Agenda item

This report presents the results of the first round of the Council’s revenue budget monitoring process for 2025/26. The Council’s summary position is presented in section 4, with sections 5 and 6 providing the detail for each service area.

Discussion:

The Committee received the report which presented the results of the first round of the Council’s revenue budget monitoring process for 2025/26. Across the Council, there was a projected overspend across the Council of £10.948million.The overall round one position was better than in recent years.

Within the remit of this Committee there was a projected Overspend of £4.5million.

Members raised several comments and questions which included:

Funding - it was commented that when the forecast was made year on year, it was based on projections and it difficult to know exactly what would happen or any additional hidden costs that would affect the budget. There was a predicted education overspend of £1.2million and given the recent announcement by Government of an additional £1.5 billion funding for high dependency block, it was asked what percentage would be received by Medway and if it would be used against the £1.2 million deficit and reduce the Dedicated Support Grant (DSG) reserve deficit.

The Committee was informed that a percentage of the allocation was received, and the figures were factored into the forecast presented. There was however huge increases in demand in the high needs block and the grant funding was ring fenced to the DSG and central spend and as a result cannot be used to cover the £1.2million deficit.

The Assistant Director of Education and SEND added that the overspend in education was due to the additional project to clear the backlog of Education Health Care Plans (EHCP) till the end of July 2025. This project has now been extended till December 2025 due to increase in requests for EHCP assessments received since May. The extension would also prevent the good work that had been completed on clearance of backlogs unravelling and remain in line with completion of assessments within statutory timeframes due to the significant increase.

The SEND reforms that were due to come in in the Autumn were highly anticipated, the ambiguity of those reforms appeared to have prompted the increase in requests for EHCPs nationally.

Risk– it was asked  what action would be taken to ensure that we do not have high risk ratings in the future. The Committee was informed that this was the beginning of a robust budget process that would continue in the coming months and in the autumn, a draft budget would be presented. There was extensive work being undertaken in each department to ensure that we come out of the position of dependency on Exceptional Financial Support as quickly as possible. The finance department worked closely with services to ensure that forecasts were as accurate and robust as possible and there were allowances built into the forecasts for placements demand. Panels also scrutinised the placements forecast, and business cases were being explored to review expenditure and where further savings could be made.

The knock on effects of Exceptional Financial Support was that a minimum revenue provision had to be set aside to repay and that had been built into all interest and financing forecasts to provide as robust a budget as possible for Medway. The children’s directorate were demand led and when a need was presented, they had to be addressed. The focus was on trying to model the demand to remain as demand led as possible.

Decision:

a)     The Committee noted the results of the first round of revenue budget monitoring for 2025/26.

b)     The Committee noted that the Cabinet instructed the Corporate Management Team to implement urgent actions to bring expenditure back within the budget