Issue - meetings

Report by the Strategic Director of Finance and Customer Services.

Recommendations:

That Cabinet

1. Note the current General Fund Revenue Budget forecast underspend of £0.1m.

2. Note the updated position of the Capital Programme.

Consideration was given to the report which set out the financial position as at the end of May 2025 and forecast for the remainder of the financial year, based on actual costs and income for the first two months of 2025/26. As at May 2025, the Council’s financial position for  ...  view the full minutes text for item 21

Report by the Strategic Director of Finance and Customer Services.

Recommendations:

That Cabinet

1. Note the current General Fund Revenue Budget forecast underspend of £0.1m.

2. Note the updated position of the Capital Programme.

At the Chair’s invitation the Cabinet Member for Finance and Community Safety introduced the report noting the following:

·       The Council was projecting a small underspend of £0.1 million; this was composed of an overspend of £4.2 million within directorates and offset by a £4.3 million underspend in central services.

·       The main financial pressure was within Children’s Services, particularly due to the increased demand for placements and rising costs in the children’s social care market.

·       The Treasury Management Strategy continued to perform well.

• The Council was using a strategy of minimising borrowing levels and relying on short-term borrowing to reduce interest costs.

·       This approach had been supported by delays in capital programme delivery, which has pushed back the need to borrow.

·       The treasury strategy was expected to generate savings that would help offset wider budget pressures across the Council.

·       In the current climate of economic difficulty and financial constraint, it was essential that spending remained aligned with the Council’s budget.

·       Close monitoring of expenditure and income across all services would remain a top priority.

The Chair invited members of the Overview and Scrutiny Management Board (OSMB) to raise questions and queries on the points raised earlier.

Councillor Blackham expressed frustration over the continued overspend in Children and Young People’s Services (CYPS), stating that it undermined the credibility of the budget process. He emphasised the need for a realistic budget that reflects actual service costs. The Assistant Director Financial Services acknowledged the concern and reiterated that CYPS spending had been reducing year-on-year. The overspend was due to non-delivery of savings plans. The Council had included a contingency for CYPS in the 2025–26 budget and expected to reassess the budget alignment during the year, especially after the residential programme was fully implemented.

The Chair asked how the Council was managing the financial risk associated with the Dedicated Schools Grant (DSG) deficit, especially with the statutory protection being removed. The Assistant Director Financial Services confirmed that the statutory override had been extended for two more years, reducing immediate risk. The Council was continuing its DSG reduction plans, focusing on increasing local pupil placements to avoid expensive out-of-borough placements. The DSG deficit had been reduced from £23 million to around £1 million, projected to be £3 million at the end of the financial year. However, national SEND reforms were still pending and could impact future funding.

Resolved: That the Overview and Scrutiny Management Board supported the recommendations that Cabinet:

1.    Note the current General Fund Revenue Budget forecast underspend of £0.1m.

2.    Note the updated position of the Capital Programme.