To consider the Financial Review 2025-26 July to September Report (DFP/12/2526).

Director of Finance and Procurement, Mike Rea presented the report and provided Members with assurance that the approved budget remained robust and that the current expenditure forecast could be contained within the available resources whilst providing updates on the Revenue Budget, Capital Budget, Reserves, and Treasury Management, covering the period from April to September 2025.

Members were advised that budget movements in the second quarter related to the planned use of reserves; adjustments to external funding, for the delivery of specific projects; and self-balancing virements. As all adjustments were self-balancing, they did not affect the approved net budget requirement, whichremained at £77.934 million.

As a result of one-off savings, a total saving of £1.35m had been identified and Members were asked to approve allocating this amount to increase the Clothing Reserve by £850,000 and the Capital Investment Reserve by £500,000 to support future expenditure on fire kit and equipment replacement and to fund capital projects to reduce borrowing levels.

Paragraph 18 of the report outlined the changes to the capital programme since the last review and that during this quarter the £1.58m increase was funded through specific grants and revenue. During the quarter, the level of capital borrowing for 2025/26 decreased from £41.982m to £40.380m, primarily due to the £2.0m drawdown from Capital Reserves agreed at the Q1 financial review.

This reduction also reflected a net adjustment of £448,000 following changes in capital receipts: the removal of the planned sale of Vesty 5A (required for ICT Managed Services provision), an anticipated increase from the sale of Richie Avenue stores, and a £0.050m reduction in the capital programme relating to ICT software.

Members’ attention was drawn to the table on page 25 outlining reserve movements during the quarter and advised that the General Reserve remained unchanged at £3.9m.

Paragraphs 26 to 31 on pages 16 to 18 of the report outlined Treasury Management Performance which was consistent with the approved treasury management strategy for 2025/26.

Councillor Les Byrom confirmed that   the report showed the Authority’s financial position backward and forward looking which allowed Members to understand the level of reserves and how much was capital. This reflected how matters have been managed and controlled and provided confidence to Members.

Councillor Dave Hanratty queried whether the debt of £33.7m was what was anticipated at end of year and if it was on target. Mike Rea confirmed that this would not change and was on target.

It was noted that there was a number of loans with a fixed interest rate.

Councillor Dave Hanratty asked about Write-offs and if there was any idea what these might be. It was confirmed that the above £33.7m debt related to the Authority’s borrowing and Write-off of outstanding debtors would be confirmed within future reports.

Councillor James Roberts said he felt it was useful to have £1.350m underspend which was a relatively small sum of money however he queried whether the monies resulted from vacancies which you would want filled and that the vacancies were only short term based. Mike Rea advised that some of the vacancies were due to retirement and others resulted from external funding. 

Councillor Jeanette Banks stated that she felt it was important that the money was used for what the Authority needed and passed on her thanks for the content of the report

RESOLVED that;

a)     the contents of the report be noted;

b)    the use of the forecast £1.350m savings to fund an increase in the Clothing Reserve £0.850m and Capital Investment Reserve £0.500m to enable future service expenditure relating to the replacement of fire kit and equipment and to fund capital expenditure to reduce the level of capital borrowing be approved;

c)    the proposed revenue and capital budget alignments be approved and;

d)      the Director of Finance and Procurement be instructed to continue to work with budget managers to maximise savings in 2025/26 and use any savings to reduce the level of capital borrowing.