The Powys County Council's Finance Panel met on 11 September 2025, to discuss the council's financial performance and future plans. The panel reviewed the Q1 revenue and capital forecasts for 2025/26, discussed recommendations to the cabinet, and examined the end-of-year transformation portfolio report. Additionally, the panel received an update on public sector pay awards and reviewed the Sustainable Communities for Learning Programme Plan.

Q1 Revenue Forecast 2025/26

The panel received the Q1 Revenue Forecast 2025/26 report, which presented the forecast revenue budget outturn for the financial year based on data as of 30 June 2025. The report indicated an overall underspend of £2.2 million, including a £734,000 underspend in the Housing Revenue Account¹ (HRA) and a £211,000 overspend in schools' delegated budgets. The forecast for non-ringfenced budgets² showed a £1.7 million underspend.

The forecast position was a combination of overspends in Children's Services (£1.6 million), Highways, Transport and Recycling (£1.1 million), and School Improvement and Learning (£0.3 million), offset by a £3.0 million underspend on the risk budget. Some of the risk budget was proposed to be used with virement³ requests to be approved by the Cabinet, including £0.3 million for Highways, Transport and Recycling due to overspending on highways operations and grave digging, and £0.64 million for education, related to school improvement and early years settings.

Net cost reductions of £12.3 million were approved as part of the council’s budget for 2025-26, with an additional £3.7 million in unachieved savings from previous years rolled forward, bringing the total to £16.0 million. By the end of Q1, 21.5% (£3.4 million) of the cost reductions had been delivered, with 63.5% (£10.2 million) assured for delivery and 14.5% (£2.3 million) at risk.

The reserves position showed opening reserves of £71.5 million, with the General Fund reserve at £11.4 million, equivalent to 4.2% of the net revenue budget for 2025. The council's reserves policy requires the General Fund Reserve to be maintained at a minimum of 4% of net revenue budget.

Additional grants received in Q1 included £9,119,444 from the UK Shared Prosperity Fund⁴ and were included in the report to comply with financial regulations.

The report also detailed several virements requiring cabinet approval, including adjustments to the school's transport equalisation reserve, funding for highways routine maintenance, the grave digging service, and foundation phase learning in early years settings.

Q1 Capital Forecast 2025/26

The panel reviewed the Q1 Capital Forecast 2025/26 report, which provided an update on the financial position of the council's capital programme as of 30 June 2025. The revised programme was budgeted at £114.95 million, with actual spending amounting to £5.69 million, representing 5% of the total budget.

The report noted that 38% (£43.88 million) of the capital expenditure was budgeted to be financed by borrowing, with the interest cost charged to the revenue account. The report anticipated that this would reduce during the year as grant funding was received and schemes were reprofiled into future years.

The report detailed grants received since the start of the financial year for additional schemes, including funding for highways, transport and recycling, economy and climate, housing, education, and adult services.

As of the report, £0.09 million in capital receipts had been received, with agreed sales of £1.79 million at the legal stage of the process. The report stated that sales totalling £10.00 million could be achieved this financial year, but that there remained a significant risk to achieving this target.

End of Year Transformation Portfolio Report

The panel reviewed the End of Year Transformation Portfolio Report, which provided an overview of the progress and impact of various transformation projects across the council. The report included financial summaries, savings breakdowns, and detailed impact reports for different service areas.

The report highlighted the achievements and challenges in areas such as social services and wellbeing, transforming education, climate and nature, supporting communities, and digital transformation. It also included information on enabler evaluations and financial performance.

The report included a request for formal approval to close Cynefin and Supporting our Communities and transfer under a new programme Tackling Poverty and formal approval to close Recruitment and Retention.

Public Sector Pay Awards Settlement Update

The panel received an update on the public sector pay awards settlement, presented by Paul Bradshaw, Head of People. The update covered the progress of pay negotiations for various employee groups, including NJC Local Government Services, JNC Chief Executives and Chief Officers, Teachers, Soulbury, and JNC Youth and Community.

The update confirmed that agreements had been reached for NJC Local Government Services and JNC Chief Executives and Chief Officers, with a 3.2% increase applied to all salary points. For teachers, an independent review body recommended a 4.8% increase, but the Welsh Government announced a reduced figure of 4% to be applied. Negotiations were still ongoing for Soulbury and JNC Youth and Community employees.

The report noted that the council's proportion of the pay award would cost £8.1 million, including oncosts, with part of the awards funded by grants and external fees.

Sustainable Communities for Learning Programme Plan

The panel reviewed the Sustainable Communities for Learning Programme Plan.