Agenda item

Report by the Strategic Director of Finance and Customer Services.

Recommendations

That Cabinet:

1. Note the revenue outturn position for 2024/25.

2. Note the budgeted transfer to HRA reserves increased by £4.4m following the revenue and capital outturn positions.

3. Note the carry forward of the combined surplus schools balance of £2.3m in accordance with the Department for Education regulations.

4. Note the reserves position set out in paragraphs 2.52 to 2.57.

5. Note the capital outturn, funding position and programme variations as set out in paragraphs 2.58 to 2.91.

6. Approve the capital budget variations as detailed in section 2.79 to 2.82 of the report.

7. Note the position on CRSTS Revenue Grant as set out in paragraphs 2.92 to 2.94 and delegate the decision to allocate and spend the remaining grant to the Assistant Director Planning Regeneration and Transport in consultation with the Section 151 Officer and the Cabinet Member.

Consideration was given to the report which outlined the final revenue and capital outturn position for 2024/25. The Council set a balanced budget position for 2024/25 as part of the Budget and Council Tax Report 2024/25 approved at Council 28 February 2024. A Revenue Budget of £326.1m was set for General Fund services and this excluded schools’ budgets and Housing Revenue Account (HRA). The Medium-Term Financial Strategy (MTFS) contained within that report included a balanced position for 2024/25, and a funding gap of £6.6m for 2025/26. This Budget and MTFS position was based on sound financial assumptions at the time, factoring in budget contingencies for service demand pressures in particular within Social Care and Home to School Transport.

The Council had seen, during 2024/25, significant demand and market pressure challenges in Adult Social Care and pressures above the planned

contingencies for Children’s Social Care and Home to School Transport. In addition, the Council was still impacted by the inflationary pressures in the economy, which had increased the Council’s base costs further.

The December Financial Monitoring Report 2024/25 submitted to Cabinet on 10 February 2025 outlined that the Council anticipated an overspend of £3.1m. This forecast position was also outlined in the Budget and Council Tax 2025/26 report which was submitted to the same Cabinet meeting and also to Council on 5 March 2025. The overspend was proposed to be funded from the Budget and Financial Strategy Reserve. However, the report noted the Council’s intention was to further improve that outturn position, if possible, which would see a lower value call on reserves. The actual financial outturn position reflected an overspend of £0.3m for the financial year 2024/25. This was an improvement of £2.8m from the December Financial Monitoring reported to February Cabinet, as a result of service areas delivering further

savings ahead of year-end, maximising grant allocations, improvements in income were recognised and the Council generated further savings in Treasury Management. The Council’s final overspend position of £0.3m had been funded by use of £0.3m of the Budget and Financial Strategy Reserve as approved within the Budget and Council Tax Report 2025/26.

Following approval of the 2024/25 Budget, the global economic position had improved with inflation easing, reducing from 11.1% in October 2022 at its peak back down to 1.7% in September 2024. Inflation had since started to rise again as the economy had slowed with inflation back at 2.6% in March 2025, highlighting that the economic uncertainty had not yet ended. The Council’s base costs had continued to significantly rise across the period of high inflation and needed to continue to be factored into the Budget and MTFS moving forwards. Energy prices, whilst also positively reducing, were still projected to cost the Council around 60% more in 2025/26 than the outturn position for 2022/23, prior to the significant inflationary increase. These financial challenges were being regularly reviewed as part of the Council’s ongoing Medium Term Financial Planning.

Although inflation was easing, the Local Government Association (LGA) Pay Award was agreed with a financial impact £3m greater than was assumed within the Budget for 2024/25. However, the majority of this was covered by in-year savings within Treasury Management.

The Council’s General Fund minimum balance had remained at £25m as planned and set out within the Council’s Reserves Strategy reported in the Budget and Council Tax Report 2024/25 and 2025/26. The reserve was held to protect the Council against unforeseen events and realisation of contingent liabilities.

The Housing Revenue Account had an underspend of £4.4m. As a result of this the HRA was able to transfer to reserves £5.8m, instead of the planned £1.4m, an improvement of £4.4m. This would help the HRA to mitigate the financial challenges presented by increased maintenance requirements over the medium term.

The Capital Programme outturn position showed slippage and underspend of £31.8m against the Budget for 2024/25. Capital expenditure (programme delivery) in the year was in line with previous years at £140.6m (2023/24 outturn was £140.7m).

Councillor Alam wished to place on record his thanks to Judith Badger, Strategic Director of Finance and Customer Services, Rob Mahon, Assistant Director of Financial Services and all officers and members for their hard work on the Council’s finances throughout the year.

The report was considered by the Overview and Scrutiny Management

Board (OSMB), who advised that the recommendations be supported.

Resolved:

That Cabinet:

1.    Note the revenue outturn position for 2024/25.

2.    Note the budgeted transfer to HRA reserves increased by £4.4m following the revenue and capital outturn positions.

3.    Note the carry forward of the combined surplus schools balance of £2.3m in accordance with the Department for Education regulations.

4.    Note the reserves position set out in paragraphs 2.52 to 2.57.

5.    Note the capital outturn, funding position and programme variations as set out in paragraphs 2.58 to 2.91.

6.    Approve the capital budget variations as detailed in section 2.79 to 2.82 of the report.

7.    Note the position on CRSTS Revenue Grant as set out in paragraphs 2.92 to 2.94 and delegate the decision to allocate and spend the remaining grant to the Assistant Director Planning Regeneration and Transport in consultation with the Section 151 Officer and the Cabinet Member.