Agenda item

To set out the current financial position for the Council at the end of the first quarter of 2025/26 (report of the Interim Director of Finance (Section 151 Officer) enclosed).

Consideration was given to the report of the Interim S151 Officer which set out a summary of the current financial position for the Council at the end of the first quarter of 2025/26 forecasting to the year end.

The Portfolio Holder for Finance introduced the report which outlined the forecast full-year financial performance as at 30 June 2025, based on the quarterly monitoring undertaken throughout the year.

He drew attention to the following key areas:

General Fund Revenue Forecast

The revenue outturn forecast indicated an overspend position of £462,000 at year-end.

Key points highlighted included:

·                     The 2025/26 net budget for investment income was £0.771m. The forecasted full-year outturn as at Quarter 1 was £1.142m, representing an overachievement of £371,000.

·                     The 2025/26 budget included a savings efficiency target of £1.203m. As at 30 June, 54% of this target had been identified. The forecast assumed the remaining target would be met, with work ongoing to support this. Details were provided in Table 1b.

General Fund Capital

·                     Table 1a of Appendix B provided details of all capital schemes. The capital budget for the General Fund as at Quarter 1 was £14.880m. Changes to the capital programme totalling £304,000 were identified and detailed in Table 1c.

·                     Slippage continued to be monitored and budgets refined as the financial year progressed.

General Fund Reserves

·                     Table 2 of Appendix A set out the reserve balances held at 30 June 2025, totalling £7.699m. The overall movement in reserve balances during Quarter 1 was a decrease of £24,000, reflecting adjustments either budgeted or previously approved via Proforma B by the S151 Officer or Cabinet.

Housing Revenue Account (HRA) Revenue

·                     Section 2.4 detailed the HRA revenue outturn, which showed a surplus of £373,000. This was primarily due to underspends in Supervision and Management (£163,000) and investment income (£247,000).

HRA Capital

·                     Table 4a outlined all HRA capital schemes, with the programme totalling £20.356m for 2025/26. Forecasted capital spend at the end of Quarter 1 was £20.356m, indicating the budget was expected to be met.

Treasury

·                     Section 2.6 of Appendix A provided details of the Council’s treasury investments. The Council’s cash continued to perform well, with £371,000 forecast to be achieved in excess of budget.

Cllr Barnes queried the £70k overspend on the General Fund assets, specifically questioning the £35k allocated for utilities at Priory Road. He questioned why the budget did not reflect last year’s actual costs and where the forecasting may have gone wrong for this year.

The S151 officer acknowledged that occasional variances in estimates were not unusual. Officers were actively monitoring such discrepancies and would ensure appropriate in-year adjustments were made. Specific attention would be given to this issue, with the aim of bringing the budget back on target by Quarter 4.

Cllr Barnes queried the recurring issue of not achieving salary efficiency targets. It was asked where these targets were being derived from.

The S151 officer confirmed Finance were working closely with Assistant Directors to ensure these areas received particular attention in the preparation of Quarter 2 figures, due at the end of September. It was expected that the variances identified in the report would reduce as the year progressed. To improve the quality of future budgets, it was confirmed that salary efficiency targets would be set to reflect actual staff turnover within specific service areas, which may not have been the case previously.

DECISION:

1)    That the forecast revenue position of a £462,000 overspend for 2025/26 as detailed in Table 1 and the need for continued focus on the savings and efficiency programme, be noted.

2)    That the forecast revenue position of the HRA for 2025/26 (surplus of £373k) as detailed in Table 3, be noted.

3)    That the amendments to the HRA Capital Programme at Appendix A – Table 4 to take into account the changes set out in this report, be recommended to Council for approval.

4)   That the amendments to the Capital Programme at Appendix B- Table 1c that require Cabinet approval to take into account the changes set out in this report, be approved.

(Other options considered:

·           To not approve the financial movements outlined.

Reason for decision:

·           To ensure the Council’s forecast financial position for 2025/26 is considered and related decisions approved. It is important that the Cabinet are aware of the financial position of the General Fund and Housing Revenue Account to ensure that they can make informed decisions that are affordable and financially sustainable for the Council).