Issue - meetings

(A report by Brendan Arnold, Interim Director of Finance (S151 Officer))

The Portfolio Holder for Finance and Economic Growth, Councillor Sandeep Ghosh, presented a report by the Interim Director of Finance (S151 Officer) which set out the Council’s financial position as at 30 June 2025 and provided a forecast to year-end. The report highlighted a projected revenue overspend of £829,000 for the 2025/26 financial year.

Cabinet was informed that the draft Quarter 1 position forecasted a net revenue deficit of £829,000. The principal cause of the overspend was a shortfall in achieving targeted salary savings, although service managers were actively reviewing forecasts and identifying opportunities to deliver efficiencies.

Councillor Ghosh highlighted that the Council’s investment income was performing strongly, with a forecast overachievement of £213,000 against the budget. He also reported that the Council had received £654,000 in government funding to offset Internal Drainage Board (IDB) levy pressures, which had been reflected in the outturn figures.

Cabinet was reminded that the 2025/26 budget included an overall savings and efficiency target of £1.429 million, of which £760,000 (approximately 53%) had been identified to date. If the additional investment income was committed against this target, the outstanding requirement would reduce further.

In respect of treasury management, Councillor Ghosh confirmed that negotiations had successfully concluded to repay the Council’s State Street loan early, replacing it with borrowing from the Public Works Loan Board at a lower rate. Full financial details would be reported in the Quarter 2 update.

Turning to the capital programme, Cabinet was advised that proposed amendments totalling £201,000 were presented for approval. Forecast expenditure for the year was £37 million against a revised budget of £38 million, resulting in a projected underspend of £921,000.

Cabinet acknowledged the challenges associated with delivering the required savings and efficiencies, particularly in relation to staffing costs. Members welcomed the proactive approach being taken by service managers to identify further opportunities for savings.

The additional investment income and government support for IDB levies were noted as positive developments that had helped to mitigate the overall financial position. Cabinet also welcomed the early repayment of the State Street loan and the move to more favourable borrowing arrangements.

Appreciation was expressed for the work undertaken by the Finance team in preparing the report and for their continued efforts in managing the Council’s financial position.

The recommendations were moved by Councillor Sandeep Ghosh and seconded by Councillor Callum Butler.

Resolved:

1.    That the forecast revenue position of £0.829m overspend for 2025/26, as detailed in Appendix A – Table 1 within the report, and the need for continuous focus on the savings and efficiency programme be noted; and

2.    That the amendments to the Capital Programme, in Appendix B – Table 3 within the report, that require Cabinet approval, to take into account the changes set out within the report, be approved.