The Overview & Scrutiny Board meeting on 04 February 2026 addressed significant concerns regarding the Council's financial sustainability, the effectiveness of its contracts, and the proposed budget for 2026/27. Key decisions included noting the Council's ongoing reliance on Exceptional Financial Support to balance its budget, approving revised Contracts Procedure Rules, and scrutinising the draft budget with a view to making recommendations to Cabinet.

Ombudsman Complaints 2024-25

The Board reviewed the Council's performance in handling ombudsman complaints, noting that 80% of Housing Ombudsman findings identified service failures, particularly concerning property conditions and complaints handling. While the Council performs better than the national average for Local Government and Social Care Ombudsman complaints, with a rate of six cases per 100,000 residents compared to the national average of nine, there was a focus on improving response times to ombudsman enquiries. An 80% target for on-time responses has been set, with performance to be tracked monthly and cumulatively. The Council also confirmed that ombudsman reports are linked via background papers on the council's website.

Contracts Procedure Rules

The Board received an overview of the Council's procurement and contract management processes, highlighting the complexity introduced by the Procurement Act 2023, which requires the Council to operate under three different legislative frameworks. The current contracts register has an annual spend of approximately £227 million, with the top three contracts being waste property services, contingent labour, and highways maintenance. The report detailed the governance processes followed, including reviews by gateway governance procurement groups and Cabinet. Contract management is devolved to individual services, with dedicated staff for major contracts. The Council is also developing a centralised contract management framework. Financial savings are being sought through re-procurement, such as a multi-disciplinary works contract, and the Council is actively working to leverage market power for better value. Social care procurement is being streamlined through a new adult social care framework, which has seen significant interest from providers.

The Council's Budget 2026/27

The most significant discussion revolved around the Council's dire financial situation, with a projected budget gap of £73 million for 2026/27, potentially rising to £84 million in a worst-case scenario. This gap remains even after accounting for savings, the full benefit of fair funding reforms, and an assumed 4.99% council tax increase. The Council is forecasting an unsustainable position, requiring exceptional financial support or a capitalisation direction for the remainder of the Medium Term Financial Plan (MTFS) period. By 2028/29, the Council anticipates accumulating debt of approximately £300 million, with borrowing costs estimated at £28 million per year.

Key points raised included:

• Financial Sustainability: The Council is not in a financially sustainable position and will require exceptional financial support beyond 2026/27. The fair funding reforms, while beneficial, are insufficient to close the structural deficit.
• Savings and Efficiencies: Officers are working to reduce costs, with further savings and efficiencies to be presented to Cabinet. There is a need to examine funding for demographic pressures, particularly in social care, and the increasing demand on temporary accommodation.
• Capital Programme: The capital programme reflects regeneration business plans and the Housing Revenue Account business plan, with approximately £30 million in new capital expenditure, partly funded by grants and investor-save projects.
• Treasury Management Strategy: The Council is unable to comply with the prudential code indicators regarding affordability and sustainability due to the level of debt and borrowing required for exceptional financial support.
• Budget Gap: The projected budget gap for 2026/27 is £72.7 million (mid-case) and £83.8 million (worst-case). The MTFS forecasts a £90 million annual gap for years two and three.
• High Needs Deficit: There is a significant high needs deficit on the dedicated schools grant, forecast to be £65-£68 million by the end of the year.
• Council Tax: An assumed 4.99% increase in council tax is proposed, subject to full council agreement.
• Recommendations: A number of recommendations were made for officers to consider, including aligning the improvement and transformation plan with the budget, modelling alternative street trading licence fees, reviewing discretionary fees for compassion, providing costings for parking initiatives, confirming the national insurance shortfall, piloting single bulky waste collections, and examining individual licensed fly-tipping collectors.

The meeting also discussed the Contracts Procedure Rules, with an overview of the Council's procurement legislation, contract register, and top three contracts by annual spend. Contract management is devolved to services, but a central framework is being developed. Dispute resolution processes were outlined, and potential financial savings from re-procured contracts were discussed. The Council is also establishing an adult social care framework to improve value for money.

Finally, the Board noted the significant work undertaken by officers in preparing the budget papers and acknowledged the challenging financial situation the Council faces. The next meeting of the Board is scheduled for Thursday, 05 March.