Agenda item

The Committee was presented with a report summarising the Council’s financial performance and position at the end of the first quarter of the 2025/26 financial year. The Powering Our Futures programme, and in particular the transformation mission, had identified savings of £5.8m by 2026/27. The updated savings target was now £1.35m in 2025/26 and £2.256m in 2026/27. The transformation programme, alongside the wider Powering our Futures Programme, would continue to look to address the budget gap, alongside ensuring improvements to services to local residents.

The financial position for the Council for the first quarter of the financial year (to 30th June 2025) highlighted a projected overspend of £1.684m against the budget. Growing demand for Council services and the increased cost of delivery was putting pressure on several budget headings. Work was underway to look at ways to mitigate this projected overspend and the position would continue to be closely monitored and managed throughout the remainder of the financial year.

The financial challenges facing Stockton reflected a wider national picture, with councils across the country experiencing significant and well-documented pressures. Stockton had managed these pressures responsibly, using earmarked reserves over recent years to support the Medium-Term Financial Plan and maintain stability during a period of exceptional strain. Looking ahead, reliance on reserves alone was not sustainable. Work was already under way on the 2026/27 budget and the updated MTFP, ensuring that planning was proactive and focused on maintaining financial resilience. Cabinet would continue to receive regular updates on progress and the measures being developed.

The report also presented an update on the Capital Programme.

Key issues highlighted and discussed were as follows:

·         Members asked whether a further uplift was anticipated in relation to inflationary pressures relating to accommodation costs and living allowances for children in care and care leavers, food costs and highway maintenance. Officers advised that inflationary pressures had been estimated during budget setting as well as demand on services, however, there were inevitably other factors that could have an impact such as contract renewals

·         Members queried why the overspend in Home to School transport had not been predicted. The Committee discussed the increasing numbers of children requiring home to school transport nationally and it was noted that the Government was looking at this issue. Officers advised that trends were being examined to understand pressures on future budgets. Members requested details on the numbers of pupils being transported by the Home to School Transport Service

·         The overspend in relation to Preston Park Museum was due to the closure of the museum being longer than anticipated. The Director would be approached to clarify whether an increase in the entry fee was planned. More detail around Libraries service pressures would also be provided

·         Overall, good progress had been made to manage budgets and achieve savings although there were still ongoing pressures. The current predicted MTFP position in the Budget report approved by Council in February 2025 would be confirmed after the meeting

·         Members questioned the budget pressure on Wellington Square.  Members requested further information on the work planned with prospective tenants to mitigate the financial pressure

·         Details of savings generated by moving to paperless Committee agenda despatch (printing and posting) were requested

·         Details of what was included in the planned maintenance programme for Community and Environment, Culture and Leisure 2025/25 were requested and how the MEND grant impacted the programme following work at Preston Park Museum and Grounds

AGREED that the update to the Medium-Term Financial Plan, the current level of General Fund balances and the revised capital programme be noted.