To consider the Council’s Budget Monitoring Report 2025/26 for Quarter 1 and make recommendations to the Cabinet.

The Board considered the submitted report which provided a high level summary of the Council’s Revenue and Capital Budgets for the 2025/2026 Financial Year. The forecasts were based on information at the end of Quarter 1 and showed a predicted overspend of £0.785m mainly due to children’s placements and legal services staffing mitigated by underspends in Adult Services and increased income through Treasury Management.  There was a revised forecast of the Capital Investment Plan of £76.643m for the period up to 2027/28 with £52.239m planned spend in 2025/26. 

The Leader of the Council – Councillor David Thomas outlined a revised Officer recommendation and update in respect of the grant of a capital loan to SWISCo for fleet modernisation which proposed that this be reduced from £4m to £2.5m restricting the purchases up to 31 March 2028 rather than the original six years proposed as a result of the uncertainty around Local Government Reorganisation.

Members raised the following questions:

• Q1 outturn suggests overspend due partly due to ongoing challenges in recruitment in Legal Services, which is a national issue, what action is being taken to address this?
• The monitoring report was changed to only include approved Capital Projects.  If so, why are projects such as Edginswell station included?
• What about visibility of pipeline projects?
• Why is the original budget values for some service areas different from the budget digest? (a written response would be provided.)
• Is the £49k for Edginswell capital or revenue?
• Torre Abbey overspend was due to low café/wedding use – has this improved?
• What is the highways road closure income?
• Adult social care budget is positive – could this be lost with Local Government Reorganisation (LGR)?
• What caused the £95k overspend in HR and Payroll?

The following responses were provided:

• Additional money was put into the budget for Legal Services this year but there continues to be challenges which is the same nationally.  The focus has been through the sustainability plan focussing upon what needs to be done to recruit and retain staff.  The Chief Executive gave assurance that Directors had asked to review this area more quickly than previously planned with an additional lens focussing on where the demand is coming from and assure Directors that the demand is being appropriately managed and mitigated against. 
• Edginswell figure is a holding figure as there were certain actions required to keep the Planning permission live.
• Usage may have picked up but the income was still below budgeted levels due to ongoing works at Torre Abbey.
• The highways road closure is income the Council receives when roads are closed e.g. from utility companies.
• The positive results in Adult Social Care was due to tailored packages, the risk of LGR was acknowledged.
• The £95k overspend in HR and Payroll came from small additional staffing costs, occupational health, and a range of projects requiring additional resource, this was being reviewed to see what action can be taken to balance the budget in-year.

Resolved (unanimously):

That the Director of Finance be requested to ensure that future Budget Monitoring reports include an appendix of capital pipeline projects so that Members can keep an overview of them.

That the Cabinet be recommended:

1.       that the Cabinet notes the forecasted revenue outturn position and amendments made to the published 2025/26 Capital Investment Plan;

2.       that, subject to Council approving the additional capital as set out in paragraph 4 below, the Director of Finance be given delegated authority to agree appropriate terms and grant capital loans up to £2.5m to SWISCo for fleet modernisation.

Recommendations for Council

3.       that Council approves the revisions to the Capital Investment Plan, set out in Appendix 1 to the submitted report; and

4.       that Council approve the additional borrowing of £2.5m to facilitate capital loans to SWISCO to enable them to modernise their fleet.