The Finance Scrutiny Committee of Watford Council met on 16 September 2025 to discuss the financial monitoring report for the first quarter of the 2025/26 financial year. The report covered revenue and capital budget performance, along with risks and reserve levels. The committee was also scheduled to discuss temporary accommodation and B&B budget monitoring.

Financial Monitoring Report

The committee was scheduled to review the Financial Monitoring Report for the first quarter of 2025/26, a period running from 1 April 2025 to 30 June 2025. The report provided an overview of the council's financial position, comparing the forecast year-end position against the original budget approved by the council on 28 January 2025.

Revenue Budget

The original revenue budget agreed at council on 28 January 2025 was £17.036m. The report noted that the council was undertaking a review of capital financing policy, and that savings could be used to offset pressures identified by the 2024/25 outturn position.

The report stated that recent pressures included a higher than expected pay award and other inflationary pressures. It was noted that services would continue to monitor their budgets to identify efficiencies.

The report stated that, subject to the approval of virements¹, the forecast variance to the latest budget was £0.129m.

The following table shows the latest budget, latest forecast, and variance to latest budget for each service area:

Capital Budget

The original Capital Investment Programme for 2025/26, agreed by the council on 28 January 2025, had an agreed budget of £37.074m. The latest agreed budget was £46.686m, including £6.112m carried forward from 2024/25 and £3.5m approved by the council on 15 July 2025. Following a review, the forecast year-end position was £48.662m, a net increase of £1.976m.

The forecast year-end capital expenditure position reflected a net increase of £0.326m on Corporate Asset Management Watford Borough Council (WBC) properties. It was anticipated that there would be a budget overspend, which would be mitigated in part by expected additional funding from occupiers.

In addition, the forecast year-end capital expenditure position reflected a net increase of £1.650m for affordable housing. It was proposed that £1.650m from the commuted sums reserve² be vired to support the delivery of new affordable housing, allowing a timely response when opportunities arise, helping to reduce pressures on temporary accommodation.

The following table shows the latest budget, forecast year end, and actual to date for each budget responsibility:

General Fund and Earmarked Reserves

The following table sets out the latest forecast for the General Fund and Earmarked Reserves:

The council's general fund was forecast to remain at the risk assessed level of £2m. Other Earmarked reserves, set aside for specific purposes and risks, were forecast to be £60.518m at 31 March 2026. Total revenue reserves were therefore forecast to be in the region of £65m at year end.

Aged Debt

The report stated that the council charges its customers for various services by raising a debtor invoice, giving the customer 21 days to pay. The total outstanding debt at 30 June 2025 was £1.252m, of which 56.5% (£0.707m) was under one month, 20.6% (£0.258m) was from 1 month to a year, and 23.0% (£0.287m) was over one year.

Recommendations

The Finance Scrutiny Committee was recommended to consider the Financial Monitoring Report and note both the revenue and capital forecasts for 2025/26, and to make any recommendations to Cabinet and/or Council.

Cabinet was recommended to note the Financial Monitoring Report, recommend approval of the Revenue Virements as set out in Appendix 7 to Council for approval, recommend Council approve the use of commuted sums totalling £1.650m in the capital budget for affordable housing, recommend Council approve a net budget increase of £0.326m in the capital programme for Corporate Asset Management WBC Properties, and recommend that the Chief Finance Officer have delegated authority to vire funds, realigning expenditure and income across budgets within the budget envelope.

Council was recommended to approve the Revenue virements as set out in Appendix 7, approve the use of commuted sums totalling £1.650m in the capital budget for affordable housing, approve a net budget increase of £0.326m in the capital programme for Corporate Asset Management WBC Properties, and approve that the Chief Finance Officer have delegated authority to vire funds, realigning expenditure and income across budgets within the budget envelope.

Temporary Accommodation & B&B Budget Monitoring Report

The committee was also scheduled to discuss the number of households in temporary accommodation and the B&B budget.

The report stated that while the initial months of this year saw higher numbers in temporary accommodation than forecast, due to delayed lettings at Ascot Road, the council had since made significant progress in reducing temporary accommodation placements and was now outperforming forecasts.

The report also stated that the number of households in high-cost B&B/Nightly Let placements had also been reducing, with August's net weekly spend £9,500 per week less than April's, a drop of 20%.

The report projected further monthly reductions of 4–7% as positive prevention work and the procurement of other temporary accommodation provisions continue. The net budget was £1,822,394.00 (£2,822,394 out to suppliers and £1,000,000 in from rent). The report stated that if the council could continue to reduce the expenditure by 6% a month, it would be within budget at the end of the year.