This meeting was intended to provide scrutiny members of Bexley Council with a better understanding of the council’s Medium Term Financial Strategy, as well as the latest monitoring information on the council’s finances. It also included a request to scrutiny members to agree an initial project plan for the sub-group to work from.

The Council's Medium Term Financial Strategy 2025/26-2028/29

The report pack says the revised forecasted budget gap was £34.825m in 2025/26, rising to £62.207m in 2028/29.

The report pack says that if it were assumed that council tax and the adult social care precept were to increase to the maximum level allowed, and that grants continued at the same level as 2024/25, the budget gap would reduce to £19.843m in 2025/26, rising to £32.099m in 2028/29.

The report pack describes the factors that contribute to the council’s budget position, including demand and cost pressures within adult and children's services, recent legislation regarding waste collection and recycling, changes to the national minimum wage, and the rising cost of living.

The report pack describes a number of service reviews¹ that had taken place, or that were scheduled to be carried out. It says that detailed modelling had been carried out to review the impact of demographic and inflation changes on home care, residential and nursing care, the council’s Preparing for Adulthood scheme, looked after children placements, special educational needs transport and waste services.

Budget monitoring

The report pack contains an update on Bexley Council’s finances from the beginning of the financial year to the end of September 2024.

It says the revenue budget was forecasting an overspend of £4.705m against the current net budget of £215.028m. This represents an adverse movement of £1.733m compared to the previous month.

The report pack says that the key factors contributing to the forecast overspend are a shortfall in income of £1.878m; demographic pressures of £8.528m over and above the amounts set aside; and contract inflation of £1.051m above the amount set aside.

The report pack says the council’s capital programme was forecasting a projected outturn of £45.665m, which represents a decrease of £0.562m (1.21%) since the last report.

Developing a project plan

The sub-group was asked to agree an initial business case to develop a project plan for the remainder of the financial year.

The report pack proposes that the project should examine how economic fluctuations affect the council's operations, decision-making, service delivery and overall sustainability.

It says that the sub-group should analyse changes in revenue streams and expenditure, and should review the council’s financial health, including reserves and debt levels.

It says that the project should examine the impact of reduced government funding and changes to council tax, business rates and fees and charges.

It proposes that the project should consider the impact of rising demand for adult and children's services, homelessness services and public health interventions.

The report pack says that the sub-group should consider how the council has responded to rising inflation, energy prices, wage inflation and increased costs within the supply chain.

It proposes that the project should examine the council’s approach to mitigating risks arising from the increased costs of borrowing for capital projects and the maintenance of its assets.

The business case says that the sub-group should gather evidence through meetings with officers, reports and reality checking visits.

It says that the sub-group should report its findings to Councillor David Leaf, the cabinet member for resources.

The report pack says the sub-group’s recommendations should inform any improvements to the council’s financial monitoring mechanisms or processes.