Agenda item

To note. 

The Executive Member for Finance will be in attendance to present OSB with the Council’s financial position at year-end 2025/26.

The Chair invited the Director of Finance to present the report.

Members were advised quarterly update reports were always considered by Executive prior to being submitted to OSB. There had been minor updates in the intervening period between Executive and OSB, which did not have any substantive impact on the report, its conclusions or decisions.

The report submitted to OSB had been considered and approved by Executive on 10 June 2026. The report had shown an overspend of £1.793million after the application of contingencies and that reserves had improved. While overspent, the position was a significant improvement on the 2025/26 quarter one forecast of an overspend of £4.5 million.

The reported overspend was largely attributed to demand led services, notably children’s social care, which had experienced an overspend of £7.45 million. However, there had been underspending in central budgets.

The dedicated schools grant showed a cumulative deficit of £29million following an in-year deficit of £7.1million. While 90% of the Dedicated Schools Grant commitment was provided by government, the Council had budgeted for 10%.

Members were also advised of an underspend in the Capital programme of approximately £30m and that work was being carried out to prevent further slippage in this area.

The Director of Finance invited questions from the Board.

A Member queried how much the Council owed in loans. It was clarified that information would be contained in the Statement of Accounts and the Treasury Management report which was due to be considered by Executive on 8 July 2026. Overall, the Council was not overborrowing. It was agreed that the Director of Finance would bring the Treasury Management report to the next meeting of OSB to provide answers to the question posed.

The Member further queried how much the Council was spending on interest associated with Council loans. It was clarified that approximately £13 million had been budgeted for capital costs. For 2025/26 the Council was spending approximately 8% against this budget and the Director of Finance stated this would not go above 10%. It was also commented this was a large budget that needed effective management.

The Chief Executive stated that, while the numbers being discussed were large, there were established prudential indicators, scrutinised by CIPFA, which dictated sensible levels of borrowing. It was stated that Middlesbrough was comparatively comfortable in this regard as other authorities had run into difficulty with external agencies.

A conversation took place during which comments were made that the Council needed to maintain its payments on borrowing.

A Member drew the Board’s attention to page three of appendix seven (Revised Capital Programme Forecasts) and the entry relating to Section 106 Marton West Beck. It was agreed that the Director of Finance would provide the Member with detailed costs on the project.

A question was posed about the costs to the Council following changes to the Local Government Pension Scheme regulations which allowed elected Members to join the pension scheme. It was clarified this was difficult to quantify as it was unknown how many Members had joined the scheme.

When this figure was known the cost to the Council would be more accurate. However, it was commented that the cost to the Council would be minimal and was not a concern for the Council financially.

ORDERED that

1.     The Director of Finance present the Treasury Management Report to the next meeting of OSB on 29 July 2026 to address questions of Council borrowing.

2.     The Director of Finance provide detailed costs associated with the entry Section 106 Marton West Beck in Appendix seven (Revised Capital Programme).

3.     That the information presented be noted.