Councillor Mark Lowry (Cabinet Member for Finance) introduced the Finance Monitoring Report Month 6 and discussed:

a)     The report set out the revenue monitoring position of the Council at the end of September 2025, forecasting an adverse variance of £8.754 million;

b)    This variance reflected ongoing financial pressures across several key service areas, despite significant efforts by members and officers to deliver cost savings against delivery plans;

c)     Adult Social Care continued to experience increased demand, particularly in home placements, resulting in a reported budget pressure of £2.2 million;

d)    Children’s Services faced rising placement costs, with residential and unregistered placements exceeding budget, creating a pressure of £3.7 million;

e)     Community Connections remained under strain due to rising costs of temporary accommodation and increasing demand, maintaining a pressure of £0.91 million;

f)      Customer and Corporate Services reported a budget pressure of £1.2 million, largely due to unbudgeted facility surveys, resulting repairs, and associated maintenance costs;

g)     Costs associated with the directly elected Mayor referendum exceeded expectations by £169,000;

h)    The Growth Directorate was unable to realise a £1.3 million income target from the Energy to Waste Plant profit share arrangement due to scheduled maintenance downtime;

i)      £6.5 million of savings had been achieved in-year against target, with a further £3.7 million in progress;

j)      Opportunities to reprofile available reserves existed but would not fully address the shortfall;

k)     Work would continue with the Section 151 Officer and Chief Executive’s team to maintain focus on in-year delivery and address high placement costs across children’s, adults, homelessness and SEND;

l)      The five-year capital programme stood at £372 million, with a revised forecast of £161 million for the current financial year, reflecting prudent reprofiling of £17 million and offset by £12 million of new expected spend;

m)   76.8% of the capital programme was funded through grant contributions and in-service supported borrowing;

n)    All prudential indicators remained within approved limits, confirming that borrowing was managed within prudent boundaries;

o)    For the first time, the impact of the Dedicated Schools Grant (DSG) deficit on the revenue budget was reported;

p)    The capital monitoring and indicators demonstrated that the investment plan was affordable and sustainable, operating within a robust financial framework;

q)    Officers across all directorates were acknowledged for their continued work in maintaining mitigation actions in a challenging financial environment.

Ian Trisk-Grove (Service Director for Finance) added:

r)     The Month 6 report represented a full half-year review and clearly set out the challenges facing the Council into the second half of the year;

s)     Officers remained focused on delivering in-year savings and addressing the financial tasks ahead.

In response to questions, the Cabinet discussed:

t)     The pressures in Children’s Services were not unique to Plymouth, with other councils reporting similar overspends, including one projecting an £8.2 million overspend and another facing a £5 million pressure;

u)    Robust workstreams were in place to address the challenges in residential placements, which were a national issue.

The Cabinet agreed:

1. To note the forecast revenue monitoring position at Month 6 as an adverse variance of £8.754 million, with further risks highlighted;

2. To note that the overall Capital Budget 2025–2030 was revised to £372.311 million, as shown in Table 18, with reconciliation and detail of the movements in the quarter set out in Tables 18 and 21, and to recommend these amendments to City Council for approval;

3. To note the performance against prudential indicators for Quarter 2 2025–2026, detailed in Section 13 of the report.