URL: https://cmttpublic.cheshirewestandchester.gov.uk/ieDecisionDetails.aspx?ID=2013

Decision Maker: Cabinet

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: To inform Members of the financial performance of the Council as at the end of September. Members are asked to approve any proposed changes to the capital programme and revenue budget.

Content: To inform Members of the financial performance of the Council as at the end of September. Members are asked to approve any proposed changes to the capital programme and revenue budget. Cabinet considered the report of the Director of Finance which set out the financial performance of the Council at the mid year review of the 2025-26 financial year, covering the six month period from 1 April 2025 to 30 September 2025. The report summarised the key headlines for financial performance, covering revenue and capital budgets.   Cabinet noted that Cheshire West and Chester, along with councils nationally, continued to face unprecedented financial challenges.  At mid year the Council was forecasting an underlying overspend of £14.4 million (compared to £13.4 million at first review) and the report explained that significant financial pressures were in Adult Social Care.   Members were informed that previous pressures in children’s social care were not being flagged for 2025-26 with the number of children who required support described as stable and budgeted forecasted numbers of Children in Care being higher than the actual children requiring care, although the high cost placements forecast was above the budgeted figure. Due to volatility in this area, this remained a key risk area for the Council and monitoring would continue closely.   Cabinet Members were also informed of mitigating actions in-year across all Directorates and council-wide budgets to offset overspend pressure, including alternative funding sources as well as deliverable actions such as vacancy management and a reduction of non-pay related spend. After mitigation, there remained a £9.6 million overspend pressure (compared to £9.9 million at first review).  Immediate action was being taken to reduce this forecast pressure as failure to do so would seriously impact council financial resilience. Management Board and Directors would review high risk savings proposals and also agreed actions to ensure delivery of those proposals as well as identifying other funding streams and mitigations including future in-year budget savings which could potentially be brought forward.  Further mitigation was also planned, including a reduction of agency staff, a review of in-year expenditure of all departments and enhanced monitoring to ensure pay spend did not exceed agreed budgets. Adult Social Care weekly sessions would also be held to review the financial position and to ensure actions were being taken to reduce pressure.   Members noted that if the current overspend of £9.6 million was not mitigated, this would reduce reserves to £15.6 million which would take the Council below the risk-assessed range and plans would then be required to be put in place to replenish reserves in the Medium Term Financial Strategy.   Members acknowledged the highest expenditure for the Council was Adult Social Care, with an underlying overspend of £12.7 million which comprised 80% of the council’s overall debt position. Significant work had been undertaken to address expenditure, with the Council Client Finance team allocating staff to focus on Adult Social Care debt and this debt was beginning to stabilise as the Council moved forward.   Councillor Carol Gahan, Cabinet Member for Finance and Legal, led the discussion on the item as proposer and the item was seconded by Councillor Nathan Pardoe, Cabinet Member for Inclusive Economy, Regeneration and Digital Transformation.   Visiting Members: Councillor Charles Hardy spoke in relation to the item.   Members welcomed the comprehensive report and acknowledged the challenging financial situation for councils at both local and national level.  Members recognised the statutory requirement to protect vulnerable adults and older people and highlighted the borough’s increasing ageing population and the difficulties in quantifying the number of older people who may require future social care.   Members acknowledged that whilst the number of young people in children’s social care had decreased slightly, children with complex needs requiring high-cost placements was still a significant budget demand.  Members were reminded that unforeseen and urgent demand, for example a family suddenly falling into crisis, would result in significantly increased expenditure in childrens social care almost overnight, with this having been extremely difficult to predict but essential that the care needed for that family was delivered.   Staff were thanked for their continued diligence and hard work to deliver savings in such a challenging financial environment.    DECIDED:     That   Financial Performance:   1)            the forecast revenue and capital outturn of the Council as set out             in this report be noted;   2)            the Council remains within all Prudential Indicators set for itself             for the year (see paragraphs 4.91 to 4.92 and Appendix L) be noted;   3)            the significant financial challenges facing the Council and the need             to identify further in year mitigations to reduce the forecast overspend         be noted;   RECOMMENDATIONS TO COUNCIL:   1)            The current Council Tax Reduction Scheme is adopted and implemented for 2026-27 financial year with no changes (paragraphs 4.89 to 4.90); and 2)            In-principle approval be given for any additional capital receipts achieved in 2025-26, above the base target of £7.1m required to fund the capital programme, be made available to support transformation work for the Council (paragraphs 4.22-4.25).   Reason for Decision   To ensure the Council remains a well-managed authority, recognising and responding to emerging cost pressures and complying with current accounting requirements.   Alternative Options   The report sets out various recommendations. Members could choose not to approve the recommendations. However, this is not recommended as this would adversely impact the Council’s financial position.

Date of Decision: November 12, 2025