Agenda item

To receive an update on the Council’s financial monitoring position.

The Cabinet Member: Finance, Governance and Customer Services presented the first financial monitoring report for the 2025/26 financial year, outlining the Council’s early-year budget position and associated pressures.

It was reported that the Council was on track to remain within budget by year-end without drawing on the Budget Strategy or General Fund reserves. Adult Social Care continued to face significant financial pressure due to sustained demand and increasing complexity of care needs, with a projected overspend of £4.8m before applying contingencies. The Council had allocated £2m in specific contingency for Adult Social Care, alongside a general contingency of £3.95m, of which £2.113m had been used, leaving £1.837m available for other pressures.

It was noted that the Council’s preventative work in social care had focused on early intervention and promoting independence and was delivering both financial and social benefits. The safeguarding service was operating within its approved budget, providing a stabilising outcome amid wider sector challenges. A separate pressure of £268,000 had arisen from historic teachers’ pension liabilities.

On a Council-wide level, financial gains of £989,000 had been realised through Section 31 grant receipts under the business rates retention scheme and the release of provisions for savings shortfalls. However, the Dedicated Schools Grant carried a £4.66m deficit into the 2025/26 financial year, with high needs demand expected to increase this further. The statutory override had been extended to March 2028, with further guidance on deficit treatment expected in the next Local Government financial settlement.

In terms of the Capital Programme, the approved programme stood at £138m, with £8.9m spent at the time of the meeting and a forecast outturn of £135m, broadly in line projected forecasts. Income collection was below target across all areas and the Council’s income recovery team remained focused on debt recovery.

It was highlighted that there was an ongoing consultation on the Fair Funding Review, which would assess local needs and resources and introduce a multi-year settlement framework. Despite financial pressures, the Council’s proactive and responsive approach had ensured stability and alignment with national reforms.

Cabinet Members welcomed the report and expressed their thanks to the Council’s Finance Team for their work in keeping the Council on track for a balanced budget, particularly in the face of ongoing pressures in Adult Social Care. Members acknowledged that rising demand, increasing complexity of care and extended care durations were driving significant financial challenges both locally and nationally. However, thanks to the strong financial planning and prudent use of contingencies, the Council was managing these pressures effectively.  As a result of early intervention and prevention strategies, the Council had been able to deliver £7.7m in savings and cost avoidance but had also helped residents remain independent for longer.

RESOLVED that:

a)    the 2025/26 revenue budget position, which shows that the Council is projecting to be within budget at year end, without having to use the Budget Strategy or General Fund reserves be noted;

b)   the position in relation to capital spend; and recommends that Full Council approve the changes to the Capital programme detailed in Appendix C and all associated changes to the Medium Term Financial Strategy, including Treasury and Prudential Indicators 2025/26 Financial Monitoring Report 2 be noted; and

c)    the collection rates for NNDR, council tax and sales ledger be noted.