Councillor Mark Lowry (Cabinet Member for Finance) and Ian Trisk-Grove (Service Director for Finance) introduced the Finance Monitoring Report, Month Three, and discussed:

a)     The report covered Quarter 1 (April–June 2025) and showed an adverse variance of £2.609 million against the approved revenue budget, reflecting emerging pressures across key services;

b)    The pressures were primarily in children’s services, special educational needs, homelessness, and adult social care, which together consumed approximately 85% of the core revenue budget;

c)     Children’s services faced a pressure of £418,000 due to an increase in independent sector placements, exceeding budget assumptions by two placements;

d)    An additional adverse variance of £1.557 million was attributed to unexpected survey requirements in facilities management services, linked to the council’s asset register and the need for comprehensive surveys of the corporate estate;

e)     The council had banked £4.7 million in savings to date, representing 43% of the £11 million savings target for the financial year;

f)      The capital programme had increased by £38.2 million in Quarter 1, primarily to fund upgrades to the Civic Centre, the National Marine Park, additional SEND placements, and housing projects;

g)     The majority of the additional capital funding was grant-based and did not form part of corporate borrowing.

In response to questions, the Panel discussed:

a)     Concerns around the transparency of asset disposals. Councillor Lowry explained the surplus property declaration process and offered to investigate specific cases if details were provided;

b)    Clarification that the Dedicated Schools Grant (DSG) backstop had been extended by two years, with further guidance expected in a forthcoming white paper towards the end of the year;

c)     Pressures in Customer and Corporate Services included the delayed opening of the Guildhall which had resulted in a loss of expected revenue income from weddings and events, as well as additional surveys and investment undertaken in the asset base;

d)    Vacancy savings targets in legal and finance had been determined to be unachievable due to service demand. Recruitment had been necessary to meet operational needs;

e)     Vacancy savings and agency staffing costs in children’s services were clarified. The department was being restructured to reduce dependency on agency staff and improve continuity of care;

f)      Projects were underway to reduce external placements for children including property sourcing and recruitment of service managers, though progress had been slower than desired;

g)     Concerns about temporary accommodation pressures linked to the Renters Reform Bill. It was confirmed that there had been an increase in Section 21 evictions, likely due to market anticipation and fear of upcoming changes;

h)    Concerns regarding the Council’s gross debt levels. It was explained that while headline figures appeared high, much of the debt was offset by grant-funding schemes and investments which did not show in the mandated reporting requirements. The Council operated within CIPFA guidelines, and utilised the advice of external advisors.

1. Action: Officers to providea breakdown of Private Finance Initiative (PFI) and finance leases in future reporting;

2.     Action: Officers to provide further details on vacancy levels and vacancy targets for Council departments;

3.     Action: Officers to provide further information relating to the increase in  Section 21 evictions and resulting trends in temporary accommodation pressures;

4.     Action: To schedule further scrutiny of legal and finance department vacancies and staffing demand to the work programme following commencement of a business case.

The Panel agreed:

1. To note the Finance Monitoring Report.