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That Cabinet
recognises:
 
A gross revenue budget surplus at outturn of
£1,239,000 prior to transfers to reserves, representing a
0.6% variance against the budget.
 
After accounting for approved transfers
to/from earmarked reserves of £742,000, the final net surplus
stands at £497,000, which will be added to the Council
Fund.
 
The surplus reflects a significant improvement
of £2.83 million compared to the previous financial update.
This positive variance is largely due to an unbudgeted grant of
£1.19 million from the Welsh Government in March 2025,
alongside favourable service budget positions resulting from
effective budget recovery actions.
 
The Council’s continued financial
discipline, combined with late grant funding has enabled the
replenishment of reserves in line with the Medium Term Financial Strategy.
 
Despite the positive outturn, significant cost
pressures remain in Social Care, Additional Learning Needs, Waste,
Passenger Transport, and Homelessness/Housing, with a combined
overspend reported for the year of £4.6 million. While some
of these were addressed in the 2025/26 budget, these areas continue
to pose financial risks.
 
An increase in school reserve deficits of
£3.19 million during the year, resulting in a cumulative
year-end deficit of £4.09 million. Fifteen schools were in a
deficit balance at year-end. Several schools continue to face
structural budget challenges, which are being addressed through
recovery plans.
 
Total capital expenditure for the year was
£48.81 million, with a gross underspend of £2.73
million, primarily due to underspends in Infrastructure and
Property Maintenance and the receipt of additional unbudgeted
grants that have offset core budgets.
 
Capital slippage requests total £25.03
million, which includes £1.3 million that can be allocated
out of the underspend achieved and will be re-purposed to create a
capital contingency budget for 2025/26 to mitigate scheme risks or
address emerging capital priorities.
 
There are early indications of cost pressures
against the 2025/26 revenue budget, exceeding the £850,000
contingency held. Prompt mitigation by services will be required to
ensure a balanced outturn position is achieved.
 
That Cabinet
approves:
 
The strategy to replenish reserves as outlined
in Section 7, including the allocation of the £497,000
year-end surplus to the Council Fund.
 
The use of £3.68 million in capital
receipts to fund eligible revenue expenditure under the Welsh
Government’s “flexible use of capital receipts”
direction (Appendix 3).
 
The capital slippage requests of £25.03
million (Appendix 1 - Section 4), acknowledging the factors that
delayed project delivery.
 
The capital budget revisions detailed in
Appendix 5, reflecting finalised grant funding awards for the
year.