Agenda item

The Financial Services Manager presented the Quarter Four Financial Monitoring and Outturn Report for 2025/26.

The Committee was advised that the report set out the Council’s final financial position for 2025/26, including performance against budget, explanations for key variances, and the impact on Council balances, reserves and the capital programme.

It was reported that the Council had closed the financial year with an overspend of £579,000. Members noted that this was significantly lower than some of the service pressures projected during the year. The overspend had been funded from the General Fund balance.

The largest service pressures were within Finance and Customer Services, this was largely as a result of a housing benefit subsidy shortfall of one point two million pounds. Additional budget pressures had arisen from the use of agency staffing and work relating to VAT. Environmental Services had also experienced an overspend, largely due to fleet maintenance costs and bereavement services. Members were informed that many of these pressures were one-off in nature and were not expected to recur. These issues, together with income shortfalls and recruitment challenges, would be reflected in the Medium Term Financial Plan (MTFP) scene-setting report.

The Committee noted that the Council had benefited from positive corporate finance outcomes during the year, including one point six million pounds in Section 31 grant funding and £541,000 of investment income.

Despite the year-end overspend, the Council remained in a relatively stable financial position, with a General Fund balance of £6.79 million. It was highlighted that these balances provided an important degree of financial resilience. Members also noted that the Housing Revenue Account (HRA) position was broadly in line with budget and that the Council continued to invest in its housing stock, energy efficiency measures and the delivery of new homes.

In conclusion, Members noted that while an overspend had been recorded at year-end, the report provided a clear explanation of the underlying pressures and outlined the actions being taken to address them.

The Portfolio Holder for Finance and Governance commented that the Council’s financial position had changed since Quarter Four, with overspends now anticipated in relation to both the Innovation Centre and the Town Hall. He advised that work was being undertaken with the Director of Finance to gain a clearer understanding of earmarked reserves and balances, including reviewing projects to ensure that resources were directed towards schemes that were deliverable. Where projects were no longer considered achievable, consideration would be given to reallocating resources accordingly.

RESOLVED that

1)    the updated procurements position set out in Appendix A to the minutes be noted, with any new items over £0.200m to be included on the forward plan.

RECOMMENDED that

2)    The 2025/26 revenue outturn position is an overspend of £0.579m which will be funded by an allocation from the General Fund Balance.

3)    The Ward Budget allocation for 2025/26 of £54,000 had approved allocations at £46,900 as at 31 March 2026, resulting in £7,100 which is transferred to General Fund reserves.

4)    The General Fund Balance of £7.364m (as at 1 April 2025) being reduced to £6.792m as a result of the £0.579m overspend and the £0.007m net transfer from Ward Budget Reserves using the approach previously agreed with members

5)    The outturn position in respect of the GF Earmarked Reserves is £20.957m and HRA Earmarked Reserves is £9.160m as at 31 March 2026.

6)    The 2025/26 capital outturn position is £8.154m spend against a total estimated programme of £31.847m. The net balance of £23.693m will be carried forward and included for review within the 2026/27 capital programme.

7)    HRA net operating expenditure is £0.397m, broadly in line with the revised budget, and is break even after a small variance in planned use of balances at year end. Capital Expenditure is net £1.326m more than budget and the balance be carried forward and included in the 2026/27 HRA capital programme.