Cabinet – 3 September 2025

Financial Monitoring Report (based on performance April to June 2025 inclusive)

Purpose	For Decision
Classification	Public
Executive Summary	This report provides the latest budget forecasts for the General Fund, Housing Revenue Account (HRA) and capital programme for the 2025/26 financial year, based on quarter one performance from April 2025 to June 2025 inclusive. It shows: a. An additional budget requirement within the General Fund of £258,000; b. a balanced position within the HRA and; c. an increase in the capital programme for 2025/26 of £2.093 million predominately due to the rephasing of 2024/25 activity into 2025/26.
Recommendation(s)	It is recommended that Cabinet: 1) note the latest budget forecasts of the General Fund, HRA, and Capital.
Reasons for recommendation(s)	To comply with accounting codes of practice and best practice which requires councils to regularly monitor the annual budget position and take any action to support the sustainability of the council’s financial position ensuring we are being financially responsible. To comply with the council’s financial regulations regarding budget virements and supplementary budget requests.
Ward(s)	All
Portfolio Holder(s)	Councillor Jeremy Heron – Finance and Corporate
Strategic Director(s)	Alan Bethune – Strategic Director Corporate Resources and Transformation (Section 151 Officer)
Officer Contact	Paul Whittles Assistant Director - Finance 02380 285766 paul.whittles@nfdc.gov.uk

1. Following the approval of the Original Budget for 2025/26 in February 2025, this report provides an update on the General Fund, Housing Revenue Account and Capital budgets, adjusting for any budget changes now required and recommended.

2. Financial Monitoring is an important feature in the management of the council’s finances as it gives an opportunity to reflect on variations as against the latest set budget and reflect on the impact that these variations may have over the period covered by the council’s Medium Term Financial Plan (MTFP).

Pay award implications

3. The 2025/26 pay award for all employees has been agreed with all NFDC pay points increasing by 3.2%.

4. Following a detailed review of the impact across all Council pay budgets this has collectively added an additional £316,000 of salary costs above the original service level budgets in the General Fund and £125,000 in the HRA.

5. In the General Fund the £316,000 will be funded by reallocating the centrally held £565,000 pay award contingency to each service. The remaining £249,000 will be allocated to fund the £116,000 cost of waste and Street Scene drivers' market supplements, leaving a contingency balance of £133,000.

6. In the HRA the £125,000 will be funded from its £236,000 pay award contingency, leaving £111,000 to fund any additionally unforeseen future budget pressures.

General Fund revised projection

7. Appendix 1 sets out the General Fund budget of £25.509 million for 2025/26 as agreed by council in February 2025 (£28.719 million at Portfolio analysis level, with other budget elements reducing this to this lower General Fund budget figure).

8. The latest budget variations reported include net unfavourable expenditure variations of £425,000, net income increases of £16,000 and additional grant income of £151,000. Furthermore, expenditure projects totalling £896,000 have been rephased from 2024/25. In addition to internal virements between portfolios, major variations are detailed below (ordered in accordance with Appendix 1), with full variations listed in Appendix 2.

9. Rephased budgets between years are summarised below:

	£’000
Community, Safety and Wellbeing
Grants	29
CCTV - Expansion	51
Community Safety	34

Environment and Sustainability
Cemeteries - Maintenance	47
Foreshores – Maintenance	21

Finance and Corporate
Lymington Town Hall	16
Salisbury Road, Totton	157
Fleet & Infrastructure Strategy	80

Planning and Economy
Local Plan	298
Policy - Digital Planning Grant	63
Economic Development – Totton Masterplan	100

TOTAL FROM 2024/25	896

Environment and Sustainability (Place, Operations and Sustainability)

10. Refuse and Recycling – Grant (-£151,000) – Grant funding to support the new waste service roll out totalling £151,000 will be received during this financial year. This was confirmed by DEFRA in March, after the original budget was set. Contra expenditure adjustments (in utilisation of this additional funding) are shown below.

11. Refuse and Recycling (£408,000)

11.1. Operations Administration (£25,000)– Additional agency cover is required to provide temporary administrative support within the Business Support Team.

11.2. Drivers (£67,000) - To support the rollout of the new waste service, drivers are being appointed earlier than originally budgeted.

11.3. Narrow Access Round (£59,000) – Further to the July Waste Programme Board, it has been decided to include an additional narrow access round. This will allow the service to stabilise the collections at properties requiring narrow access resources.

11.4. Waste Transition (£88,000) – To support the new service roll out additional temporary resources are being employed. This includes two waste advisors (£46,000), a customer services officer (£20,000) and extended programme support (£22,000).

11.5. Behind Gates Trial (£150,000) – To carry out a trial period for collection of waste, particularly food waste, from behind property gates to determine the best resolution of issues regarding interaction of waste and animals.

11.6. Waste Supervisor (£19,000)– Further to the August Waste Programme Board, it has been decided to include an additional waste supervisor given the increased level of operatives within the service.

12. The overall impact of all variations results in an updated General Fund Budget of £25.767 million; an increase of £258,000 from the original estimate. At this stage, the additional budget requirement will be funded from reserves.

13. The revised General Fund Budget for 2025/26 can be seen at Appendix 1, with further details on the variations being reported included within Appendix 2.

Other Financial Matters of note

14. The council anticipates a favourable Interest receivable position compared to budget. Forecasts are currently being reviewed (in light of the most recent base rate reduction and updated forecasts), and the detailed findings shall be reported in due course.

15. Resourcing the necessary preparations for Local Government Reorganisation has resulted in just over £100,000 of the £500,000 Devolution and LGR Reserve being spent or committed to date, which includes supporting the collective work with councils to develop the case for change, the county wide engagement survey and local communications and engagement activity.

16. Given the scale of the investment supporting the roll out of the new waste collection service, all costs will continue to be monitored closely. Lessons learned from phase one will continue to inform changes to the existing assumptions and highlight new budget requirements which shall need to be considered in line with financial regulations.

Housing Revenue Account Revised Projection

17. A break-even HRA budget for 2025/26 was agreed in February 2025, with a Revenue Account contribution of £10.200 million supporting the financing of the £30.820 million HRA Capital Programme.

18. This report identifies net budget increases of £60,000, funded from rephasing reserves from 2024/25.

19. General Management - (£60,000)– Garages survey brought forward from 2024/25 into 2025/26.

20. The updated HRA budget can be seen at Appendix 3.

Capital Expenditure (General Fund and Housing Revenue Account)

21. A Capital Programme budget of £50.231 million for 2025/26 was agreed by council in February 2025.

22. The latest forecast confirms gross programme changes totalling £162,000 and net rephasing into 2025/26 of £1.931 million which results in an updated 2025/26 Capital Programme Budget of £52.324 million (Appendix 4).

23. Leader - (£162,000) - The 2025/26 budget reflects new schemes funded through the Rural England Prosperity Fund, as approved by Cabinet on 7 May 2025.

24. Rephasing £1.931 million from 2024/25 added to 2025/26:

	£’000
Environment and Sustainability
Strategic Regional Coastal Monitoring	180
Barton Drilling Trials	103
Hurst Spit Beach Shingle Source Study	15
Waste Strategy Containers	43
Asset Modernisation - Public Convenience	58

Finance and Corporate
Eling Toll Bridge and Quayside Repairs	40
Commercial Property - Queensway	323
Ringwood Depot: Extension and Works	248

GENERAL FUND - REPHASINGS FROM 2024/25	1,010

Housing Revenue Account
Major Structural Refurbishments	921

HRA – REPHASINGS FROM 2024/25	921

TOTAL REPHASINGS FROM 2024/25	1,931

Corporate plan priorities

25. Regular monitoring and reporting of our financial activity including adjusting budgets whilst maintaining a balanced medium term financial plan (MTFP), ensures we are being financially responsible and supports our Future New Forest transformation programme which underpins the delivery of all our priorities.

Options appraisal

26. There are no recommendations for decision, therefore no alterative options have been presented.

Consultation undertaken

27. Internal consultation between finance officers, service managers and budget holders has determined the forecast data presented in the report.

Financial and resource implications

28. This is a financial report with budget implications already detailed and considered in the main body of the report.

Legal implications

29. There are no legal implications arising directly from this report.

Risk assessment

30. The projected forecast is prepared based on estimates and assumptions in consultation with services. There are key risks in the projections across all service areas and both revenue and capital activity.

Environmental / Climate and nature implications

31. There are no environmental implications arising directly from this report.

Equalities implications

32. There are no equality implications arising directly from this report.

Crime and disorder implications

33. There are no crime and disorder implications arising directly from this report.

Data protection / Information governance / ICT implications

34. There are no data protection, information governance or ICT implications arising directly from this report.

Appendices:

Background Papers:

Appendix 1 – Revised General Fund Budget 2025/26

Appendix 2 – Variation Analysis General Fund 2025/26