Agenda item

Purpose: to report the financial performance of the Council’s Revenue and Capital budgets following the Q2 2025/26 outturn. The report details variances between the 2025/26 Budget (set in February 2025) and the current forecast for the financial year end position.

Resolved that: Executive note

·       The forecast Q2 revenue outturn is £6.8m/ 3.7% adverse (Q2 vs Budget). Total net revenue is forecast at £190.2m in the Q2 outturn, vs £183.4m in the Budget.

·       The Q2 reprofiling of £22.5m of capital budget, approved by the S151 officer in consultation with the portfolio holder for Finance.

·       The revised position at Q2 for expected capital expenditure in 2025/26 is £58.3m against an updated budget of £81.7m.  £22.5m has been approved to slip to 2026/27 leaving a variance of £0.9m potentially unspent.

This decision is not subject to call in as:

·     Report is to note only

therefore it will be implemented immediately.

Councillors Iain Cottingham, Heather Codling and Patrick Clark all made statements relating to the Council’s finances and increasing pressures from Children’s Services and Adult Social Care. The statements can be viewed in full here.

Councillor Iain Cottingham introduced the report (Agenda Item 6), which detailed the financial performance of the Council’s Revenue and Capital budgets following the Quarter Two 2025/26 outturn.

Councillor Ross Mackinnon requested clarification from Councillor Codling in relation to the Children’s Services figures discussed. Councillor Codling repeated that the Children’s Services budget for 2022/23 had been £11 million, which had increased to £19.8 million for 2025/26 but was forecast to be £23.4 million by Quarter Four.

Councillor Mackinnon suggested that it was the biggest jump in an overspend outturn in one quarter that he could remember and described it as financial chaos. Councillor Mackinnon noted that the Council had just spent £700,000 on a grass football pitch at Faraday Road which was now about to be replaced; was planning to sell its commercial property portfolio and thereby lose £1 million in revenue; had increased the number of Executive Members to ten; and referred to an outdated Transformation spend figure which had recently been presented for review at a Resources and Place Scrutiny Committee meeting; all of which he suggested displayed a lack of control over the finances.

Councillor Mackinnon queried what modelling changes the Executive would be adopting to prevent a recurrence of such a large overspend. Councillor Jeff Brooks responded that he did not accept the accusation of ‘chaos’ nor the comments relating to the Transformation programme. Councillor Brooks further provided assurances that the correct controls were in place going forward.      

Councillor Cottingham reminded Councillor Mackinnon that in Quarter One of 2022/23 there had been an £8.1 million overspend under the previous administration. He commented that the Council was not in isolation and that local authorities across the country were struggling with the increased Adult Social Care pressures and the high unit cost of residential care for children. Councillor Cottingham noted that the budget had forecast one additional child but had needed to extend to four children in care.

Councillor Cottingham further referred to an £800,000 saving that the Council had hoped to make, which had not occurred due to the collapse of NRS.

Councillor Cottingham confirmed that there were numerous controls in place particularly in driving down the commissioning costs for care placements.

Councillor Mackinnon queried how Councillor Brooks could reject the comment in relation to Transformation when he had been present at the Resources and Place Scrutiny Committee meeting and been unable to justify that the saving detailed within the report would be achieved. Councillor Brooks responded that Resources and Place Scrutiny Committee would review all business cases for transformation going forward. He further commented that the £469,000 detailed in the paperwork had returned as a pressure as the Executive had decided not to proceed with the project.

Councillor Mackinnon queried whether there had been a lack of political focus to the finances. Councillor Brooks rejected the suggestion.

Councillor David Marsh referred to the Adult Resource Centres and the inability to provide sufficient alternative private care and queried whether Councillor Clark still intended to sell off one or more of its care homes. Councillor Clark responded that part of the reason for not pursuing sale of the Adult Resource Centres was not due to finding alternative providers but had been due to being unable to provide a similar level of care. Councillor Brooks added that the Council was currently engaging to consider whether private providers could take over the care homes, and consequently there needed to be discretion when discussing.

Councillor Marsh queried when the Council was likely to announce a deal in relation to Newbury Gateway and the Bond Riverside regeneration project. Councillor Brooks responded that again there was a market engagement exercise currently being undertaken and so was unable to provide any further update at this time but would provide updates when applicable.

Councillor Dominic Boeck suggested that the Children’s Services budget was not spent wholly on statutory requirements and queried how services such as Early Help would be protected. Councillor Codling responded that that particular area would become statutory from April 2026 and so would continue to be funded with appropriate budgeting.

Councillor Brooks suggested that the question related more to the distinction between statutory and non-statutory services and how non-statutory services would be protected. He commented that an independent person would be appointed to provide challenge to commissioning care packages.

Councillor Nigel Foot further added that the Health and Wellbeing Board would be focusing specifically on early years intervention.

RESOLVED that: Executive note

·         The forecast Q2 revenue outturn is £6.8m/ 3.7% adverse(Q2 vs Budget). Total net revenue is forecast at £190.2m in the Q2 outturn, vs £183.4m in the Budget.

·         The Q2 reprofiling of £22.5m of capital budget, approved by the S151 officer in consultation with the portfolio holder for Finance.

·         The revised position at Q2 for expected capital expenditure in 2025/26 is £58.3m against an updated budget of £81.7m.  £22.5m has been approved to slip to 2026/27 leaving a variance of £0.9m potentially unspent.