Agenda item

2025/26 Finance Update Quarter 2

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

Decision:

DECLARATIONS OF INTEREST FOR THIS ITEM:

 

None

 

RESOLVED:

 

That Cabinet:

 

  1. Noted the forecast total revenue outturn variance for the General Fund of £23.4m, comprising £14.72m base budget pressures and £8.7m non-delivery of savings.

  2. Noted the net DSG forecast of £3.1m overspend.

  3. Noted the net Housing Revenue Account (HRA) forecast underspend of £514,000.

  4. Noted the forecast General Fund and HRA Capital expenditure of £441.4m, which equated to 85% of the total 2025/26 quarter two 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 approved in Quarter 2 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 the Constitution.

  8. Noted the Finance Response and Recovery Plans and progress against actions as at Quarter 2.~

  9. Noted the decision not to participate in the 8 Authority Pool during the 2026/27 financial year, taken by the Director of Finance and Corporate Resources following consultation with the Lead Member for Finance and Corporate Services.

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 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.

Alternative Options Considered

The report on 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 this report and the accompanying appendices set out the current forecast budget position in more detail.

 

Minutes:

 

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

 

The Cabinet Member provided an update on the Council’s financial position for Quarter 2 of 2025/26. It was explained that there was an overspend on the general fund of £23.4m, but it was noted that it was encouraging that this had reduced since the Quarter 1. Additionally it was noted was that there was an improved position in both Adult Social Care and Temporary Accommodation: the two services with the greatest pressure.

 

It was explained that officers were working across the Council to examine and reduce the amount spent. While the measures in place had reduced spend, the definition of what was essential might have needed to be revised going forward.

 

The Cabinet Member noted that the Housing Revenue Account (HRA) was affected by the rising cost of repairs and associated works, including damp and mould and disrepair cases. The increased investment was necessary to bring homes up to standard so that all our tenants and leaseholders lived in homes that were well maintained and comfortable.

 

It was additionally noted that the capital programme was under constant review to reduce the revenue costs of borrowing, and a number of projects had been paused. It was stressed by the Cabinet Member that priority capital investments were continuing, especially where they saved revenue costs in the long run. We continued to build new council homes, creating affordable homes that our residents needed and reducing the costs that unaffordable housing caused for other public services.

 

Despite all the measures we had put in place, the level of need did not match the funding we had and that the Council would continue to lobby and make the case for fair funding.

 

Following questions from Councillor Connor, the following information was shared:

 

·       It was explained that officers had worked to determine the current status of the commercial property estate. It was additionally explained that the Council was undertaking some rent reviews, and that the Council was doing more work to ensure that the Council was collecting rents due as a priority.

·       It was explained that the Safety Valve agreement was being well project managed and that the budgets for the Safety Valve agreement were being dealt with separately and that these were reported back to the Department for Education (DfE). It was explained that the Council was £2-3 million over the target, and that the Council had submitted a report to the DfE to explain this.

·       It was explained by officers that the Council was working with enforcement agencies to chase bad parking debts as much as possible. It was also noted that the Council was looking at prevention and making it easy for residents to pay off potential penalty charge notices as easily as possible. It was also noted that the Council was working to identify persistent evaders.

 

RESOLVED:

 

That Cabinet:

 

  1. Noted the forecast total revenue outturn variance for the General Fund of £23.4m, comprising £14.72m base budget pressures and £8.7m non-delivery of savings.

  2. Noted the net DSG forecast of £3.1m overspend.

  3. Noted the net Housing Revenue Account (HRA) forecast underspend of £514,000.

  4. Noted the forecast General Fund and HRA Capital expenditure of £441.4m, which equated to 85% of the total 2025/26 quarter two 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 approved in Quarter 2 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 the Constitution.

  8. Noted the Finance Response and Recovery Plans and progress against actions as at Quarter 2.~

  9. Noted the decision not to participate in the 8 Authority Pool during the 2026/27 financial year, taken by the Director of Finance and Corporate Resources following consultation with the Lead Member for Finance and Corporate Services.

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 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.

Alternative Options Considered

The report on 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 this report and the accompanying appendices set out the current forecast budget position in more detail.

 

Supporting documents: