To consider the Budget Monitoring Report for Quarter 3 2025/2026 and make recommendations to the Cabinet.

The Cabinet Member for Housing and Finance, Councillor Tyerman, outlined the submitted Budget Monitoring report for 2025/2026 which set out the quarter 3 position in respect of the Council’s Revenue and Capital Budgets. Cabinet Members and Directors also attended the meeting and responded to questions as well as Councillor Tyerman.

Councillor Bye provided an update since the report had been published and advised that the Children’s Services overspend continued but the wording in the report needed further refining.  This was driven largely by high-cost placements and reliance on unregulated provision.  Some progress had been made reducing unregulated placements, but more work needed to be done.  The Government had agreed to write off 90% of historic Special Educational Needs and Disabilities (SEND) overspends, however, future funding arrangements remain uncertain with the Government taking over the funding for SEND from 2028.

Members asked questions in respect of the following:

·                What was the actual cost difference between regulated and unregulated children’s placements, and how do these compare financially and operationally?

·                What would the cost implications be if the Council provided its own placements, including the potential benefits of managing the market more effectively?

·                Why was progress slow in transitioning children out of unregulated provision?  Was this due to delays in obtaining Ofsted registration, availability of appropriate placements, or other barriers?

·                Why were waste disposal costs higher than expected?  Was more residual waste being sent to the Energy-from-Waste (EfW) plant than planned?  What factors were driving this increase?  (A written response would be provided.)

·                Could reassurance be provided that historic debts labelled as old or historic were being reviewed thoroughly, with proper tracking of business rates and council tax recovery processes?

·                Were the current levels of write-offs for Council Tax and Business Rates typical compared to previous years and national benchmarks?

·                What early intervention steps were taken when residents start falling into arrears, and were they consistently being signposted to support such as the community helpline?

·                Why was the Integrated Care Organisation (ICO) not included within the Council’s financial sustainability plan, given it presents a risk area?

·                Why was there such a large overspend in AOTAS (educated other than at school) and school place allocations, despite reduced numbers?  What cost pressures or quality issues are driving this?

·                What solutions exist to resolve issues around Torbay Coast & Countryside Trust (TCCT) parking passes, particularly in relation to fairness and integration with the Council’s parking tariff structure?

·                Why were charges in TCCT car parks different from others, and how could these be rationalised without inappropriate cross-subsidising between car parks?

·                Could alternative permit options or differential pricing be explored to better reflect the different destinations, usage patterns, and operational costs of TCCT car parks?

·                When we refer to collection rates could it include percentages e.g. what does good look like compared to the budget.  (A written response would be provided to this and a note for future reports.)

The following responses were provided:

·                Unregulated placements were not automatically cheaper; cost was dependent on the complexity of need and availability rather than the regulatory status. Ofsted registration does not necessarily make it cheaper, it is more about the quality of the provision.  Some providers were pursuing Ofsted registration, but competition between authorities for high?need placements keeps costs high.  Average cost of placements was £8,500 per week locally, compared to £6,000–£7,000 nationally.

·                If the Council partnered to run its own children’s homes, it could manage the market more effectively like other authorities.  This may stabilise costs, but regulatory compliance, staffing, and specialist infrastructure mean in?house provision isn't inherently cheaper but it provides greater control over quality and availability.

·                Progress was slow in moving children out of unregulated provision due to:

·                delays in achieving Ofsted registration for suitable placements;

·                limited availability of specialist placements for complex needs; and

·                market competition between local authorities.

However, progress had been made in recent months, with two children due to move into Ofsted?registered placements shortly.

·                The Team was reviewing the end?to?end process for business rates and council tax debts and was working to ensure that debts were not allowed to become too historic.  They were also appointing a new enforcement agent and increasing early intervention to prevent arrears escalating.  Some debts relate to Covid grants, so validation work was ongoing to ensure accuracy.

·                The write?off levels were typical although the Council has not reviewed debt as regularly in recent years, explaining why the figures may appear elevated.

·                Steps taken when residents fall into arrears include signposting to the Community Helpline, with early engagement encouraged.  Previously, residents may not have been connected with someone skilled enough to arrange realistic repayment plans.  Members were encouraged to ask residents to speak to the Team early because ignoring someone getting into debt only creates a bigger problem.

·                A separate transformation plan exists for the ICO with regular updates to Directors.  Sustainability plans cover pressures within existing Council budgets (e.g., children’s placements), whereas the ICO sits within a different programme structure.

·                Although numbers in AOTAS have reduced from 72 to the 30s, costs have risen because:

·                quality improvements have offset savings from reduced numbers;

·                more families have secured high?cost independent school placements; and

·                pressures remain around children with autism requiring out?of?area specialist placements.  (A written response was requested for more detail.)

·                TCCT car parks previously had lower fees, and the Trust was cross?subsidising some parking.  Council car parks operate differently: the Council cannot use ANPR cameras (unlike TCCT), which increases staffing and enforcement costs.  If fees remain different between Trust?transferred car parks and others, this will create cross?subsidisation, which was not considered appropriate.  A strategic review of charges, zones and permits will be undertaken over the next six months.  Extra parking revenue seen this year was considered a one?off due to an excellent summer and not necessarily repeatable.

Resolved (unanimously):

1.       that the Overview and Scrutiny Board notes the forecast revenue outturn position and amendments made to the published 2025/26 Capital Investment Plan;

2.       that the Cabinet be recommended to carry out a strategic review of car parking charges, zones and permits taking into account the location of the car parks and those which are now the responsibility of the Council having been transferred from the Torbay Coast and Countryside Trust and report to a future Overview and Scrutiny Board meeting; and

3.       that the Director of Finance be requested to ensure that the future Capital Programme reports include initial implementation date for the project, e.g. point approved at Capital and Growth Board, so that the Board can see the start date and help focus on the difficulties of delivering the Capital Programme.