Agenda item

Report from the Strategic Director of Finance and Customer Services.

Recommendations:

That Cabinet:

1. Note the current General Fund Revenue Budget forecast overspend of £0.9m.

2. Note that whilst there is a projected overspend, the Council expects to be able to manage this pressure during the year and return to a balanced position following mitigating actions. Should that not be possible the Council will need to draw on its reserves to balance the 2025/26 financial position.

3. Note the updated position of the Capital Programme.

4. Note the update on the Local Authority Better Care Fund 2025/26 - Discharge Grant Commitments.

Consideration was given to the report which set out the financial position as at the end of September 2025 and forecast for the remainder of the financial year, based on actual costs and income for the first half of 2025/26. As of September 2025, the Council’s financial position for 2025/26 remained positive. Whilst there was still a forecast overspend of £0.9m, this was an improvement of £1.5m since the reported position in July, as positive management activity took effect. The forecast position was made up of a Directorate overspend of £6.2m, offset by a projected Central Service underspend of £5.3m. Whilst this was an overspend, the Council expected

to be able to manage this pressure further during the year and return to a balanced position following mitigating actions.

As of September 2025, the Council estimated an overspend against the Directorates of £6.2m for the financial year 2025/26. This was largely due to demand and market pressures in relation to Children’s residential placements and placement types. Market prices were 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.

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 to borrow short term to ultimately minimise interest costs. It was estimated that this approach should see the Council generate savings to support Council wide pressures.  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 were out of the Council’s control.

Paragraph 2.16 of the report set out the Capital Programme Update. The revised Capital Programme was £211.687m split between the General Fund (£138.907m) and Housing Revenue Account (£72.780m.) This was an increase of £2.208m from the position reported to Cabinet on 15 September 2025, the majority of which related to revised grant and funding estimates. The movement was based on the latest profiles of expenditure against schemes, including slippage re-profiles and corrections of £879k and new grant funding added to the programme of £3.086m.

The report also provided an update on Local Authority Better Care Fund 2025/26 - Discharge Grant Commitments. As part of the Financial Settlement 2025/26 the Discharge Grant was combined into the Local Authority Better Care Fund from 2025/26 onwards. As such, the Discharge Grant of £3.4m ceased to exist from the outset of 2025/26. However, as this was confirmed by Government late in the Budget setting process for 2025/26, the Council had needed to fund some of the activity that was already underway to ensure key projects and programmes could be completed and allow time to assess what areas of activity the Council needed to continue. The Council’s Medium Term Financial Strategy could not accommodate the continuation of £3m of activity but could accommodate a phased reduction of the Discharge Grant  activity.

Resolved:

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £0.9m.

2.    Note that whilst there is a projected overspend, the Council expects to be able to manage this pressure during the year and return to a balanced position following mitigating actions. Should that not be possible the Council will need to draw on its reserves to balance the 2025/26 financial position.

3.    Note the updated position of the Capital Programme.

4.    Note the update on the Local Authority Better Care Fund 2025/26 - Discharge Grant Commitments.