8,600 households across Perth and Kinross with the Council Tax Reduction Scheme with an average award of £16.91 per week. This results in a projected over spend on the Council Tax Reduction Scheme of approximately £165,000 which is reflected in Appendix 1. Funding 4.45 Further information on the Council’s funding is set out within Section 3 of Appendix 1. More information on variances against individual budget headings are set out below. Council Tax Income 4.46 The amount of income the Council will generate from Council Tax is dependent on two main factors, firstly the collection levels and secondly, the number of Band D properties on the Valuation Roll. 4.47 Monitoring of Council Tax collection levels is carried out monthly. The following graph sets out collection performance to 31 March 2025 together with prior year comparative figures for the previous five financial years.
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2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% In Year Collection to 31 March 4.48 Between 2019/20 and 2023/24, the average collection figure to 31 March was 97.08%. The actual collection figure to 31 March 2025 was 97.34% which is 0.26% more than the five-year average but 0.19% less than the comparable position in 2024. Despite the in year collection percentage being slightly down on last year, in terms of the amount of actual cash collected, this increased by more than £5.515 million. 4.49 Secondly, in setting the Council’s Revenue Budget, assumptions are made on increases in the number of Band D equivalent properties. The graph set out below suggests that actual growth levels are in line with budget assumptions.
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4/1/2019 7/1/2019 10/1/2019 1/1/2020 4/1/2020 7/1/2020 10/1/2020 1/1/2021 4/1/2021 7/1/2021 10/1/2021 1/1/2022 4/1/2022 7/1/2022 10/1/2022 1/1/2023 4/1/2023 7/1/2023 10/1/2023 1/1/2024 4/1/2024 7/1/2024 10/1/2024 1/1/2025 4/1/2025 77,000 76,000 75,000 74,000 73,000 72,000 71,000 budget Band D Equivalents Council Tax - Number of Band D Equivalent Properties 4.50 Given the 2024/25 collection information set out above and the growth in the number of Band D equivalent properties, it is currently anticipated that Council Tax income will exceed the budget by £500,000 in the current financial year which is reflected in Appendix 1. Non-Domestic Rates 4.51 The actual collection rate to 31 March 2025 was 97.10%, compared to 96.46% for the same period in 2023/24. Again, for context, as well as increasing the in year collection rate, the Council also collected in excess of £3.849 million of non-domestic rates in 2024/25. Other Updates Arm’s Length External Organisations (ALEOs) 4.52 The Council continues to work closely with its three Arm’s Length External Organisations (ALEOs) – Live Active Leisure (LAL), Perth Theatre & Concert Hall (PTCH) and Culture Perth & Kinross (CPK) who make an important contribution to the Corporate Plan through the current Culture, Physical Activity and Sport Strategies approved by Council in May 2023. 4.53 Currently, for the current financial year, Live Active Leisure and Perth Theatre and Concert Hall are projecting deficits that are in line with their approved budgets. 4.54 As previously reported, Culture Perth and Kinross were projecting a deficit for 2024/25 that is more than the level originally budgeted. They have
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experienced additional costs in relation to the charitable arm of the organisation, particularly relating to the current year pay award, to historic equal pay claims and to the running costs of their establishments. 4.55 The Committee was previously advised that the potential deficit could be £170,000 more than budget and delegated authority to the Chief Finance Officer to provide additional financial support up to that amount if required. 4.56 Council officers have continued to work with Culture Perth and Kinross to provide support and challenge. Furthermore, measures have been implemented across Culture Perth and Kinross to, as far as possible, restrict all non-essential spend. These proactive measures have meant that the Council has been able to reduce the level of additional support required to £100,000. Approval is sought later in the report to apply the remaining balance of £70,000 to the Culture earmarked Reserve. 4.57 The long-term sustainability of the Council’s ALEOs across future financial years remains challenging. The Council’s Transformation and Change Programme includes a review of ALEOs, and the Council will be asked to consider options on future models of service delivery later this year. Tayside Contracts 4.58 On 10 March 2025, the Tayside Contracts Joint Committee considered their latest financial operating statement for the 9 months to 31 December 2024. 4.59 This statement set out a projected distributable surplus of £594,000 for the current financial year. This is made up of a £440,000 projected surplus in Construction, a projected break even position in Catering and projected surplus of £144,000 in Facilities Management. 4.60 An analysis of how income and expenditure compare with budget is set out in the following table. Projected Outturn £m Budget £m Variance £m Income 96.007 94.289 1.718 Direct Costs (79.627) 77.066 (2.561) Indirect Costs (15.786) 16.552 0.766 Distributable Surplus 0.594 0.671 (0.077) 4.61 It is anticipated that the Council will receive £244,000 of the distributable surplus which is less than the target that is independently set by the Council and this is reflected in Appendix 1. 4.62 During 2024/25, Tayside Contracts incurred non-recurring expenditure associated with restructuring of services. Had these costs not been incurred, the projected distributable surplus would have been almost £1 million which would have been available to be returned to the constituent Councils. The
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restructuring is expected to generate annual savings of approximately £543,000. 4.63 In addition to the distributable surplus identified above, Perth and Kinross Council will also receive a rebate of £326,000 from the Catering Division. This is a direct benefit of the revised invoicing arrangements agreed between Tayside Contracts and all three constituent Councils and is reflected in Appendix 1 under Property. Housing Revenue Account 4.64 The Housing Revenue Account is currently projected to break even in the current financial year. The main elements are summarised below and set out in Appendix 5. 4.65 Within this projection, £455,000 has been applied from HRA earmarked Reserves to support the needs of tenants. 4.66 Across the Housing Revenue Account activity there is a net reduction in the projected under spend of £40,000. Within this movement, additional costs in relation to improvements and administration are partially offset by reduced costs in repairs. 4.67 As a result of the variances identified above Capital from Current Revenue will reduce by £40,000. 5. 2024/25 Revenue Budget Adjustments 2024/25 Additional Funding 5.1 Since elected members were provided with the 2024/25 Revenue Budget update on 5 February 2025 (Report No. 25/24 refers), notification has been received of additional resources in the current financial year from several sources as set out below. To ensure that the 2024/25 Management Budget continues to reflect the operational requirements of the Council, several adjustments are required, which are summarised below and included in Appendix 1 and Appendix 5. Scottish Government – Revenue Support Grant: SNCT Pay Offer: £7,000 (Education and Learning) Educational Psychologist Training: £19,000 (Education and Learning) 5.2 The Sottish Government has advised that the increase in Revenue Support Grant identified above of £26,000 will be made through a redetermination of the Council’s funding. It is therefore necessary to adjust budgets for Education and Learning and Revenue Support Grant. 5.3 ACTION: The Committee is asked to approve the adjustments set out at paragraph 5.1 which are reflected in Appendix 1 (Column 3) to this report.
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Other Funding 5.4 Other funding amounting to £368,668 has been paid outside the Revenue Support Grant mechanism as Other Grant income and is, therefore, cost neutral in terms of the budget summary. Details of this funding is set out in Appendix 5. 5.5 ACTION: The Committee is asked to note the receipt of £368,668 of additional resources, with this funding being reflected within Economy, Development and Planning, Environment and Infrastructure and Housing and Communities as additional grant income. The current projected outturn assumes that all these additional resources will be fully expended in 2024/25 or will be carried forward under the terms of the grant award. 2024/25 Virements Contribution to/from Capital Fund 5.6 In line with the strategy for managing the Council’s Capital Programme over the medium term, it is recommended that the eventual over or under spend on Capital Financing Costs and Interest on Revenue Balances be transferred from or to the Capital Fund. 5.7 The latest monitoring indicates a projected increase in capital financing costs (loan charges) of £3,000 based on the latest treasury management activity and a reduction of £302,000 in income from interest on revenue balances due to reduced cashflows. This will result in a reduced Contribution to the Capital Fund of £305,000 in the current financial year. 5.8 ACTION: The Committee is requested to approve the virement of £3,000 to the Capital Financing Costs (Loan Charges) Budget and £302,000 to Interest on Revenue Balances with a corresponding reduction in the projected Contribution to the Capital Fund. These adjustments have been reflected in Appendix 1 (Column 4) to this report. Service Virements 5.9 To ensure that the 2024/25 Management Revenue Budget continues to reflect current Service needs and operational requirements there are several virements that are reflected in Appendix 1 (column 4) that have been processed in line with the Scheme of Administration. 5.10 This includes a proposal to transfer a refund of £292,000 for insurance on the investment in learning estate to the Council’s own Insurance Fund to mitigate against rising costs. 2024/25 Movements in Reserves 5.11 Included at Appendix 6 is an update on the Council’s General Fund Reserves which includes the following:
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Earmarked and unearmarked Reserves at 31 March 2024 (per unaudited Annual Accounts). previously approved contributions to and from earmarked Reserves in 2024/25. 2025/26 and 2026/27. The impact of proposals within this report on earmarked Reserves. The impact of the latest revenue monitoring on the level of unearmarked Reserves. 5.12 The earmarked Reserves are brigaded under three headings as follows: i. Balances held under statute / regulation – these earmarked Reserves are prescribed under legislation, and the Council has limited discretion in how they are applied. ii. Balances held for specific (previously approved) purposes – the purpose of these earmarked Reserves has been previously approved by Council in either the Reserves Strategy or Annual Accounts iii. Balances held for other purposes – the creation of these earmarked Reserves has been approved by Council, but not specific proposals. 5.13 Going forward proposals involving earmarked Reserves under i. and ii. above will be advised to Committee in summary as Council either has limited discretion or previously approved their application. Proposals to apply earmarked Reserves under iii. above will include more detail for elected member consideration. Balances Held Under Statute / Regulation 5.14 Approval is sought to draw down resources of £139,000 from the Revenue Grants earmarked Reserve, specifically in relation to the Green Capital Recovery Fund. Approval is also sought to return £36,000 to the Council Tax Income for Affordable Housing earmarked Reserve due to a rephasing of the Empty Homes Initiative. 5.15 ACTION: The Committee is asked to approve the transfer of £139,000 from Revenue Grants to Economy, Development and Planning and £36,000 from the Council Tax Income for Affordable Housing earmarked Reserve to Housing & Communities. These adjustments are reflected in Appendix 1 (Column 5) to the report. Balances Held for Specific (Previously Approved) Purposes 5.16 These earmarked Reserves have previously been approved by elected members in their consideration of the Reserves Strategy or Annual Accounts. 5.17 Specifically, authority is sought to transfer: £49,000 from Education and Learning to the School Counsellor earmarked Reserve. £485,000 for the projects listed in Appendix 7 to the Council Approved Revenue Budget Flexibility.
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£166,000 from Economy Development and Planning to the Culture earmarked Reserve. £32,000 to Property from the Cemetery Walls earmarked Reserve. from Services to the Transformation and Workforce Management earmarked Reserve in line with actual spending profiles. 5.18 ACTION: The Committee is asked to approve the transfer to / from earmarked Reserves set out in paragraph 11.7 above. These adjustments are reflected in Appendix 1 (Column 5) to the report. Balances Held for Other Purposes 5.19 Approval is sought for several adjustments relating to the earmarked Reserve for Transformation and Workforce Management as follows: £189,000 from the earmarked Reserve to fund workforce management costs that deliver recurring savings. £73,000 to the earmarked Reserve to reflect updated expenditure plans for the Procurement and Finance Transformation projects. 5.20 Approval is also sought for several adjustments relating to the earmarked Reserve for Anti-Poverty as follows: £101,000 to the earmarked Reserve to reflect updated spending plans. 5.21 ACTION: The Committee is asked to approve the adjustments to the Transformation and Workforce Management and Anti-Poverty earmarked Reserves set out in paragraphs 5.18 and 5.19. These adjustments are reflected in Appendix 1 (Column 5) to the report. Approach for Financial Support – Perth 125 Live 5.22 During 2025, Perth Theatre and Concert Hall will commemorate two significant anniversaries. Firstly, Perth Theatre came into existence 125 years ago, secondly Perth Concert Hall, 20 years ago. 5.23 The Council has been approached for funding of £75,000 to support a large scale outdoor event in September 2025. This will supplement funding already committed by Creative Scotland and the Gannochy Trust as well as sponsorship by St. Johnstone Football Club. 5.24 It is proposed that this is funded from unearmarked Reserves which based on Appendix 6 are projected to exceed 4% at 31 March 2025. 5.25 ACTION: The Committee is asked to approve funding for Perth 125 Live with a contribution from unearmarked Reserves. 5.26 The Committee was previously advised that an insurance claim had been submitted for the cost associated with the cancellation of the November 2024
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Christmas Light switch on. The Council has now received notification that the claim has been approved and the sum of £97,000 will be paid. As previously agreed by the Committee, when received, this amount will be applied to an earmarked reserve for future events to augment activity in the future. Unearmarked Reserves 5.27 Based on the latest information, the level of unearmarked Reserves at 31 March 2025 is projected to be £19.486 million or 4.2%. This position will change as the final outturns for 2024/25 become available for the Annual Accounts. 5.28 The Reserves Strategy sets out arrange of between 2% and 4%. Should the final level of unearmarked Reserves exceed the 4% range, approval is sought to apply the excess to a new earmarked Reserve to support Communities. This will be included within the unaudited Annual Accounts that will be considered by the Audit and Risk Committee in June 2025 and confirmed at the meeting of the Finance and Resources Committee in September 2025. 6. 2025/26 Revenue Budget 2025/26 Additional Funding 6.1 Since the 2025/26 Revenue Budget was approved on 26 February 2025 (Report No. 25/36 refers), the Council has been advised of get update on 5 February 2025 (Report No. 25/24 refers), notification has been received of the following additional resources. To ensure that the 2025/26 Management Budget continues to reflect the operational requirements of the Council, several adjustments are required, which are summarised below and included in Appendix 9 and Appendix 6. Scottish Government – Revenue Support Grant: Employers National Insurance Contribution: £3.915 million Scottish Government – Ring Fenced Grant: Justice Social Work Grant: £1.922 million (Children, Families and Justice) 6.2 The Scottish Government has advised that the increase in funding identified above of £5.837 million will be made through a redetermination of the Council’s funding. 6.3 ACTION: The Committee is asked to approve the adjustments set out at paragraph 6.1 which are reflected in Appendix 9 (Column 3) to this report.
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Other Funding 6.4 Other funding amounting of £1.140 million will be paid outside the Revenue Support Grant mechanism as Other Grant income and is, therefore, cost neutral in terms of the budget summary. Details of this funding is set out in Appendix 5. 6.5 ACTION: The Committee is asked to note the receipt of £1.140 million of additional resources, with this funding being reflected within Children, Families and Justice as additional grant income. The current projected outturn assumes that all these additional resources will be fully expended in 2025/26 or will be carried forward under the terms of the grant award. 2025/26 Virements 6.6 To ensure that the 2025/26 Management Revenue Budget continues to reflect current Service needs and operational requirements there are several virements that are reflected in Appendix 1 (column 4) that have been processed in line with the Scheme of Administration. 2025/26 Movements in Reserves 6.7 There are a several adjustments set out above, where resources were applied to Reserves in 2024/25 that require to be drawn down in 2025/26 which are summarised as: School Counsellors - £49,000 Procurement and Finance Transformation - £73,000 Council Approved Budget Flexibility - £485,000 Anti Poverty - £101,000 6.8 In addition, approval is sought to apply £140,000 from the Transformation and Workforce Management earmarked Reserve to for additional short-term capacity to support the Leadership Phase 2 Review (£70,000 in 2025/26 and £70,000 in 2026/27). This will include elements of organisational development and design with a key focus on cultural change and improving individual and organisational effectiveness. This investment will support delivery of the £1.6 million savings target that is due to be delivered for April 2026. 6.9 ACTION: The Committee is asked to approve the adjustments set out at in paragraphs 6.7 and 6.8 which are reflected in Appendix 9 (Column 5) to this report. 6.10 An opportunity has arisen for the Council to purchase a piece of land to the front curtilage of the former Crieff Primary School for £125,000 which will allow for the redevelopment of the site for affordable housing. It is proposed that this is funded by a contribution from the Council Tax Income for Affordable Housing earmarked Reserve in 2025/26.
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6.11 ACTION: The Committee is asked to approve the transfer of £125,000 from the Council Tax Income for Affordable Housing earmarked Reserve to Economy, Development and Planning which is reflected in Appendix 9 (Column 5) to this report. 7. Financial Risks 7.1 In preparing the Council's revenue monitoring, officers have considered the key strategic, operational and financial risks facing the Council over this period. Whilst the risks may be managed in the current financial year, there is the potential for there to be an impact in the future. 7.2 To alleviate the impact these risks may have if they occur, a number of general risk mitigation factors are utilised by the Council which include detailed budget monitoring carried out by Services and having general fund balances available to meet unforeseen expenditure. 7.3 Risks are captured within the body of the report with a summary being maintained in Appendix 8. 7.4 Given the latest revenue monitoring position, which is set out in this report, the risks to 2024/25 have been removed or reduced. 7.5 Going forward, risks to the 2025/26 Revenue Budget and beyond will be captured with mitigating actions identified. 8. Best Value Audit Report 8.1 The Council has an outstanding Best Value Assurance Report action in relation to longer term financial planning covering a five to ten year period. Should the Committee be minded to accept the recommendation set out below at paragraph 8.5, this will deal with this action and satisfy the requirements of Audit Scotland. 8.2 There are limited resources available in the public domain that the Council can rely on to inform longer term financial planning with varying degrees of certainty. 8.3 However, notwithstanding this, the Council does have a suite of measures in place to support its approach to longer term financial planning as follows: Three year revenue budgets covering financial years 2025/26, 2026/27 and 2027/28. A six year Medium Term Financial Plan through to 2030/31 that is updated annually. A six year funded Capital Budget through to 2030/31. A thirty year Capital Investment Plan through to 2054/55. Capital Fund monitoring, including the modelling of the capacity to fund the Capital Budget through to the late 2070s.
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8.4 It is the view of the Chief Finance Officer that this information is sufficient in order to provide elected members with information and confidence on the Council’s finances over the longer term. 8.5 ACTION: The Committee is asked to confirm the Council’s approach to medium to longer term financial planning. 8.6 In addition, the Best Value Audit Report suggested a review of the Community Planning Partnership (CPP). The review involved several steps including, a review of data and intelligence including community impact assessments to help inform the new Local Outcome Improvement Plan (LOIP) in 2022. Following this a CPP self-assessment was carried out and a CPP risk profile was developed in 2023. This led to further work in 2024 to revise the CPP priorities and agree on the new CPP governance arrangements, with an update to the LOIP in early 2025. This will strengthen and improve governance and the accountability process for the work of the CPP going forward and ensure that the CPP is working together to achieve collective goals and priorities for the community. 9. Conclusion 9.1 This report provides an update on the financial performance of Perth and Kinross Council for 2024/25. The report highlights a projected net under spend of £2.737 million. Key areas contributing to this underspend include Education and Learning, Children, Families and Justice, and Environment and Infrastructure. 9.2 The report also outlines several adjustments to the 2025/26 Revenue Budget, including additional funding from the Scottish Government and various virements to ensure the budget aligns with current service needs. 9.3 Financial risks are identified and mitigated through detailed budget monitoring and the availability of general fund balances. 9.4 The latest monitoring indicates that the Council will have unearmarked General Fund balances of £19.486 million or 4.2% on 31 March 2025. 9.5 In conclusion, the Council's proactive financial management has resulted in a favourable projected outturn for 2024/25, with strategic adjustments and risk mitigation measures in place to support future financial stability. 9.6 The report recommends approval of the proposed budget adjustments and notes the importance of continued vigilance in managing financial risks. 10. Impact and Value Assessment Impact and Value Assessment
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11. Appendices 11.1 Appendix 1 – 2024/25 Management Budget 11.2 Appendix 2 – General Fund 2024/25 Projected Outturn – Service Analysis 11.3 Appendix 3 – Perth & Kinross IJB 2024/25 outturn 11.4 Appendix 4 – Housing Revenue Account 2024/25 Projected Outturn 11.5 Appendix 5 – Other Fundings 11.6 Appendix 6 – General Fund Balances 11.7 Appendix 7 – Council Approved Revenue Budget Flexibility 2024/25 11.8 Appendix 8 – Financial Risks 11.9 Appendix 9 – 2025/26 Management Budget