The Performance and Audit Scrutiny Committee of West Suffolk Council met on Thursday 22 January 2026 to review the council's performance and financial resilience. Key discussions included the Q3 performance report, the annual report on the governance of the council's trading companies, and the treasury management report. The committee also reviewed the outline audit plan for the upcoming year and noted the council's health and safety performance.

2025 to 2026 Performance Report Quarter 3

The committee received an update on the council's performance for the third quarter of the 2025 to 2026 financial year. The report, presented by Councillor Diane Hind, Cabinet Member for Resources, detailed the revenue and capital positions, alongside key performance indicators (KPIs). The council's General Fund balance stood at £5.62 million at the start of the financial year, with a forecast surplus of £230,000 by the year-end, increasing the General Fund balance to £5.85 million. This reserve is intended to manage unforeseen impacts and variances to the budget.

The report highlighted income stream volatility, with planning, property rental, trade waste, garden waste, car parking, event ticketing, and solar generation income all subject to market conditions and consumer behaviour. Despite these challenges, income streams were showing signs of recovery and improvement. Inflationary pressures and wider economic conditions were also noted as significant impacts on the council's finances, particularly affecting new contract costs and commodity prices. While inflation had stabilised, some pressures had continued to grow in-year. Conversely, interest rates continued to result in increased investment income, and fuel prices had generally been lower than expected.

The council's budget for 2025 to 2026 included a three per cent assumption for the local government pay award, which was agreed at 3.2 per cent in July 2025. The forecast overall cost of employment was higher than budgeted by £129,000.

Significant investment was being made in resource and capital items for the Better Recycling initiative, which mandated councils to align their waste and recycling services with new nationwide requirements by March 2026. This includes providing weekly food waste collections and incorporating glass, cartons, and plastic film into dry recycling collections by 2027. Extended Producer Responsibility (EPR) was also coming into effect, meaning producers of packaging waste would be responsible for covering the costs associated with its collection, recycling, and disposal.

The report included appendices detailing key performance indicators (KPIs), income and expenditure, capital programme outturns, earmarked reserves, the strategic risk register, aged debt, and action plans for the Environment and Sustainability Reference Group and the Housing, Homelessness Reduction and Rough Sleeping Strategy. A review of KPIs was underway to ensure they remained fit for purpose and accurately reflected the council's priorities. The updated suite of KPIs was planned to go live from the beginning of the 2026 to 2027 financial year.

The capital programme was detailed across three appendices, covering general capital items, strategic projects, and investment facilities. The forecast year-end spend for non-strategic capital items was £16.94 million against a budget of £18.54 million. For larger strategic projects, £75.97 million was anticipated to be spent against a total programme allocation of £75.77 million. The investment and loan facilities, including Barley Homes, totalled £35.13 million, with £3.03 million forecast to be used in the year. Earmarked reserves were forecast to increase from £38.9 million to £47.5 million, mainly due to the timing of expenditure and additional contributions.

The Strategic Risk Register highlighted several high residual risks, including staff recruitment, loss of key employers, partner/public sector failure, cyber security, and the financial impact on individuals due to the rising cost of living.

Delivering a Sustainable Medium-Term Budget

Councillor Diane Hind, Cabinet Member for Resources, presented the report on delivering a sustainable medium-term budget for 2026 to 2027. The report followed up on previous discussions and outlined the principles and challenges in setting the council's budget. It was noted that all councils face pressures in delivering services, and West Suffolk Council was no exception.

The budget work to date indicated new pressures for the upcoming year, exceeding those assumed in the indicative 2026 to 2027 budget set in February 2025, amounting to approximately £0.89 million. These pressures, stemming from potential pay awards and reduced rental income, would form a new cost base for future budgets. The report highlighted that Council Tax covers less than a fifth of the cost of services, with approximately 70 per cent of the budget funded locally through fees, charges, council tax, and business rates retention.

The council faced challenges from income stream volatility due to market conditions, consumer behaviour, and weather. Planning, property rental, trade waste, garden waste, car parking, event ticketing, and solar generation income were all identified as areas susceptible to these factors. However, the report indicated a recovery across most income streams, with planning, commercial rents, and solar generation showing improvement.

Global economic pressures, including inflationary impacts on commodities due to supply chain uncertainty, continued to affect the council's finances. While inflation had stabilised, some pressures had grown in-year and were not expected to improve significantly in the short term. The budget for 2025 to 2026 included a three per cent assumption for the local government pay award, which was agreed at 3.2 per cent in July 2025, leading to a higher forecast cost of employment by £129,000.

The report detailed the government's legislative requirements for councils to align waste and recycling services with new nationwide Better Recycling standards by March 2026, including weekly food waste collections. Extended Producer Responsibility (EPR) was also being introduced, making producers responsible for the costs associated with packaging waste. This initiative would require significant investment in resource and capital items such as waste collection vehicles and bins.

The council's General Fund balance at 1 April 2025 was £5.62 million, with a forecast year-end surplus of £230,000, increasing the balance to £5.85 million. This reserve is crucial for managing unforeseen impacts and budget variances.

The report recommended that Cabinet include the proposals detailed in Section 2 and Appendix A (Budget Assumption Changes) in the 2026 to 2027 Revenue Budget. The medium-term financial plan projected deficits of £1.24 million in 2028 to 2029 and £3.18 million in 2029 to 2030, attributed to inflationary pressures and the winding down of transitional support funding for the reduction of Revenue Support Grant.

A proposed 10-year Capital Programme of £80 million was attached, encompassing strategic capital and investment projects, as well as operational requirements. This included ongoing commitments to projects like the Rougham Hill redevelopment, AME Centre Suffolk Park, the Barley Homes loan facility, and decarbonisation initiatives. The programme was funded through a mix of capital grants, receipts, prudential borrowing, and revenue reserves.

The council's reserves were forecast to decrease from £47.5 million to £34.8 million by March 2030, primarily due to the utilisation of the Strategic Priorities and MTFS reserve and the Building Repairs reserve.

The report also noted the impending Local Government Reorganisation, with West Suffolk Council ceasing to exist at the end of March 2028 and new unitary councils forming from April 2028. The budget prepared up to that point was balanced, with £0.32 million allocated annually for LGR administration costs.

Ernst & Young Auditor's Annual Report 2024/2025

Natalie Clark, the Council's Engagement Partner from Ernst & Young (EY), presented the auditor's annual report on the 2024/2025 financial statements. EY issued a qualified opinion on the financial statements, noting that the audit work was substantially complete. The report highlighted that EY had no matters to report on the council's arrangements to secure economy, efficiency, and effectiveness in its use of resources.

Councillor Karen Richardson questioned the valuation of the council's solar farm asset, which the Chief Operating Officer explained remained a longstanding challenge due to the asset's characteristics and valuation factors. Christine Ashley-Caunt and Councillor Mike Chester raised concerns about the forecasted budget gap of £7.6 million by 2028/2029, as referred to in the report. The Chief Operating Officer clarified that the council had set a two-year balanced budget, and the longer-term gap was a cumulative figure. The committee noted the report.

Ernst & Young Presentation of External Audit Plan and Fees 2025/2026

Natalie Clark from EY presented the audit plan for the year ending 31 March 2026. The plan outlined the work EY intended to perform to provide an audit opinion on the financial statements and commentary on the council's value for money arrangements. EY considered strategic, operational, and financial risks, as well as developments in financial reporting and auditing standards.

The Chief Operating Officer announced that the draft accounts had been completed and published by the end of May, meaning the 2025/2026 Annual Statement of Accounts would be reported to the committee in September, reverting to the earlier reporting timeline. The committee noted the audit plan and confirmed their understanding and agreement of the materiality and reporting levels.

Internal Audit Annual Report 2025 to 2026

Senior Auditors presented the Internal Audit Annual Report, which provided an opinion on the adequacy and effectiveness of the council's framework of risk management, control, and governance processes. The report included conclusions on governance, risk, internal control, and financial control, as well as the overall direction of travel.

Councillor Karen Richardson noted an increase in single-person discount (SPD) fraud cases, which the Senior Auditor attributed to an enhanced exercise by the Anglia Revenues Partnership (ARP) every two years. Both the Senior Auditor and the Cabinet Member for Resources reassured the committee that the ARP was robust in detecting SPD fraud and pursuing outstanding payments.

Councillor Mike Chester inquired about the Building Safety Regulator Inspection, noting it had not been undertaken in 2025/2026 and was planned for 2026/2027. The Chief Operating Officer confirmed that summary results would be shared as part of the assurance framework reporting. Councillor Chester also asked about the communication of Section 106 developer contributions to members. The Chief Operating Officer reminded the committee of a previous all-member briefing on S106 and confirmed that information on where annual reports were published would be recirculated. Members were also informed that the Overview and Scrutiny Committee would receive a presentation on a Section 106 and Community Infrastructure Levy (CIL) Comparison Study.

Christine Ashley-Caunt requested the sharing of the CIPFA checklist on evaluating the impact and effectiveness of the Performance and Audit Scrutiny Committee, which the Senior Auditors agreed to provide. The committee noted the contents of the Internal Audit Annual Report, the Summary of Audit Work, and the Annual Fraud Report, and confirmed that the annual audit opinion could be relied upon as evidence for the Annual Governance Statement.

Outline Audit Plan 2026 to 2027 and Internal Audit Delivery and Development Strategy

Members were presented with the proposed Annual Audit Plan for 2026/2027, which was risk-based and flexible to adapt to changing risks. The Internal Audit Delivery and Development Strategy had been refreshed to include working with Suffolk local authorities on governance structures arising from Local Government Reorganisation (LGR).

Councillor Karen Richardson inquired about training and information briefings for Parish/Town Councils regarding LGR. The Chief Operating Officer clarified that the training mentioned in the document related to internal audit working practices but would pass on the comment regarding wider LGR work to the Chief Executive. The committee approved the Internal Audit Delivery and Development Strategy and the Internal Audit Plan.

2025 to 2026 Performance Report Quarter 4

The committee received the quarter four performance report for 2025/2026, covering financial results and KPIs from April 2025 to March 2026. Councillor Mike Chester requested larger font sizes for the exempt Appendix F (Debt still outstanding after 90 days), and the Chief Operating Officer noted this could be addressed for future reports, also reminding members that the document could be viewed electronically to allow zooming. Councillor Janne Jarvis highlighted that recycling numbers for the reverse vending pilot exceeded those listed. Christine Ashley-Caunt raised a question about outstanding routine food hygiene inspections, and the Chief Operating Officer explained that the service was undergoing changes, including resourcing and a staffing review, with improvements expected.

Councillor Mike Chester inquired about the scrutiny of Barley Homes (Group) Limited's overall finance by the Overview and Scrutiny Committee. The Chief Operating Officer outlined existing scrutiny processes, including invitations to the Barley Homes AGM, Cabinet consideration of the business plan, PASC scrutiny of governance, and invitations to the Shareholder Advisory Group meetings for Scrutiny Committee Chairs. She confirmed that the Overview and Scrutiny Committee would also discuss Barley Homes in September 2026. Councillor Chester's request for this response to be circulated in writing was agreed.

Councillor Karen Richardson raised an issue with accessing bin collection dates on the council's website, which the Chief Operating Officer attributed to high traffic following the launch of a new system. The Cabinet Member for Resources added that residents had received a bin collection calendar by post. The committee noted the 2025/2026 forecast revenue and capital positions.

Health and Safety Summary Report 2025/2026

The Cabinet Member for Resources presented the Health and Safety annual summary report, which detailed the council's health and safety performance and legal compliance efforts during the year. The committee noted the report.

Annual Appointments to the Financial Resilience Sub-Committee 2026/2027

The committee was asked to appoint three members and one substitute to the Financial Resilience Sub-Committee for 2026/2027. Councillor Mike Chester, Councillor Richard Alecock, and Councillor Peter Armitage were appointed as full members. The appointment of a temporary substitute was to be nominated by the relevant Group Leader to the Monitoring Officer as required.

Performance and Audit Scrutiny Work Programme 2025/2026

The committee noted the current forward work programme for 2025/2026.