Agenda item

This report details the final revenue and capital outturn position for the financial year ended 31 March 2026.These figures will form part of the Council’s Statement of Accounts, which will be presented to the Audit Committee following the completion of the External Audit. The report also presents a summary of debts written off during the 2025/26 financial year in line with the constitutional requirement to submit a report to Cabinet on an annual basis setting out details of all debt written off.

Estimated time: 45 minutes

Discussion:

The Chief Operating Officer introduced the Annual budget report, he highlighted the final budget position which represented a £9.8m overspend which was funded by an increased capitalization direction which now stood at just over £28m for the financial year.

The Committee were asked to note the Council’s general fund reserves position which stood at just over £10m and the declassification of £3.7m of reserves to the revenue budget.

The following issues were discussed:

Exceptional Financial Support (EFS) – A Member asked if the final budget position, low level of reserves meant further EFS may be required for the 2026/27. The Chief Operating Officer stated that the final overspend in Adult Social Care was significantly higher than had been forecast in round 3 monitoring. As a consequence, he was less confident that the 2026/27 budget would be met without further recourse to EFS. He had informed CMT and the administration that he was concerned that the overspend in Adult Social Care would place strain on the 2026/27 budget. The Council had put resources into adult social care, but forecasting had been overly optimistic regarding the delivery of savings targets and work was ongoing to understand the causes of this.

Debt write off – A Member commented that £2.4m represented a significant amount of unpaid Council Tax debt to write off. The Chief Operating Officer stated that finance typically achieved 97% collection of council tax in year and a 99% collection rate over the longer period, however, more recently the cost of living crises had impacted collection rate. Whilst the Council had put additional resources into collection of debt, it was realistically not expected to  recover the £2.4m, hence the exceptional level of write off.

Finance and Interest – A Member asked if the Chief Operating Officer retained confidence in the Council’s treasury advisors following the finance and interest overspend against the budget last year. The Chief Operating Officer explained that it had been expected that interest rates would fall during the last two to three years, however, this has not happened and due to the conflict in the middle east, The Public Works Loans Board rates (PWLB) had risen to circa 5.5%. This had largely caused the overspend shown in the budget outturn. The Chief Operating Officer added that the Council had recently changed its treasury advisors.

Overspend across departments – A Member commented that whilst there were one or two areas of significant overspend. There was also overspend across a number of budgets. The Chief Operating Officer acknowledged that there were some departments where budgets had seen an overspend, however, the wider department was within budget, or there were particular causes for the overspend. One example was the Public Health budget, which had overspends in some areas but as a whole was within budget overall.

Capital Programme – A Member asked if there had been a change to the Capital Programme due to the overspend. The Chief Operating Officer stated that the Capital Programme had not changed, a number of projects were already significantly underway. However, he acknowledged that the Capital Programme had required increased borrowing which had to be repaid and this had impacted the revenue budget.

Decision:

a)     The committee noted the 2025/26 revenue and capital outturn position as summarised in Section 4 of the report, and the Council’s reserves position as summarised in Section 13 of the report.

b)     The committee noted the declassification of £919,000 of earmarked reserves and transfer of these to general reserves, carried out under Director’s delegations.

c)     The committee noted that Council has been asked to agree the addition of £3.743million to the revenue budget from general reserves to fund the final overspend as set out in Section 13 of this report.  This includes the £2.825million agreed by the Council in February and preserves the Council’s general reserve balance at £10.012million, just above the minimum level set by the Section 151 Officer.

d)     The committee noted that Council has been asked to agree to the following removals from the Capital Programme for scheme that have underspent as set out in Section 11 of this report:

 • £160,000 for Greenacre Academy 

• £133,000 for Hundred of Hoo 6th Form

• £63,000 for Leigh Academy Canopy 

• £20,000 for Strood Academy 

• £226,000 for Victory Academy 

• £65,000 for Dane Court

• £2,000 for Luton Primary (Nursery)

• £3,000 for ICT Infrastructure 

• £168,000 for Waste Fleet Replacement 

e)     The committee noted that Council has been asked to agree to the following removals from the Capital Programme for schemes that could be funded by revenue Section 106 developer contributions:

• £400 for Rainham Play

• £400 for Jackson Fields & Victoria Gardens

• £10,000 Luton Millennium Green 

f)      The committee noted the debts written off against provisions as set out in section 14 of the report.