The Finance Sub-Committee met to discuss the first financial review of 2025/26, the financial performance of Enterprise Cheshire and Warrington¹ (ECW), and the updated medium-term financial strategy. The committee approved the 14 pipeline projects listed in Appendix 1 of the procurement pipeline report as business as usual, and also recommended that the Corporate Policy Committee allow the Executive Director of Resources to continue discussions with the Ministry of Housing, Communities and Local Government (MHCLG) regarding Exceptional Financial Support.

First Financial Review of 2025/26

The committee reviewed the first financial review of the 2025/26 financial year, which showed a forecast adverse variance of £3.1m against a revised budget of £440.5m. This figure takes into account the planned use of £25.3m in conditional Exceptional Financial Support (EFS). Councillors scrutinised the directorate revenue commentary and progress on approved budget change items, with a focus on actions to address any adverse variances from the approved budget.

Key points from the review:

• A £9.0m projected overspend within Children and Families, mainly due to increased placement costs (£6.4m) and staffing (£2.2m).
• A £9.7m shortfall in cross-directorate transformation savings.
• A favourable variance of £4.7m within the Place Directorate due to vacancy management and one-off income.
• The contingency budget is contributing £7.2m to the overspend, including £1.6m to cover pay inflation.
• Interest and Minimum Revenue Provision² (MRP) are forecast to be £3.3m under budget due to lower than expected borrowing, increased investment, and slippage in the capital programme.

The committee also reviewed in-year forecast capital spending of £205.5m against an increased capital budget of £208.5m. They noted that the Adults and Health, Children and Families and Environment and Communities committees would be asked to approve Supplementary Revenue Estimate Requests for Allocation of Additional Grant Funding over £500,000 and up to £1,000,000, as per Annex 1, Section 3, Table 2 of the First Financial Review of 2025/26 Decision Report Template.

The committee made the following recommendations:

• Recommend to Council to approve the Supplementary Revenue Estimate Request for Allocation of Additional Grant Funding over £1,000,000 as per Annex 1, Section 3, Table 1 of the First Financial Review of 2025/26 Decision Report Template.
• Note the Capital Virements above £500,000 up to and including £5,000,000 as per Annex 1, Section 4, Table 4 of the First Financial Review of 2025/26 Decision Report Template to be approved in accordance with the Council's Constitution.
• Recommend to Council to approve the Supplementary Capital Estimate Request for Allocation of Additional Grant Funding over £1,000,000 as per Annex 1, Section 4, Table 5 of the First Financial Review of 2025/26 Decision Report Template.
• Note the available reserves position as per Annex 1, Section 5 of the First Financial Review of 2025/26 Decision Report Template.

Enterprise Cheshire and Warrington - First Financial Review 2025-26

The committee reviewed the in-year financial performance of Enterprise Cheshire & Warrington (ECW). The ECW group is forecasting a surplus of £0.1m for the financial year based on Quarter 1 information. Within that figure, Marketing Cheshire is reporting a forecast surplus of £16,741, compared to a budgeted deficit position of £33,259. The committee was asked to note the information provided in the in-year financial review for ECW.

Companies Draft Financial Statements 2024/25

The committee considered the draft financial statements for the council's wholly owned companies for 2024/25. The core contract expenditure of Ansa Environmental Services Ltd (Ansa) and Orbitas Bereavement Services Ltd (Orbitas), charged at cost to Cheshire East Council in 2024/25, was £43.611m, a reduction from £45.051m in 2023/24. This reduction in costs is due to Orbitas coming back in house on 1 February 2025 and the wind down of ANSA, most of which came back into Cheshire East Council on 1 April 2025. The committee was asked to note the summarised position of the WOC Financial Statements for year ended 31 March 2025 based on the information provided at the meeting and included in the report at Appendix A for Companies Draft Financial Statements 202425.

The movement in reserves reflecting net (after tax) commercial profits of Ansa and Orbitas were:

• Opening Balances £2.014m
• Dividend Payment (£1.500m)
• In Year Profit £0.334m
• Closing Reserves £0.848m

The committee was asked to note the dates in relation to the approval process for the Financial Statements, and the overall financial performance of the WOC's in the 2024/25 financial year, as contained within the Companies Draft Financial Statements 202425 Decision Report Template.

Medium Term Financial Planning Assumptions - Update (Finance Sub Committee)

The committee reviewed the updated budget assumptions for the period 2026/27 to 2029/30, including sensitivity analysis. The report set out the updated funding position since the June meeting, including some sensitivity analysis on potential funding and spend scenarios. These revised budget assumptions were reviewed by a Sub-Committee Working Group on 19 August 2025.

The committee was asked to note the updated budget assumptions for the period 2026/27 to 2029/30 including sensitivity analysis, and to work with officers and members to bring forward further budget change proposals to assist with presenting a balanced budget for 2026/27 to the Corporate Policy Committee for consultation in November 2025.

The committee also recommended to Corporate Policy Committee to delegate to the S151 Officer³ the permission to continue dialogue with MHCLG on the continued use of Exceptional Financial Support over the medium term.

Procurement Pipeline

The committee considered a report on procurement activity across the council. The report provided an overview of the pipeline of high value (over £1m) procurement activity, all contracts awarded since 1 April 2025, the number and reasons for waivers to the Contract Procedure Rules, and the number of non-adherences to the Contract Procedure Rules.

The committee approved the 14 pipeline projects in Appendix 1 of the Procurement Pipeline Report September 25 Final as business as usual. They noted the reason for 12 waivers approved between 1 December 2024 and 31 July (18 in total in 2024/25 and 5 for 2025/26), and the contracts awarded since April 2025, as detailed in Appendix 2 - All council contracts-2025-07-31-18-01-12. The committee also noted that this paper would be presented to the next meeting of the Audit and Governance Committee on 29 September 2025 for assurance with regards procurement waiver compliance and reporting.

Land at Longridge, Knutsford

The committee considered a report about an option agreement for land at Longridge, Knutsford.

The committee approved entering into the option agreement for the disposal of the land at Longridge and North Downs Knutsford, and delegated authority to the Director of Growth and Enterprise to enter into an Option Agreement and subsequently dispose of the land at Longridge and North Downs, Knutsford on terms and conditions to be agreed in consultation with the Governance, Compliance and Monitoring Officer, the Executive Director of Resources (S151), Executive Director of Place; and the Chair, Vice Chair and Opposition Spokesperson of the Finance Sub Committee.

The committee also delegated authority to the Director of Growth and Enterprise, in consultation with the Governance, Compliance and Monitoring Officer and the Executive Director of Resources (S151); to complete all legal documentation required in relation to the Option Agreement and disposal of the land at Longridge and North Downs, Knutsford and including (but not limited to) the completion of any licence or Page 252 similar agreements required prior to disposal or relating to the Councils retained land.

Councillors Garnet Marshall and Stewart Gardiner left the meeting prior to consideration of this item and did not return, due to previously declared conflicts of interest.