To enable Cabinet to consider the updated financial forecast and budget proposals for 2025/26 for consultation with the Overview and Scrutiny Committees.

RESOLVED that –

a)     the updated Financial Forecast and proposed budget position for 2025/26, as set out in item A.5 of the Report of the Corporate Finance & Governance Portfolio Holder and its appendices, be approved; and

b)     the Resources and Services Overview and Scrutiny Committee’s comments be requested on this latest financial forecast and proposed position for 2025/26.

Cabinet considered a detailed report of the Corporate Finance & Governance Portfolio Holder (A.5) which enabled it to consider the updated financial forecast and budget proposals for 2025/26 for consultation with the Resources and Services Overview and Scrutiny Committee.

Members were informed that, as part of maintaining a ‘live’ forecast, this report ‘built’ on the last position that had been presented to Cabinet on 15 November 2024.

It was reported that, despite the on-going challenging financial and economic environment, confidence in the long-term approach to the forecast continued, which was supported by the forecast risk fund.

The Council had maintained a prudent and sustainable approach to its long-term plan, which provided the ‘platform’ against which it could consider its financial position in response to the challenging economic outlook it continued to face.

Cabinet was advised that a limited number of changes to the forecast had been made since 15 November 2024, with a revised position set out in Appendix A to the Portfolio Holder’s report. Those changes required broadly reflected updates to cost pressures and savings but also now reflected the most up to date position in respect of the council tax ‘base’ for 2025/26. 

In terms of the cost pressures included in the forecast, they broadly reflected unavoidable items, many of which related to issues already identified during the year, with one-off adjustments made in 2024/25 pending the development of the forecast. Many of the cost pressures proposed to be included therefore reflected the on-going impact from those known issues in 2025/26 and beyond.

Work remained on-going in consultation with Services and it was likely that additional cost pressures would need to be included in later iterations of the forecast before final budget proposals were recommended for presenting to Council in February 2025.

Members were told that in terms of the savings identified to date, two new items had been included since the 15 November 2024 report mentioned above and that they had also now been split into those expected to be included in the 2025/26 budget and those that remained subject to further review over the coming year in readiness for confirming as part of agreeing the budget for 2026/27. The necessary work to reflect the identified items within the 2025/26 budget remained on-going and the position would be finalised for consideration by Cabinet in January 2025.

Taking the above into account and in comparison, with the position reported to Cabinet on 15 November 2024, the net overall position reflected a forecasted annual deficit of £1.508m (a decrease from £2.476m). This was broadly due to the expected deliverability of savings earlier in the forecast period i.e. from 2025/26.  In line with the long-term plan, it was currently proposed to meet this from the Forecast Risk Fund, which, based on the current forecast, would leave a balance within the fund of £5.157m at the end of 2025/26.

An annual review of reserves had also been undertaken, which had highlighted the need to continue to maintain a number of reserves to  ...  view the full minutes text for item 98