Council’s financial position improves

At the end of the 24/25 financial year, the council has a £1 million underspend, after taking tough action to make savings including strict vacancy and spending controls.

Early in the year forecasts indicated significant pressures of over £10 million. Reducing this predicted overspend required a sustained effort by staff and services.

Alongside normal financial management across services, strict recruitment and spending controls were put in place, as well as a thorough review of grants and provisions to release funds to revenue wherever we’ve been able to.

While the council’s financial position shows progress, there are still significant challenges ahead. 2025/26 is likely to continue to be challenging due to our low reserves, pressures on services and further savings to meet.

In February the council set a budget with £16 million of savings to deliver and a further £6 millon of pressures across services, and these pressures continue to grow.

Our reserves are very low compared to other similar authorities – we are in the lowest 10 authorities in the country.  Additionally, £3.3 million came out of our reserves in 2022/23 to fund an overspend in that year.

The council needs to build our reserves to help give us resilience against the significant pressures all councils are facing including housing, temporary accommodation, social care and inflation.

Achieving the 2024/25 underspend means the council can begin to address these concerns. The report to Cabinet proposes the £1 million underspend is added to the working balance (general reserves) to improve our financial resilience.

Councillor Jacob Taylor, Deputy Leader and Cabinet member for Finance and City Regeneration, said: “It’s a fantastic achievement to have ended the year under budget. £1 million underspend towards our working balance means we’ve entered the new financial year in a stronger position than we expected a few months ago.

“This is a great start, but as with all local authorities, we have significant financial challenges and service pressures ahead.

“There’s much more we need to do to build our reserves and ensure we remain financially resilient.

“It’s also important to recognise the effort it took to achieve it. It’s been a difficult year, with tough decision for staff and unavoidable impacts on service delivery, but it has been extremely important for our finances.”

The council’s Targeted Budget Management Provisional Outturn for 2024/25 is due to be presented in detail to Cabinet next Thursday.