Agenda item

To consider the report on the Fourth Financial Review 2025/26.

The Committee considered the report on the Fourth Financial Review for 2025/26. 

During consideration of the report the Sub Committee raised concerns on the significant and growing SEND overspend, including an unexpected additional £7m pressure.  It was explained that this had been driven by higher than forecast demand for EHCP assessments influenced by the anticipated national SEND reforms due in 2029 and by the reliance on independent and non-maintained special schools due to insufficient local provision.  Forecasting issues were partly attributed to system upgrades which had improved visibility of pressures rather than creating them. 

It was noted that a £0.26m overspend was being reported in SEND transport and it was asked why these costs were not more predictable.  It was confirmed that SEND transport pressures were now feeding into future budget planning and that additional transport costs had arisen from statutory school transport duties with transport provision based on distance, age, safety of route and SEND status.

Concerns were raised over continued underspends in the capital programme and the re-profiling of schemes across years.   Officers confirmed that movements between financial reports (FR3 to FR4) captured grant timing changes.  Work was underway to ensure that no Government grant funding was lost.   The Sub Committee emphasised the need for greater member scrutiny and clarity over the capital programmes’ relationship with the revenue budget.

Reference was made to the Transformation Programme, and concerns were raised on the rising costs and uncertainty of delivery of the promised savings.  Officers acknowledged the delays to the Target Operating Model and attributed this to slippage rather than abandonment.  The Programme was currently focusing on management span and layers, reduction of use of agency staff, sickness absence and productivity improvements.  The savings had been reprofiled into future years with the current year risks flagged as ‘red’.

The Sub Committee was being asked to recommend to Council the approval of a Supplementary Capital Estimate of £2.280m for the feasibility and enabling works for a new structure over the wildlife corridor to allow development of the Capricorn local plan site, with the funding from S106 contributions.  It was confirmed that the proposals met the legal requirements for the use of S106 monies.  Members noted historic delays to the site and the 10-year deadline to spend the funds.

RESOLVED:  That the Sub Committee

1               note the factors leading to a forecast balanced position and note the contents of Annex 1, Section 2 which details progress on the delivery of the MTFS approved budget policy change items, the RAG ratings and the latest forecasts and note the actions to be taken to address any adverse variances from the approved budget.

2               note the in-year forecast capital spending of £137.915m against an original capital budget (at outturn) of £208.491m.

3               note the approved Supplementary Capital Estimates and Capital Virements up to £500,000 as per Annex 1, Section 3, Table 3.

4               note the Capital Virements above £500,000 up to and including £5,000,000 to be approved in accordance with the Council’s Constitution as per Annex 1, Section 3, Table 4.

5               Recommend to Council to approve the Supplementary Capital Estimate Request over £1,000,000 as per Annex 1, Section 3, Table 5.

6               note the Capital Budget Reductions as per Annex 1, Section 3, Table 6.

7               note the available reserves position as per Annex 1, Section 4.