Agenda item

The Committee reviewed the financial position and performance for the 2024–25 financial year. Members noted underspends of £1.3 million in Finance and Transformation and £1.9 million in Corporate Services and Property. Of the £4.7 million savings target, it was reported that £1.7 million had been achieved, with the remaining £3 million carried forward into 2025–26.

Members discussed the capital budget allocation of £120 million, noting an underspend of £33 million due to project delays. These included a contractor going into administration and slippage in the delivery of the water sports facility. The Committee considered the relatively low underspend of £15 million in the Housing, Operations and Assets capital programme to be a positive outcome.

Looking ahead, the Committee was informed of a projected overspend of £4 million for 2025–26, identified as early as month two. This was attributed to treasury pressures linked to reduced cash balances and rising borrowing costs. Members also noted an additional shortfall of £1.6 million in Corporate Services and Property, caused by delays in leasing Civic Centre space. The savings target for 2025–26 was set at £8.3 million, incorporating the £3 million carried forward. The Committee acknowledged that over half of the savings were either banked or on track, while £974,000 was flagged as at risk and £1.2 million was proposed for write-off.

The Council’s debt level of £500 million at an interest rate of 2.2% was acknowledged by Members and considered manageable. The Committee welcomed the continued cautious financial approach, which avoided excessive borrowing and high-risk investments. However, concerns were raised regarding the lack of clarity around capital receipts for 2025–26. Members noted that approximately £600,000 had been received, with additional funds carried forward to support transformation-related spending. It was further noted that the £17 million transformation programme lacked sufficient detail, and officers committed to providing clearer reporting in future updates.

Members requested a more detailed breakdown of departmental savings, and officers confirmed that the data was available. By month two, 51% of planned savings had been banked and 23% were on track for later delivery. The Committee raised questions about accelerating future savings, noting that many had already been delivered through early actions such as vacancy removals.

The Committee discussed garage assets, which had been revisited using an ABC classification model to assess their condition and potential use. A review of the garage portfolio was underway, and Members were advised that further details would follow. Broader asset management was also addressed, including efforts to consolidate asset data into a central system to support strategic decision-making and better align services with residents’ needs.

The new finance lead shared observations on the team’s strong corporate knowledge and outlined plans for due diligence, including reviews of savings, capital receipts, and transformation spending. Members noted that the results from 2024–25 were being used to improve forecasting and budgeting for 2026–27.

The Committee was informed that the Council had set a £5 million savings goal as part of its new operating model, listed under unallocated savings. Half of this was expected to come from operating cost reviews and the other half from spend control measures. Legal compliance under Section 114 legislation had been maintained, with no immediate risks identified, although Members noted that cash flow remained a concern.

Questions regarding the Oracle system were raised and addressed by the Audit Committee. Members noted that a capital budget had been allocated for system improvements and that work was ongoing. Savings in digital and technology contracts were being pursued through early assessments and contract consolidation. Rising costs linked to AI investment were acknowledged, and Members welcomed efforts to explore in-house solutions to reduce reliance on proprietary software.

The Committee discussed procurement practices, referencing a previous review that highlighted the need to reduce contract numbers and avoid duplication. Members noted that a procurement and contract review had been launched, funded through the capital transformation programme, with the aim of improving sourcing models and commercial management. A commitment was made to revisit savings throughout the year, and both the 2024–25 outturn and the 2025–26 month two budget monitoring position were formally noted.

RESOLVED:

That the Committee:

1.    Note the 2024/25 outturn position.

2.    Note the 2025/26 Month 2 budget monitoring position.