To report the forecast position for 2025/26 at Quarter 3 (December 2025), including explanation and analysis of the drivers for the material budget variances, and to outline current and planned recovery activity to reduce the forecast overspend.

The Cabinet Member Finance and Corporate Services provided a brief overview of the report. The Director of Finance, attending cabinet members and directors were also present to respond to questions from the committee; The key points of the discussion are detailed below:

1. Members asked whether cost pressures in Adult Social Care and homelessness were routinely underestimated and whether an “optimism bias” should be applied to budgeting. Officers responded that budgets were developed jointly with service leads using the best available evidence at the time, including client numbers and activity forecasts, but future changes in demand and care complexity could not be precisely predicted. They emphasised that reports were intended to be transparent rather than optimistic and already highlighted known pressures and mitigation plans.

2. Members questioned why Adult Social Care continued to overspend year on year. Officers explained this was driven by an ageing population with increasingly complex needs, hospital pressures affecting discharge, severe flu impacts, capacity constraints in home care, and rising package costs due largely to national wage policy. Work was underway to improve discharge pathways, expand reablement, strengthen partnerships with providers, and reduce reliance on spot purchasing.

3. Members asked what action was being taken to address homelessness and the loss of private landlords. Officers outlined investment in temporary accommodation, targeted homelessness prevention work, and proactive engagement with landlords through briefings, regulation support, and partnership approaches. They acknowledged that wider national legislation and market conditions were the primary drivers of landlords leaving the sector and that the council could not resolve these issues alone. Members raised concerns regarding the apparent absence of a robust action plan to help support and increase the number of landlords in the county.

4. Members sought clarity on the long?term plan for managing Adult Social Care costs. Officers described a focus on major transformation programmes centred on prevention, demand management, assistive technology, and alternative care models, alongside longer?term partnership contracts with providers. They stressed there was no single solution and that managing demand was as critical as managing expenditure.

5. Members asked whether Cabinet was confident that delivery plans adequately responded to recurring overspends. Cabinet representatives confirmed that overspends were robustly challenged in detail, that forecasting accuracy was improving, and that emerging tools such as AI?supported modelling were strengthening projections. While dissatisfaction with recurring overspends was openly acknowledged, members were assured that all feasible options were tested regularly.

6. Members questioned whether agreed savings remained achievable. Officers reported that approximately 40% of total savings had been delivered by Q3, with a further majority of legacy savings already achieved. Some savings had been delayed due to timing or operational factors, such as academic?year delivery, but were still expected to be realised, with overall performance described as positive but cautious due to volatility.

7. Members asked how additional income from treasury management was governed and allocated. Officers explained that this income was reported through the central budget line and was offset against other financial pressures such as borrowing costs and MRP. It was not separately allocated to services but managed corporately through established financial governance processes.

8. Members questioned why capital projects were frequently reprofiled and how inflation risks were managed. Officers stated that reprofiling usually reflected delivery delays rather than lack of control, with inflation risks managed at project level and through corporate oversight. They acknowledged global economic uncertainty but said strong governance, challenge, and risk management arrangements were in place.

9. Members queried delays to active travel schemes funded through the Levelling Up Fund. Officers explained that delays were due to managing cumulative disruption in the city and responding to business and resident concerns about traffic impacts. They confirmed continued commitment to active travel and advised that no immediate risks to grant funding had been identified.

At the conclusion of the debate on item 7 and item 8 the committee discussed and agreed the following recommendations.

That the executive should:

1. Review the method by which the council counts the number of people sleeping rough, to take into account local factors.

2. Urgently review the application of the RAG status to reassure themselves it is a realistic picture of the current position on Delivery Plan items. In doing so, they should also develop guidance for senior responsible officers (SROs) and service leads in line with the outcome of this review.

3. Ensure that delivery reports display RAG ratings for each quarter (Q1-Q4), to provide a transparent record of progress and to highlight risks or declining performance as they occur.

4. Develop an action plan to support and increase the number of private landlords in the county.