Agenda item

Report from the Executive Director of Corporate Services.

Recommendations:

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £3.4m.

2.    Note the projected overspend and that whilst the Council aims to manage this pressure, should that not be possible use of reserves will be required to balance the 2025/26 financial position.

3.    Note the updated position of the Capital Programme.

4.    Approve the capital budget variations as detailed in section 2.17 of the report.

Consideration was given to the report which set out the financial position as at the end of November 2025 and forecast for the remainder of the financial year, based on actual costs and income for the first eight months of 2025/26. Financial performance was a key element within the assessment of the Council’s overall performance framework and was essential to achievement of the objectives within the Council’s policy agenda. To that end, this was the fourth financial monitoring report of a series of reports for the current financial year which would continue to be brought forward to Cabinet on a regular basis.

As of November 2025, the Council’s forecast outturn for 2025/26 was an overspend of £3.4m, which was a worsening of the £0.9m overspend position reported in September financial monitoring. The increased overspend was primarily due to increased costs of care packages within Adult Social Care Mental Health placements and a number of backdated payments for packages across Older People and Physical and Sensory Disabilities. The forecast position overall was made up of a combined Directorate overspend of £8.7m, offset by a projected Central Service underspend of £5.3m. The forecast position would continue to be monitored closely but it was possible that even with mitigations, the Council would need to call on reserves to achieve a balanced outturn for 2025/26. In order to help mitigate the position, Directors were expected to take all steps to reduce the overall overspend, ensuring grant maximisation, restricting any non-essential expenditure and delaying recruitment where possible.

The combined Directorate overspend of £8.7m was largely due to demand and market pressures in relation to Children’s residential placements and placement types, and the cost of care packages in Adult Social Care. Market prices were increasing at above inflation levels, placing further pressures on the Council’s Budget. These pressures were anticipated and a corporate provision of £5.4m was maintained within Central Services as part of the Budget and Council Tax Report 2025/26.

Central Services was forecasting an underspend of £5.3m, reflecting use of the £5.4m Social Care Contingency approved within the Council’s Budget and Council Tax Report 2025/26, the impact of the Local Government Pay Award and savings generated within the Council’s Treasury Management Strategy.

The revised Capital Programme was £169.917m split between the General Fund (£103.770m) and Housing Revenue Account (£66.148m.) This was a decrease of £41.770m from the position reported to Cabinet on 17 November 2025. The movement was based on the latest profiles of expenditure against schemes, including slippage re-profiles and corrections of £43.449m, new grant funding added to the programme of £1.755m and some minor programme corrections of -£0.076m in 2025/26.

The report was considered by the Overview and Scrutiny Management Board who advised that the recommendations be supported.

Resolved:

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £3.4m.

2.    Note the projected overspend and that whilst the Council aims to manage this pressure, should that not be possible use of reserves will be required to balance the 2025/26 financial position.

3.    Note the updated position of the Capital Programme.

4.    Approve the capital budget variations as detailed in section 2.17 of the report.