Purpose

This report summarises the 2025/26 outturn position across the Council’s Revenue, Capital and Schools Budgets. The financial position should be considered alongside delivery of the Council Plan and associated key performance indicators.

The final revenue outturn for 2025/26 is an overspend of £2.992m, representing 0.24% of the net revenue budget. This reflects a continued improvement throughout the year. A significant pressure of £27.863m (2.24%) was identified at Quarter 1, which reduced to £10.354m (0.83%) at Quarter 2 and £6.117m (0.49%) at Quarter 3.

Over the course of the financial year, the Council has maintained a clear focus on financial stability despite a challenging operating environment, characterised by rising demand and cost pressures. The implementation of efficiency measures and robust in-year mitigations, supported by strong service-level controls and corporate oversight, has culminated in the improved outturn position.

The Council’s reserve position remains robust, with the Transitional Reserve providing resilience. Reserve utilisation is closely monitored and ensures that resources are aligned to corporate priorities, underpinned by strong governance arrangements. Further details of major spending variations to budget and the resultant impact on reserves are shown in Appendix 'A'. 

The in-year Capital Delivery Programme was £306.005m (after approved additions and re-profiling). The outturn position for 2025/26 is spend of £193.229m, a variance of -£112.776m (-36.9%). The variance is primarily the product of delayed delivery on some schemes, arising notably from resource, procurement and contract issues and delayed decisions. This has been mitigated where possible through earlier than originally planned delivery on other schemes within the multi-year programme. It should be noted that over half of the variation (56%) relates to grant funded activity (for example Levelling Up Fund and Department for Education projects) and the majority of the former wasn't received until late in the year. Further details are provided in Appendix 'B'.

The Dedicated Schools Grant (DSG) has overspent in this year by £79m, with the cumulative DSG deficit at March 2026 now £102m. This is due to continuing pressures in Special Educational Needs, which reflects a national picture across upper tier authorities, with insufficient central Government grant resources to meet increasing need. Schools outturn position of schools delegated budget for 2025/26 is an overspend of £9.195m. This has resulted in the level of school balances falling to £57.73m. Further details are provided in Appendix 'C'.

The Council’s Efficiency Review continues to play a central role in supporting financial sustainability and organisational improvement. Phase 1 of the review informed the 2026/27 budget and Medium-Term Financial Strategy, with identified savings incorporated into the Council’s approved financial and transformation plans. The review is designed as an ongoing programme, with Phase 2 building on this work to further embed efficiency into business as usual, identify and deliver further opportunities. An update on progress to date is provided in Appendix ‘D’.

Decision

The Cabinet approved the recommendation(s) as set out in the report.