Issue - meetings

Report of the Corporate Director of Finance and Resources (S151 Officer). To be presented by the Cabinet Member for Finance and Corporate Services.

DECLARATIONS OF INTEREST RELATING TO THIS ITEM:

None

RESOLVED:

That Cabinet:

1.    Noted the forecast total revenue outturn variance for the General Fund of £19m, comprising £10.72m base budget pressures and £8.312m non?delivery of savings.

2.    Noted the net DSG forecast of a £3.2m overspend.

3.    Noted the net Housing Revenue Account (HRA) forecast surplus of £1.791m.

4.    Noted the forecast General Fund and HRA capital expenditure of £393.8m, which equated to 72.9% of the total 2025/26 Quarter Three revised budget position.

5.    Approved the revenue budget virements and receipt of grants as set out in Appendix?8.

6.    Approved the proposed budget adjustments and virements to the capital programme as set out in Table?5 and Appendix?8.

7.    Noted the debt write?offs in Quarter Three 2025/26, which had been approved by the Corporate Director of Finance and Resources under delegated authority, or, for those above £50,000, by the Cabinet Member for Finance, as set out in Appendix?9 and in accordance with the Constitution.

8.    Noted the Finance Response and Recovery Plans and progress against actions as at Quarter Three, as set out in Appendix?10.

Reason for Decision

A strong financial management framework, including oversight by Members and senior management, was an essential part of delivering the council’s priorities as set out in the Corporate Delivery Plan and in meeting its statutory duties. This was made more critically important than ever because of the uncertainties surrounding the Council’s challenging financial position, which was being impacted by Government funding, high demand for services—particularly for the most vulnerable—and the wider economic outlook. This created an ongoing reliance on Exceptional Financial Support in the current year and across the MTFS period.

Alternative Options Considered

The management of the Council’s financial resources was a key part of the role of the Corporate Director of Finance and Resources (Section?151 Officer) in helping Members exercise their role, and no other options were therefore considered. The remainder of the report and its accompanying appendices set out the forecast budget position in more detail.

The Cabinet Member for Finance and Corporate Services introduced the report.

It was explained that the report provided an update on the financial position for Quarter 3 of 2025/26. It was noted that the predicted overspend had reduced from £34m in Quarter 1 to £23.4m in Quarter 2 and reduced by a further £4m to £19m in Quarter 3, explaining that this position included an increase in unrecovered historic parking debt, which did not represent an ongoing service pressure and was not expected to affect the following year’s budget.

It was explained that most of the reduction reflected improvements in service overspends, particularly within Adult Social Care and Temporary Accommodation, alongside reduced capital expenditure. This had a direct impact on the level of Exceptional Financial Support required for the current and subsequent financial years and contributed to the medium-term approach to financial sustainability.

The Housing Revenue Account also showed an improved position, primarily due to a reduction in forecast capital expenditure, although this spending remained committed. Capital investment was required to bring housing stock up to standard and support well-maintained accommodation for tenants and leaseholders. The capital programme continued to be kept under review to manage the revenue impact of borrowing. Capital expenditure was focused on essential investment and on projects that were expected to reduce revenue costs over the longer term. The council continued to progress the delivery of new council homes, supporting housing affordability and reducing cost pressures on other public services.

Additional government funding was confirmed for boroughs with comparable financial pressures. Funding of just under £18m increased the core government grant by £25.3m over the following three financial years. Together with potential council tax increases, this funding was insufficient to fully close the budget gap. However, ongoing work across the council to increase income, reduce service expenditure and manage borrowing costs indicated that a more sustainable financial position was achievable over the medium term.

Following questions from Councillor Cawley-Harrison, the following information was shared:

• It was explained that if a statutory recommendation regarding the budget was issued, the Council would be required to publicly at the next available Cabinet, which would be in June 2026.
  
  
• It was explained that the Council was reviewing all options to review spend, and were additionally reviewing changing and reviewing bank charges as part of financial options. It was additionally stressed that the Council was reviewing all options across the Council relating to spend and that the Council had identified some areas already to improve in this area.
  
  
• It was explained that if there were any proposed changes to how budget quarterly updates were received, the Council would be required to be considered as a change to the Constitution, and would be required to be put to Full Council for consideration.

RESOLVED:

That Cabinet:

1.    Noted the forecast total revenue outturn variance for the General Fund of £19m, comprising £10.72m base budget pressures and £8.312m non?delivery of savings.

2.    Noted the net DSG forecast of a £3.2m overspend.

3.    Noted  ...  view the full minutes text for item 429