To provide a general update and overview of the Council’s financial position against the 2025/26 budget as at the end of September 2025 and looking ahead to 2026/27 and beyond.

RESOLVED that Cabinet –

(a)   notes the Council’s in-year financial position at the end September 2025;

(b)   approves the proposed adjustments to the 2025/26 budget, as set out in Appendix 1H and requests Officers to review the potential on-going impact in 2026/27 and beyond, where necessary, as part of developing the forecast and detailed estimates for further consideration by Cabinet later in the year;

(c)   agrees that the Council continues to be a member of the Essex Business Rates Pool and Council Tax Sharing Agreement with Essex County Council and the other Major Preceptors in 2026/27, if it remains financially advantageous to do so;

(d)   notes the updated context to the financial forecast from 2026/27, as set out in this report (A.2) and requests Officers, in consultation with Portfolio Holders, to further develop the financial forecast alongside the development of the Council’s priorities; and

(e)  formally invites the views of the Resources and Service Overview and Scrutiny Committee on the information set out in this report along with the Council’s wider financial position, as part of its work programme for the year.

Cabinet considered a report of the Corporate Finance and Governance Portfolio Holder (A.2) which provided it with a general update and overview of the Council’s financial position against the 2025/26 budget as at the end of September 2025 and looked ahead to 2026/27 and beyond.

SECTION 1 - In-year financial position at the end of September 2025:

The report highlighted that several adjustments had been made to the 2025/26 budget as part of developing the detailed estimates that had been agreed by Full Council in February 2025. This had been complemented by further 2025/26 budget amendments as part of the Outturn Position for 2024/25 that had been reported to Cabinet in July 2025.

Members were advised that, with the above approach in mind, the in-year position at the end of September 2025 was broadly performing to the underlying budgetary position with no new major issues emerging relating to 2025/26. 

However, it was considered timely to address a limited number of items that had been identified to date, which it was proposed to fund on an initial one-off basis in 2025/26 as set out in Appendix 1H to the Portfolio Holder’s report (A.2). Any longer-term impact would be considered as part of developing the forecast as detailed in Section 2 of the report (A.2).

Cabinet was informed that the position to the end of September 2025, as set out in more detail within the appendices, showed that overall, the General Fund Revenue Account was underspent against the profiled budget by £3.661m. However, it was important to highlight that this position continued to primarily reflect the timing of expenditure across several budgets along with the timing of when the Government reimbursed the Council for the cost of meeting housing benefit claims. 

It was acknowledged that other expenditure or income trends might still emerge / develop over the remainder of the year, which would be included in future financial performance reports as necessary.

In respect of other areas of the budget such as the Housing Revenue Account, capital programme, collection performance and treasury activity, apart from additional details set out within the report, there were no other major issues that had been identified to date.

SECTION 2 Updated long-term financial forecast:

Cabinet was aware that, as set out earlier in the meeting, the waste contract had highlighted a significant financial challenge for the Council and, when taken into account with the potential impact of Local Government Reorganisation, which had emerged / evolved since the last forecast had been considered, it had presented an important financial ‘cross roads’ that set the financial context over the next two years.

It was recognised that the next two years could be the Council’s last two budget ‘cycles’ ahead of a successor Unitary Council being established and in place from 1 April 2028. With that in mind, there was clearly now an underlying and critical need to revisit / revise the Council’s financial plans over the next two years.

Given the timing and expected financial scale / impact of the outcome of the waste and street cleansing tender process, an updated forecast had not presented within this report, as would normally be the case at this time of the year. However, several activities were underway to reflect on the above to inform the presentation of a detailed budget position to Cabinet on 19 December 2025, that would aim to set out a funded two-year financial forecast, reflecting savings and cost pressures alongside the outcome of the Government’s current fair funding review and proposed business rates reset where possible. 

Members were reminded that the challenges faced by the Housing Revenue Account also remained significant and included increased expectations and requirements that continued to emerge from the Social Housing Regulation Act and associated enhanced powers of the Housing Regulator. The HRA 30 Year business plan would be developed over the coming weeks, with the aim of continuing to respond to such challenges set against the wider context of the underlying and essential requirement to provide a financially sustainable position in the long term that would in turn provide a ‘sound’ position against which the potential new Unitary Council could consider its own plans and aspirations from potentially as early as 2028/29.

In order to set out the latest financial position for the Council and to respond to emerging issues in 2025/26 and to develop the budget and long-term forecast from 2026/27:-

It was moved by Councillor Stephenson, seconded by Councillor Kotz and:-

RESOLVED that Cabinet –

(a)   notes the Council’s in-year financial position at the end September 2025;

(b)   approves the proposed adjustments to the 2025/26 budget, as set out in Appendix 1H and requests Officers to review the potential on-going impact in 2026/27 and beyond, where necessary, as part of developing the forecast and detailed estimates for further consideration by Cabinet later in the year;

(c)   agrees that the Council continues to be a member of the Essex Business Rates Pool and Council Tax Sharing Agreement with Essex County Council and the other Major Preceptors in 2026/27, if it remains financially advantageous to do so;

(d)   notes the updated context to the financial forecast from 2026/27, as set out in this report (A.2) and requests Officers, in consultation with Portfolio Holders, to further develop the financial forecast alongside the development of the Council’s priorities; and

(e)  formally invites the views of the Resources and Service Overview and Scrutiny Committee on the information set out in this report along with the Council’s wider financial position, as part of its work programme for the year.