The Finance & Performance Scrutiny committee of Hinckley and Bosworth Borough Council met on Monday 11 May 2026. The committee received updates and discussed the council's financial outturn for December 2025, treasury management activities for the fourth quarter of 2025/26, and the position on sundry debts as of 31 March 2026. Discussions also covered the Finance & Performance Scrutiny Work Programme.

Financial Outturn - December 2025

The committee reviewed the financial outturn position as at December 2025, presented by Ashley Wilson, Head of Finance. The General Fund was forecasting a £63,000 improvement against the revised budget, with an estimated £378,046 to be transferred to balances. Favourable variances were noted in areas such as additional planning fee income (£450k), Extended Producer Responsibility income (£337k), and additional trade waste income (£140k). However, adverse variances included a £231,000 overspend on Bed and Breakfast accommodation for homelessness, and significant agency costs within Legal Services (£184k), Development Control (£152k), and Planning Policy (£55k), alongside a higher-than-budgeted pay award across all services (£254k).

The Housing Revenue Account (HRA) was forecast to be in a surplus of £74,603, an improvement compared to a budgeted deficit of £40,397, driven by additional rental income. However, there were employee cost pressures and premises-related cost pressures.

Discussions highlighted the significant pressure on homelessness services, with a supplementary budget of £900,000 agreed for temporary accommodation costs, on top of the £231,000 overspend. The council is investing in general fund properties to provide temporary accommodation, with around 20 properties being purchased or under offer, aiming to reduce overall costs in the 2026/27 financial year.

Concerns were raised about the clarity of some explanations within the report, particularly regarding contractual commitments and the impact of vacant posts on salary costs. Ashley Wilson committed to providing further clarification on these points in future reports. The committee also noted the improvements made to the report's clarity and the usefulness of the A&F (Adverse/Favourable) indicators.

Treasury Management - Quarter 4 2025/2026

The committee received an update on the council's treasury management activities for the fourth quarter of 2025/2026. Ashley Wilson reported that the council held £52 million in external debt, with £47 million being medium-term and £5 million short-term. The General Fund accounted for £28.89 million of this debt. Additional borrowing of £18 million occurred during the year, split between the General Fund (£13 million) and the HRA (£5 million).

Average borrowing rates were noted to be increasing due to the energy crisis, with daily fluctuations in rates charged by providers like PWLB¹. The report included a graph illustrating the history of interest rates, showing a recent upward trend. Economic forecasts suggested inflation was expected to rise again, potentially impacting future borrowing costs.

Investment activity showed a weighted average of £11 million invested, yielding an average return of 3.9%, comparable to industry averages for short-term investments. The council's investment strategy prioritises safeguarding principal and interest, ensuring liquidity, and then maximising returns.

Members discussed the volatility of interest rates and the implications for long-term debt. It was confirmed that interest rates on existing debt from the Public Works Loan Board (PWLB)² are fixed for the life of the loan, and early redemption typically incurs a premium, making it rarely worthwhile. The £5 million borrowed for the HRA was confirmed to be a mix of funding for new properties and renovations, supporting the general cash flow needs of the HRA.

Sundry Debts - Quarter 4 2025/2026

The committee reviewed the position on sundry debts as of 31 March 2026. Ashley Wilson reported that the total sundry debt stood at £3,836,873. The Key Performance Indicator (KPI) for debt over 90 days, which has a target of 25% or less, was at 37.2% after agreed amendments for homelessness, instalment plans, and disputed items.

A significant factor contributing to the KPI not being met was a large debt owed by another local authority, exceeding £600,000, which had not been paid within the 90-day target. While the council aims to maintain positive working relationships with other local authorities, it was noted that this debt could be withheld if necessary.

The report detailed the breakdown of debt over 90 days, with Other LA (Local Authority) debt showing a significant increase. Homelessness-related debt remained a substantial figure, with a provision for doubtful debts of £124,000. The council's approach to recovering homelessness debts prioritises support and avoids legal action where it is unlikely to be effective, aligning with the Anti-Poverty Strategy.

Members discussed the trend shown in the graph of total debt, noting that while the debt owed by other local authorities was a key reason for the KPI miss, the overall debt value is also affected by inflation and costs. The timing of the quarter four review relative to the year-end financial statements was also raised, with a commitment to review the timing for future years to ensure accuracy and relevance.

Finance & Performance Scrutiny Work Programme

The committee received an update on the Finance & Performance Scrutiny Work Programme for 2025/2026 and 2026/2027. The programme outlines upcoming reviews and monitoring activities, including further budget monitoring, service reviews, and performance updates throughout the year.