Purpose

The 2026-27 Period 3 Financial Performance Report will include recommendations to update the 2026-27 General Fund and Housing Revenue Account (HRA) capital programme budgets (including agreeing slippage from 2025-26).

Decision

For the reasons set out in the report, the Executive Mayor and Cabinet AGREED to:

1. 2.1 Note the General Fund revenue budget outturn is forecast at Period 3 to overspend at financial year end by £2.3m. This is an improvement of £0.8m since Period 2.
2. 2.2 Note that service directorates are expected to reduce their net expenditure, or bring forward mitigations, so that the annual budget can be balanced within the budgeted level of capitalisation directions. It should not be underestimated what a challenge this will be against the background of increased demand pressures which are continuing to build across local government as well as increased market prices.
3. 2.3 Note the unfunded local government cost pressures that exist nationally, regionally and locally relating to increases in demand and market prices which need to be addressed by Government changes to policy and/or funding levels. For example, the current Government policy of holding housing rent level subsidies at 90% of the Local Housing Allowance (LHA) rates in 2011 currently costs Croydon c£45m per annum.
4. 2.4 Note the progress in Medium Term Financial Strategy (MTFS) forecast savings achievement of £26.5m (76.4%) against the total savings target of £34.7m.
5. 2.5 Note the Housing Revenue Account (HRA) revenue forecast overspend of £3.9m.
6. 2.6 Note the Dedicated Schools Grant (DSG) forecast overspend of £45.0m.
7. 2.7 Approve the various General Fund capital budget additions, virements and re-profiling across years (including slippage) as set out in paragraph 5.61 (and detailed in the table following paragraph 5.63), which in total comprise a net budget increase to the 2026-27 General Fund capital programme of £36.6m (being slippage of £36.9m and a net decrease from changes of £0.3m).
8. 2.8 Note the General Fund capital programme 2026-27 forecast underspend of £13.7m (5.3%) against the revised budget (including the net increase to be agreed through this report) of £256.7m. The capital budget includes expected capitalisation directions of £119.0m.

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1. 2.9 Approve the HRA capital budget increase, as a result of prior year slippage, of £8.7m as set out from paragraph 5.64.
2. 2.10 Note the HRA capital programme 2026-27 forecast underspend of £14.6m (12.3%) against the revised capital budget (including slippage to be agreed through this report) of £118.4m.
3. 2.11 Note the Council’s historic borrowing and subsequent debt burden and national, regional and local service pressures continue to be critical to the non-sustainability of the Council’s revenue budget as set out from paragraph 5.56.
4. 2.12 Note that current forecasts are based on the best available information at the time and will be subject to review and change during the financial year.