Agenda item

The Committee gave consideration to a report presented by the Head of Finance (Deputy S151) regarding the Budget and Treasury Monitoring - Final Outturn 2025/2026. It was explained that against revenue budgets the Council was reporting a net revenue underspend of £1.488m which reflected strong budget control in the main with one off variances in year, rather than ongoing savings for future years. The outturn variance was summarised, with Members directed to section two of the report for full details. The Committee was also advised of the proposed allocation of the surplus, with approval sought for this.

Note:              Councillor P. Howitt-Cowan returned to the Chamber at 7.48pm

Committee Members were directed to section 2.5.1 of the report, seeking approval for the use of reserves greater than £50,000, and also section 2.4.2 regarding amendments to the fees and charges schedules for 2026/27, which were to be recommended to Full Council for approval. These were the specifically the introduction of a Building Safety Levy introduced under the Building Safety Levy Act 2022 from October, and the planning application fees published by Government at the end of February.

In relation to the capital programme, Members heard there was a final underspend against budget of £7.118m, with £1.698m requested as carry forward in to 2026/27. The report also included details of balances held on usable reserves at year end 2025/26 and forecast balances as at year end 2031/32. This summary would be provided as part of the quarterly monitoring reports throughout 2026/27 to provide Members with the latest position.

It was explained that the forecast balance on reserves only included approved movements to and from reserves but did not take account of the full £8m identified for reprioritisation. Other use of reserves in the pipeline would be included as they were approved. Further use of reserves may be identified in the future. It was highlighted that the balance in the final column also included annual contributions to several reserves, which would be reviewed through the MTFS and, if reduced, would lower the forecast reserve balance and also be a gain for the revenue accounts.

Members were advised that, in addition to the quarterly update to this committee, there would be a separate review of reserves report presented in November as part of the budget setting process.

The Committee thanked the Finance Team for their work, acknowledging the challenges faced. With regard to the project reserve for Local Government Reorganisation, it was explained that there would be significant work required to ready the council for reorganisation, with there also being a transition fund with other authorities. Members commented on the costs involved and questioned the government’s rationale of LGR being a money-saving process. It was acknowledged that the decision outcome was expected imminently.

The Chairman highlighted the benefits of building reserves up, and again thanked the Finance Team for their diligence.

With no further questions or comments, and having been proposed, seconded, and voted upon, it was

            RESOLVED that

a)    the DRAFT out-turn position of a £2.117m gross contribution to reserves against the revised budget for 2025/2026, which includes £0.629m of approved revenue carry forwards into 2026/2027, be accepted. The remaining balance being a net underspend and contribution to reserves of £1.488m; and

b)    the creation of a new earmarked reserve ‘Planning Fee Reserve’ be approved; and

c)    the balance of £1.488m be approved to be transferred as follows (2.2):

·         £0.200m contribution to the Maintenance of Facilities Reserve

·         £0.150m contribution to the Health and Wellbeing Reserve – Temporary Accommodation

·         £0.370m contribution to a new Planning Fee Reserve

·         £0.088m contribution to the Business Rates Volatility Reserve

·         £0.645m contribution to the Project Investment Reserve (LGR)

·         £0.035m Transfer to the Business Planning Contingency budget

d)    the use of Earmarked Reserves - £0.303m (2.5.1) be approved; and

e)    the use of Earmarked Reserves approved by the Chief Finance Officer using Delegated powers (2.5.2) be accepted; and

f)     the contributions to Earmarked Reserves - £0.073m (2.5.3) be approved; and

g)    the contributions to Earmarked Reserves approved by the Chief Finance Officer using Delegated powers (Section 2.5.4) be accepted; and

h)    the amendments to the statutory fees and charges be included in the schedules for 2026/2027 (2.4.2) and recommended to Council for approval.

CAPITAL

i)     the final Capital Outturn position of £7.206m (Section 3) be accepted; and

j)     the amendments to the Capital Schemes 2025/2026 as detailed in 3.2.1 to 3.2.2 be approved; and

k)    the amendments to the Capital Schemes 2026/2027 as detailed in 3.2.3 and 3.3.4 be approved.

TREASURY

l)     the report, the treasury activity and the prudential indicators (Section 4) be accepted.