URL: https://rother.moderngov.co.uk/ieDecisionDetails.aspx?ID=2007

Decision Maker: Cabinet

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: No

Purpose: To update Members on the Revenue and Capital Budget Monitoring Position for Quarter 3 2025/26. This report also summarises the position to date on delivery of the savings targets for 2025/26.

Content: Members received and considered the report of the Director of Resources on the Revenue and Capital Budget Monitoring Position for Quarter 3 (Period 10) 2025/26.  The report also provided an update on progress against the 2025/26 savings targets.  The Revenue Budget (RB) and Capital Programme (CP) statements were summarised at Appendices A and B to the report respectively and a review of the agreed savings targets for 2025/26 had been undertaken, contained within Appendix C to the report.   The RB was currently forecast to be £15.581m at year end, compared to the approved budget of £15.716m.  £344,000 of this sum was anticipated to be funded from flexible capital receipts, leaving the forecast service underspend as £479,000.  The agreed budget already anticipated a draw from reserves of £694,000.  In addition to this, adverse variances of £769,000 were anticipated which related to financing costs and an error at budget setting on government grants.  The combination of these variances meant the Council was forecast to draw £1.075m from reserves rather than the budgeted £694,000. The main variances were summarised within Appendix A to the report.   The further review of the deliverability of the agreed savings targets for 2025/26, outlined within Appendix C to the report, anticipated £422,800 to be fully deliverable (green status), with £130,400 identified as undeliverable in year (red status).  The remaining savings target of £531,200 was anticipated to be partially deliverable in year (amber status).  Monitoring would continue throughout the financial year.   The CP for 2025/26 and beyond was reviewed and reforecast as part of the governance improvements led by the Corporate Development Team. The priority was to ensure the CP remained affordable, minimising any impact on the RB from borrowing and interest costs.  This approach supported the medium-term sustainability of the CP whilst maximising opportunities to secure external grant funding.   The updated CP totalled £191m, including prior year expenditure.  Projected spend from 2025/26 to 2028/29 was approximately £124m.  For 2025/26, planned expenditure of £48m was now forecast at around £45m due to re-phasing.  The phasing to the CP had been adjusted as part of the 2026/27 budget process to reflect the amendments outlined within the report.   General Reserves (GR) stood at £5.00m, plus £5.54m in Earmarked Reserves.  If the projected revenue outturn was achieved, the GR would reduce by £1.075m to £3.925m.   As previously reported, the Council might need to draw on reserves to cover losses from the Hermes Property Fund investment and to meet costs arising from changes to capital schemes that required charging expenditure to revenue.  These potential transactions were not expected to exceed £1.057m.  Should they materialise, the GR was forecast to reduce to £2.87m by year end.   Financing costs excluded the anticipated interest receivable in respect of the loans made to the Housing Company (forecast to be £1,868,500 for 2025/26), as the Council would not receive this until the Housing Company could commence repaying the loans provided to it. It was proposed that the surplus generated from allowing for this interest payable within the Council’s accounts was moved to an Earmarked reserve until realised in cash terms, at which point it would be transferred to the General Reserve.    Members were asked to note the recent announcement that Elected Members would be eligible to join the Local Government Pension Scheme from 1 April 2026.  As this had not been know at the time of budget setting for 2026/27, it had not been incorporated within the budget set, therefore officers would undertake an analysis of this cost pressure and report it to a future committee. Joining the scheme was optional for Members, but Members over the age of 75 would not be eligible.   Members raised concerns about the impact any non-budgeted increase in staff salaries would have on the budget now that the Council was part of the National Conditions; incremental salary increases plus a 3% uplift had been included in the budget only. The Council’s Savings Programme was therefore critical.     RESOLVED: That:   1)    the report be noted; and   2)    the Committee note the changes anticipated for 2026/27 in respect of Elected Members’ eligibility to join the Local Government Pension Scheme.    

Date of Decision: March 16, 2026