Agenda item

To receive an update on the Council’s financial monitoring position for 2025/26.

Councillor Zona Hannington, the Cabinet Member: Finance, Governance and Customer Services provided Cabinet with the latest financial monitoring position for the year, which related to the revenue budget, capital programme and income collection.

She said that the Council had demonstrated outstanding financial management by maintaining a balanced budget for 16 consecutive years, despite the previous government having made cuts to its spending of more than £181m since 2010.  She said that this reflected the Council’s unwavering commitment to prudent financial planning, robust governance and strategic decision-making.   Over this period, she said, the Council had also received unqualified accounts from external auditors, which reaffirmed the integrity and transparency of its financial reporting.

Councillor Hannington said that, despite the extreme challenges faced nationally, particularly with regard to adult social care, children safeguarding and school travel assistance, the Council remained resilient.  She said that the current year’s projected revenue position initially indicated a £11.3m overspend, which was a significant increase since the last financial monitoring report and that this had been due to the increased demand for adult social care.  However, she said, thanks to the Council’s proactive financial management, the application of targeted adult social care contingencies, general budget contingencies and identification of in-year services had put the budget back into balance.

Councillor Hannington said that key pressures would be addressed through efficient service delivery.   She went on to say that the borough’s population of those aged over 65 had risen by 6.13% since 2021, which now made up 17.9% of the borough’s total population.  However, she said, the Council’s statutory reserves of £21.7m remained untouched, which showed the Council’s readiness for unexpected challenges and its commitment to maintaining essential services.

Councillor Hannington then listed the following key financial achievements and figures for the Council:

1. Income generated from its Grade Fund investment was over £10m per year, which yielded a return of just over 2% after the cost of borrowing, which she said, was good borrowing as it invested in the borough’s communities and delivered a return to the Council and was one of the reasons why the borough’s Council Tax levels remained one of the lowest in the West Midlands.

2. Additionally, she said that the nett income received from New Place included loan interests and dividends amounting to £2m per year after covering the Council’s costs.

The long-term return on the Council’s equity investment on New Place was forecast to be around 6%.

In terms of what this meant in respect of numbers and people within the borough, Councillor Hannington said that New Place provided accommodation for over 2,000 tenants and had brought back 48 acres of brownfield land, with 4,656 sq. metres of redundant floor space being brought back into use and working with partners to accelerate the development of brownfield land for residential use through the Telford Land Deal.

Councillor Hannington went on to say the Council was working with partners to deliver intergenerational mixed tenancy developments at Wild Walk, Donnington (329 homes that included 189 affordable homes).

She added that dementia friendly extra care was also being delivered through multi-partnership working.

Councillor Hannington said that the Council’s authorised limit for borrowing was £665m for 2025/2026 and its capital financing requirement for the same period was estimated to be £489.5m, which indicated that the Council was well within its borrowing limits.  She said that the Council’s Capital Programme remained robust with changes that included new allocation slippage, detailed in Appendix C, all of which required the approval of the full Council.

She said that Treasury and Prudential Indicators monitoring had confirmed full compliance with governance standards, with no issues reported.  She said the Council’s investments were targeted, strategic and aligned with the Council’s priorities.  They were, she said, not only financially sound but socially impactable. 

Councillor Hannington said that the Council had secured £7.3m through the UK Shared Prosperity Fund, which was an additional grant to support homelessness initiatives.  She said that capital investments had included regeneration projects such as Dawley Swimming Pool, Wellington Time Fund and affordable housing schemes, all backed by capital receipts and external funding.  She added that commercial investments continued to generate income to support local economic growth and helping the Council maintain financial resilience.

Councillor Hannington then spoke in the impact of this on the services and the community:

• Investments were helping to protect and enhance vital services, support vulnerable residents and create opportunities for growth and innovation.

• A commitment to investing wisely to secure value for money and to build a better borough for all.

She said that the Council’s track record spoke for itself and it would continue to lead with integrity and purpose.

She went on to say that income streams such as Council Tax and business rates were on target, whilst sales ledger transactions were actively being pursued.  She said that these efforts reflected the Council’s commitment to maintaining financial stability and accountability throughout the year. 

In conclusion, Councillor Hannington said that this report reaffirmed the Council’s strong financial position and effectiveness of its long-term planning.  It was, she said, a testament to the investments made across the borough and managing the Council’s resources properly.  She said that the Council remained committed to its residents while navigating economic uncertainty with confidence and clarity.

Cabinet Members spoke on the Council’s commitment to keeping Council Tax low; recognised that adult social care was the biggest single issue within the Council’s budget and that a lot of work was being done to reduce costs.  It was noted that savings had been and continued to be delivered, and officers were thanked for all their hard work.

It was recognised that local government was struggling, financially and that local authorities had to respond to demands, despite limited resources.

Members raised a number of issues, which included:

• A lot of work was being done to reduce the increasing costs of adult social care (currently, over 50% of the Council’s budget was spent on adult social care).

• A belief that adult social care should be funded via Central Government.

• The Council was committed to building a better borough and would continue to deliver for its residents due to its good financial management and commitment to keep Council Tax low.

• Running a Council was not like running a business – it had to respond to demand, despite having limited resources.

• Because of the Council’s financial management, it was still delivering a full range of services, which many other Councils had started to cut back on.

• The Council still managed to balance its budget at the end of the year, whilst not dipping into its reserves.

• The Council had managed its finances in a robust way, and has allowed it to put money into growth, new homes and leisure facilities, which not only generated new jobs for residents but also generated income for the Council.

RESOLVED – that:

(a)            The 2025/26 revenue budget position (which showed that the Council was 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 be noted and it be RECOMMENDED 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.

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

(d)            The current position in relation to Treasury and Prudential Indicators, be noted.