Agenda item

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

Discussion:

The Committee received the Capital Budget Monitoring Round 3 2025/26 report which was presented to Cabinet on 10 February 2026. Education was forecasting an overspend of £434,000 which was an improvement of £525,000 from round 2. Children’s Services was forecasting an overspend of £2.750million, which was an increase of £343,000 from the round 2 forecast.

Overspend in children’s services – it was asked how confident officers were that children’s services would reduce the overspend, in particular in client support packages of £2.4millon and that the reduction in the overall budget of £4.6million next year would be achieved. The Committee was informed that the placement support package alleviated foster care placement costs and the increased spend in that area had brought down the overall spend in placements, The service continued to work diligently with finance to bring down overspend and worked to reduce overall packages where appropriate. There was confidence in provision of the right support for children in receipt of support packages, whether at home with carers or in kinship arrangements by providing additional support  to prevent children coming into care where possible.

The Finance Business Partner added that there was confidence at this time due to mapping of current situation and expectations in subsequent years, that the  assumptions made on reduction of the budget for the upcoming year was as accurate as possible based on current data, however small variations could occur at any time and could lead to higher spend.

Overspend in Education and SEND -  there was concern regarding the £1.5million overspend in inclusion which would bring spend to £5.3million and due to the increase in demand for EHCP, there was concern raised regarding the allocation of £4.6million overall budget for the service in 2026/27. The Committee was informed that the £1.5million overspend was a result of agency staff brought in to address backlog and issues with EHCP assessments. This had been included in next year’s budget, with a view to recruit more permanent staff, notwithstanding any changes that needed to be made as a result of reforms. There had also been significant savings realised in the transport budget.

SEND service - in response to a question on how confident the service was in meeting budget requirements for SEND children despite the impact on services, the Committee was informed that officers were as confident as possible in terms of delivery and current support in place, notwithstanding changes that would come with the new reforms and how the service would be redeveloped. There had been announcements of grants to fund the reforms, which the Council would have to bid for and what this could mean for Medway would have to be factored in as more information came though.

Sustainability – in response to a question on fluctuations in long term planning and mitigating reliance on capital receipts, the Committee was informed that the finance team worked alongside services to update forecasts on a regular basis. Forecasts were made with 99% live tracking data and all peaks and troughs were monitored. The  Director of People and Deputy Chief Executive added that the senior leadership team consistently recognised pressures and mitigated.

Decision:

The Committee noted the results of the third round of revenue budget monitoring for 2025/26, in particular the risk to interest and financing projections, the Committee noted that Cabinet have instructed CMT to implement urgent actions to bring expenditure back within the budget agreed by Full Council.