URL: https://councillors.knowsley.gov.uk/ieDecisionDetails.aspx?ID=7774

Decision Maker: Cabinet

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: The report will approve the allocation of resources and will therefore need to be a key decision.  

Content: The report will approve the allocation of resources and will therefore need to be a key decision.               The Cabinet considered the report of the Executive Director (Resources), which set out the mid-year forecast of the Council’s 2025/26 revenue budget outturn position.    Councillor Mrs J Lonergan, Cabinet Member for Resources, reported that the increased demand, need and costs continued to have a significant impact on the provision of essential public services by all local authorities. Councillor Lonergan highlighted that the forecasts suggested that the deficit on service budgets could be as high as £7.277m in 2025/26, which was largely due to severe increases in demand for, and costs of, Children’s Social Care placements and Home to School Transport provision.  In this respect, taking surpluses of £1.835m on other Council-wide budgets into account, the overall forecast had been a potential deficit of £5.442m at the end of 2025/26.   Councillor Lonergan reported that the Council had previously set aside one-off resources of £3.557m to help manage the unbudgeted in-year pressure and had also implemented a range of actions to mitigate this impact, including controls on non-essential expenditure and continued close monitoring of service budgets. Councillor Lonergan highlighted that it would be essential that Managers across the Council continued to ensure robust financial management to reduce the extent of the deficit at year-end.    Councillor Lonergan reported that the Council had also ensured that it maintained General Balances at a level appropriate for the nature of the financial risks facing the Council, and they would be available to fund any further shortfall at the year-end.  It is therefore forecast that this approach would enable the Council to report a balanced overall position at year-end as detailed in section 9 of the report. In this respect, the need to utilise one-off resources in this way clearly reduced the scope to use that money to make other investments in the continued growth and regeneration of the Borough.    Councillor Lonergan reported that the demand, need and inflation pressures in the current year would add significant costs to the Council’s medium-term financial forecasts and the Council’s medium-term forecasts were currently being updated to reflect latest information on all expenditure and funding forecasts.  Councillor Lonergan highlighted that the position on local government funding remained extremely uncertain, and the Government had recently confirmed that key announcements on funding would be delayed until November and December 2025. In this respect, it was therefore intended to bring revised financial forecasts to the Cabinet in December 2025.   Councillor Lonergan reported that the Council’s commitment to strong financial management had provided much-needed financial resilience over recent years, although, the ability to sustain key services had been increasingly difficult as demand and costs continued to rise.  Councillor Lonergan reported that the need to fund the identified budget monitoring pressures, combined with potential new pressures emerging in the current year, would significantly reduce the Council’s flexibility to manage budget pressures, and its ability to allocate one-off resources to new investments.   RESOLVED – That:-   (i)            the latest budget monitoring position for the Council as set out in this report be noted; and (ii)           the allocation of one-off resources to fund the 2025/26 deficit as set out in section 9 of this report be endorsed.  

Date of Decision: November 5, 2025