Issue - meetings

To consider the report on the Council’s financial position at the end of Quarter 2 of 2025/26.

The report included with this item was first published as part of the agenda papers for the Cabinet meeting on 9^th December 2025.

Cllr Dana Carlin, Cabinet Member for Finance & Corporate Services, introduced the Quarter 2 update report for the Council’s 2025/26 financial forecast which projected an overspend of £23.4m. This was an improvement of £10.7m since Quarter 1 and this included a substantial reduction in the overspend on Adult Social Services and Temporary Accommodation. Officers had been working to reduce spend wherever possible including through spending control panels and tight controls on staffing, including a reduction in the use of agency staff. Cllr Carlin also reported:

·       An increase in the cost to the Housing Revenue Account (HRA) of dealing with cases of damp and mould.

·       That the Council’s capital programme was under constant review in order to balance for need for infrastructure in the Borough with the need to reduce expenditure. Priority capital investment would continue, particularly where it would save on future revenue costs.

·       72% of the Council’s forecast services spend was on adult services, children’s services and temporary accommodation. These were areas where the Council had a statutory responsibility to provide support to those who were eligible. In particular, she emphasised the high number of elderly people living in poverty in the Borough.

Cllr Carlin and Taryn Eves, Corporate Director of Finance & Resources, then responded to questions from the Committee:

·       Cllr White noted the ongoing concerns with the size of the budget gap and the additional burden of financing this that would be added to revenue expenditure in future years. He also noted that only £3.8m out of the £10.7m of improvements to the projected overspend could be attributed to the services and requested further details on other factors, including over £5.2m of improvements attributed to ‘External Finance’. Taryn Eves explained that this included a revised forecast for corporate budgets and the interest received on this as well as reduced interest payments from lower capital spend than had been budgeted for. It also included an accumulated surplus from the collection fund of Council Tax and Business Rates which had now been brought into the revenue position in order to reduce reliance on EFS rather than a reserve fund which might previously have been the preferred option. She added that the £5.2m should be regarded as a one-off in-year benefit rather than something that could also be budgeted for in future years.

·       Cllr Carlin commented that it was reassuring to see some overall improvement in Q2 as there had been constant deterioration in the quarterly updates in the previous year, particularly in areas such as adult social care and temporary accommodation.

·       Cllr White highlighted the importance of borrowing and investments as a way of improving the Council’s financial position, noting that much of the focus in discussions had been on savings and preventing overspending. Taryn Eves agreed on the importance of long-term financial planning to get to a more sustainable position, particularly given that such a large proportion of the Council’s budget was focused on meeting statutory responsibilities.

·       Cllr Connor requested further details on unbudgeted additional bad debt provision referred to  ...  view the full minutes text for item 64