Agenda item

Report of the Deputy Leader and Cabinet Member for Finance and Transformation is attached

Councillor Thorpe introduced the budget reports, noting that rental costs were increasing and that, following the budget?setting process, the Council faced a structural gap of just under £10 million. The priority remained to deliver a sustainable and legally compliant budget, as required by the Section 151 Officer. A zero?based budgeting exercise had been undertaken, which concluded that the authority was likely facing a deficit in the region of £14 million due to increased demand pressures, higher than expected pay awards, and inflationary costs.

Directorates had been challenged to identify savings, as discussed at the previous Overview & Scrutiny meeting. Some progress had been made, supported by an improved government settlement and a £1.6 million movement relating to the Greater Manchester pension fund. The remaining budget gap now stood at £3.9 million, reflecting significant progress, although the overall challenge was becoming increasingly difficult, particularly given rising demand in adult and children’s social care and the increasing costs associated with meeting that demand. Work was ongoing to ensure that emerging pressures did not undermine the Council’s future financial resilience.

The Chair, Councillor Vernon, noted that a substantial portion of the budget had been considered in December and acknowledged the delayed publication of the papers. The Director of Finance explained that the timing of the meeting had contributed to this, with Cabinet papers being published first, and confirmed that meeting cycles would need reviewing. Significant detail within the government settlement also required further analysis.

Councillor Birchmore asked questions regarding the highways budget (page 135), specifically the amount allocated for road resurfacing and the reason £9.5 million had been rephased. She also asked whether any staff redundancies were planned for the forthcoming year. Councillor Thorpe confirmed that project delivery was expected toward the latter part of the budget window, highlighting a maintenance allocation of £2.549 million,  He confirmed that no redundancies were planned, although reductions in agency staffing, improved management of sickness absence and exploring different ways of working would contribute to savings.

Councillor Moss raised a question about financial risks linked to school academisation. Councillor Thorpe explained that it was now easier to predict which schools might convert, with only a small number still outside trusts. Catholic and Church of England schools were under no pressure to academise, and any deficits would return to the Council upon conversion. He noted that a school could move between surplus and deficit within a year. The Director of Finance added that the Council had a clear understanding of school?related financial risks, particularly through services traded with schools, and confirmed that the Commercial Board monitored risks to ensure services remained cost?effective. Councillor Thorpe added that financial planning depended heavily on pupil numbers.

Councillor Moss also asked about the projected decline in reserves over the next three years and noted the absence of reference to the budget stabilisation reserve. Councillor Thorpe explained that the reserve covered both budget and business stabilisation but would not be sufficient to close the gap on its own. Detailed information was available in the annex, and Neil agreed to confirm its exact location. Councillor Green queried uncommitted reserves, and Councillor Thorpe said this work remained ongoing. The Director of Finance confirmed that some reserves had been identified and moved into the stabilisation reserve and that further review work across all reserves was underway.

Councillor Rahimov raised questions about proposed savings in temporary accommodation, acknowledging the difficulty of estimating demand. The Director of Finance noted that Cabinet had agreed a report in December outlining plans to purchase properties to support the service. Councillor Thorpe reiterated the importance of having a clear plan. Councillor O’Brien commented that demand projections were difficult due to national trends, but officers were reasonably confident in the planned savings even if demand continued to increase.

Councillor Birchmore raised further questions about leisure subsidies and rephasing of capital projects. Councillor Thorpe advised that leisure services were becoming more commercial, with growing membership and fee increases aligned to inflation, subject to consultation. Capital rephasing was monitored monthly by the regeneration board, with inflation factored into project planning and any additional cost requests requiring Cabinet approval.

Councillor Boles asked about preparations for recent changes to SEND funding. Councillor Thorpe welcomed the developments, including national funding to address local authority deficits, with an estimated 90% of Bury’s deficit expected to be written off. Further changes were anticipated, and reforms to the wider SEND system were expected. The Director of Finance  noted the announcement was very recent, with early indications that around £2 million of the deficit might remain, but councils would not be disadvantaged under the approach. Officers were working through contributions made to determine what could be offset, with the expectation that some funding could return to the stabilisation reserve.

Councillor Harris asked whether this would impact council tax levels. The Director  confirmed that while it reduced financial risk on the corporate risk register, it would not directly reduce council tax.

Councillor Moss sought further assurances regarding the Council’s financial resilience. Councillor Thorpe confirmed that several steps were in place before issuing a Section 114 notice and that the three?year settlement was an improvement on previous years. Over £100 million was spent on staffing and a significant sum on adult and children’s social care. Demand reduction work was underway with InPower, initially in adult social care and now extended to children’s social care. Examples included appropriate transitions from residential care to foster placements or family homes. All services would be expected to identify cost reductions in the new financial year, supported by new technology including AI. He noted the seriousness of the financial environment but remained confident that improved procurement and contract management would support value for money. Councillor Moss welcomed the activity underway.

Councillor Harris asked about greater in?house provision as an invest?to?save option. Councillor Thorpe explained that two accommodation projects were underway. While some children could be better placed in foster care, a shortage of foster carers remained. Others required residential care due to need levels. Ofsted registration processes took time, and although expanding in?house provision was important, it would not be achieved immediately. He noted the dynamic nature of children entering and leaving care.

Councillor Birchmore queried business rate multipliers, and Councillor Thorpe confirmed the Council was compensated. She also asked about the investment and debt portfolio, including risks associated with interest rate increases. Councillor Thorpe said this remained an ongoing issue, with ongoing work with treasury advisors. The Director of Finance confirmed borrowing had reduced by £1 million, that a mixed borrowing profile helped manage exposure, and that medium?term projections anticipated falling interest rates. Minimum revenue provision had been set aside accordingly.

Further questions were raised around levy assumptions and Council Tax collection, with the Director agreeing to verify figures referenced during the meeting. Councillor Marsden also asked about strategies to reduce sickness absence. The Executive Director outlined the positive attendance at work policy and support measures available to help staff return. Some roles required agency cover, but processes were in place for managing cases where staff could not return.

The Chair asked whether a new plan was in place to ensure savings targets would be achieved. Councillor Thorpe confirmed that funding was secured for the next three years and that ongoing work in adult and children’s services, temporary accommodation, technology investment, and procurement was focused on delivering value for money. The Director of Finance reinforced the need for focused delivery of savings plans, with work progressing on this. Councillor Thorpe acknowledged the challenge of reducing expenditure without impacting resident experience and stressed the limited options to increase income.

Members expressed thanks to officers, with Councillors Birchmore and Green noting the difficult circumstances under which staff were working and the commitment shown to providing quality services to residents.

The Director of Law & Governance provided clarification on income generation within cemeteries, noting increased demand for additional vaults and enhanced service offerings.

The Chair closed the discussion, echoed members’ thanks to officers including Neil and his team.

It was agreed:

• to note the report and consider whether they wish to make any recommendations to Cabinet on the Annual HRA Budget 2026/27 & Rent Setting.