Agenda item

Purpose: To report on the financial performance of the Council’s revenue budgets. This report is Q1, the first report of the 2025/26 financial year. The report details the variance between the budget set in February 2025 and the current forecast of the year end position. This allows the Executive and Scrutiny Commission to consider the authority’s current financial position.

The Committee considered the report (Agenda Item 9) which outlined the financial performance of the Council’s revenue budgets at Quarter One of 2025/26. The report detailed the variance between the budget set in February 2025 and the current forecast of the year end position.

Councillor Jeff Brooks, Leader of the Council, presented the report. He explained that the forecast net overspend at Quarter One was £681k after the application of transformation funding. He felt this was a satisfactory position at this point in the financial year against a net budget of £183.4m. Efforts would continue to be made to manage the forecast position throughout the year.

A number of points were raised and questions asked during the debate. Summarised as follows:

·       Greater clarification would be provided of the graphs presented in paragraph 6.2 of the report.

·       Approximately half of the budgeted savings for 2025/26 were on track to be delivered and it was queried if that position was likely to be maintained. Councillor Brooks explained that some risks to achieving the savings had been identified. Shannon Coleman-Slaughter (Service Director – Finance, Property and Procurement) added that Finance were in constant contact with service areas and received quarterly reports as part of ongoing efforts to achieve as many savings as possible.

·       Triple Value Impact (TVI) was an organisation which specialised in process management and had advised the Council on transformation projects to pursue with the aim of achieving savings. This included the provision of software and toolkits to assist with projects. Councillor Brooks explained that a number of options had been put to the Council and it had taken time to decide which ones were best to pursue. As a result, this had delayed the achievement of savings.

·       It was felt that a more suitable term should be used for savings not expected to be achieved rather than ‘ragged red’.

·       Net variance of £2.9m was noted for Transformation, Customer and ICT.

·       The £608k saving in Adult Social Care had been identified from work to achieve efficiencies in care homes.

·       It was noted that high costs could be incurred as a result of pressures within social care.

·       Short term borrowing was required to be repaid in under one year. Some of this borrowing would need to be refinanced and it was agreed that the Committee would be provided with information on the profiling of this short term debt. Borrowing that needed to be repaid in future years was considered long term borrowing.

·       A transformation cost tracker had been circulated to the Committee. Shannon Coleman-Slaughter explained that this covered all transformation activity across the Council and not just the activity in the official Transformation Programme. The areas listed in the cost tracker were all being applied to the revenue budget.

·       There was concern that some items in the cost tracker could be considered as revenue costs. In response, Shannon Coleman-Slaughter explained that thorough reviews were undertaken of how transformation funding was being used. In the previous financial year, some areas were moved from capital expenditure to revenue.

·       Councillor Carolyne Culver felt it would be useful for Scrutiny Members to receive a private finance briefing to aid Members’ understanding of factors related to the budget, such as Exceptional Financial Support (EFS) and borrowing arrangements with the Public Works Loan Board (PWLB), and how best to scrutinise them. This was something she had already discussed with Councillor Iain Cottingham, the Portfolio Holder for Finance and Resources. It would be open to all Members to attend.

Actions:

·       Greater clarification would be provided of the graphs presented in paragraph 6.2 of the report.

·       Information would be provided on the profiling of short term borrowing and repayment.

·       A private finance briefing would be arranged for Scrutiny Members, open to all Members, to aid Members’ understanding of factors related to the budget, such as Exceptional Financial Support (EFS) and borrowing arrangements with the Public Works Loan Board (PWLB), and how best to scrutinise them.

RESOLVED that the report be noted.