2025-26 Revenue Budget - Update No. 1
Perth and Kinross Council · 1 October 2025
Back to Finance and Resources Committee — 1 October 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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Our vision is a Perth and Kinross where everyone can live life well, free from poverty and inequality ___________________________________________________________________ Committee: Finance and Resources Committee Date of Meeting: 1 October 2025 Report Title: 2025/26 Revenue Budget – Update No. 1 Report Number: 25/248 Report Author: Scott Walker, Chief Finance Officer Organisational Lead: Scott Walker, Chief Finance Officer ___________________________________________________________________ 1. Purpose 1.1 The purpose of this Report is to provide an update on progress with the 2025/26 General Fund Revenue Budget based upon the June 2025 ledger, updated for any subsequent known material movements, and the projected financial position of the Housing Revenue Account. 1.2 The total net projected overspend on the 2025/26 General Fund Management Budget, currently is £3.469 million (see Appendix 1). 1.3 Sections 1. Purpose 2. Recommendations 3. Background 4. 2025/26 Revenue Monitoring Service Budgets Corporate Budgets Funding Other Updates 5. 2025/26 Revenue Budget Adjustments Issues Arising from Unaudited 2024/25 Annual Accounts Additional Funding Virements Movements in Reserves 6. Financial Risks 7. Conclusion 8. Impact and Value Assessment 9. Appendices
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2. Recommendations It is recommended that the Committee: 2.1 note the contents of the report, 2.2 note the projected outturn for the General Fund set out in Section 4 and Appendix 1 and 2, 2.3 approve the adjustments to 2025/26 General Fund budgets set out in Section 5 and Appendices 1,2,4,5,6, 7 and 8, 2.4 note the financial risks set out in Section 6 and Appendix 9. 3. Background 3.1 This report updates the Committee on progress with the 2025/26 Revenue Budget. Appendix 1 to this report summarises the current projected year end (outturn) position for each Service based upon the June 2025 ledger, updated for any subsequent known material movements. 3.2 The budget reflected in Column 1 of Appendix 1 to this report is that approved by the Council in setting the final 2025/26 Revenue Budget on 26 February 2025 (Report No. 25/36 refers). In addition, adjustments approved by the Finance and Resources Committee on 30 April and 25 June 2025 (Report No’s 25/99 and 25/172 refer) are reflected in Appendix 1 (Column 2). 4. 2025/26 Revenue Monitoring Service Budgets 4.1 The total net projected underspend on Service budgets, which is summarised in Section 1 of Appendix 1 to this report, is £50,000 which represents 0.01% of total net Service expenditure. 4.2 Details of variances against individual Service budgets are shown in Appendix 2 to this report with the most significant variances summarised below. 4.3 The management of Service over and underspends are considered throughout the financial year and may also form part of the Revenue Budget strategy for future years. 4.4 There remains a risk that the Council continues to experience increases in costs over the short to medium term that are higher than budgeted. Going forward, this may continue to have an impact on projected outturns and future years’ budgets.
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Education and Learning 4.5 The projected outturn for Education and Learning excluding Devolved School Management (DSM) and the Pupil Equity Fund (PEF) is currently anticipated to be on target against budget. The individual elements contributing to this position are summarised in the following table with commentary on the significant variances below. Function Projected Outturn Movement £’000 % £’000 Education & Learning Core Overspend 6 0.5 6 Nursery Sector Underspend (541) (1.8) (541) Primary Sector Overspend 1,114 2.0 1,114 Secondary Sector Underspend (660) (6.9) (660) Special Sector Overspend 81 0.3 81 TOTAL On Target - - - 4.6 In the Nursery Sector, there is a projected underspend of £541,000 due to additional staff slippage and savings from deferred places. 4.7 In the Primary Sector there is a projected overspend of £1.114 million due to the non-achievement of staff slippage targets at this time. 4.8 Within the Secondary Sector, there is a projected underspend of £660,000 due in part to excess staff slippage created in advance of roll out of new intensive support provisions from August 2025. 4.9 In the Special Sector there is a projected net overspend of £81,000 due to increased demand for independent school placements, partially offset by staff slippage. 4.10 Home to School Transport is currently projected on budget due to lower number of school days in financial year. 4.11 The Devolved School Management Scheme is currently projected to be on target. However, some schools are experiencing challenges in delivering approved staff slippage targets and facing inflationary pressures against budgets that have been reduced over previous years. The budgets for the Devolved School Management scheme are allocated by financial year (April – March), whereas expenditure is incurred by academic year (August – June). 4.12 At this stage of the academic year, expenditure met from the Pupil Equity Fund (PEF) is projected to be on target. Children, Families and Justice 4.13 There is currently a projected underspend for Children, Families and Justice of £270,000 or 1.0% of the approved budget. The individual elements contributing to this position are summarised in the following table with narrative on the significant variances below.
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Function Projected Outturn Movement £’000 % £’000 Children & Families Underspend (270) (1.2) (270) Justice Service On Target - - - TOTAL Underspend (270) (1.0) (270) 4.14 In Children and Families, there is a projected underspend of £270,000 based on the latest demand for foster, kinship and adoption support following the introduction of new working practices. This is partially offset by projected overspends on residential placements based on recent demand and not currently achieving the budgeted staff slippage target. Economy, Development and Planning 4.15 There is currently a projected overspend for Economy, Development and Planning of £148,000 or 0.9% of the approved budget. The individual elements contributing to this position are summarised in the following table with narrative on the significant variances below. Function Projected Outturn Movement £’000 % £’000 Service Wide Overspend 77 0.5 77 Tourism, Culture & Place Overspend 71 0.6 71 TOTAL Overspend 148 0.9 148 4.16 Service wide there is a projected overspend of £77,000 due to a shortfall in the bad debt provision and costs relating to the Tay Cities Deal. 4.17 In Tourism, Culture and Place there is a projected overspend of £71,000 relating to the running costs of Perth Harbour. Environment and Infrastructure 4.18 The projected outturn for Environment and Infrastructure is currently anticipated to be £25,000 or 0.1% more than budget. The individual elements contributing to this position are summarised in the following table with narrative on the significant variances below. Function Projected Outturn Movement £’000 % £’000 Traffic and Network Underspend (50) (4.0) (50) Waste Disposal Underspend (250) (2.9) (250) Refuse Collection Overspend 175 3.4 175 Fleet Overspend 150 - 150 TOTAL Overspend 25 0.1 25 4.19 In Traffic and Network there is a projected underspend of £50,000 due to additional income from statutory road network charges.
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4.20 Across Waste Disposal, there is a projected underspend of £250,000 due to the receipt of additional income from the sale of recyclates and favourable market prices. 4.21 Consistent with the information provided earlier in the year, the 2025/26 Revenue Budget assumed income of £4.975 million from the Extended Producer Responsibility for packaging (pEPR) scheme. In late Summer, like most councils across Scotland, the Council was advised that the 2025/26 allocation would be less than first advised. This reduction of £1.180 million can be contained within the current year, and this is reflected in Appendix 1, however there may be implications for future financial years. Discussions are ongoing between the Council and PackUK, the scheme administrators and will be included in further revenue monitoring / revenue budget updates. 4.22 In Refuse Collection there is a projected overspend of £175,000 due to a shortfall in commercial waste income based on activity to date. 4.23 In Fleet there is a projected overspend of £150,000 due to additional expenditure on vehicle materials and repairs. Housing and Communities 4.24 The projected outturn for Housing and Communities is currently anticipated to be £16,000 or 0.1% less than budget. The individual elements contributing to this movement are summarised in the following table with commentary on the significant variances below. Function Projected Outturn Movement £’000 % £’000 Bereavement Services Overspend 14 1.7 14 Public Transport Unit Underspend (30) (0.7) (30) TOTAL Underspend (16) (0.1) (16) 4.25 In the Public Transport Unit there is a projected net underspend of £30,000 due to additional income from park and ride departure charges partially offset by tendered services. Property Services 4.26 The projected outturn for Property Services is currently anticipated to be £222,000 or 0.3% more than budget. The individual elements contributing to this movement are summarised in the following table with commentary on the significant variances below. Function Projected Outturn Movement £’000 % £’000 Service Wide Overspend 778 1.8 778 Energy Underspend (840) (10.9) (840) Facilities Management Overspend 418 11.5 418 Catering Underspend (134) (1.7) (134) TOTAL Overspend 222 0.3 222
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4.27 On a Service Wide basis, there is a projected overspend of £778,000. This is due primarily to the projected non-achievement of slippage targets (at this time), additional capital charges, and increased unitary charge costs due to interest rates. 4.28 On Energy, there is a projected underspend of £840,000 due to updated rates and consumption information. 4.29 In Facilities Management, there is a projected overspend of £418,000 due to the timing of the roll out of the new cleaning regime (£196,000) and delays in public sector partners confirming their relocation into Pullar House (£222,000). This has been a particular issue with the Scottish Government who have not been able to make a formal commitment despite the best efforts of Council officers to make progress, resulting in a projected reduction in rental income in the current year compared to the business case assumptions 4.30 In Catering, there is a projected underspend of £134,000 due to a reduction in the uptake of school meals compared to budget. Legal and Governance 4.31 Within Legal and Governance there is a projected underspend of £161,000 or 3.8%. This is made up of, in the main, additional income from across the Service partially offset by the projected non-achievement of staff slippage at this time. Customer and Digital Services 4.32 The projected outturn for Customer and Digital Services is currently anticipated to be £80,000 or 0.6% more than budget. The individual elements contributing to this movement are summarised in the following table with commentary on the significant variances below. Function Projected Outturn Movement £’000 % £’000 IT & Customer Services Underspend (50) (0.7) (50) Revenues and Benefits Overspend 130 2.3 130 TOTAL Overspend 80 0.6 80 4.33 In IT & Customer Services, there is a projected underspend of £50,000 due to savings on staff costs that exceed budgeted slippage targets. 4.34 Across Revenues and Benefits there is a projected overspend of £130,000 due to the non-achievement of staff slippage targets and expenditure that is not recoverable from Housing Benefit. Strategic Planning and Performance 4.35 Within Strategic Planning and Performance, there is a projected underspend of £68,000 or 1.1%. This is due to various underspends and additional income across the Service.
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Finance and Business Support 4.36 The projected outturn for Finance and Business Support is currently anticipated to be £10,000 or 0.1% less than budget due to additional staff slippage. Scott Street Fire 4.37 At this time, there are no costs included within the Service monitoring information in relation to the fire that took place at Scott Street, Perth in June 2025. 4.38 To date the Council has incurred costs of £621,000, with projections currently exceeding £3.2 million. 4.39 Work continues with insurance companies to recover costs and discussions are ongoing with the Scottish Government in relation to costs that may not be recoverable. 4.40 Further updates will be provided to future meetings of the Finance and Resources Committee. Corporate Budgets 4.41 Included within Section 2 of Appendix 1 is an update on the Council’s Corporate budgets. More information on variances against individual budget headings are set out below. Health and Social care 4.42 On 20 August 2025, Perth and Kinross Integration Joint Board considered a report on the 2025/26 Financial Position, based on financial information to month three (June 2025) (Report No. G/25/108 refers). 4.43 This update included a projected net overspend across the Health and Social Care Partnership of £4.915 million which is summarised in the following table and in detail in Appendix 3. This position is consistent with the financial challenges facing health and social care across Scotland. Social Care £m Health £m Health and Social Care Partnership £m Gross Projected Overspend 3.644 1.435 5.079 Application of Reserves (0.164) - (0.164) Net Projected Overspend 3.480 1.435 4.915 4.44 When the budget was set in March 2025, this was based on a set of assumptions underpinning a “mid-level” scenario for demand, pay, funding and savings. The monitoring to the end of month 3 indicates that demand is much higher than anticipated under the approved scenario.
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4.45 In contrast with previous years, the majority of the projected overspend is derived from social care activity within the Partnership with a net projected overspend of £3.480 million, which under the terms of the Integration Scheme, the Council is exposed to. The projected overspend on health activity falls to NHS Tayside. 4.46 Work is ongoing to produce a Financial Recovery Plan that the Integration Joint Board will consider at its meeting on 8 October 2025. 4.47 This level of projected overspend may also have implications for future years’ revenue budgets. 4.48 The Finance and Resources Committee will receive further updates as information becomes available. Funding 4.49 Further information on the Council’s funding is set out within Section 3 of Appendix 1. More information on variances against individual budget headings are set out below. Council Tax Income 4.50 The amount of income the Council will generate from Council Tax is dependent on two main factors, firstly the collection levels and secondly, the number of Band D properties on the Valuation Roll. 4.51 Monitoring of Council Tax collection levels is carried out monthly. The following graph sets out collection performance to 31 August 2025 together with prior year comparative figures for the previous five financial years. 4.52 Between 2020/21 and 2024/25, the average collection figure to 31 August was 45.85%. The actual collection figure to 31 August 2025 was 46% which is 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 Series1 44.94% 45.96% 46.25% 46.17% 45.92% 46.00% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% In Year Collection to 31 August
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0.15% more than the five-year average and 0.08% more than the comparable position in 2025. 4.53 Secondly, in setting the Council’s Revenue Budget, assumptions are made on increases in the number of Band D equivalent properties. The graph set out below suggests that actual growth levels are in line with budget assumptions. 4.54 Currently, the level of Council Tax income is projected to be on target against the budget assumptions which is reflected in Appendix 1. April May June July Aug Average 0.30% 0.15% 0.20% 0.28% 0.15% v24/25 0.19% -0.06% 0.06% 0.15% 0.08% -0.10% -0.05% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% Movement in Council Tax Collection 71,000 72,000 73,000 74,000 75,000 76,000 77,000 01/04/2020 01/07/2020 01/10/2020 01/01/2021 01/04/2021 01/07/2021 01/10/2021 01/01/2022 01/04/2022 01/07/2022 01/10/2022 01/01/2023 01/04/2023 01/07/2023 01/10/2023 01/01/2024 01/04/2024 01/07/2024 01/10/2024 01/01/2025 01/04/2025 01/07/2025 Council Tax - Number of Band D Equivalent Properties budget Band D Equivalents
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Non-Domestic Rates 4.55 The actual collection rate to 31 August 2025 was 35.90%, compared to 35.54% for the same period in 2024/25. Other Updates Housing Revenue Account 4.56 In terms of recurring activity across the Housing Revenue Account, a break- even position is projected for the current financial year. The main elements are summarised below and set out in Appendix 4. 4.57 Within this projection, there is a projected underspend of £295,000 due to additional rental and interest income, partially offset by overspends on the administration of the Housing Revenue Account. 4.58 As a result of this projected underspend, the amount of Capital from Current Revenue will increase by £295,000 resulting in less borrowing in the current financial year. 4.59 In terms of non-recurring activity across the Housing Revenue Account, there is a proposal to draw down from the earmarked Reserve £451,000 for the projects listed in Appendix 4. 4.60 The net result of this latest monitoring on Housing Revenue Account Balances is as follows – • HRA unearmarked Reserves - £1 million • HRA earmarked Reserves - £807,000 5. 2025/26 Revenue Budget Adjustments Issues Arising from Unaudited 2024/25 Annual Accounts 5.1 In completing the Unaudited 2024/25 Annual Accounts, two issues have been identified which require adjustments to be made to the 2024/25 Management Budget. Devolved School Management / Pupil Equity Fund Balances 5.2 In setting the 2025/26 Final Revenue Budget on 26 February 2025 (Report No. 25/36 refers), the Council approved a projected Devolved School Management (DSM) carry forward of £200,000. However, the final underspend (which included agreed planned carry forwards) on the DSM scheme was £527,000 which is £327,000 more than anticipated. This level of underspend is well within the limits of the DSM scheme and it is normal practice to reflect this adjustment at this time. 5.3 Similarly, the Council approved a projected Pupil Equity Funding carry forward of £100,000. However, the final underspend was £195,000 which is
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£95,000 more. Schools spent 90.1% of their total Pupil Equity Funding in 2024/25. 5.4 ACTION: The Committee is requested to increase the Education & Learning budget by £422,000 to reflect the actual Devolved School Management scheme and Pupil Equity Fund balances brought forward from 2024/25. This adjustment is reflected in Appendix 1 (Column 3) to this report and has no overall impact on the level of uncommitted Reserves. Revenue Grants 5.5 Accounting arrangements under International Accounting Standards require that, subject to certain conditions, revenue grants which were received by the Council in 2024/25 but not utilised by 31 March 2025 should be accounted for in Reserves at the end of the financial year. Approval is therefore sought to draw down £1.176 million in 2025/26 from the earmarked Reserve for Revenue Grants. These revenue grants are set out in detail in Appendix 5. 5.6 Approval is now sought to adjust the following budgets • Education & Learning - £301,000 • Children, Families & Justice - £182,000 • Economy, Development & Planning - £458,000 • Environment & Infrastructure - £110,000 • Housing & Communities - £125,000 5.7 ACTION: The Committee is asked to approve the adjustments totalling £1.176 million to the above Service budgets (set out in detail in Appendix 5), funded from Reserves, to reflect revenue grants received in 2024/25 in respect of expenditure which will not be incurred until 2025/26. These additional adjustments are reflected in Appendix 1 (Column 3) to this report and have no overall impact on the budgeted level of uncommitted Reserves. Revenue Budget Carry Forwards 5.8 Due to the timing of activity, it is necessary to carry forward revenue budget resources of £249,000 from 2024/25 to 2025/26 in order to complete several projects as follows: • Economy, Development and Planning - £162,000 (Adapt Your Property Scheme and Green Living Fund) • Environment and Infrastructure - £8,000 (Mini Buses Project) • Health and Social Care - £79,000 (Trauma Informed project and Vitamin D project) 5.9 ACTION: The Committee is asked to approve the adjustments totalling £249,000 to the above Service budgets, funded from earmarked Reserves, to reflect expenditure that will now be incurred in 2025/26. These additional adjustments are reflected in Appendix 1 (Column 3) to this report and have no overall impact on the budgeted level of uncommitted Reserves.
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Additional Funding 5.10 Since elected members were provided with the 2025/26 Revenue Budget update on 30 April 2025 (Report No. 25/99 refers), notification has been received of additional resources in the current financial year from several sources as set out below. To ensure that the 2025/26 Management Budget continues to reflect the operational requirements of the Council, several adjustments are required, which are summarised below and included in Appendix 1 and Appendix 6. Scottish Government – Revenue Support Grant: • Teacher Induction Scheme: £31,294 (Education and Learning) • Children’s Social Care Uplift £17,000 (Education and Learning) • Children’s Social Care Uplift £116,000 (Children, Families, and Justice) • Kinship and Foster Carers Allowance £46,400 (Children, Families, and Justice) • Child Poverty Co-ordinator £72,000 (Economy, Development and Planning) 5.11 The Scottish Government has advised that the increase in Revenue Support Grant identified above of £282,694 will be made through a redetermination of the Council’s funding. It is therefore necessary to adjust budgets for Education and Learning, Children, Families and Justice, Economy, Development and Planning and Revenue Support Grant. 5.12 ACTION: The Committee is asked to approve the adjustments set out at paragraph 5.10 which are reflected in Appendix 1 (Column 4) to this report. 2025/26 Pay Awards 5.13 The Scottish Government has provided funding to Councils in the current financial year to contribute towards the additional cost of pay awards for all staff groups. For Perth and Kinross Council, this is the difference between the 3% that was budgeted for and the 4% that was accepted offered. Currently teaching unions have not accepted this offer, so this remains a risk to the current and future year budgets. 5.14 Appendix 1 includes adjustments to Service budgets (including health and social care and Tayside Contracts) totalling £2.864 million. It is assumed that this funding will be provided by the Scottish Government, and this will be confirmed in future reports. 5.15 ACTION: The Committee is asked to approve the adjustments to Service budgets that are reflected in Appendix 1 (Column 4) with a corresponding increase in the level of Revenue Support Grant of £2.864 million.
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Other Funding 5.16 Other funding amounting to £6.501 million has been paid outside the Revenue Support Grant mechanism as Other Grant income and is, therefore, cost neutral in terms of the budget summary. Details of this funding is set out in Appendix 6. 5.17 ACTION: The Committee is asked to note the receipt of £6.501 million of additional resources, with this funding being reflected within Education and Learning, Children, Families and Justice, Economy, Development and Planning, Housing and Communities and Strategic Planning, People and Performance as additional grant income. The current projected outturn assumes that all these additional resources will be fully expended in 2025/26 or will be carried forward under the terms of the grant award. Virements Contribution to/from Capital Fund 5.18 In line with the strategy for managing the Council’s Capital Programme over the medium term, it is recommended that the eventual over or underspend on Capital Financing Costs and Interest on Revenue Balances be transferred from or to the Capital Fund. 5.19 The latest monitoring indicates a projected increase in capital financing costs (loan charges) of £3.948 million based on the latest treasury management activity and a reduction of £400,000 in income from interest on revenue balances due to reduced cashflows. This will result in a reduced Contribution to the Capital Fund of £4.348 million in the current financial year. This is inline with the planned use of the Capital Fund to manage the revenue cost of supporting the Capital budget over the short term. 5.20 ACTION: The Committee is requested to approve the virement of £3.948 million to the Capital Financing Costs (Loan Charges) Budget and £400,000 to Interest on Revenue Balances with a corresponding reduction in the projected Contribution to the Capital Fund. These adjustments have been reflected in Appendix 1 (Column 5) to this report. Service Virements 5.21 To ensure that the 2025/26 Management Revenue Budget continues to reflect current Service needs and operational requirements there are several virements that are reflected in Appendix 1 (column 5) that have been processed in line with the Scheme of Administration. Movements In Reserves 5.22 Included at Appendix 7 is an update on the Council’s General Fund Reserves which includes the following:
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• Earmarked and unearmarked Reserves at 31 March 2025 (per unaudited Annual Accounts). • previously approved contributions to and from earmarked Reserves in 2025/26, 2026/27 and 2027/28. • The impact of proposals within this report on earmarked Reserves. • The impact of the latest revenue monitoring on the level of unearmarked Reserves. 5.23 The earmarked Reserves are brigaded under three headings as follows: i. Balances held under statute / regulation – these earmarked Reserves are prescribed under legislation, and the Council has limited discretion in how they are applied. ii. Balances held for specific (previously approved) purposes – the purpose of these earmarked Reserves has been previously approved by Council in either the Reserves Strategy or Annual Accounts iii. Balances held for other purposes – the creation of these earmarked Reserves has been approved by Council, but not specific proposals. 5.24 Going forward proposals involving earmarked Reserves under i. and ii. above will be advised to Committee in summary as Council either has limited discretion or previously approved their application. Proposals to apply earmarked Reserves under iii. above will include more detail for elected member consideration. Balances Held Under Statute / Regulation 5.25 Adjustments of £1.598 million have been considered earlier in the report as part of the unaudited 2024/25 Annual Accounts affecting the Revenue Grants earmarked Reserve and Devolved School Management. Balances Held for Specific (Previously Approved) Purposes 5.26 These earmarked Reserves have previously been approved by elected members in their consideration of the Reserves Strategy or Annual Accounts. 5.27 Specifically, authority is sought to draw down the following for 2025/26 from the earmarked Reserves identified below: • £105,000 (and £216,000 in future years) from Culture to support the UNESCO project • £90,000 from the Works Maintenance Reserve to fund works on contaminated land. • £97,000 from Events to support this year’s programme • £47,000 from the Community Investment Fund for this year’s activity • £103,000 to support transformation within Health and Social Care. • £1.839 million for the Extended Producer Responsibility for Packaging scheme that was allocated to Reserves in setting the 2025/26 Revenue Budget.
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5.28 ACTION: The Committee is asked to approve the transfers to / from earmarked Reserves set out in paragraph 5.27 above. These adjustments are reflected in Appendix 1 (Column 6) to the report. Balances Held for Other Purposes 5.29 Approval is sought for several adjustments relating to the earmarked Reserve for Transformation and Workforce Management totalling £661,000 including modernisation of financial and HR systems, procurement, and legal capacity. An element of this funding is the transfer of 2024/25 underspends to 2025/26 to ensure delivery of approved projects. 5.30 ACTION: The Committee is asked to approve the transfer of £661,000 from the Transformation and Workforce Management to Service Revenue Budgets. These adjustments are reflected in Appendix 1 (Column 6) to the report. Financial Insecurity Funding 5.31 Approval is sought to drawdown funding from the Anti-Poverty earmarked Reserve totalling £250,000. This will augment the Scottish Welfare Fund budget to ensure that the most vulnerable in our area have access to a dignified, cash response to crisis situations. This additional funding will allow the Council to meet the demand of low-income households struggling to meet the rise in cost of living and will allow vulnerable residents to maintain independent living in the community. Furthermore, this funding will allow us to continue to support all P&K residents in crisis and support those on low incomes living rurally. 5.32 ACTION: The Committee is asked to approve the transfer of £250,000 from the Anti-Poverty earmarked Reserve to the Financial Insecurity Fund. This adjustment is reflected in Appendix 1 (Column 6) to the report. Warm Welcome Fund 5.33 In 2024/25, Perth and Kinross Council provided funding of £200,000 for the Warm Welcome Fund allocated by ward based on population size. Groups and organisations within these areas were invited to negotiate their specific funding needs in order to implement their proposals. This approach promoted fairness, encouraged community collaboration, and minimised the duplication of services across different areas. 5.34 An update on the impact of this funding was shared in an elected member briefing in June 2025. 5.35 Given the success of previous schemes, it is proposed that a £150,000 is applied for 2025/26, along the same lines as 2024/25 with an update on outcomes to be shared with elected members in the new financial year. 5.36 ACTION: The Committee is asked to apply £150,000 from the Anti-Poverty earmarked Reserve to take forward the Warm Welcome Fund Initiative. This adjustment is reflected in Appendix 1 (Column 6) to the report.
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Perth and Kinross Foodbank 5.37 The Council has been approached by Perth and Kinross Foodbank to provide a £40,000 contribution towards their running costs in 2025/26. Perth and Kinross Foodbank provide emergency food, practical guidance and connections to wider services for people in crisis across Perth and Kinross. The Welfare Rights and Welfare Fund teams have a well-established relationship with the Foodbank providing on-site advice and assistance to members of the public. 5.38 Going forward, as part of the Council’s commitment to tackling poverty, and the cost of living crisis, officers will increase their presence at the Foodbank and develop a longer term partnership delivering on shared outcomes and stronger collaboration. 5.39 ACTION: The Committee is asked to apply £40,000 from the Anti-Poverty earmarked Reserve to support Perth and Kinross Foodbank. This adjustment is reflected in Appendix 1 (Column 6) to the report. Blairgowrie and Rattray Access Network (BRAN) 5.40 BRAN are one of the longest established path groups in Perth and Kinross and have taken on the Blairgowrie Path Network to maintain it to a high standard. This includes the River Ericht Walk circular via Kitty Swansons Bridge, parts of the Cateran Trail, the Bluebell woods path, and Ardblair Trail amongst others. 5.41 They have been an exemplar of partnership working over the last 10 years and consistently demonstrated good practice, share their knowledge and experience with other groups. They undertake their own publicity and fundraising locally to promote and undertake their work which the Community Greenspace service have been delighted to support. 5.42 In recognition of this work, approval is sought to provide funding of £15,000 to purchase specialist equipment that will double the capacity of the organisation to manage core paths. 5.43 ACTION: The Committee is asked to apply £15,000 from the Communities earmarked Reserve to increase capacity for BRAN. This adjustment is reflected in Appendix 1 (Column 6) to the report. Employer’s National Insurance Costs 5.44 In setting the 2025/26 Revenue Budget, the Council was advised of funding of £3.915 million, which was to reflect 60% of the additional cost. This, along with the £2.8 million that was funded by the Council, was allocated to Services (including the Health and Social Care Partnership) with a balance that was applied to Reserves pending an understanding of the actual impact of the increased cost.
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5.45 Approval is now sought to apply £395,000 towards the cost of services provided by Tayside Contracts and £161,000 for ALEOs which will fund 60% of their additional costs. 5.46 ACTION: The Committee is asked to apply £556,000 from unearmarked Reserves to fund additional employers’ national insurance costs. This adjustment is reflected in Appendix 1 (Column 6) to the report. Revenue Budget Flexibility 5.47 To assist with the management of the 2025/26 Revenue Budget, there are several adjustments totalling £62,000 (net) that are set out in Appendix 8. These are movements to and from previous years to more accurately reflect delivery of projects / initiatives. 5.48 ACTION: The Committee is asked to approve the net adjustments of £62,000 set out in Appendix 8. These adjustments are reflected in Appendix 1 (Column 6) to the report. Unearmarked Reserves 5.49 Based on the latest information, the level of unearmarked Reserves at 31 March 2025 is projected to be £13.182 million or 2.6%. This position will change throughout the financial year as more information becomes available. 5.50 There are two reasons for the reduction in both the level and percentage of unearmarked Reserves. Firstly, this update assumes a net overspend in the current year of £3.469 million or 0.7% (there is a risk that this figure increases). Secondly, there is a planned contribution from unearmarked Reserves of £2.064 million or 0.4%. In the 2026/27 and 2027/28 Provisional Revenue Budgets there is a net contribution of £1.062 million or 0.2%. 5.51 The Reserves Strategy sets out arrange of between 2% and 4%. 6. Financial Risks 6.1 In preparing the Council's revenue monitoring, officers have considered the key strategic, operational and financial risks facing the Council over this period. Whilst the risks may be managed in the current financial year, there is the potential for there to be an impact in the future. 6.2 To alleviate the impact these risks may have if they occur, a number of general risk mitigation factors are utilised by the Council which include detailed budget monitoring carried out by Services and having general fund balances available to meet unforeseen expenditure. 6.3 Risks are captured within the body of the report with a summary being maintained in Appendix 9. 6.4 The updated risks that may impact on the 2025/26 Revenue Budget are summarised as follows:
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• Achievement of staff slippage • Funding to Health and Social Care • Inflation • Council Tax Income • Extended Producer Responsibility for Packaging income 6.5 Going forward, risks to the 2025/26 Revenue Budget and beyond will be captured with mitigating actions identified. 7. Conclusion 7.1 This report provides an update on the financial performance of Perth and Kinross Council for 2025/26. The report highlights a projected net overspend of £3.469 million. The main driver for this position is the increased demand for Health and Social Care services. 7.2 The report also outlines several adjustments to the 2025/26 Revenue Budget, including additional funding from the Scottish Government and various virements to ensure the budget aligns with current service needs. 7.3 Financial risks are identified and mitigated through detailed budget monitoring and the availability of general fund balances. 7.4 The latest monitoring indicates that the Council will have unearmarked General Fund balances of £13.182 million or 2.6% on 31 March 2026. 7.5 The report recommends approval of the proposed budget adjustments and notes the importance of continued vigilance in managing financial risks. 8. Impact and Value Assessment 8.1 This is an operational report, and as such, an impact and value assessment is not required. 9. Appendices Appendix 1 – 2025/26 Management Budget Appendix 2 – General Fund 2025/26 Projected Outturn – Service Analysis Appendix 3 – Perth & Kinross IJB 2025/26 Projected Outturns Appendix 4 – Housing Revenue Account 2025/26 Projected Outturns Appendix 5 – Revenue Grants Appendix 6 – Other Grant Funding Appendix 7 – General Fund Balances Appendix 8 – Council Approved Revenue Budget Flexibility Appendix 9 – Financial Risks