Appendix3

Recommended · This went to the meeting on Mon 15 Dec 2025. What was decided is in that meeting's minutes.

It recommends a contingency of £200,000 for unforeseen operational costs, plus £100,000 for other unexpected or unforeseen events. p2p3

To address uncertainty over future income, it recommends reserves of about £750,000, equivalent to six months of car parking income. p4

It recommends maintaining a Repair and Redecoration Reserve, proposing this be set at a minimum of £150,000, based on six months of average annual spending of £300,000. p5p6

In total, the reserves referred to amount to £1,200,000, plus additional sums for planned spending commitments such as repair and redecoration. p8p12p13

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• p2a) Contingency based on Net Expenditure (2025/26 Budget) A contingency fund is proposed to cover unforeseen operational costs. The expenditure budget for 2025/26 is approximately £1,786,000. It is recommended that a contingency of £200,000 (approximately 10% of total expenditure) be retained for unexpected operational expenditure.
• p3b) Provision for Other Unexpected/Unforeseen Events In addition to the operational contingency, an amount may be required to meet unforeseen emergencies or other unexpected needs. Having considered potential risks and the likely level of funding that may be required, it is recommended that £100,000 be retained for this purpose.
• p4c) Uncertainty Over Future Income Prudent organisations typically retain reserves equivalent to several weeks or months of income, to allow time to either develop new income streams or reduce related expenditure. Potential risks to income include a downturn in economic activity, rising fuel costs reducing tourist numbers, major disasters, adverse weather, pollution incidents, or reputational issues (e.g. deterioration in bathing water quality). To mitigate such risks, it is recommended that reserves equivalent to six months’ income be retained. Based on the car parking income included in the budget for 2025/26 this amounts to approximately £750,000.
• p5d) Repair and Redecoration Contingency The organisation recognises that essential repair and redecoration works are necessary from time to time to maintain premises in a safe and appropriate condition. As these costs are often irregular but potentially significant, it is recommended that a designated Repair and Redecoration Reserve be maintained as a contingency. This reserve will ensure the organisation can continue to fund such works, even in years of financial uncertainty.
• p6The reserve level will be reviewed annually, considering maintenance cycles and the condition of the properties. Based on the forward plan for the next five years, anticipated expenditure averages £300,000 per year. It is therefore proposed that the reserve should be set at a minimum of six month’s average spend (£150,000).
• p8Appendix 3 In summary the Reserves to be retained amount to :-
• p12d) Repair and redecoration contingency 150,000 Total 1,200,000
• p13e) Plus planned spending commitments e.g. R&R