Financial Monitoring Overview - 31 August 2025
Argyll and Bute Council · 9 October 2025
Back to Policy and Resources Committee — 9 October 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 09 OCTOBER 2025 FINANCIAL MONITORING OVERVIEW – 31 AUGUST 2025 1. INTRODUCTION 1.1 This report provides a summary of the overall financial position of the council for 2025-26 as at 31 August 2025. It outlines the key highlights from the detailed financial monitoring reports in respect of the following: • Revenue Budget; • Financial Risks; and • Reserves and Balances. As previously reported, the Capital Plan Monitoring will now be reported on a quarterly basis with the Quarter 2 report to 30 September 2025 submitted to the next Policy and Resources Committee. 2. DETAIL 2.1 Revenue Budget Monitoring Report 2.1.1 2.1.2 2.1.3 This report provides a summary of the actual and forecast outturn expenditure and income of the council in comparison to the approved 2025-26 revenue budget. The approved 2025-26 revenue net expenditure budget totals £326.941m. Since last reporting, the net expenditure budget has been increased by £1.784m to reflect two Scottish Government General Revenue Grant redeterminations (£0.077m) and amounts drawn down from earmarked reserve balances (£1.707m). The revised 2025-26 revenue net expenditure budget now totals £328.725m. There are no budget virements over £200k, requiring committee approval, at this stage. The recently approved pay award for SJC and Chief Officers is not yet reflected within the budget monitoring position, however, it is currently anticipated that this will be funded in full through additional Scottish Government funding, with no impact on the financial position of the council in 2025-26. 2.1.4 As at 31 August 2025, there is an overall forecast underspend of £0.301m on the approved revenue budget for the year. This underspend is in respect of a forecast over-recovery of Council Tax income of £0.500m, offset by a net overspend of £0.199m across council services. 2.1.5 It is anticipated that savings in debt interest costs will be achieved during the year, providing an opportunity to redirect resources to future council priorities. At this stage, it is deemed prudent to assume no variance in the 2025-26 forecast outturn position. There is an overspend of £2.230m on the profiled budget to date. However, these variances mainly relate to the actual timing of income and expenditure, and the
Page 2
2.1.6 recharging of costs to capital, in comparison to assumed budget profiles. The main focus of budget monitoring is the forecast outturn position. 2.1.7 The 2025-26 approved budget savings options, to be achieved in 2025-26, total £2.762m. There are 15 savings options impacting 2025-26, of which 8 have been delivered (£1.375m), with the remaining 7 on track to be delivered (£1.387m). Progress on the delivery of approved savings options will continue to be monitored throughout the year. 2.1.8 The 2025-26 HSCP forecast outturn position in respect of Social Work services as at 31 August 2025 is an overspend of £0.668m. However, the HSCP expect this to be managed from within available HSCP reserves, with no impact on the council’s forecast financial position. This represents a significant financial risk to the council. 2.2 Financial Risks 2.2.1 This report provides an update on the current known financial risks facing the council in 2025-26. 2.2.2 There are 7 quantifiable council wide risks identified for 2025-26, with a potential annual value totalling £5.1m, and with varying degrees of likelihood. In addition, there are 32 departmental risks, with a potential annual value totalling £4.156m, of which 5 are categorised as ‘Likely’. 2.2.3 Financial risks are monitored and reviewed on an ongoing basis, with action taken to mitigate or manage these risks. 2.3 Reserves and Balances 2.3.1 This report summarises the overall level of reserves and balances held by the council and monitors the use of the earmarked reserves held within the General Fund. 2.3.2 The council has a total of £406.347m unusable reserves that are not backed with resources. These are required purely for accounting purposes. 2.3.3 As at 31 March 2025, the council held usable reserves, totalling £121.235m, comprising the following: • £3.608m Repairs and Renewals Fund; • £3.358m Capital Funds; • £1.564m Capital Grants Unapplied; and • £112.705m General Fund, with £105.161m of this balance earmarked for specific purposes. 2.3.4 The council’s General Fund contingency is set at 2% of estimated net revenue expenditure for 2025-26, which amounts to £6.539m. At the beginning of the financial year, there was an unallocated General Fund Balance of £1.004m over and above the general contingency.
Page 3
2.3.5 The table below summarises the current position on the unallocated General Fund balance. Heading Detail £000 Unallocated General Fund as at 31 March 2025 This is the balance that is unallocated over and above the 2% contingency, which amounts to £6.539m 1,004 Current Forecast Outturn for 2025-26 as at 31 August 2025 Per Revenue Budget Monitoring report 301 Forecast Unallocated General Fund as at 31 March 2026 1,305 3. RECOMMENDATIONS 3.1 It is recommended that the Policy and Resources Committee: a) Approve the budget changes set out in Section 3 of the 2025-26 Revenue Budget Monitoring report; and b) Note the content of the 2025-26 Revenue Budget Monitoring, Financial Risks, and Reserves and Balances reports as at 31 August 2025. 4. IMPLICATIONS 4.1 Policy – None. 4.2 Financial - Outlines the 2025-26 financial position of the council as at 31 August 2025. 4.3 Legal - None. 4.4 4.5 4.6 4.7 HR – Customer Service - Risk – Climate Change - None. None. Outlines 2025-26 Financial Risks None 4.8 Fairer Scotland Duty - None 4.9 Equalities – protected characteristics - None. 4.10 Consumer Duty - None. 4.11 Island Communities - None. 4.12 Children’s Rights and Wellbeing - None. Kirsty Flanagan Executive Director /Section 95 Officer 09 September 2025 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services For further information contact Carolyn Earl, Interim Head of Financial Services Carolyn.Earl@argyll-bute.gov.uk