Agenda item

In accordance with the Council’s Financial Procedure Rules this report informs Members of the current financial position to the end of July 2025 for the 2025/26 Financial Year, provides an update to members on the current progress for the achievement of the savings target to be achieved for the budget set 2026/27 and an update of the Cabinet Member report on activity for the 2024/25 financial year.

In accordance with the Borough Council’s Financial Procedure Rules, the  Head of Finance and Section 151 Officer informed Members of the current financial position to the end of July 2025 and provided an update on the current progress towards the achievement of the savings target for 2026/27.

Attention was drawn to an underspend of £92,050 in salaries due to vacancies above the budgeted position; an increase of £148,702 on the revenue budget due to additional reserve contributions and additional grants; a small under recovery of income for Development Control and Land Charges of £5,553 as a result of being offset by parking income; and the details in investment income as set out in paragraphs 3.6.1 to 3.6.2 of the report.

As at the end of July 2025 a number of areas had been identified as variations to the original budget estimates.  These were detailed in paragraphs 3.7.1 to 3.7.6 of the report and resulted in a current net favourable variance of £729,645 as at the end of July.

Reference was made to the savings target of £600,000 to be achieved by the time the budget for 2026/27 was set.  In addition, a milestone of saving a minimum of £300,000 by summer 2025, to feed into the budget setting process for 2026/27 had been set.  An outturn review of expenditure and income against current budgets had been undertaken. The results were summarised in 5.4 of the report and illustrated that there was a shortfall.  However, if an overprovision of inflation for the Waste Services Contract, which was considered an ongoing reduction in the Medium-Term Financial Strategy (MTFS), was factored in, the revised savings total came to £302,500.

Reference was made to the savings target for 2026/27 and Members were advised of positive progress on achieving the milestone of ‘saving a minimum of £300,000 by summer 2025 to feed into the budget setting process for 2026/27’. An exercise reviewing previous and current budgets had identified £182,500 in savings, which when supplemented by lower-than-expected inflation on waste contracts, brought total identified savings to £302,500.

Finally, Members were provided with a broader overview of financial successes and pressures under the Cabinet Member for Finance portfolio  and noted the achievement of savings targets and ongoing budgetary challenges.  The Borough Councils strong financial performance including fully audited accounts, high rates of Council Tax and Business Rates collection (97.93% and 99.29% respectively, which was the highest in Kent) and successful leveraging of over £1.5 million in external grant funding for carbon reduction projects at leisure facilities was highlighted.

Members expressed concern in respect of the significant financial challenges represented by temporary accommodation and were pleased to note a reduction in clients.  The efforts to move individuals into more cost-effective housing, such as council owned property and away from expensive overnight accommodation, and the factors contributing to continued overspend despite these improvements were noted.

Clarification was also sought on the Leisure Trust utility support payments and car parking arrangements.  It was confirmed that utility support was linked to energy price inflation and was expected to decrease.  Further reductions were anticipated if energy prices stablished.  The Leisure Trust had also budgeted for the parking arrangements for its members and this was now reflected in their budget estimates.