Report 2 - Renenue Monitoring Report
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.
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ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 09 OCTOBER 2025 2025-26 REVENUE BUDGET MONITORING – 31 AUGUST 2025 1 EXECUTIVE SUMMARY 1.1 The main purpose of this report is to provide a summary of the financial performance of the council against the approved 2025-26 revenue budget as at 31 August 2025. It reports on the monitoring of forecast net expenditure across services, in comparison to the approved annual budget, and provides an explanation of significant variances. Details of actual expenditure incurred during 2025-26 to date are also provided. The report reflects proper accounting practice, and is based on information contained within the council’s financial systems, estimation techniques and the professional judgement of council officers. 1.2 1.3 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. 1.4 1.5 1.6 Overall, there is a forecast underspend of £0.301m for the year on the council’s approved 2025-26 revenue budget. This is due to a forecast over-recovery of Council Tax income, currently estimated at £0.500m; offset by a net overspend across services, totalling £0.199m. There are forecast net overspends totalling £0.183m across the Executive Directorate (Douglas Hendry) and £0.016m across the Executive Directorate (Kirsty Flanagan). This position will be monitored and reviewed on an ongoing basis, with regular updates reported to committee throughout the year. The 2025-26 revenue budget includes approved savings totalling £2.762m. At this stage, all approved savings have either been delivered or are on track to be delivered. Progress on delivery will continue to be monitored throughout the year. 1.7 1.8 The HSCP is currently forecasting an overspend of £0.668m in respect of Social Work services. However, the HSCP expect this to be managed from within existing HSCP reserves, with no impact on the council’s forecast position for the year. This represents a significant financial risk to the council. There are a number of financial risks, which may impact the financial position of
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the council during 2025-26. These are outlined in a separate financial risks report.
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ARGYLL AND BUTE COUNCIL FINANCIAL SERVICES POLICY AND RESOURCES COMMITTEE 09 OCTOBER 2025 2025-26 REVENUE BUDGET MONITORING – 31 AUGUST 2025 2. INTRODUCTION 2.1 2.2 The main purpose of this report is to provide a summary of the financial performance of the council against the approved 2025-26 revenue budget as at 31 August 2025. It reports on the monitoring of forecast net expenditure across services, in comparison to the approved annual budget, and provides an explanation of significant variances. Details of actual expenditure incurred during 2025-26 to date are also provided. The report has been prepared in accordance with proper accounting practice. Financial forecasts are based on information contained within the council’s financial systems, estimation techniques and the professional judgement of council officers. 3. BUDGET CHANGES 3.1 3.2 3.3 The original approved 2025-26 revenue net expenditure budget totalled £326.941m. Since last reporting, the net expenditure budget has been increased by £1.784m to reflect two Scottish Government General Revenue Grant redeterminations, totalling £0.077m (Child Poverty Co-Ordinator Funding of £0.063m and Funding for Holiday Playschemes and Activities for Disabled Children of £0.014m); and amounts drawn down from earmarked reserve balances, totalling £1.707m. The revised 2025-26 revenue net expenditure budget now totals £328.725m. Virement is the process of transferring budget between cost centres, services or departments or between capital projects. The Council’s constitution requires member approval of budget virements over £200k. There are no budget virements over £200k, requiring committee approval, at this stage. The 2025-26 budget included a 3% pay award assumption across all workforce categories, at all grades, based on the Public Sector Pay Policy of 9% over the 3 years 2025-26 to 2027-28. The pay award for SJC and Chief Officers has now been agreed at 4% for 2025-26 and 3.5% for 2026-27. Negotiations in respect of the pay award for teachers have not yet concluded, however, at this stage, the expectation is that the increased cost of the 2025-26 pay award for all council and HSCP Social Work services employees will be fully funded from additional Scottish Government grant funding, with no impact on the financial position of the council in 2025-26. This has not yet been reflected within the budget monitoring position and will remain subject to financial risk until conclusion of the Teachers pay negotiations and confirmation of additional funding.
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4. 4.1 4.1.1 4.2 4.2.1 4.2.2 4.3 4.3.1 4.3.2 SUMMARY FINANCIAL POSITION 2025-26 Overall Council Financial Position There is currently an overall forecast underspend of £0.301m or 0.1% for the year on the council’s approved 2025-26 revenue budget. This is due to a forecast over-recovery in respect of Council Tax income (£0.500m), partially offset by a net overspend across council services (£0.199m). A summary of the forecast net expenditure for the year, in comparison to the approved budget, both on a departmental and subjective basis, is outlined within Appendix 1. This also provides information in respect of council-wide operational challenges and proposed mitigating actions. Council Services Net Expenditure At this stage, departments are forecasting a net overspend compared to approved budgets. Executive Director (Douglas Hendry) is forecasting an overspend of £0.183m and Executive Director (Kirsty Flanagan) is forecasting a net overspend of £0.016m. This position will be monitored and reviewed on an ongoing basis, with regular updates reported to committee throughout the year. A more detailed analysis of the financial position at service level is given within Appendix 2. This also provides information in respect of service specific operational challenges and proposed mitigating actions. Loans Fund The council’s treasury position is actively managed in line with the approved 2025-26 Treasury Management Strategy and Annual Investment Strategy, in order to minimise debt interest costs. In addition, as at 31 March 2025, the council’s external borrowing was below the level required to finance capital investment. It had been possible to defer new external borrowing due to the significant level of internal reserve balances held by the council. This position will be impacted by the planned use of earmarked reserves in 2025-26, however, it is expected to continue to some extent throughout 2025-26. Furthermore, there has been slippage experienced in the delivery of the approved capital programme. These factors will impact the net financing costs incurred during the year. A review of the current Loans Fund and projected debt position of the council is recommended, to highlight potential opportunities within the existing budget for recurring or one-off savings, or the capacity to meet future capital investment priorities, such as the LEIP school. This will be progressed under the wider review of capital arrangements, approved as part of the 2025-26 revenue budget, to be undertaken during 2025-26. A report on this review will be submitted to members later in the year. At this stage, it is deemed prudent to assume that any potential budget underspend will be redirected to future council priorities, which may include a contribution to the 2026-27 forecast budget gap, with no impact on the revenue budget position in 2025-26.
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4.4 4.4.1 4.4.2 4.4.3 4.5 4.5.1 4.5.2 Council Funding Council Tax A more sophisticated financial modelling tool has been developed to assist with Council Tax income projections for 2025-26 and future years. The forecast level of Council Tax income is based on current and forecast Band D equivalents, and reflects actual collection levels to date; and projected levels for the remainder of the year, based on historical payment profile and collection rate data. There is a forecast over-recovery of Council Tax income for the year, in comparison to the approved annual budget of £70.204m. This is currently estimated at £0.500m or 0.7% but will be subject to ongoing review and refinement, as the year progresses. The 2024-25 final outturn included additional Council Tax income of £1.234m in respect of 2024-25 and prior years, an element of which was expected to be recurring in 2025-26 and future years. A significant element of this additional income (some £0.5m) related to the reclassification of self-catering units as domestic dwellings by the Assessor, following completion of both the 2022-23 and 2023-24 canvasses during the year, which saw the transfer of properties from the Non-domestic Rates to Council Tax registers. There is a significant level of uncertainty in respect of the regulatory environment in this respect, with a risk of appeals being granted and properties returning to Non-domestic Rates. This uncertainty in respect of both timing and financial value, presents an added element of complexity in respect of Council Tax income projections. The financial risk in this respect will be subject to ongoing review throughout the year with regular updates provided as part of the separate financial risks report. HSCP Financial Position In respect of the Health and Social Care Partnership (HSCP), it is the responsibility of the Chief Officer and Chief Financial Officer to manage the HSCP financial position. If an overspend is forecast, a budget recovery plan will be prepared and submitted to the IJB, Argyll and Bute Council and NHS Highland. Where recovery plans are unsuccessful and an overspend occurs at the financial year end, and the HSCP has insufficient reserves to meet the overspend, then the partners will be required to make additional payments to the HSCP. The council’s contribution would reflect the element of the overspend related to Social Work. Whilst any additional payments by the council and NHS Highland will be deducted from future years funding, there is a risk that the council may require to make an additional unbudgeted contribution to the HSCP during the year. As at 31 August 2025, the HSCP is forecasting an overspend of £0.668m for the year in respect of Social Work services, due to demand for residential placements within both Children and Families and Older People Services. 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. The financial position of the HSCP in respect of Social Work services will continue to be monitored on an ongoing basis throughout the year.
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4.6 4.6.1 4.7 4.7.1 2025-26 Year to Date Financial Position Actual services net expenditure incurred during the year to date totals £113.855m. This indicates an overspend of £2.230m in comparison to the current profiled budget to 31 August 2025. However, the year to date variances within services largely relate to the timing of income and expenditure, and outstanding recharges to capital projects. Further detailed information in respect of the year to date position is included at summary level within Appendix 1 and at service level within Appendix 2. Approved Revenue Budget Savings The 2025-26 revenue budget includes approved Operational/Management and Policy savings totalling £2.762m. The delivery of these savings will be monitored throughout the year, with progress updates regularly reported to committee. A summary of the position as at 31 August 2025 is provided within Appendix 3. At this stage all approved savings are either delivered (£1.375m) or on track to be delivered (£1.387m). 5. 5.1 FINANCIAL RISKS Financial risks are monitored and reviewed on an ongoing basis, with actions put in place to continue to mitigate or manage these risks. There are a number of both council-wide and service specific financial risks, which may impact the financial position of the council during 2025-26. These are outlined in a separate financial risks report. 6. CONCLUSION 6.1 This report summarises the financial performance of the council in respect of the approved 2025-26 revenue budget as at 31 August 2025. 7. IMPLICATIONS 7.1 Policy - None. 7.2 Financial - Outlines the financial position of the council in respect of the approved 2025-26 revenue budget. 7.3 Legal - None. 7.4 HR - None. 7.5 Customer Service - None. 7.6 Risk - Details of Financial Risks are Separately Reported. 7.7 Climate Change - None. 7.8 Fairer Scotland Duty - None. 7.9 Equalities – Protected Characteristics - None. 7.10 Consumer Duty- None. 7.11 Island Communities - None. 7.12 Children’s Rights and Wellbeing - None.
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Kirsty Flanagan Executive Director/Section 95 Officer 09 September 2025 Councillor Ross Moreland, Policy Lead for Finance and Commercial Services APPENDICES Appendix 1 – Summary Financial Position as at 31 August 2025 Appendix 2 – Services Financial Position as at 31 August 2025 Appendix 3 – Approved 2025-26 Revenue Budget Savings For further information contact Carolyn Earl, Interim Head of Financial Services Carolyn.Earl@argyll-bute.gov.uk
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FINANCIAL POSITION AS AT 31 AUGUST 2025 Appendix 1 OBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 AUGUST 2025 YEAR TO DATE (YTD) POSITION CURRENT PROJECTED FINAL OUTTURN YTD Actual YTD Budget YTD Variance Variance Annual Budget Forecast Outturn Forecast Variance Variance £'000 £'000 £'000 % £'000 £'000 £'000 % Departmental Budgets Chief Executive's Unit 394 378 (16) (4.2%) 1,241 1,241 0 0.0% Executive Director (Douglas Hendry) 63,454 64,008 554 0.9% 159,192 159,375 (183) (0.1%) Executive Director (Kirsty Flanagan) 25,960 20,624 (5,336) (25.9%) 62,269 62,285 (16) (0.0%) Social Work 21,040 20,783 (257) (1.2%) 81,841 81,841 0 0.0% Total Departmental Budgets 110,848 105,793 (5,055) (4.8%) 304,543 304,742 (199) (0.1%) Central Budgets Other Operating Income and Expenditure (3,857) 803 4,660 580.3% 3,670 3,670 0 0.0% Joint Boards 698 636 (62) (9.8%) 1,525 1,525 0 0.0% Non-Controllable Costs 6,166 4,393 (1,773) (40.4%) 18,987 18,987 0 0.0% Total Central Budgets 3,007 5,832 2,825 48.4% 24,182 24,182 0 0.0% TOTAL NET EXPENDITURE 113,855 111,625 (2,230) (2.0%) 328,725 328,924 (199) (0.1%) Financed By
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Scottish Government Grant Funding (111,655) (111,655) 0 0.0% (264,288) (264,288) 0 0.0% Local Tax Requirement (35,475) (35,475) 0 0.0% (70,204) (70,704) 500 (0.7%) Contributions to General Fund 0 0 0 0.0% 5,306 5,306 0 0.0% Earmarked Reserves 0 0 0 0.0% 461 461 0 0.0% Total Funding (147,130) (147,130) 0 0.0% (328,725) (329,225) 500 (0.2%) (Deficit)/Surplus for Period (33,275) (35,505) (2,230) 0 (301) 301 0.1%
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SUBJECTIVE SUMMARY – OVERALL COUNCIL POSITION AS AT 31 AUGUST 2025 YEAR TO DATE (YTD) POSITION CURRENT PROJECTED FINAL OUTTURN YTD Actual YTD Budget YTD Variance Variance Annual Budget Forecast Outturn Forecast Variance Variance £'000 £'000 £'000 % £'000 £'000 £'000 % Subjective Category Employee Expenses 77,284 78,165 882 1.1% 206,518 206,116 402 0.2% Premises Related Expenditure 10,222 9,893 (329) (3.3%) 23,394 23,394 0 0.0% Supplies and Services 12,795 11,803 (992) (8.4%) 28,216 28,236 (20) (0.1%) Transport Related Expenditure 6,603 5,455 (1,148) (21.0%) 19,068 19,068 0 0.0% Third Party Payments 74,046 77,148 3,101 4.0% 194,241 194,977 (736) (0.4%) Capital Financing 801 (2,025) (2,826) 11,356 11,356 0 0.0% TOTAL EXPENDITURE 181,751 180,439 (1,312) (0.7%) 482,793 483,147 (354) (0.1%) Income (215,026) (215,944) (918) 0.4% (482,793) (483,448) 655 (0.1%) (Deficit)/Surplus for Period (33,275) (35,505) (2,230) 0 (301) 301 Notes YTD represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget.
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Key Financial Challenges Proposed Actions to address Financial Challenges Addressing service demand/expectation and the increasing challenges facing departments across the council in relation to the recruitment and retention of suitably qualified and experienced staff. Engagement and monitoring of both issues with departments to assess how these challenges are affecting service capacity and capability, staff attendance, utilisation of agency staff and costs. Collaboration with services and other back-office teams to consider and develop mitigating actions. Achieving a favourable year-end position and achieving savings targets in light of council wide risks to expenditure. Robust monitoring of the financial position and delivery of savings to ensure budget issues inform the budget monitoring process. Identifying further savings and delivering services more efficiently with less resources, as whilst a balanced 2025-26 budget was agreed in February 2025 there are still significant budget gaps in future years. The council will continue to progress savings options identified, refine options that require further development and seek to identify further savings through themed reviews and business process reviews. A longer-term approach is being explored with the intention to develop a pipeline of savings that can be delivered over a number of years. Maintaining or improving the level of service income recovered, for example planning, building standards and car parking. Actively monitor income recovery and ensure council fees and charges policies are regularly reviewed. Managing spend in service areas which are demand led and, to some extent, outwith service control, for example Winter Maintenance. Use a risk-based approach to budget monitoring to focus additional attention on these areas. Ongoing requirement to fund unavoidable inflationary increases in areas like utility costs, fuel, food etc. Ensure emerging issues are highlighted as soon as possible so that the financial impact can be evaluated and reported through the budget monitoring and preparation processes. Future ongoing impact on revenue budgets as a result of the delivery of substantial capital projects such as Rothesay Pavilion and a new school on Mull. Ensure costs are identified and reported on early in the process so Members are aware of the ongoing financial impact to budgets. Monitor and report on these regularly as part of the routine budget monitoring once the projects are complete. Delivery of climate change measures which can be costly and result in overspends. The council will look at financially sustainable options and closely monitor the impact of these on the budget position.
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CHIEF EXECUTIVE’S UNIT – AS AT 31 AUGUST 2025 The department is currently forecasting spend in line with budget. The department has a year to date underspend of £0.016m (4.2%) which can be attributed to budget profiling issues. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance (Aug) £000 Previous Forecast Variance Reported to P&R (Jun) £000 Change £000 Chief Executive 1,241 1,241 0 0 0 Totals 1,241 1,241 0 0 0 Year to Date Position Key Financial Successes: • All savings options have been delivered. • The department’s 2024-25 outturn position was an underspend of £0.020m. This resulted from an overall underspend of £0.055m offset by earmarking of £0.035m due to an auto-carry forward for unspent grants.
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CHIEF EXECUTIVE’S UNIT – AS AT 31 AUGUST 2025 Key Financial Challenges: Proposed Actions to address Financial Challenges: To continue to deliver a high-quality service to support community engagement and participation. Regular monitoring, reflection and improvement cycle on service provision to ensure most efficient use of staffing and financial resources to meet national and local policy requirements for quality engagement. To continue to deliver a high quality support service function to community organisations and community planning partners during a time of challenge arising from continuing reductions in funding. Within the partnership working of the CPP we seek to establish working groups and collate resources within this to deliver high quality solutions to identified needs. Demands for funding from community applications to the Supporting Communities Fund higher than available annual funds by about 40%. Continue to monitor fund criteria adapting this to align with priority outcomes for Argyll & Bute and continue to support groups to seek alternative sources of funding from our database of funding providers.
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CHIEF EXECUTIVE’S UNIT – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Service Area YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Chief Executive 194 186 (8) (4.3%) 511 511 0 0.0% Outwith reporting criteria. Community Planning & Development 200 192 (8) (4.2%) 730 730 0 0.0% Outwith reporting criteria. 394 378 (16) (4.2%) 1,241 1,241 0 0.0% YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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CHIEF EXECUTIVE’S UNIT – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 436 412 (24) (5.8%) 1,096 1,096 0 0.0% The variance is profile related and will be refined later in the year. Supplies and Services 18 15 (3) (20.0%) 22 22 0 0.0% The variance is profile related and will be refined later in the year. Transport 5 6 1 16.7% 15 15 0 0.0% The variance is profile related and will be refined later in the year. Third Party 26 29 3 10.3% 200 200 0 0.0% The variance is profile related and will be refined later in the year. Income (91) (84) 7 (8.3%) (91) (91) 0 0.0% Outwith reporting criteria. Totals 394 378 (16) (4.2%) 1,242 1,242 0 0.0% YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – AS AT 31 AUGUST 2025 The department is currently forecasting an overspend position of £0.183m (0.1%) due to the Schools Residential Budget having a higher demand for placements than budget allows, partially offset by slippage in the Education 100 day promise budget due to delays in recruitment. The department has a year to date (YTD) underspend of £0.554m (0.9%). This is mainly due to slippage in 100 day promise funding, due to delays in recruitment and the current budget profile, which will be refined through September. This is partially offset due to the above noted pressure on the Schools Residential Budget. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance (Aug) £000 Previous Forecast Variance Reported to P&R (Jul) £000 Change £000 Executive Director (Douglas Hendry) 195 195 0 0 0 Head of Commercial Services 10,595 10,595 0 0 0 Head of Education 126,931 127,114 (183) 0 (183) Head of Legal and Regulatory Support 21,471 21,471 0 0 0 Totals 159,192 159,375 (183) 0 (183) Year to Date Position 0% 25% 50% 75% 100% Executive Director (Douglas Hendry) Head of Commercial Services Head of Education Head of Legal and Regulatory Support Expenditure to date against the remaining budget for each Service YTD Actual £000 Remaining Budget £000
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – AS AT 31 AUGUST 2025 Key Financial Successes: The 2024-25 year-end consolidated outturn position was an under spend of £0.767m after adjusting for automatic earmarking. Contributing factors included: • Continuation of NDEEF and expansion of CEEF projects resulting in recurring annual saving in utilities and a significant contribution to meeting net zero targets. • Received funding from DRAX for energy saving lighting in 7 schools, located in the area surrounding Cruachan Power Station, to the value of £148.8k, with potential for further funding. • Further rationalisation of office space through Our Modern Workspace Programme has reduced utility costs, printer costs and cleaning costs as well as receiving Non-Domestic Rates relief for closed buildings. • Income generation within Early Years, including expansion at Rothesay Joint Campus to accommodate care for children under the age of 2. • Successful grant applications to Bord na Gaidlig and Armed Forces Covenant Grant for Early Years. • Effective contract management of NPDO and Hub School contracts, including a lower-than-expected insurance premium due to the annual renegotiation of insurance costs. • Successful funding awards have enabled the Welfare Rights Team to expand its service. In 2024-25 the whole team have helped residents of Argyll and Bute claim £4.45m in additional benefits that they were entitled to. The support is targeted at some of the most vulnerable in our communities and makes a significant difference to families and individuals both financially and to their overall health and wellbeing. Key Financial Challenges: Proposed Actions to address Financial Challenges: The legacy impact of COVID-19 on our young learners has led to an increased demand on the additional support need functions of the Education Service in response to the growing health and wellbeing needs of our young people and their families. This annual increase in assessed need is consistent across Scotland. Continuous analysis and review of delivery models, robust costings of agreed changes to the current delivery model being implemented in August 2025 and continual monitoring of associated budgets. Maximise use of Additional Support for Learning Funding and Mental Health and Wellbeing Funding whilst working collaboratively across Children’s Services. Impact of the current cost of living crisis on the cost of the school day for learners and their families. Collaborate with schools to ensure effective use of Strategic Equity Funding, Pupil Equity Funding and SG Core Curriculum funding to close the poverty related attainment gap and identify other multi agency funding sources to ensure equity of experience for all children.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – AS AT 31 AUGUST 2025 Impact of the current cost of living crisis on uptake in demand led service areas like catering, design services and licensing. Continually refine/develop systems to accurately forecast service usage, budget outturn and future budget requirements. Strategies in place to redesign services in line with demand. Reductions to Capital Funding and rising cost of statutory and regulatory work along with rising material and labour costs across departments may result in a reduction in activity or overspends within the Central Repairs Budgets. Costs are monitored regularly and contained as much as possible with any unavoidable overspends highlighted as soon as known, regular meetings with Property Services. Ensure that the School Catering Service remains efficient and effective as the requirement to comply with the Statutory Guidance supporting Nutritional Requirements for Food and Drink in Schools (Scotland) Regulations 2020, has increased the cost of producing a school meal. Continue working with finance to review the efficiency of the service, through good procurement of supplies and the use of a school meal pre order app that reduces food waste. Produce meals that pupils want to eat through regular consultation and a range of menu choices. The Council has a requirement to deliver 1140 hours of Early Learning and Childcare (ELC) to eligible 2-year-olds and all 3–5-year-old children. Following several years of reduced funding and a requirement to set a sustainable hourly rate for our valued partner providers, the service must continually redesign to fit the resources available. Robust service costings, financial monitoring and timely reporting to ensure the service can be delivered within the available budget. Medium to longer term forecasting on population to shape ongoing service redesign. Analysis of potential to extend income generation using “spare” capacity to expand paid care for under 2’s Impact of high inflationary uplifts within the NPDO/HUB School contracts. Ensuring continued effective contract management of NPDO/HUB Schools to minimise the impact of high inflationary uplifts. The Scottish Government has increased the amount of ringfenced Education funding. This funding is dependent on maintaining teacher numbers to a set level. Additionally, Councils have been asked to make progress towards reduced teacher class contact time. Monitor teacher numbers and associated costs, highlighting any budget pressures or potential penalties should staffing levels fall below target. Collaboration with the Education Service to prepare robust costings for the impact of any reduction in teacher class contact time. The demand for residential school placements for our children is growing and the costs for this service have had higher than budgeted inflation due to a reduction in Government financial assistance for Grant Aided Special Schools (GASS), impact of changes to National Insurance and commitment for providers to pay real living wage. These placements are jointly funded by Education and Social Work. Monitoring of placements and costs, collaborative working with other services to ensure that decisions are taken jointly by all services and all options have been considered and costed.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Service Service Area YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Executive Director (Douglas Hendry) Central/Management Costs 282 181 (101) (55.8%) 195 195 0 0.0% The YTD overspend variance is due to costs of the Education Review and some Storm Eowyn Costs for repairs to Council Properties. The variance will be rectified through draw down from an earmarked reserve. 282 181 (101) (55.8%) 195 195 0 0.0% Head of Commercial Services Catering (182) (164) 18 (11.0%) 564 564 0 0.0% The YTD underspend is profile related and will be refined through September. Head of Commercial Services Central/Management Costs 505 516 11 2.1% 1,588 1,588 0 0.0% Outwith Reporting Criteria Head of Commercial Services CHORD 44 39 (5) (12.8%) 38 38 0 0.0% The YTD overspend is due to the timing of recharges to Capital. Head of Commercial Services Cleaning (117) (27) 90 (333.3%) 189 189 0 0.0% The YTD underspend is mainly due to lower use of bank staff and also some profile related variances which will be refined through September. Head of Commercial Services Culture, Heritage, Recreation & Sport 2,046 2,099 53 2.5% 5,735 5,735 0 0.0% The YTD underspend is profile related and will be refined through September. Head of Commercial Services Events & Commercial Catering 52 (12) (64) 533.3% 8 8 0 0.0% This overspend is due to lower than forecasted income in commercial café's which is mainly as a result of the temporary closure of Pier Point Café. Head of Commercial Services Property Portfolio (118) (130) (12) 9.2% (187) (187) 0 0.0% Outwith Reporting Criteria Head of Commercial Services Property Services 540 661 121 18.3% 1,001 1,001 0 0.0% The YTD underspend is due to delays in recruitment. This will be reduced through harvesting vacancy savings.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Head of Commercial Services Shared Offices 342 365 23 6.3% 1,659 1,659 0 0.0% Outwith Reporting Criteria 3,112 3,347 235 7.0% 10,595 10,595 0 0.0% Head of Education Additional Support for Learning 4,782 4,778 (4) (0.1%) 12,951 12,950 1 0.0% Outwith Reporting Criteria Head of Education Central/Management Costs 1,277 1,161 (116) (10.0%) 2,104 2,104 0 0.0% The YTD overspend is due to payment of subscriptions, PVG's, SRCO, Licensing, IT software; budget will require to be identified for these spends. Head of Education Community Learning & Development 2 1 (1) (100.0%) 15 15 0 0.0% This variance is profile related and will be refined through September. Head of Education COVID 0 0 0 0.0% 0 0 0 0.0% Outwith Reporting Criteria Head of Education Early Learning & Childcare 7,066 7,173 107 1.5% 18,709 18,709 0 0.0% The YTD underspend is profile related and will be refined through September. Head of Education Primary Education 17,585 17,783 198 1.1% 43,737 43,737 0 0.0% The YTD underspend is mainly due to delays in recruitment. Under the Scheme of Devolved School Management schools are permitted flexibility at year end, therefore no forecast variance will be processed. Head of Education Pupil Support 1,869 1,826 (43) (2.4%) 4,675 5,259 (584) (12.5%) Outwith Reporting Criteria Head of Education Schools - Central Services 1,225 1,415 190 13.4% 2,683 2,283 400 14.9% The YTD underspend is due to delays in recruitment from 100 day promise funding, which has been reported as a forecast variance. Head of Education Secondary Education 18,095 18,287 192 1.1% 42,057 42,057 0 0.0% The YTD underspend is mainly due to delays in recruitment. Under the Scheme of Devolved School Management schools are permitted flexibility at year end, therefore no forecast variance will be processed. 51,901 52,424 523 1.0% 126,931 127,114 (183) (0.1%)
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Head of Legal & Regulatory Support Central/Management Costs 98 100 2 2.0% 269 269 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Community Safety 130 112 (18) (16.1%) 195 195 0 0.0% The YTD overspend is due to removal of cost pressure funding for annual system costs, budget will need to be identified for this. Head of Legal & Regulatory Support Elections 17 13 (4) (30.8%) 16 16 0 0.0% The YTD over spend is profile related and will be refined through September. Head of Legal & Regulatory Support Governance 258 220 (38) (17.3%) 752 752 0 0.0% The YTD overspend is due to redundancy payment that requires drawdown from earmarked reserve. Head of Legal & Regulatory Support Governance, Risk & Safety 219 211 (8) (3.8%) 584 584 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Legal Services 345 263 (82) (31.2%) 769 769 0 0.0% The YTD overspend is profile related and will be refined through September. Head of Legal & Regulatory Support NPDO and Hub Schools 6,415 6,419 4 0.1% 16,959 16,959 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Procurement, Commercial and Contract Management 432 466 34 7.3% 1,265 1,265 0 0.0% Outwith Reporting Criteria Head of Legal & Regulatory Support Trading Standards & Advice Services 245 252 7 2.8% 662 662 0 0.0% Outwith Reporting Criteria 8,159 8,056 (103) (1.3%) 21,471 21,471 0 0.0% 63,454 64,008 554 0.9% 159,192 159,375 (183) (0.1%) YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 44,719 45,875 1,156 2.5% 117,152 116,751 401 0.3% The YTD underspend is mainly within staffing budgets in Schools, Early Years and Learning Centres. Under the Scheme of Devolved School Management (DSM) schools are permitted flexibility at year end, therefore no forecast variance will be processed in relation to school staffing. There is slippage in recruitment in 100 day promise funding which has been reported as a forecast variance. SLGE and Chief Officer pay awards and backdated pay are due to be paid out in September reducing this underspend significantly. Premises 3,150 2,814 (336) (11.9%) 9,719 9,719 0 0.0% The YTD overspend is mainly profile related with £86k being Storm Eowyn property repair costs coded under Exec Director DH. Supplies and Services 5,898 5,903 5 0.1% 14,559 14,559 0 0.0% Outwith Reporting Criteria Transport 173 157 (16) (10.2%) 371 371 0 0.0% The YTD overspend is profile related and will be refined through September. Third Party 24,372 24,246 (126) (0.5%) 47,081 47,665 (584) (1.2%) The YTD overspend is due to the budget pressure within School Residential Budget and a forecast variance has been processed to reflect the higher than budget demand for this service. Income (14,858) (14,987) (129) 0.9% (29,690) (29,690) 0 0.0% The YTD under recovery of income is profile related and will be refined through September. Totals 63,454 64,008 554 0.9% 159,192 159,375 (183) (0.1%) YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (DOUGLAS HENDRY) – RED VARIANCES SUMMARY AS AT 31 AUGUST 2025 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Education - Pupil Support 4,675 5,259 (584) (12.5%) Higher than budgeted demand for placements within Residential Schools Budget. Education - School Support 2,683 2,283 400 14.9% Recruitment delays within 100 day Promise Budget. A red variance is a forecast variance which is greater than +/- £50,000.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 31 AUGUST 2025 Currently there is a small forecast overspend of £16k in the department reported – finance officers will continue to work with their respective services throughout September to provide updates. The department has a year to date overspend of £5.336m (25.9%). This is currently being driven by profiling of budget for 2025-26 not aligning to actual spend/income, lag in capital works progressing through final measures, accruals/prepayments from the 2024-25 year end that are still to come through, drawdowns from ear-markings which have not taken place yet and the allocation of grant funding for ferries that is currently sitting within the central grant code. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance (Aug) £000 Previous Forecast Variance Reported to P&R (Jun) £000 Change £000 Executive Director (Kirsty Flanagan) (241) (241) 0 0 0 Head of Customer Support Services 9,630 9,653 (23) 0 (23) Head of Development and Economic Growth 8,525 8,550 (25) 0 (25) Head of Financial Services 7,429 7,429 0 0 0 Head of Roads and Infrastructure Services 36,926 36,894 32 0 32 Totals 62,269 62,285 (16) 0 (16) Year to Date Position 0% 25% 50% 75% 100% Executive Director (Kirsty Flanagan) Head of Customer Support Services Head of Development and Economic Growth Head of Financial Services Head of Roads and Infrastructure Services Expenditure to date against the remaining budget for each Service YTD Actual £000 Remaining Budget £000
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 31 AUGUST 2025 Key Financial Successes: The department had a challenging 2024-25 financial year with a net overspend of £2.124 million reported after automatic earmarkings were applied. This was primarily driven by increased costs in school and public transport contracts, heightened maintenance requirements across piers, harbours and the Belnahua Ferry, escalated winter maintenance expenses, unachieved savings from the RIS review due to contractor delays, offset partially by over-recovered vacancy savings and higher-than-anticipated Planning and Building Warrant income. Key Financial Challenges: Proposed Actions to address Financial Challenges: Ensuring that services spend to budget and do not overspend. Detailed monitoring in the key areas overspent in 2024-25 to flag up concerns early and mitigate before becoming an overspend. Department / Service ongoing ability to meet future savings / efficiency requirements. Monitoring of trends / expenditure levels / service configuration and the Service Packages Policy Options savings process. Rising cost of materials, software and consultancy services across the service will result in a reduction in activity or overspends. Costs are monitored regularly and contained as much as possible with any unavoidable overspends highlighted as early as possible. Financial Services to continue to deliver a high-quality support service function during a time of substantial uncertainty and challenge arising from continuing reductions in funding whilst costs are increasing due to forecasted timelines for reductions in inflation having now been revised. Ensure the team is operating as efficiently and effectively as possible by building resilience across the team and working collaboratively with other services of the Council to support evidence-based decision making. Winter Maintenance costs are difficult to estimate as they are very much dependant on the weather. Close monitoring of Winter Maintenance activity and reporting of the financial implications through the budget monitoring process. The Council agreed the winter policy, setting out the intervention level and locations to be treated. The number of treatments is determined by weather conditions. There is a sophisticated weather monitoring system in place consisting of several weather stations, this is supported by a forecasting and meteorological service which is collaboratively procured by West of Scotland local authorities. Climate Change Mitigation impacting on the department’s key infrastructure will result in overspends as a result of increased inspection and maintenance activity. The Council will continue to tackle climate change, looking at financially sustainable options and will closely monitor the financial consequences.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – AS AT 31 AUGUST 2025 Dangerous buildings costs as there is no budget for this expenditure and the council has no control over the demand for the service. Building Standards, Legal Services and Financial Services are working closely to manage debt recovery and to consider other options to minimise corporate risk exposure. Due to the nature of the various components of Waste Management there are ongoing challenges with: • The delay of the Deposit Return Scheme. • Uncertainty with recycling income/gate fee costs due to the volatility of the market. • Challenges in the legislative changes around the disposal of Biodegradable Municipal Waste. • The Circular Economy Bill that has recently been passed and the implications that may bring. To closely monitor all service components of Waste Management and review the Waste Strategy in conjunction with our contractual partner Biffa. Berthing income from CalMac Ferries Larger CalMac ferries that normally berth at Craignure have been removed due to ongoing issues in the wider fleet, replaced with much smaller vessels (MV Isle of Mull having the biggest impact). The recent release of the winter timetable and vessel deployment means there is expected to be a significant drop in income. Finance Contact will be working with the service through the month to understand the full impact of this. Overspends showing in Roads & Lighting due to a lag in completed capital works progressing through final measures. Roads Operatives to be prompted to complete measures as soon as schemes are complete so that income will be recorded more timeously.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Service Service Area YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Executive Director (Kirsty Flanagan) Central/Management Costs 141 139 (2) (1.4%) (241) (241) 0 0.0% Outwith Reporting Criteria 141 139 (2) (1.4%) (241) (241) 0 0.0% Head of Customer Support Services Central/Management Costs 58 59 1 1.7% 176 189 (13) (7.4%) Outwith Reporting Criteria Head of Customer Support Services Communications 138 140 2 1.4% 344 344 0 0.0% Outwith Reporting Criteria Head of Customer Support Services Customer Service Centres 637 622 (15) (2.4%) 1,734 1,734 0 0.0% Outwith Reporting Criteria Head of Customer Support Services HR 1,214 1,002 (212) (21.2%) 2,667 2,677 (10) (0.4%) £197k variance in the Itrent Cost centre - this has to come from earmarkings. £14k Redundancy payment in training centre - no budget. Head of Customer Support Services ICT 2,249 2,151 (98) (4.6%) 4,753 4,753 0 0.0% Overspend in Microsoft Enterprise agreement of £156k - any overspend for MS365 will be met from draw down from earmarked reserve 071 at end of year. Underspend of £95k in Internet/exchange software maintenance. This will be reprofiled during September. Head of Customer Support Services Registrars (38) (37) 1 (2.7%) (44) (44) 0 0.0% Outwith Reporting Criteria 4,258 3,937 (321) (8.2%) 9,630 9,653 (23) (0.2%) Head of Development & Economic Growth Airports 492 465 (27) (5.8%) 1,272 1,272 0 0.0% Outwith Reporting Criteria Head of Development & Building Control (210) (66) 144 (218.2%) (60) (60) 0 0.0% YTD income higher than budget due to fee restructure
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Economic Growth Head of Development & Economic Growth Central/Management Costs 224 208 (16) (7.7%) 601 601 0 0.0% Outwith Reporting Criteria Head of Development & Economic Growth Culture & Heritage 59 53 (6) (11.3%) 235 235 0 0.0% YTD Variance mainly due to accrual for Rothesay Pavilion "AE1230 Rothesay Pavilion Charity Support for 2024-25 running costs" - costs not through yet Head of Development & Economic Growth Development Management (212) 8 220 2750.0% 301 301 0 0.0% YTD variance due to higher than expected income Head of Development & Economic Growth Development Policy 204 146 (58) (39.7%) 387 387 0 0.0% YTD Variance due to Strategic Development Framework Helensburgh spend with no budget and unallocated saving in Dev Policy Head of Development & Economic Growth Economic Development 213 606 393 64.9% 1,210 1,210 0 0.0% YTD Variance due to earmarkings not drawn down until later in year and grants with no expenditure Head of Development & Economic Growth Environmental Health 536 521 (15) (2.9%) 1,393 1,418 (25) (1.8%) Outwith Reporting Criteria Head of Development & Economic Growth Environmental Initiatives 43 43 0 0.0% 118 118 0 0.0% Outwith Reporting Criteria Head of Development & Economic Growth Housing 2,184 1,695 (489) (28.9%) 2,755 2,755 0 0.0% YTD variance due to Strategic Housing Fund funded from earmarkings & HEEPS 12 grant income not yet received Head of Development & Private Landlords (273) (17) 256 (1505.9%) 0 0 0 0.0% Short Term LETS has no budgets (ongoing discussions with budget holder)
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Economic Growth Head of Development & Economic Growth Transportation Policy 413 94 (319) (339.4%) 313 313 0 0.0% YTD variance due to Sustrans grants still to be received although issues with the Sustrans Grant portal have been rectified 3,673 3,756 83 2.2% 8,525 8,550 (25) (0.3%) Head of Financial Services Accounting & Budgeting 1,025 1,018 (7) (0.7%) 2,775 2,775 0 0.0% Outwith Reporting Criteria Head of Financial Services Internal Audit & Fraud 128 140 12 8.6% 355 355 0 0.0% Outwith Reporting Criteria Head of Financial Services Revenues & Benefits 116 269 153 56.9% 3,280 3,280 0 0.0% YTD underspend due to the timing of cash flows in comparison to the profiling of budget and will be rectified over the financial year. Head of Financial Services Scottish Welfare Fund 476 502 26 5.2% 1,019 1,019 0 0.0% Outwith Reporting Criteria 1,745 1,929 184 9.5% 7,429 7,429 0 0.0% Head of Roads & Infrastructure Services Amenity 1,951 1,621 (330) (20.4%) 3,414 3,414 0 0.0% Largest variance across amenities continues to relate to under-recovery of interment income. Also during July aged debt was written off relating to the Pavilion café which went into liquidation during 2024 - funding to cover this to be discussed with the budget holder. Lastly street sweeper external hire costs high given 2 Council sweeper vehicles written off and external hire charges are high - awaiting information from Fleet/Service on leasing sweeper vehicles going forward. Head of Roads & Infrastructure Services Car Parking (351) (388) (37) 9.5% (557) (557) 0 0.0% Outwith Reporting Criteria
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Head of Roads & Infrastructure Services Central/Management Costs 1,406 1,319 (87) (6.6%) 1,426 1,426 0 0.0% Stephen Hall was covering the Head of Service post. Awaiting final invoices and then will be drawndown from earmarked reserves and any differences will be included as a forecast variance. Additional variance made up of training costs, due to profile not matching YTD spend. Head of Roads & Infrastructure Services Depots 146 121 (25) (20.7%) (292) (292) 0 0.0% NDR Spend is higher than profiled position - to be investigated as profile should be set at what the NDR charge will be. Internal Refuse Collection Recharge - profile needs correcting Head of Roads & Infrastructure Services Fleet & Transport 4,378 4,537 159 3.5% 11,917 11,917 0 0.0% The YTD variance on Transport will be adjusted once new contract payments for school buses are processed. Continuing overspend in cost of internal fleet repairs. Head of Roads & Infrastructure Services Infrastructure 47 211 164 77.7% 765 765 0 0.0% Spend profile incorrect, works have been delayed due to processing small frame works contracts. Spend will occur in 2025-26 just later than profile suggests. Profile to be updated to reflect this. Head of Roads & Infrastructure Services Marine (844) (2,291) (1,447) 63.2% (3,518) (3,518) 0 0.0% YTD variance due to additional funding from Transport Scotland not showing in Ferries budgets, work ongoing to update this. It is anticipated there will be a shortfall in berthing income, this is to be calculated following the publication of Calmac's winter timetables. Head of Roads & Infrastructure Services Network & Traffic Management 92 80 (12) (15.0%) 249 249 0 0.0% TRO income behind forecasted position - £8k in but not processed to ledger brings YTD variance down to £4k (5%)
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Head of Roads & Infrastructure Services Road Safety 46 31 (15) (48.4%) 159 159 0 0.0% Error in the budget resulted in saving being profiled incorrectly. The actual YTD Budget should be £56k which would produce a YTD underspend of £10k. The underspend is likely to be harvested for vacancy savings. Head of Roads & Infrastructure Services Roads & Lighting 5,912 2,200 (3,712) (168.7%) 8,072 8,230 (158) (2.0%) Trading Account - £2.9m under recovery as capital schemes are progressing with the income still to come upon the completion of the schemes. Bellwin - £360k of grant still due to come in for Storm Eowyn Claim and costs to be moved to new Capital Cost Centres (£470k total) Rechargeables - £270k lag on income from rechargeable works - profile to be updated to reflect this Street Lighting - £70k overspend YTD and £158k forecast as variance for 2025-26 Head of Roads & Infrastructure Services Waste 3,360 3,422 62 1.8% 15,291 15,101 190 1.2% YTD Variance - Accrual arranged at year end for £590K relating to waste PPP indexation back pay not yet processed. This will be paid once the Compost Like Output negotiations are concluded. Once paid this would change the current YTD variance to an adverse variance of (£528K). The adverse variance relates mainly to commercial refuse, external hires cost and profiling. Work is underway by the service to recover additional income from gap sites, unable to confirm at this stage if the target income of £700K will be achieved. Forecast Variance - Over-recovery anticipated by year end in relation to recyclates sale of glass. 16,143 10,863 (5,280) (48.6%) 36,926 36,894 32 0.1% 25,960 20,624 (5,336) (25.9%) 62,269 62,285 (16) (0.0%)
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 16,835 17,397 562 3.2% 46,791 46,791 0 0.0% YTD variance mainly due to vacancies within the Roads and Lighting Holding Account which are being covered by external contractors Premises 1,147 1,206 59 4.9% 4,258 4,258 0 0.0% YTD variance mainly due to the profile of the Depot internal recharges. Supplies and Services 5,672 4,741 (931) (19.6%) 11,228 11,248 (20) (0.2%) YTD variance mainly due to purchase of materials within Roads, which will be offset against additional income over the coming months, alongside payments made against UK Shared Prosperity Fund which will be offset with grant income once received Transport 6,084 4,966 (1,118) (22.5%) 17,532 17,532 0 0.0% Outstanding budget adjustment required against the Ferries budget to reflect additional Scottish Government Funding, part of the overall block grant this year Third Party 24,346 26,496 2,150 8.1% 73,033 73,184 (151) (0.2%) YTD variance mainly due to underspends on private contractors and transport operator payments, with profiling being the main driver of this and will begin to smooth out over the next few reporting periods. Capital Financing 0 0 0 0.0% 2,949 2,949 0 0.0% Outwith reporting criteria Income (28,124) (34,182) (6,058) 17.7% (93,522) (93,677) 155 (0.2%) YTD variance due to profile of income recharges within the Roads Operational Holding Account on account of capital works still progressing through final measures, internal refuse recharge being processed later than profiled and recharge to education not yet done. Totals 25,960 20,624 (5,336) (25.9%) 62,269 62,285 (16) (0.0%) YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget.
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025 A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%
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EXECUTIVE DIRECTOR (KIRSTY FLANAGAN) – RED VARIANCES AS AT 31 AUGUST 2025 Service Area Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Roads & Lighting 8,072 8,230 (158) (2.0%) An overspend of £158k is forecast mainly due to the reliance on external contractors and related vehicle costs (£138k) in street lighting as a result of internal staffing capacity being focused on delivering other capital works and higher than expected public liability claims and rising external software costs (£20k). Waste 15,291 15,101 190 1.2% The forecast underspend reflects an expected over-recovery of income from the sale of glass for recycling. Red Variance is a forecast variance which is greater than +/- £50k
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SOCIAL WORK – AS AT 31AUGUST 2025 The department is currently forecasting an overspend of £0.668m (0.8%). This is due to demand for residential placements within Children and Families and Older People Services. The Integration Joint Board will be expected to recover this position by the end of the financial year or offset the overspend from its budget reserves. Consequently, there is a reported forecast variance of zero. The department has a year-to-date overspend of £0.257m (1.2%) which again is due to demand driven services within Children and Families and Older People along with timing differences for reserves drawdowns and grant income. Forecast Outturn Position Service Annual Budget £000 Forecast Outturn £000 Current Forecast Variance (Aug) £000 Previous Forecast Variance Reported (Jun) £000 Change £000 Chief Officer Integration (1,965) (1,965) 0 0 0 Head of Strategic Planning and Performance 508 508 0 0 0 Head of Health and Community Care 44,802 45,802 0 0 0 Head of Acute and Complex Care 21,700 21,700 0 0 0 Head of Children and Families 16,796 16,796 0 0 0 Totals 81,841 81,841 0 0 0 Year to Date Position Key Financial Successes: Delivered a balanced budget at the end of 2024/25 after utilising £2.553m of pension reserves held in the council and £0.156m of IJB reserves. -115% -90% -65% -40% -15% 10% 35% 60% 85% 110% Chief Officer Integration Head of Adult Services Head of Children and Families Head of Strategic Planning and Performance Expenditure to date against the remaining budget for each Service YTD Actual £000 Remaining Budget £000
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SOCIAL WORK – AS AT 31AUGUST 2025 Key Financial Challenges: Proposed Actions to address Financial Challenges: Deliver the savings total for 2025/26 of £2.047m. Maintain a close working relationship with the HSCP Service Improvement Team to quickly and efficiently identify and assess options for delivering the outstanding savings. Development and delivery of future service redesigns which will be necessary to contain service expenditure within the allocated resource, noting that in year savings still need to be identified for 2025/26 to address the 2025/26 budget gap, as well as budget gaps in future years. Support from finance to assist strategic managers to develop and identify further savings options and to look beyond the short term to identify and plan the changes which will be needed to address the expected ongoing budget challenges over the current, and future, years. Cost of the use of agency staff to support service delivery across Social Work, but particularly in Older People services, due to recruitment and retention challenges within the service. Year to date spend at August 2025 of £1.707m. Close working relationship with the HSCP to support the costing of a plan to stabilise the service and ensure it is operationally and financially sustainable. This includes an exit plan from the reliance on agency staff. Cost of living crisis affecting pay inflation negotiations and financial sustainability of service providers, which could affect affordability and sustainability of service delivery. Ensure emerging issues are highlighted as soon as possible so that the financial impact can be evaluated and reported through the budget monitoring and preparation processes.
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SOCIAL WORK – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Service Service Area YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Chief Officer Integration Integration Headquarters 234 193 (41) (21.2%) 1,802 1,802 0 0.0% The year to date variance is due to timing differences in third party payments and income recharges. The forecast variance is due to unallocated budgets held to offset likely overspends in other service areas including care at home and care home placements. Chief Officer Integration Social Work Central Support (453) (468) (15) 3.2% (3,767) (3,767) 0 0.0% The YTD and forecast variances are outwith reporting criteria (219) (275) (56) (18.0%) (1,965) (1,965) 0 0.0% Head of Strategic Planning & Performance Management & Central Costs 167 168 1 0.6% 474 474 0 0.0% The YTD and forecast variances are outwith reporting criteria Head of Strategic Planning & Performance Service Development 12 16 4 25.0% 34 34 0 0.0% The YTD and forecast variances are outwith reporting criteria 179 184 5 25.6% 508 508 0 0.0% Head of Health and Community Care Management & Central Costs 163 243 80 32.9% 608 608 0 0.0% The YTD and forecast variance are both due to staff vacancies. Head of Health and Community Care Older People 11,341 11,306 (35) (0.3%) 44,194 44,194 0 0.0% The YTD variance is outwith reporting criteria. The forecast outturn variance reflects the demand for care home placements, home care packages and the use of agency staff partially offset by increased income from self funders in the HSCP's care homes. 11,504 11,549 45 0.4% 44,802 44,802 0 0.0% Head of Acute and Complex Care Learning Disabilities 1,653 1,726 73 4.2% 14,934 14,934 0 0.0% The YTD variance is due to profiling of payments to third parties and the forecast variance is due to current commitments within joint residential and supported living.
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SOCIAL WORK – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Head of Acute and Complex Care Management & Central Costs 33 45 12 26.7% 116 116 0 0.0% The YTD variance is due to timing differences in training costs and payments to third parties. The forecast variance is outwith reporting criteria. Head of Acute and Complex Care Mental Health 719 787 68 8.6% 3,408 3,408 0 0.0% The YTD variance is due to staff vacancies partially offset by spend on agency staff and timing differences with payments to third parties. The forecast overspend is due to current commitments for residential placements and the use of agency staff in assessment and care management. Head of Acute and Complex Care Physical Disability 842 925 83 9.0% 3,242 3,242 0 0.0% The YTD variance is due to timing differences with payments to third parties. The forecast variance is outwith reporting criteria. 3,247 3,483 236 48.5% 21,700 21,700 0 0.0% Head of Children & Families Child Protection 1,266 1,299 33 2.5% 3,840 3,840 0 0.0% The YTD variance is outwith reporting criteria. The forecast variance is due to use of agency staff covering vacant posts and a reduction in income from Police Scotland and NHS due to CAMHS project ending partially offset by demand for contact and welfare services. Head of Children & Families Children with a Disability 362 435 73 16.8% 1,083 1,083 0 0.0% The YTD variance is due to timing differences in third party payments. The forecast variance is outwith reporting criteria. Head of Children & Families Criminal Justice 27 (193) (220) 114.0% 272 272 0 0.0% The YTD variance is due to timing differences on government grant income. The forecast variance is outwith reporting criteria. Head of Children & Families Looked After Children 3,392 2,889 (503) (17.4%) 7,604 7,604 0 0.0% The YTD variance is due to timing differences on third party payments and the forecast variance is due to demand for residential placements partially offset by forecast underspends in adoption and fostering. Head of Children & Families Management & Central Costs 1,282 1,412 130 9.2% 3,997 3,997 0 0.0% The YTD variance is due to timing differences on third party payments and income from health boards and other bodies. The forecast variance is due to vacant posts in the integrated care area teams and
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SOCIAL WORK – OBJECTIVE SUMMARY AS AT 31 AUGUST 2025 forecast underspends in third party payments. 6,329 5,842 (487) (8.3%) 16,796 16,796 0 0.0% GRAND TOTAL 21,040 20,783 (257) (1.2%) 81,841 81,841 0 0.0% YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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SOCIAL WORK – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025 Subjective Category YTD Actual £000 YTD Budget £000 YTD Variance £000 % Variance Annual Budget £000 Forecast Outturn £000 Forecast Variance £000 % Variance Explanation Employee 13,956 13,225 (731) (5.5%) 36,665 36,665 0 0.0% Both the YTD and forecast underspends are due to staff vacancies partially offset by the use of agency staff. Premises 478 405 (73) (18.0%) 1,644 1,644 0 0.0% The YTD overspend is due to unbudgeted property maintenance and refuse collection costs within in the HSCP's Care Homes. The forecast overspend is outwith reporting criteria. Supplies & Services 701 385 (316) (82.1%) 468 468 0 0.0% The YTD and forecast overspends are largely due to a re-profiling of savings options that will no longer be achieved this financial year. Transport 327 299 (28) (9.4%) 684 684 0 0.0% The YTD and Forecast variances are outwith reporting criteria. Third Party 24,335 24,581 246 1.0% 69,608 69,608 0 0.0% The YTD and forecast variances are due to demand for purchased care services across both Children's and Adult Services. Income (18,757) (18,112) 645 (3.6%) (27,228) (27,228) 0 0.0% The YTD variance is due to timing differences in re-charges to health boards and the forecast variance is due to the profiling of reserves drawdowns. Totals 21,040 20,783 (257) (1.2%) 81,841 81,841 0 0.0%
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SOCIAL WORK – SUBJECTIVE SUMMARY AS AT 31 AUGUST 2025 YTD is year to date and represents the actual or budgeted expenditure and income for the financial year so far. Forecast Outturn is the estimate now of what expenditure or income will be for the whole of the financial year. The Variance is the difference between budget and actual or forecast outturn. A positive variance is when actual or forecast expenditure is less than budget or actual or forecast income is more than budget. A negative variance is shown in brackets and is when actual or forecast expenditure is more than budget or actual or forecast income is less than budget. An explanation is given for any variance which exceeds £50,000 or 10%.
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# MONITORING OF BUDGET SAVINGS OPTIONS APPROVED FEBRUARY 2025 Appendix 3 POSITION AS AT 31 AUGUST 2025 2025-26 2025-26 2026-27 2026-27 Future Years Future Years £000 FTE £000 FTE £000 FTE EDU 001 25/26 45689 Education Services Education Services Education Service are about to commence a review of the service, in a similar way to Roads and Infrastructure. The savings figure represents a target level of savings for Year 1 only at this stage, as the review progresses, further savings will be identified. 200 0.0 200 0.0 200 0.0 On Track to be Delivered LRS 003 25/26 45689 Governance Governance Following a review of the Governance Team it is proposed to take advantage of a retirement within the team to re- structure. The revised team structure will allow for better use of available resource and ensure that key priority areas service levels are maintained. 33 2.0 44 2.0 44 2.0 Delivered LA 001 25/26 45689 Live Argyll Live Argyll 10% cut to Live Argyll Management Fee - savings options to deliver this level of saving will be determined by the Live Argyll Board. 0 0.0 311 tbc 311 tbc Delivered CS 001 25/26 45689 Community Sport Community Sport Removal of payments to Camanachd Association and Scottish Rugby at £10,000 each. 0 0.0 20 0.0 20 0.0 Delivered CS 002 25/26 45689 Council Catering Service Council Catering Service Over the last year the department has been revising delivery models to increase efficiency and effectiveness of the service and are able to reduce the budget as a result of this. 50 0.0 50 0.0 50 0.0 Delivered CS 003 25/26 45689 Property Services Property Services Condition Surveys - due to favourable market conditions and the frequency to undertake the condition surveys a one-off saving of £50k can be made in 2025/26. 50 0.0 0 0.0 0 0.0 Delivered LRS 001 25/26 45689 Schools Contracts - NPDO/DBFM Schools Contracts - NPDO/DBFM As part of contract management measures there has been a contractual review of the ongoing base budget requirements and the base can be reduced on a recurring basis going forward. 108 0.0 108 0.0 108 0.0 Delivered LRS 002 25/26 45689 Elections Elections The annual budget for elections of £36,751 covers the running costs of the election office £4,848 with the balance of £31,903 being available to fund by-elections for the Council and Community Councils. Given that these are unpredictable and as such outwith our control it is proposed that this is treated as a centrally funded cost pressure going forward with the budget of £31,903 being removed from the core budget. 32 0.0 32 0.0 32 0.0 Delivered FS 001 25/26 45689 Financial Services Financial Services Increase in Agency Income from Scottish Water and a reduction in supplies and services budgets following a review. 51 0.0 51 0.0 51 0.0 On Track to be Delivered Template Ref Department Service Service Delivery Area Savings Option Status of Implementation
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DEG 001 25/26 45689 Development Policy Development Policy Re-organisation of the service and the posts therein that carry out specific functions creating a better structure for the future. 44 1.0 44 1.0 44 1.0 On Track to be Delivered DEG 002 25/26 45689 Development Projects (Planning) Development Projects (Planning) Introduction of new charges for returned applications, retrospective planning applications and discharge of planning conditions/confirmation of compliance. For future years assumed increase income as a result of SG review of statutory planning fees. 45 0.0 45 0.0 145 0.0 On Track to be Delivered RIS 001 25/26 45689 Roads and Infrastructure Services Roads and Infrastructure Services A review of Roads and Infrastructure is currently being carried out. Stage 1 was reported to EDI in June 2024 and Stage 3-4 are progressing. Savings are expected to be identified and Members will be asked to agree each saving option when it is identified. The savings figure represents a target level of savings. 300 tbc 800 tbc 800 tbc On Track to be Delivered RIS 002 25/26 45689 Commercial Waste Commercial Waste A high level review of self-catering units has highlighted that some do not have commercial waste contracts. A further more detailed review will be carried out but it is anticipated that there is additional income that can be budgeted for. This saving will be monitored and reported during the year. 700 0.0 700 0.0 700 0.0 On Track to be Delivered CW 001 25/26 45689 Council Wide Council Wide Following a review of some supplies and services budgets, there are a number of small efficiencies that can be made within various cost centres will limited impact. 47 0.0 49 0.0 88 0.0 On Track to be Delivered CPD 001 25/26 45689 Community Planning and Development Community Planning and Development Staffing efficiencies through workforce planning and service re-shaping to better meet needs from communities on assets and funding. 38 1.0 63 1.0 63 1.0 Delivered Loans FundFeb-25 Loans Fund Loans Fund A detailed review of the loans fund will be undertaken, however, it is anticipated that a one-off saving of at least £0.500m will be achievable within 2024-25 that could be earmarked and used to balance the 2025-26 budget. The saving is a result of slippage in the capital programme and a better return on interest rate estimates. 500.00 0.0 0.00 0.0 0.00 0.0 Delivered Funding Feb-25 Funding Funding After the Council set its 2024/25 budget, the SG allocated the Island Cost Crisis Funding that was to be used to support increasing service costs in islands. As our budget was already set, this funding was set aside and can be carried forward and used to help balance the 2025/26 budget on a one-off basis. 564.00 0.0 0.00 0.0 0.00 0.0 Delivered TOTAL 2,762 4.0 2,517 4.0 2,656 4.0