The Cabinet has decided to address the £1.1m overspend in the Council's 2025-26 financial year through significant mitigating actions.

URL: https://cmttpublic.cheshirewestandchester.gov.uk/ieDecisionDetails.aspx?ID=2059

Decision Maker: Cabinet

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: To inform Members of the financial performance of the Council for the 2025-26 financial year. 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 for the 2025-26 financial year. 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 for the 2025-26 financial year. This covered the 12-month period from 1 April 2025 to 31 March 2026 and summarised the key headlines for financial performance, covering revenue and capital budgets.   Councillor Carol Gahan, Cabinet Member for Finance and Legal, led the discussion on the item as proposer and the item was seconded by Councillor Louise Gittins, Leader of the Council.   Councillor Gahan highlighted key headlines within the report on the Council’s financial position. She reported that for the 2025-26 financial year, the Council had an overspend of £1.1m against its approved budget. Whilst spend had not been contained within the approved budget, the level of overspend had reduced during the year, from the forecast £6.9m pressure (after planned mitigations) reported to Cabinet in January 2026. She reported that whilst it was positive that the level of overspend had reduced during the year, there were continued significant cost pressures in Adults Services which had caused a final outturn pressure of £12.8m within the directorate.  However, Childrens Services had reported a £1.8m underspend, with the number of children in care reducing, however the number of high cost placements was above the budgeted figure and remained a key risk area for the Council due to its volatility.   Councillor Gahan further reported that as a result of the pressures mentioned, the Council had to identify significant mitigating actions in year from across all directorates and council-wide budgets to offset the pressure. The Council also utilised underspends on capital financing, driven by interest earnt on cash balances and reduced borrowing. In addition, the Council extended the Flexible Use of Capital Receipts for Transformation by £2.0m.    Members noted that the £1.1m overspend for 2025-26 reduced the general fund reserve to £24.1m, which fell below the Council’s risk assessed range of £24.9m to £27.9m. However, the 2026-27 budget included a planned contribution of £3.0m to the General Fund reserve which would replenish the reserve to within the Council’s risk arranged range.   Visiting Members: Councillor Charles Hardy spoke in relation to the item.    Cabinet Members welcomed the comprehensive report detailing the Council’s financial position, noting that it had been considered at Cheshire West and Chester Overview and Scrutiny Committee on 6th July 2026.  Members further noted that, due to positive and proactive actions, the Council had been able to mitigate a significant proportion of the financial pressures in-year. They recognised that pressures remained, particularly within Adult Social Care, and that the challenges would likely continue to be significant.  The formation of the cross-party Adult Social Care Budget Member Working Group was highlighted and welcomed in order to investigate the challenges in this area and strengthen transparency, understanding and member oversight of the Adult Social Care budget.   Members thanked the Finance team for the comprehensive report and for its continued robust financial management which meant the council was in a better position compared to that of neighbouring local authorities.   DECIDED:     That    Revenue Budget:   1)            the overall financial position of a £1.1m overspend and the call on the General Reserve be noted; 2)            the carry forward of revenue budgets within directorates (£0.1m) and central budgets (£0.4m) to support planned spend in 2026-27 (paragraph 4.12) be noted; 3)            the Council remains within all Prudential Indicators set for itself for the year (see paragraphs 4.87 to 4.88 and Appendix L) be noted; and   Capital Programme:   4)            the capital programme delivery and key outputs for 2025-26 (see paragraphs 4.15 to 4.20 and detailed in appendices) be noted.   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: July 15, 2026