Decision
Analysis
outcome: Recommendations were approved, including replenishing reserves, using capital receipts for revenue expenditure, approving capital slippage requests, and revising the capital budget.
summary: The decision involves approving recommendations for the allocation of budget surplus, replenishing reserves, and addressing cost pressures in various service areas.
topline: The Cabinet has decided to approve recommendations for budget surplus allocation, replenishing reserves, and addressing cost pressures in various service areas.
reason_contentious: This issue may be contentious as it involves financial decisions that impact various service areas and schools, with potential implications for service delivery and budget management.
affected_stakeholders: ["Council Fund", "Welsh Government", "Schools", "Service areas"]
contentiousness_score: 6
political_party_relevance: There are no explicit mentions of political parties in the decision.
URL: https://democracy.monmouthshire.gov.uk/ieDecisionDetails.aspx?ID=1132
Decision Maker:
Outcome: Recommendations Approved
Is Key Decision?: No
Is Callable In?: No
Purpose:
Content: That Cabinet recognises: A gross revenue budget surplus at outturn of £1,239,000 prior to transfers to reserves, representing a 0.6% variance against the budget. After accounting for approved transfers to/from earmarked reserves of £742,000, the final net surplus stands at £497,000, which will be added to the Council Fund. The surplus reflects a significant improvement of £2.83 million compared to the previous financial update. This positive variance is largely due to an unbudgeted grant of £1.19 million from the Welsh Government in March 2025, alongside favourable service budget positions resulting from effective budget recovery actions. The Council’s continued financial discipline, combined with late grant funding has enabled the replenishment of reserves in line with the Medium Term Financial Strategy. Despite the positive outturn, significant cost pressures remain in Social Care, Additional Learning Needs, Waste, Passenger Transport, and Homelessness/Housing, with a combined overspend reported for the year of £4.6 million. While some of these were addressed in the 2025/26 budget, these areas continue to pose financial risks. An increase in school reserve deficits of £3.19 million during the year, resulting in a cumulative year-end deficit of £4.09 million. Fifteen schools were in a deficit balance at year-end. Several schools continue to face structural budget challenges, which are being addressed through recovery plans. Total capital expenditure for the year was £48.81 million, with a gross underspend of £2.73 million, primarily due to underspends in Infrastructure and Property Maintenance and the receipt of additional unbudgeted grants that have offset core budgets. Capital slippage requests total £25.03 million, which includes £1.3 million that can be allocated out of the underspend achieved and will be re-purposed to create a capital contingency budget for 2025/26 to mitigate scheme risks or address emerging capital priorities. There are early indications of cost pressures against the 2025/26 revenue budget, exceeding the £850,000 contingency held. Prompt mitigation by services will be required to ensure a balanced outturn position is achieved. That Cabinet approves: The strategy to replenish reserves as outlined in Section 7, including the allocation of the £497,000 year-end surplus to the Council Fund. The use of £3.68 million in capital receipts to fund eligible revenue expenditure under the Welsh Government’s “flexible use of capital receipts” direction (Appendix 3). The capital slippage requests of £25.03 million (Appendix 1 - Section 4), acknowledging the factors that delayed project delivery. The capital budget revisions detailed in Appendix 5, reflecting finalised grant funding awards for the year.
Date of Decision: July 16, 2025