Agenda item

Report for decision.

ORDERED that Executive:

1. Approves budget virements over £250,000 within the revenue budget (Appendix 1);
2. Approves budget virements over £250,000 within the Capital Programme (paragraph 4.47); and,
3. Approves the inclusion of new schemes and additions to existing schemes to the Capital Programme totalling £0.357m for 2025/26, which are all externally funded to either new or existing schemes (detailed in Appendix 5). Subject to approval this will increase the approved 2025/26 Capital Programme budget to £88.451m.

AGREED that Executive:

1. Notes the Council’s financial performance and forecast year-end financial outturns for revenue and capital budgets for the financial year 2025/26 as at Quarter Three, highlighting the budget pressures and the forecast year-end position if no further action is taken. At present, the revenue budget is forecast to be under pressure by £1.675m (1.1%) at year end after the proposed use of central contingences and other budgets; and,

2. Notes that Directors continue to implement recovery plans, mitigations and financial controls aimed at reducing their forecast budget pressures and acknowledges the ongoing requirement for Directors to continue refining and implementing these plans to achieve a balanced budget by the end of 2025/26. In support of this corporate revenue budget spending controls will continue to be applied during 2025/26.

The Executive Member for Finance submitted a report for Executive consideration presenting the Council’s forecasted financial position at Quarter Three 2025/26 and seeking approval for several required financial actions.

Members were informed that the projected year‑end revenue budget pressure stood at £7.719 million before mitigations, and that the proposed use of £6.044 million in central contingencies and other budgets would reduce this to a net pressure of £1.675 million (1.1%), representing a slight improvement from the Quarter Two position.

The report outlined continued budget pressures within key service areas, most significantly in Children’s Care, Adult Social Care, Environment and Community Services, and Strategic Commercial Properties, and noted that £7.675 million of required savings were forecast as undeliverable in 2025/26. Directors had therefore submitted financial recovery plans, supported by ongoing corporate spending controls, in an effort to stabilise the year‑end position.

In relation to capital activity, Members were advised that the report sought approval for a series of revenue and capital virements over £250,000 and the inclusion of £0.357 million of new and expanded externally funded schemes, increasing the revised Capital Programme for 2025/26 to £88.451 million. The projected capital outturn was reported as £64.173 million, reflecting £23.300 million of slippage to future years and £0.978 million of identified underspends.

The report also provided updates on the latest forecast for reserves, including expected usable unrestricted revenue reserves of £25.937 million at year‑end, the Dedicated Schools Grant position, which showed a forecast cumulative deficit of £31.213 million by 31 March 2026, and the Council’s borrowing, prudential indicators, and debt‑recovery performance.

Members were further informed of actions already implemented and those planned to address identified pressures, including strengthened financial controls, ongoing review of savings delivery, and continued monitoring of expenditure, reserves and cashflow.

Members noted that the graph on page 21 demonstrated that, despite the forecast overspend, the Council’s reserves were still expected to increase by year end compared with the position at the start of the financial year.

Members acknowledged areas of improvement and noted that, when viewed in the context of the wider Budget, several actions being taken to manage service demand were expected to contribute to reducing overspends over time.

Reference was made to the recent decision on school catering, which would result in additional costs, and Members emphasised the importance of ensuring such impacts were reflected and built into future budgets.

It was considered helpful to set out clearly why service demand levels were being reset and how this supported efforts to address budgetary pressures.

In relation to crematorium income, Members noted that if income targets could not realistically be achieved, it was appropriate to adjust the budget accordingly. Members also stressed that underspends within service areas should not be absorbed into future budgets, as services were expected to manage within their allocated resources rather than rely on historic overspends.

OPTIONS

The alternative would be to not approve the revenue budget virements over £250,000 and the changes to the Council’s capital programme, and to not report on the Council’s forecast year-end financial outturn for the financial year 2025/26. This would not enable the Executive to discharge their responsibilities to manage and control the revenue budget, capital programme and overall balance sheet position of the Council.

ORDERED that Executive:

1. Approves budget virements over £250,000 within the revenue budget (Appendix 1);
2. Approves budget virements over £250,000 within the Capital Programme (paragraph 4.47); and,
3. Approves the inclusion of new schemes and additions to existing schemes to the Capital Programme totalling £0.357m for 2025/26, which are all externally funded to either new or existing schemes (detailed in Appendix 5). Subject to approval this will increase the approved 2025/26 Capital Programme budget to £88.451m.

AGREED that Executive:

1. Notes the Council’s financial performance and forecast year-end financial outturns for revenue and capital budgets for the financial year 2025/26 as at Quarter Three, highlighting the budget pressures and the forecast year-end position if no further action is taken. At present, the revenue budget is forecast to be under pressure by £1.675m (1.1%) at year end after the proposed use of central contingences and other budgets; and,

2. Notes that Directors continue to implement recovery plans, mitigations and financial controls aimed at reducing their forecast budget pressures and acknowledges the ongoing requirement for Directors to continue refining and implementing these plans to achieve a balanced budget by the end of 2025/26. In support of this corporate revenue budget spending controls will continue to be applied during 2025/26.

REASONS

The recommendations would enable effective management of finances, in line with the Council’s Local Code of Corporate Governance, the Scheme of Delegation and financial regulations.