Agenda item

This report presents the forecast revenue outturn position for the current financial year 2025/26, as at Quarter 1 (30 June).

The Committee received a report presenting the forecast revenue outturn position for the current financial year 2025/26, as at Quarter 1 (30 June).

The following matters were considered:

a)            Budget overspend. A Member of the Committee asked if the report was forecasting year end to be a £485k overspend or whether that is the current position and the overspend will be even more. The Member also asked for clarification as to how the overspend will be dealt with other than just using reserves. The Director of Corporate Services (S151) confirmed that when the finance team do the budget forecast, it is for the year end position. He explained that this will be reviewed in the Q2 report scheduled to come to Committee in November. He recognised that there is a structural challenge in the Council’s housing budget with regard to the demand for temporary accommodation and the impact on the Council’s finances. He acknowledged that this is a wider issue, being felt and dealt with across the country. He informed the Committee that whilst the Council is fortunate to have healthy reserves, the aim is to not dip into reserves as that would not be sustainable. He continued to explain that this structural issue has been addressed in the Medium-Term Financial Strategy, and it is understood that if it is not adequately addressed it will continue into the next financial year.

b)            Housing and homelessness budget. A Member of the Committee asked if there was an increase compared to last year’s budget for homelessness. The Director of Corporate Services (S151) explained that the homelessness budget is based on a temporary accommodation (TA)  demand of 70, meaning as soon as we are over that number, the Council does not have the budget and is overspending. He explained to the Committee that there needs to be a budget set that ensures that services aren’t subject to failure every year and also recognises that services are doing their utmost to be able to manage to structural issue. The Member asked why the TA figure is set at 70 when it has been seen for years that the actual TA figure is much higher and therefore the budget should be set higher. The Director of Corporate Services (S151) informed the Committee that for 2026/27 the budget will be higher and that is what has been reported on.

·                     Councillor Bridger proposed a motion to add an additional recommendation to;

‘Agree to write to the Chair of Strategy and Resources and express concerns regarding the historically low Housing and Homelessness budget and Temporary Accommodation figure and seek assurance that it will be addressed and corrected in the upcoming budget.’

Councillor Neale seconded the motion.

The Committee unanimously agreed the motion and addition of a fourth recommendation to the report.

c)            S&R and C&W. A Member of the Committee asked for clarification as to whether Strategy and Resources are the right committee to write to when Community and Wellbeing Committee deal with homelessness.The Chief Accountant explained that Community and Wellbeing Committee can only work within their set budget, and if the issue and concern Audit and Scrutiny Committee Members have is with the budget being set too low, then Strategy and Resources are the correct Committee to raise those concerns with.

d)            Temporary Accommodation forecast. A Member of the Committee asked what the projected number was for people in temporary accommodation by the end of the financial year. The Director of Corporate Services (S151) explained that finance will closely work with the relevant service area and the housing delivery group to forecast the figures. He explained that as of the 30 June 2025 Q1, the forecast was 116 TA. He informed the Committee that the figure will change and likely go up by the end of Q2. The Member asked if it was possible to predict where numbers will be in the future. The Director of Corporate Services (S151) informed the Committee that there is an element within the Council’s control but there is a bigger element that is out of the Council’s control, particularly in regard to demand and supply of TA and the inflation rate. The Member asked for a projected figure for TA at the end of Q2, 3, and 4. The Director of Corporate Services (S151) explained that the housing and homelessness adverse variance on page 83, is in regard to a higher TA number than 70 and agreed to come back to the Member to with further detail.

·                     Councillor Froud proposed a motion to add an additional recommendation to;

‘Agree to write to the Chair of Community and Wellbeing Committee expressing concern over the Temporary Accommodation figure of 70 and requested forecast Temporary Accommodation numbers for Q2, 3, and 4.’

The motion was withdrawn.

e)            Government funding. A Member of the Committee asked if the Council receives central government funding on homelessness, which is set at one level and sometimes raised later on, which can make the financial predictions more unpredictable. The Chief Accountant confirmed that the Council does receive some grant funding called the Homelessness Prevention Grant. She explained that the government have set parameters around that grant and only a specific amount can be spent on nightly paid accommodation costs and the rest should be spent on activities to try and address the cause of homelessness and a prevent it. She continued to inform the Committee that there was a significant increase on that grant for 2025/26 compared to previous years, but a lot of that has gone into funding temporary staff that had been taken on to try and address some of the issues and making them permanent so that the Council have got those staff long term to continue the good work that they’re doing. She explained that the budget was set a lot earlier and based on information from October and November last year. She informed the Committee that there is also the Homelessness Strategy that C&W Committee have been implementing to assist with bringing the number of people in nightly paid accommodation down.

f)             Factors causing increase. A Member of the Committee asked what factors are causing the increase in homelessness in the borough. The Chair informed the Member that the question can be taken away to get a response from the relevant officer.

g)            S&R reports. The Chair asked for clarification as to whether the Revenue Budget Monitoring quarterly reports are sent to Strategy and Resources Committee. The Director of Corporate Services (S151) confirmed that is correct. He explained that the setting of budgets, various updates, and the outturn (Q4) reports go to S&R Committee. The Chair raised that there may be a benefit sharing these reports with S&R Committee. The Director of Corporate Services (S151) explained that the Terms of Reference of S&R Committee don’t include that so this would need to be addressed.

h)            Revenue reserves. The Vice Chair asked for clarification as to whether the £8.4m of the revenue reserves balance, mentioned in paragraph 8.2, will be looked at by the finance team. The Director of Corporate Services (S151) confirmed that they would be reviewed. He explained that if there are reserves which are over prudent and can be released, then this will be raised with Councillors as part of the review process.

Following consideration, the Committee unanimously resolved to:

(1)      Receive the revenue budget monitoring report, which sets-out a projected deficit of £485,000 for 2025/26;

(2)      Agree that regular reports continue to be prepared for Community & Wellbeing Committee to update members on progress against the Homelessness Strategy and Action Plan;

(3)      Agree that the updated Quarter 2 position will be reported back to Audit and Scrutiny Committee in November.

(4)      Agree to write to the Chair of Strategy and Resources Committee to express concerns regarding the historically low Housing and Homelessness budget and Temporary Accommodation figure and seek assurance that it will be addressed and corrected in the upcoming budget.