The Finance & Performance Scrutiny Committee of Hinckley and Bosworth Council met on Monday 11 May 2026 to review the council's financial outturn for December 2025, treasury management activities for the fourth quarter of 2025/2026, and the position on sundry debts as of 31 March 2026. The committee noted the financial outturn, which showed a favourable variance of £63,000 for the General Fund, and reviewed the treasury management report, noting the increase in borrowing rates. The committee also discussed the sundry debts report, highlighting a KPI performance of 37.2% against a target of 25% for debt over 90 days, largely due to a significant debt owed by another local authority.

Financial Outturn - December 2025

The committee received a detailed report on the council's financial outturn position as at December 2025. Ashley Wilson, Head of Finance, presented the figures, noting that the General Fund was forecasting an improvement of £63,000 against the revised budget, leading to an estimated transfer of £378,046 to General Fund balances, an increase from the budgeted £314,921.

Key favourable variances included additional planning fee income of £450,000 in Development Control, £337,000 from Extended Producer Responsibility income in Recycling, £140,000 in additional trade waste income for Refuse Collection, and £170,000 in additional income from Housing Benefits and Bed and Breakfast contributions related to homelessness.

However, adverse variances were also noted. A significant pressure was the £231,000 overspend on Bed and Breakfast accommodation, net of Home Office funding, for homelessness services. This was in addition to a supplementary budget of £900,000 already agreed for temporary accommodation costs, meaning the total pressure on homelessness services exceeded £1 million. Staffing pressures also contributed, with adverse variances of £184,000 for agency costs in Legal Services, £152,000 for agency staff in Development Control, and £55,000 for agency costs in Planning Policy. A higher-than-budgeted pay award across all services resulted in an additional £254,000 in salary costs.

The Housing Revenue Account (HRA) was forecast to be in a surplus of £75,000, an improvement from a budgeted deficit of £40,000. This was driven by an additional £189,000 in rental income, partially offset by £65,000 in employee cost pressures.

Councillor David Cope asked for clarification on contractual commitments, and Ashley Wilson undertook to provide further detail in future reports. Councillor P Williams noted the usefulness of the A&F (Adverse/Favourable) indicators but suggested optimising column width. Councillor H Smith raised concerns about the increasing spend on homelessness and asked about strategies to mitigate this. Ashley Wilson explained the council's investment in general fund properties for temporary accommodation, which is intended to reduce costs and become cost-neutral over time. He noted that approximately 20 properties were being purchased or were under offer, with a further 10 planned, aimed at single people. He anticipated that these investments would begin to reduce overall temporary accommodation costs in 2026/27.

The committee also discussed the net position on planning income and agency staff costs, with Councillor Williams noting it as a good investment given the return.

The report was noted by the committee.

Treasury Management - Quarter 4 2025/2026

The committee reviewed the treasury management activities for the fourth quarter of 2025/2026. Ashley Wilson, Head of Finance, reported that the council currently holds £52,062,263 in external debt, comprising £47,062,263 long-term and £5,000,000 medium-term debt. For the General Fund, the debt stands at £28,892,680, with £16 million long-term and £13 million medium-term. Approximately £13 million of this medium-term debt is due for repayment or rollover within the next five years.

Additional borrowing during the year amounted to £18 million, split between £13 million for the General Fund and £5 million for the HRA. Average borrowing rates have continued to increase, attributed to the energy crisis and global economic conditions. The report included a graph illustrating the history of interest rates, showing a recent upward trend.

Regarding investments, the council held £11 million with a weighted average return of 3.95%, comparable to industry averages for shorter-term investments. The council's investment strategy prioritises safeguarding principal and interest, ensuring liquidity, and then achieving investment returns.

Councillor P Williams found the graph illustrating interest rate history particularly useful and suggested extending it to include forecasts and historical predictions for comparison. He also inquired about the fixed interest rates on existing debt from the Public Works Loan Board (PWLB) and the possibility of recalculating debt if interest rates fell. Ashley Wilson explained that PWLB charges a premium for early redemption, making it generally not worthwhile unless at absolute extremes.

Councillor D S Cope asked about the £5 million borrowed for the HRA, specifically whether it was for purchasing new properties or for renovations. Ashley Wilson clarified that the treasury management borrowing is not always directly matched to specific capital expenditure items like new housing or repairs due to the timing of debt acquisition and the need to manage the HRA's capital financing requirement. He confirmed that some of the borrowing would be for capital purchases and some for works like insulation.

The report was noted by the committee.

Sundry Debts - Quarter 4 2025/2026

The committee received an update on sundry debts as of 31 March 2026. Ashley Wilson, Head of Finance, reported that the total sundry debt stood at £3,836,873. The Key Performance Indicator (KPI) for debt over 90 days, as a percentage of all sundry debt, was 37.2%, exceeding the target of 25%. This figure was adjusted for homelessness-related debt, instalment plans, and disputed items.

A significant factor contributing to the KPI performance was a substantial debt owed by another local authority, exceeding £600,000, which had not been paid within the 90-day target. Ashley Wilson stated that while he would need to chase this up, he preferred not to take action that would jeopardise positive working relationships with other councils, although withholding payments was an option.

Councillor P Williams noted the rising trend shown in the graph for total debt and inquired if the situation with the other local authority was the primary cause. Ashley Wilson confirmed that while inflation impacts the underlying value of debt, large, unpaid amounts can significantly push up the figures. He also suggested that a longer-term view of the graph might be beneficial. Councillor Williams also raised the point that sundry debts represent only a proportion of the council's overall debt and suggested including this context in future reports. Ashley Wilson agreed that additional indicators could be included, such as council tax and business rates, which are monitored by a Joint Committee, but cautioned against replicating questions already addressed elsewhere.

The committee discussed the breakdown of debt over 90 days, with Other LA debt showing a significant increase to £744,101 in Q4. The report detailed that this was due to other local authorities not providing timely purchase order references and communication delays. Estates debt also saw an increase due to a high volume of queries.

The report was noted by the committee.

Finance & Performance Scrutiny Work Programme for 2025/2026 & 2026/2027

The committee received an update on its work programme. The programme for 2025/2026 included reviews of sundry debts, financial outturn, and treasury management for Q4, as well as frontline service reviews for Commercial Estate, Housing Services (Rents), and Streetscene Services. For 2026/2027, the programme included quarterly reviews of business rates and pooling, performance management framework updates, treasury management, financial outturns, and sundry debts, alongside frontline service reviews for Planning and Environmental Health. A joint budget scrutiny meeting with the Scrutiny Commission was also scheduled for January 2027. The committee noted the work programme.

The meeting was declared closed.