Agenda item

Report from the Executive Director of Corporate Services.

Recommendations

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £5.9m.

2.    Note the updated position of the Capital Programme.

3.    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 July 2026 and forecast for the remainder of the financial year, based on actual costs and income for the first four months of 2026/27.

As of July 2026, the Council’s forecast outturn for 2026/27 was an overspend of £5.9m, made up of a Directorates overspend of £10.9m, offset by a projected Central Services underspend of £5.0m. The main pressures driving this forecast were within Social Care, largely due to market prices and the increasing number of people receiving support and care who had complex needs, and an overspend in Regeneration and Environment Directorate increased by £2.9m, mostly due to additional overspends in Waste and Home to School transport. Detailed explanations of the reasons for variances within each Directorate were provided in the main body of the report.

Following approval of the 2026/27 Budget, the global economic position had remained unsettled. Economic market sentiment had been heavily influenced by the Middle East conflict leading to steepening energy and fuel costs impacting the wider economy and creating uncertainty around inflation, which has risen to 2.9% in July. These financial challenges were being regularly reviewed as part of the Council’s ongoing Medium Term Financial Planning. 

The report also provided an updated position on the Council’s Capital Programme including a number of programme variations as detailed in section 2.17.

Due to a clerical error, paragraph 2.14.4 of the report was incorrect. It should have read:

“The Central Services budgets are made up of a number of corporate budgets for levies and charges such as the Transport Levy, Private Finance Initiative (PFI) Financing, and Treasury Management. A list of the main budget areas within Central Services was provided as part of the Council’s Budget and Council Tax Report 2026/27, approved at Council on 4th March 2026. The costs within this area are largely fixed costs, set out prior to the start of a financial year, not specific to a particular Directorate and are therefore not controllable by the Directorates and thus held centrally.”

Rob Mahon, Service Director for Financial Services, confirmed that work was being undertaken with Directors throughout the remainder of the financial year to reduce pressures, mitigate the impact on reserves and improve the year-end position.

Councillor Steele reported the conclusions of Overview and Scrutiny Management Board and summarised the discussion around significant overspends within Children and Young People’s Services, Adult Care, Housing and Public Health, and Regeneration and Environment Directorates. He explained that questions were raised regarding:

·       The sustainability of using Central Services underspends to offset budget pressures

·       The Dedicated Schools Grant deficit

·       Demand pressures in Adult Social Care and SEND services, SEND assessment processes and backlogs

·       Home-to-school transport costs

·       Waste service expenditure and vehicle replacement delays

·       Market income shortfalls

It was noted that several of these financial pressures, particularly transport-related costs and vehicle issues, had appeared repeatedly in previous monitoring reports.

Councillor Steele advised Cabinet that the Overview and Scrutiny Management Board supported the recommendations outlined in the report but had also recommended that future financial monitoring reports include updates on overspend recovery actions, progress against service plans, management of key financial risks and the ongoing deliverability of the Capital Programme.

Councillor Alam OBE confirmed acceptance of the additional recommendation from the Overview and Scrutiny Management Board.

Resolved:

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £5.9m.

2.    Note the updated position of the Capital Programme.

3.    Approve the capital budget variations as detailed in Section 2.17 of the report.

4.    Agreed that future financial monitoring reports include updates on the delivery of overspend recovery actions, progress against savings plans, management of key financial risks, and the ongoing deliverability of the Capital Programme.