Agenda item

At Quarter 1, the Council is forecasting significant pressures arising from Children’s Services (£11.8m) and Adult Social Care (£8.3m) due to rising demand for care services, increasing placement costs. Pressures are also forecast in Operations (£6.8m). The total general fund forecasted overspend of £27m is of a level unseen at the Council and is real threat to the financial sustainability of the council. Actions to address the position are set out in the report.

Delivery of the Council’s £14.1m savings programme remains a challenge, with only £9.6m currently forecast to be achieved, resulting in a projected £4.5m shortfall.

The Dedicated Schools Grant (DSG) deficit remains the Council’s most significant financial risk, with the accumulated deficit forecast to increase to approximately £275.5m by March 2027.

The Council is awaiting approval of its SEND Reform Plan, which would unlock Government support through a High Needs Stability Grant covering 90% of the historic deficit as of March 2026.

The Capital Investment Programme has increased to £149m, with £11m (8%) spent by the end of Quarter 1. Major investment continues in flood defences, transport, fleet replacement and SEND provision.

The Housing Revenue Account remains financially stable and is forecasting a £3.5m surplus.

Overall, the Council faces significant financial pressures and savings delivery risks, requiring ongoing management and recovery actions during the remainder of 2026/27.