Agenda item

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 2025/26 remained positive with a projected underspend of £0.1m. This position was made up of a Directorate overspend of £4.2m, offset by a projected Central Service underspend of £4.3m.

The pressures reported in the Directorates were largely due to demand led pressures, in particular in relation to Children’s residential placements. Increased costs were also being felt across the wider Children’s social care market, this was leading to market prices increasing at above inflation levels, placing further pressures on the Council’s Budget. These pressures were anticipated, and a corporate provision was maintained within Central Services as part of the Budget and Council Tax Report 2025/26.

Early indications also suggested that the Local Government Pay Award would be higher than budgeted, and the Council had no control over the level of pay award agreed. As a result, Central Services had a £4.3m forecast underspend, reflecting the budgetary support from the £5.4m Social Care Contingency set aside as part of the Budget and Council Tax Report 2025/26 and Treasury Management Savings. This contingency and treasury savings were offset by the estimated financial impact of the Local Government Pay Award.

The Council’s Treasury Management Strategy continued to perform well with the Council’s approach to borrowing adapted to minimise the level of borrowing and borrow short term to ultimately minimise interest costs. The position had also improved following the outturn for 2024/25 because of the re-profiling of the Capital Programme delivery, which pushed back the need to borrow. It was estimated that this approach should see the Council generate savings to support Council wide pressures such as the impact of the pay award. However, it was noted that the Council’s Budget and Council Tax Report 2025/26 approved a requirement for the Treasury Management Strategy to save at least £3m in 2025/26. This was on track, however

economic and market conditions are out of the Council’s control.

The report also provided an updated position on the Council’s Capital Programme. The Capital Programme 2025/26 had been updated following the 2024/25 outturn and the latest information on project position and delivery plans. The Capital Programme 2025/26 had been reset at £211.024m split between the General Fund (£149.275m) and HRA (£61.749m.) This position would act as the original budget position for 2025/26 and future reports would explain how this budget moved during the year due to project and programme variations, but the value would remain as the original budget.

The 2025/26 programme had decreased overall by £30.969m from the position reported to Cabinet in March 2025. The movement was based on the latest profiles of expenditure against schemes, following the 2024/25 outturn position, factoring in slippage from 2024/25 and new grant funding.

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

2.    Note the updated position of the Capital Programme.