Report of the Cabinet

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The revenue projections show a projected overspend of £22.8m by 31 March 2026, with Children's Services forecasting a £13.5m overspend and Adult Social Care a £9.0m overspend. p11p12p13

The net impact is an unplanned draw from reserves of £11.8m in 2025/26, in addition to the planned £11.4m draw made in setting a balanced budget, and the Council is continuing actions introduced last year, including extra spending controls and an updated recruitment protocol. p19p20p21

The Capital Programme is forecasting a net £2.275m of additional expenditure, including a £5.180m overspend driven mainly by the Queensway Gateway Road. p23p26

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• p11Budget Outturn 1.5 The detailed revenue projections for each department are set out in the relevant appendices which show a projected overspend of £22.8m by 31 March 2026 (£24.1m at quarter 2).
• p121.6 The main headlines are: · Children’s Services (CSD) is forecasting a £13.5m overspend for 2025/26 (£14.9m at quarter 2). Whilst the forecast has reduced since quarter 2, the main financial pressure continues to come from the statutory demand-driven areas of Children We Care For, child protection, and Home to School Transport (HTST). There has been a slight improvement in the forecast for Children We Care For, achieved through a focus on commissioning activity and contract negotiations, and strengthened oversight, meaning that providers are held to account for cost, quality and outcomes. Mitigation measures include family support programmes, reunification work, strengthened market management, and increased health funding. The HTST forecast has improved on the previous quarter due to a reduction in the numbers of solo journeys for pupils with Special Educational Needs and Disability (SEND), increased route optimisation, and additional Dedicated School Grant income for eligible SEND pupils requiring transport. Not included in the revenue budget projections due to the statutory accounting override, the Dedicated Schools Grant High Needs Block deficit is projected to be £20.1m by the end of 2025/26. Demand for special school placements is rising, but local maintained schools are at capacity, forcing reliance on Independent and Non-Maintained Special Schools at significantly higher costs. Additionally, bespoke out-of-school provisions requested by parents further increase expenditure, with limited mechanisms to control these costs.
• p13· The forecast overspend for Adult Social Care (ASC) is £9.0m (no change from quarter 2) which largely relates to the Independent Sector. This is due to an increase in demand and more people being supported, however it should be noted that support is being provided at a lower average cost than previous years, because the service is managing the market, being prudent with packages of support and reviewing more people.
• p191.8 The net impact of the above is an unplanned draw from reserves of £11.8m in 2025/26. This is in addition to the planned £11.4m draw to present a balanced position in setting the 2025/26 budget. Use of the Capital Reserve has the potential to increase the requirement to borrow, leading into increased costs in the future; use of Collection Fund surplus and Insurance and Local Government Reorganisation Reserves will likely hinder the Council’s management of future risk and transformation. To address the projected in-year overspend and reduce the required draw from reserves, the Council continues with several actions introduced last year, including:
• p20· Additional controls on spending, including the requirement for purchase orders above £1,000 to be supported by a business case and approved by a reviewing board.
• p21· An updated recruitment protocol, including Corporate Management Team approval of non-core role recruitment.
• p231.10 The Capital Programme net expenditure for the year is projected to be £92.768m against a planned programme budget of £92.669m. A slippage risk factor has been applied to the capital programme budget to reflect likely slippage based on a risk assessment of historic levels of actual expenditure and slippage at a project / programme level. The risk factor will be held at a corporate level to enable services / project managers to manage project budgets at a local level, whilst ensuring greater robustness to the planning and monitoring process at a corporate level. The net budget after applying this risk factor is £90.493m. The Capital Programme is currently forecasting a net variation of £2.275m additional expenditure, with the key contributing factors outlined below.
• p261.13 The programme is reporting a £5.180m overspend, driven mainly by the Queensway Gateway Road, where redesign requirements, unexpected issues (including utility diversions and poor ground conditions), and a decade of construction inflation have significantly increased costs.