5. 2026 03 17 Revenue Budget 2025-26 Financial Performance to 31 January 2026 V2
North Ayrshire Council · 17 March 2026
Back to Cabinet — 17 March 2026 and its agenda
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NORTH AYRSHIRE COUNCIL 17 March 2026 Cabinet Title: Revenue Budget 2025/26 : Financial Performance to 31 January 2026 Purpose: To advise Cabinet of the financial performance for the Council at 31 January 2026 Recommendation: That Cabinet agrees to: (a) note the information and financial projections outlined in the report; (b) approve the earmarking of £1.103m identified at 2.5 to meet future year commitments in accordance with funding requirements; (c) note the latest financial projection for the Health and Social Care Partnership highlighted at 2.6; and (d) approve the virements detailed in Appendix 8. 1. Executive Summary 1.1 The General Services Revenue Estimates for 2025/26 were approved by Council on 26 February 2025. The Housing Revenue Account (HRA) Revenue Budget for 2025/26 was approved by Council on 12 February 2025. 1.2 As part of the monitoring procedures to keep the Cabinet informed of the financial performance of the Council, financial performance reports are presented on a regular basis. This is the fourth report for 2025/26 and covers the period to the end of January 2026 (Period 10). Projections have been made to the year-end. 1.3 At Period 10 the General Fund is forecasting a net projected underspend of (£1.680m), (0.4%), after transferring resources to/from earmarked reserves which includes the previously approved release of £0.348m following a review of earmarked funds and a request to earmark £0.703m to support the future costs associated with the Extended Producer Responsibility Obligations and £0.400m to develop business support projects following the draw down of funds from the Business Loans Scotland. This is an improvement of (£0.795m) from the previously reported (£0.885m) underspend. 1.4 The Housing Revenue Account is forecasting a net in-year underspend of (£2.325m), (3.6%). This is an increase of (£0.826m) from the previously reported underspend.
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1.5 The Health and Social Care Partnership is projecting a year-end overspend of £2.802m, (0.8%), for 2025/26. This is a decrease of £2.144m since the previous report. The Council services element is reporting a projected overspend of £1.941m and the Health services element is reporting a projected overspend of £0.861m. However, there is assumed funding within Health of £0.551m for the Reduced Working Week. This brings the net position to a projected overspend of £2.251m which includes £1.941m for Council Services, an increase of £0.060m from the previous position, and £0.310m for Health services, an increase of £0.252m. 1.6 Management action is ongoing to address absence levels across services. However, employee absence rates remain above targets, and there has been a marginal 0.6% increase in days lost during the period when compared to the same period last year. 1.7 Risks to the reported financial position of the Council mainly centre around the updated HSCP position which requires measures to be put in place by the HSCP to address these risks through a recovery plan. However, failure to recover this position would have an impact on the level of financial contributions required from the funding parties. With this level of projected overspend it is unlikely the HSCP will fully recover this position. This will lead to a request to the Council from the IJB to make interim funds available. 2. Background General Fund 2.1 The Council set a breakeven budget for 2025/26. In addition to the budget approved on 26 February 2025, earmarked funds of £85.088m were carried forward from 2024/25 for service expenditure in 2025/26 and beyond. The projections in this report include the net release of £0.348m following the review of these funds, as previously reported, as well as the requests to earmark £0.703m to support the future costs associated with the Extended Producer Responsibility Obligations and £0.400m to develop business support projects following the draw down of funds from the Business Loans Scotland in accordance with funding requirements. 2.2 Current financial projections indicate that a net in-year underspend of (£1.680m), net of the transfers to/from reserves as detailed above, is anticipated for the year to 31 March 2026. The forecast position will continue to be monitored throughout the year. 2.3 Details of the current financial projections are summarised in the following table: Service Expenditure App No. Annual Budget £ million Projection to 31 March 2026 £ million Projected Variance for year (Fav)/Adv £ million Projected Variance @ P8 (Fav)/Adv £ million Movement £ million Note Corporate Services 1 21.128 20.533 (0.595) (0.379) (0.216) (i) Education 2 191.243 191.844 0.601 0.611 (0.010) (ii) Place 3 56.389 56.800 0.411 0.772 (0.361) (iii) Communities & Housing 4 15.761 15.361 (0.400) (0.304) (0.096) (iv) Other Corporate Items 5 21.829 20.753 (1.076) (1.073) (0.003) (v)
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Sub Total 306.350 305.291 (1.059) (0.373) (0.686) Health and Social Care Partnership 9 141.355 141.355 0.000 0.000 0.000 Balance for Services 447.705 446.646 (1.059) (0.373) (0.686) Financing Charges 6 14.012 14.012 0.000 0.000 0.000 Contribution to Loans Fund Reserve 6 9.860 9.860 0.000 0.000 0.000 Total Planned Expenditure 471.577 470.518 (1.059) (0.373) (0.686) Aggregate External Finance 6 (393.573) (393.597) (0.024) (0.024) (0.000) Council Tax 6 (72.009) (72.606) (0.597) (0.488) (0.109) Use of Earmarked Funds 6 (5.995) (5.995) 0.000 0.000 0.000 Total Planned Income (471.577) (472.198) (0.621) (0.512) (0.109) Net Expenditure/ (Income) 0.000 (1.680) (1.680) (0.885) (0.795) 2.4 The reported Planned Income includes adjustments to Scottish Government funding from that included in the approved budget, as detailed in the following table: Movements on Planned Income General Revenue Grant £ million Non Domestic Rates £ million Specific Grants £ million TOTAL AEF £ million Revised Budget 30 November 2025 (339.699) (42.606) (8.101) (390.406) Discretionary Housing Payments (0.032) (0.032) Housing Emergency Discretionary Housing Payments (0.019) (0.019) RRTP (0.024) (0.024) CSC Pay Uplift (0.163) (0.163) Child Poverty Coordinators 0.001 0.001 Island Cost of Living (0.058) (0.058) SRA Kinship Care (0.058) (0.058) Single Use Vapes (0.005) (0.005) LA Pay (2.117) (2.117) Teacher Induction (0.499) (0.499) Scotish Welfare Fund (0.193) (0.193) Revised Planned Income (342.866) (42.606) (8.101) (393.573) 2.5 Commentary on Significant Movements from Period 8 The Council's overall financial forecast against the revised budget is an improvement of (£0.795m) from the previously reported position. A brief explanation of the significant movements at a service level are outlined as follows: (i) Corporate Services – underspend of (£0.595m), an improvement of (£0.216m) from the previously reported underspend
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The movement is primarily related to: • Vacancy management across the services; and • Reduced ICT contract costs (£0.107m). (ii) Education – overspend of £0.601m, a decrease of (£0.010m) from the previously reported overspend Projected teacher costs across Primary and Secondary schools have increased by (£0.384m). The projections include anticipated Teacher absence cover costs, lower than anticipated turnover and teacher salary profiling adjustments. This position will be subject to continued monitoring throughout the year. This has been offset by: • Forecasted decrease in uptake of hours with funded providers within early years (£0.173m); and • Increase in the projected underspend of £0.188m within Facilities management primarily relating to vacancy management and increased income. (iii) Place – overspend of £0.411m, a decrease of (£0.361m) from the previously reported overspend The movement is primarily related to: • Projected underspend within Waste Services of £0.703m due to funds received from the Extended Producer Responsibility Payment. • Projected Underspend within Business of £0.400m due to receipt of income from the West of Scotland’s Loans Fund • A projected £0.559m reduction in transport costs largely due to lower than anticipated pupil transport costs due to lower cost projections from SPT (£0.306m), a reduction in external hire costs (£0.102m), increased bus transport income (0.062m) and reduction in projected fuel costs (£0.054m) This has been partially offset by: • A request to earmark £1.103m in relation to the Extended Producer Responsibility Obligation payment (£0.703m) and the West of Scotland’s Loans fund payment (£0.400m) in accordance with funding requirements. • An increased overspend within Property running costs of £0.207m largely relating to an increased under-recovery of rental income. Virements in relation to the recognition of additional income within Roads have been included within Appendix 7. (iv) Communities and Housing – underspend of £0.400m, an improvement of (£0.096m) from the previously reported overspend The movement is primarily related to:
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• Additional Planning fee Income (£0.041m); and • Vacancy management across the services. (v) Other Corporate Items – underspend of (£1.076m), an increase of £0.003m from the previously reported underspend The movement primarily relates to a favourable movement in relation to updated salary sacrifice costs (£0.056m) which is offset by an adverse movement of £0.053m due to updated Housing benefit subsidy calculations. Health and Social Care Partnership 2.6 A copy of the HSCP financial performance report at the end of January 2026 is attached at Appendix 9. The report highlights the key challenges and variances for the Partnership. The key points for Cabinet to note are summarised below: • The projected outturn is a year-end overspend of £2.802m for 2025/26. However, this has been reduced to £2.251m due to assumed funding in relation to the Reduced Working Week. This is an increase of £0.312m since the previous reporting period. • The projected overspend on the Council Services element is £1.941m over the same period. This is an increase of £0.060m since the previous reporting period; • The most significant areas of overspend include care at home, residential placements for children, physical disability care packages, supplementary staff in wards, staff costs in Montrose House and Unplanned Activities (UnPACs) within the lead partnership for mental health. • Further detail is included in the report at Appendix 9. The main areas of risk identified include: • Current overspend areas, especially in low volume / high-cost services e.g. Children’s residential placements, UNPACs, and supplementary staffing across community, mental health and learning disability wards. • Growing demand for services. • Staff recruitment and retention challenges across a number of service areas. • The expectation that performance will continue to be maintained or improved despite the significant resource challenges. • Ongoing delivery costs of Scottish Government policy directives, particularly where these are not fully funded or inflation proofed. • Pay settlements for both NHS and Local Government staff have been agreed for 2025/26. The NHS element has been funded, and the current assumption is that the shortfall between budget planning assumptions and actual settlements will be fully funded for Local Government staff. • Unearmarked reserves are depleted, there is no scope to absorb in-year variances, with any overspends requiring additional funding from partners.
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• The ongoing review of the Integration Schemes, where there is a focus on financial arrangements and risk share. • The wider system financial challenges and impact across the whole system, for example the financial position of NHS AA and the decisions taken to reduce the Board’s deficit may have impacts on other parts of the health and care system. • Removal of brokerage for NHS Boards, NHS AA have been asked by Scottish Government to deliver further financial improvement beyond their Board approved financial plan and have now been escalated to Level 4 of the NHS Scotland Support and Intervention Framework. • The overall sustainability of commissioned care providers, with eNICs compounding historic challenges re financial sustainability, there is a heightened risk of provider failure leading to handing back of care and contracts. • The ongoing ability to source packages of care for service users. • Progress with the work to develop set aside arrangements and the risk sharing arrangements agreed as part of this. • The recurring underlying levels of overspend which may impact on the Partnership’s ability to continue to sustain service levels in the future. • The use of supplementary staffing for enhanced observations across a number of service areas and the use of high-cost agency staff to support frontline service delivery in areas where there are recruitment challenges. • Agenda for Change Pay Reform programme – including Nursing Band 5-6 re-grade, protected learning time and reduction to the working week. • Scotland Excel inflationary increases for children’s services have been significantly higher than assumed. • There is a risk in relation to recovering recharge income in relation to the LD Assessment and Treatment patients from outwith Ayrshire. • Risk related to NHS Reform investment being allocated by Scottish. Absence Management 2.7 The programme of work to monitor absence levels and effectively implement relevant policies has been ongoing and initially resulted in a significant reduction in reported absence levels across the Council. However, the 10 months to 31 January are now showing a marginal increase in days lost when compared to the same period last year i.e. 10.40 days lost compared to 10.34 for the same period in 2024/25. Current absence levels exceed the target of 8.5 days for the period. Within the Education Service, the number of days lost for teaching staff has reduced by almost 13% when compared to the previous year (4.68 days compared to 5.22 last year). The HSCP and the Communities and Housing directorate’s number of days lost have increased by 21% and 9% respectively, with the Place directorate showing a 13% improvement for the period. Risks 2.8 Under the terms of the Health and Social Care Integration Scheme, a recovery plan is required in order to address the projected overspend. There is a risk that, if the recovery plan is not successful, this would have an impact on the level of financial contributions from the funding parties. In such a circumstance the Council would be asked to make interim funds available. The funding could be made available for repayment by the HSCP across a period of future years or as an additional contribution. The approach would also likely be influenced by the Council’s outturn
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position at the year-end and Cabinet would be asked to consider this. With this level of projected overspend it is unlikely the HSCP will fully recover this position. Housing Revenue Account 2.9 The Housing Revenue Account budgeted for a breakeven position in 2025/26 and an in-year underspend of (£2.325m), (3.6%), is currently anticipated for the year to 31 March 2026. This is an increase of (£0.826m) from the previously reported position. The projected position is summarised in the following table with further details provided in Appendix 7. 2.10 Commentary on Significant Movements from Period 8 A brief explanation of the significant movements from the previous forecasts is outlined as follows: (i) Property Costs – overspend of £0.158m, a reduction of £0.525m from the previously reported underspend position The movement is primarily related to reduced expenditure on Aids and Adaptation, (£0.259m), Responsive Repairs (£0.223m) and Other Property Costs primarily in relation to Sheltered Housing Unit Electricity costs (£0.221m). This has been partly offset by reduced expenditure on Void Repairs, (£0.157m). (ii) Capital Financing Costs – underspend of (£2.372m), a movement of (£0.171m) from the previously reported position The movement is primarily related to revised loan charges reflecting the revised profile of capital project delivery, leading to a lower level of in-year borrowing. Housing Revenue Account Annual Budget £ million Projection to 31 March 2026 £ million Projected Variance for year (Fav)/Adv £ million Previous Variance @ P8 (Fav)/Adv £ million Movement £ million Note Employee Costs 5.222 5.224 0.002 0.000 0.002 Property Costs 25.727 25.885 0.158 0.683 (0.525) (i) Supplies and Services 2.145 2.139 (0.006) 0.011 (0.017) Transport and Plant Costs 0.016 0.016 0.000 0.000 0.000 Administration Costs 2.114 2.110 (0.004) 0.003 (0.007) Third Party Payments 3.832 3.893 0.061 0.038 0.023 Transfer Payments 0.177 0.177 0.000 0.000 0.000 Other Expenditure 0.550 0.550 0.000 0.000 0.000 Capital Financing 25.549 23.177 (2.372) (2.201) (0.171) (ii) Gross Expenditure 65.332 63.171 (2.161) (1.466) (0.695) Income (65.332) (65.496) (0.164) (0.033) (0.131) (iii) Net Expenditure 0.000 (2.325) (2.325) (1.499) (0.826)
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These funds will be required to support the HRA capital programme in future years. (iii) Income – over recovery of (£0.164m), a movement of (£0.131m) from the previously reported position The movement is primarily related to an over-recovery in Recharges and other income (£0.274m), partially offset by an under-recovery of £0.110m in Other Rents. 3. Proposals 3.1 It is proposed that Cabinet agrees to: (a) note the information and financial projections outlined in the report; (b) approve the earmarking of £1.103m identified at 2.5 to meet future year commitments in accordance with funding requirements; (c) note the latest financial projection for the Health and Social Care Partnership highlighted at 2.6; and (d) approve the virements detailed in Appendix 8. 4. Implications/Socio-economic Duty Financial 4.1 General Services The net projection for the year as at 31 January 2026 is a net underspend of (£1.680m). Housing Revenue Account The net projection for the year as at 31 January 2026 is a net underspend of (£2.325m). Human Resources 4.2 None. Legal 4.3 None. Equality/Socio-economic 4.4 None. Climate Change and Carbon 4.5 None. Key Priorities
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4.6 This report directly supports the Council Plan 2023 to 2028 by maximising financial flexibility to support the delivery of our priorities. Community Wealth Building 4.7 None. Islands Communities Impact Assessment (ICIA) 4.8 None. United Nations Rights of the Child (UNCRC) 4.9 None. Consumer Duty 4.10 None. 5. Consultation 5.1 Progress as outlined in this report has been approved by Executive Directors. Mark Boyd Head of Service (Finance) For further information please contact Mark Boyd, Head of Service (Finance), on 01294 324560. Background Papers Revenue Budget 2025/26: Financial Performance to 30 November 2025 – Cabinet 27 January 2026
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Appendix 1 CORPORATE SERVICES BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Objective Summary Annual Budget Projected Outturn Annual Variance Adverse or (Favourable) % Variance Note No £000 £000 £000 Chief Executive Chief Executive 154 167 13 8% Total for Chief Executive 154 167 13 8% Financial Services Change Programme 234 234 - 0% Audit, Fraud, Safety & Insurance 698 708 10 1% Corporate Procurement 758 600 (158) (21%) 1 Financial Services 1,582 1,533 (49) (3%) Revenues (503) (520) (17) 3% Transformation 790 814 24 3% Total for Financial Services 3,559 3,369 (190) (5%) People & ICT Employee Services 927 856 (71) (8%) 2 HR & Organisational Development 1,193 1,158 (35) (3%) 3 ICT 5,253 5,146 (107) (2%) 4 Business Support 1,456 1,416 (40) (3%) 5 Customer Services 4,316 4,257 (59) (1%) 6 Total for People & ICT 13,145 12,833 (312) (2%) Democratic Services Legal & Licensing 501 556 55 11% Policy, Performance & Elections 527 505 (22) (4%) Communications 491 505 14 3% Civil Contingencies 60 60 - 0% Committee Services 440 450 10 2% Member Services 1,560 1,544 (16) (1%) Information Governance 533 487 (46) (9%) 7 Ayrshire Support Service 61 57 (4) (7%) Total for Democratic Services 4,173 4,164 (9) (0%) Totals 21,031 20,533 (498) (2%) Transfer to/ (from) Earmarked Reserves 97 - (97) Net Total 21,128 20,533 (595) (3%)
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Appendix 1 Subjective Summary Annual Budget Projected Outturn Annual Variance Adverse or (Favourable) % Variance £000 £000 £000 Employee Costs 17,738 17,395 (343) (2%) Property Costs 68 68 - 0% Supplies and Services 3,291 3,179 (112) (3%) Transport and Plant Costs 23 21 (2) (9%) Administration Costs 1,614 1,596 (18) (1%) Other Agencies & Bodies 1,951 1,904 (47) (2%) Transfer Payments 861 861 - 0% Other Expenditure - - - - Capital Financing - - - - Gross Expenditure 25,546 25,024 (522) (2%) Income (4,515) (4,491) 24 (1%) Net Expenditure 21,031 20,533 (498) (2%)
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Appendix 1a CORPORATE SERVICES BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Budget £000 Projected Variance £000 Variance as % of budget Section Note 1 Finance - Corporate Procurement Movement - There has been a favourable movement of (£0.034m) since P8 mainly due to forecasted underspends in employee costs. 758 (140) -18% Employee costs - There is a projected underspend of £0.139m due to vacancy management. (18) Other minor movements (158) Note 2 Finance - Financial Services Movement - There has been a favourable movement of (£0.044m) since P8 mainly due to vacancy management. 1,456 (40) -3% Employee Costs - There is a projected underspend of £0.040m mainly due to vacancy management. (9) Other minor movements (49) Note 3 People & ICT - Employee Services Movement - There has been a favourable movement of (£0.002m) since P8 due to vacancy management. 883 (71) -8% Employee Costs - There is a projected underspend of £0.071m due to vacancy management. Other minor movements (71) Note 4 People & ICT - HR & Organisational Development Movement - There has been a favourable movement of (£0.041m) since P8 due to underspend in Occupational Health payments. 413 (45) -11% Third Party Payments - There is a projected underspend of £0.045m due to less than expected Occupational Health charges. 10 Other minor movements (35) Note 5 People & ICT - ICT Movement - There has been a favourable movement of (0.107m) since P8 due to contract costs being less, Co- Pilot trial being funded from change fund and Wi-Fi support not being completed. 2,246 (107) -5% Supplies and Services - There is a projected underspend of £0.107m due to contract costs being less than expected, Wi-Fi support not completed in September due to negotiations of new product, a dispute with Capita over pricing of WAN circuits and expected costs of Co-pilot license trial being covered by change fund. (107) Note 6 People & ICT - Business Support Movement - There has been a favourable movement of (£0.005m) since P8 due to vacancy management. 1,595 (40) -3% Employee Costs - There is a projected underspend of £0.040m due to vacancy management. (40) Note 7 People & ICT - Customer Services Movement - There has been no significant movement from P8. 1,595 (59) -4% Employee Costs - There is a projected underspend of £0.059m due to vacancy management. (59) Note 8 Democratic Services - Legal & Licensing Movement - There has been an unfavourable movement of £0.038m since P8 due to unachievable turnover and under recovery in licenses income. 1,200 31 3% Employee Costs - There is a £0.031m projected overspend due to unachieved turnover. 774 24 3% Income - There is a projected under recovery of income of £0.017m in legal fees and £0.007m under recovery in licenses. 55 Note 9 Democratic Services - Information Governance
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Appendix 1a Budget £000 Projected Variance £000 Variance as % of budget Section Movement - There has been a small favourable movement of (£0.005m) in employee costs since P8. 570 (60) -11% Employee Costs - Forecast underspend of £0.060m due to vacancy management. 14 Other minor movements (46)
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Appendix 2 EDUCATION BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Objective Summary Annual Budget Projected Outturn Annual Variance Adverse or (Favourable) % Variance Note No £000 £000 £000 Early Years Education 21,469 20,768 (701) (3%) 1 Primary Education 55,451 56,101 650 1% 2 Secondary Education 67,732 68,843 1,111 2% 3 Additional Support Needs 17,721 19,094 1,373 8% 4 Central Education 4,008 3,684 (324) (8%) 5 Scottish Equity Fund 152 152 - 0% Pupil Equity Fund 4,728 4,728 - 0% Facilities Management 19,779 18,474 (1,305) (7%) 6 Net Total 191,040 191,844 804 0% Transfer to/(from) Earmarked Reserves 203 - (203) Net Total 191,243 191,844 601 0% Subjective Summary Annual Budget Final Year End Outturn Annual Variance Adverse or (Favourable) % variance £000 £000 £000 Employee Costs - Teachers 107,913 109,567 1,654 2% Employee Costs - Non Teachers 52,745 51,697 (1,048) (2%) Property Costs 1,630 1,650 20 1% Supplies and Services 25,447 25,118 (329) (1%) Transport and Plant Costs 136 143 7 5% Administration Costs 426 424 (2) (0%) Other Agencies & Bodies 9,628 11,172 1,544 16% Transfer Payments 580 580 - 0% Other Expenditure - - - Capital Financing 71 70 (1) (1%) Gross Expenditure 198,576 200,421 1,845 1% Income (7,536) (8,577) (1,041) 14% Net Expenditure 191,040 191,844 804 0%
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Appendix 2a EDUCATION BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Budget £000 Projected Variance £000 Variance as % of budget Section Note 1 Early Years Education Movement : There has been a favourable movement of (£0.151m) since P8 mainly due to a decrease of £0.173m in the forecasted uptake of hours with funded providers. 15,876 (544) -3% Employee Costs: Overall a forecasted underspend of £0.544m. - Teachers:- forecasted underspend of £0.054m. - Non Teachers:- forecasted underspend of £0.490m as a result of vacancy management after accounting for budgeted turnover. 5,341 (142) -3% Third Party Payments: There are forecasted underspends of £0.158m in payments to funded providers due to a lower than forecasted uptake of hours and a change in the charging model for cross boundary costs, partially offset by a projected overspend of £0.024m in Speech Therapy costs. (15) Other minor movements (701) Note 2 Primary Education Movement : There has been an unfavourable movement of £0.182m since P8 due to projected increased teacher costs 53,059 651 1% Employee Costs : Overall a forecasted overspend of £0.651m - Teachers:- forecasted overspend of £0.652m Pressures on this line include teacher absence cover, budgeted turnover and teacher salary profiling adjustments - Non Teachers:- forecasted underspend of £0.001m after accounting for budgeted turnover. (1) Other minor movements. 650 Note 3 Secondary Education Movement : There has been a unfavourable movement of £0.202m since P8 due to projected increased teacher costs 51,884 1,227 2% Employee Costs : Overall a forecasted overspend of £1.227m - Teachers:- forecasted overspend of £1.103m. Pressures on this line include teacher absence cover, budgeted turnover and teacher salary profiling adjustments. - Non Teachers:- forecasted overspend of £0.124m after accounting for budgeted turnover. 15,867 (116) -1% Supplies and Services: forecasted underspend in PPP unitary charge mostly due to a reduction in energy costs 1,111 Note 4 ASN Movement: There has been a favourable movement of £0.010m since P8. An unfavourable movement of £0.138m in Employee Costs has been offset by a favourable movement in Placement costs. There are less children in a Residential Placement since P8, which has contributed to a favourable movement of £0.067m. There has also been a favourable movement of £0.065m in Day Placements, as revised rates have been confirmed with various establishments, and these rates are lower than previously projected. 15,699 (254) -2% Employee Costs : Overall a forecasted underspend of £0.242m - Teachers:- forecasted underspend of £0.053m. Pressures on this line include teacher absence cover, budgeted turnover and teacher salary profiling adjustments. - Non Teachers:- forecasted underspend of £0.201m reflecting the level of turnover within the service.
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Appendix 2a Budget £000 Projected Variance £000 Variance as % of budget Section 268 (24) -9% There is a forecasted underspend of £0.024m on payments to Other Local Authorities due to a reduction in the number of NAC children accessing placements in their establishments. 1,310 124 9% There is a forecasted overspend of £0.124m on external day placements, as a result of additional children requiring this level of support, and an increase in rates from these establishments. Currently there are 31 children in, or expected in, day placement provision. This service will continue to be monitored as options for alternative service provision are developed. 499 1,531 307% There is a forecasted overspend of £1.531m on external specialist residential placements. Currently there are 11 children in, or expected in, accommodation. Increased pressures on internal care settings as well as changing needs of children and young people have resulted in an increase in the need for external residential settings. Joint working is ongoing with HSCP on the Brighter Pathways Programme to ensure that all options are fully explored to retain young people within their local community where possible. Where this is not possible, a forum has been set up to further discuss those young people who will require care and education provision to support them appropriately. Any additional children who enter Residential Accommodation will increase the future projected overspend. (4) Other minor movements. 1,373 Note 5 Central Education Movement: There has been a favourable movement of (£0.045m) since P8. 3,694 26 1% Employee Costs: There is a forecasted overspend of £0.026m mainly due to unachieved turnover. (2,380) (410) 17% Income: There is a forecasted over-recovery of PPP insurance rebate of £0.255m and PPP deductions of £0.135m in excess of budget. Also £0.023m additional probationer income received. 60 Other minor movements. £0.010m forecasted overspend in SQA presentation charges and £0.045m in payments to other bodies. (324) Note 6 Facilities Management Movement: There has been a favourable movement of (£0.188m) since P8. This is mainly due to further employee cost underspends and projected over recovery of income. 15,576 (505) -3% Employee Costs: There is a forecasted underspend of £0.836m primarily due to previous vacancy management, offset by a budgeted turnover target of £0.331m resulting in a net underspend of £0.505m 1,362 21 2% Property Costs: There is a forecasted overspend of £0.021m across cleaning materials budget lines 5,374 (251) -5% Supplies and services: There is a forecasted underspend of £0.251m. This comprises of a £0.408 underspend in kitchen equipment which is offset slightly by a projected overspend on food costs of £0.158m. (2,583) (597) 23% Income: There is a forecasted projected over recovery in Commercial Catering of £0.224m, cleaning/janitorial income of £0.159m and school meals income of £0.048m and bad debt provision of £0.165m 27 Other minor movements (1,305) Note 7 General Teacher absence levels are subject to regular review across the service and appropriate actions are being taken to maximise attendance. Average days lost per FTE is 6.66 for the period April-Jan. Average days lost per FTE for same period last year was 7.17
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Appendix 3 PLACE BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Objective Summary Annual Budget Projected Outturn Annual Variance Adverse or (Favourable) % Variance Note No £000 £000 £000 Directorate and Support 1,024 969 (55) (5%) 1 Neighbourhood Services Roads 7,250 7,250 - 0% Streetscene 5,749 5,823 74 1% 2 Waste Resources 8,269 7,566 (703) (9%) 3 Municipalisation Advertising (73) (33) 40 (55%) Total for Neighbourhood Services 21,195 20,606 (589) (3%) Economic Development, Growth and Investment Economic Policy 336 281 (55) (16%) 4 Employability & Skills 2,197 2,197 - 0% Regeneration 568 568 - 0% Business 624 214 (410) (66%) Growth & Investment 226 226 - 0% Total for Economic Development, Growth and Investment 3,951 3,486 (465) (12%) Sustainability, Transport and Corporate Property Property Management & Investment 1,778 1,661 (117) (7%) 5 Housing Assets & Investment 202 202 - 0% Property Maintenance 4,588 4,588 - 0% Property Running Costs 5,536 6,189 653 12% 6 Energy and Sustainability 6,889 6,889 - 0% Internal Transport 11,226 10,786 (440) (4%) 7 Total for Sustainability, Transport and Corporate Property 30,219 30,315 96 0% 0 Net Total 56,389 55,376 (1,013) (2%) Transfer to Earmarked Reserves - 1,424 1,424 Net Total 56,389 56,800 411
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Appendix 3 Subjective Summary Annual Budget Projected Year End Outturn Annual Variance Adverse or (Favourable) % variance £000 £000 £000 Employee Costs 30,206 30,469 263 1% Property Costs 23,088 23,258 170 1% Supplies and Services 4,514 4,508 (6) (0%) Transport and Plant Costs 9,840 10,218 378 4% Administration Costs 589 578 (11) (2%) Other Agencies & Bodies 16,505 15,836 (669) (4%) Transfer Payments - - - 0% Other Expenditure 78 68 (10) (13%) Capital Financing 26 26 - Gross Expenditure 84,846 84,961 115 0% Income (28,457) (29,585) (1,128) 4% Net Expenditure 56,389 55,376 (1,013) (2%)
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Appendix 3a PLACE BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS ENDED 31 JANUARY 2026 Budget £000 Projected Variance £000 Variance as % of budget Section Note 1 Directorate and Support Movement: There has been no significant movement from P8. 1,011 (55) (5%) Employee Costs: There is a projected underspend due to vacancy management. (55) Note 2 Roads Movement: There has been no movement from P8. 4,877 (35) (1%) Employee Costs: £0.031m forecasted underspend due to vacancy management. 31 83 268% Transport Costs: £0.083m projected overspend mainly due to hire charges in particular of a gully unit. (48) Other minor movements. 0 Note 3 Streetscene Movement: There has been an adverse movement of £0.030m since P8. Reduced interment and memorial permit income, as well as reduced income from fees and charges and other Council departments has resulted in an adverse movement of £0.088m. There has been an adverse movement of £0.029m in supplies and services, with £0.024m of this movement relating to storm rectification costs. Vacancy management has resulted in a favourable movement of £0.048m in employee costs, and a further favourable movement of £0.046m due to realignment of budget to resolve an overspend with Skip Hire charges. 7,712 (155) (2%) Employee Costs: Projected £0.155m underspend due to vacancy management. 567 78 14% Supplies and Services: £0.078m overspend includes £0.045m for storm rectification works, £0.013m overspend on tools and machinery and £0.012m overspend on PPE. (2,886) 129 (4%) Income: £0.129m under recovery of income, which includes a £0.076m under recovery of interment income, £0.026m under recovery of memorial permit income and £0.030m under recovery of income from other NAC departments. 22 Other minor movements. 74 Note 4 Waste Services Movement: There has been a favourable movement of (£0.703m) since P8 due to funds received from the Extended Producer Responsibility payment. 5,596 770 14% Employee costs: Current sickness absence rates for April to January 2026 are 16.84 days per employee, if projected at these levels to March 2026 this would result in a forecasted annual rate of 20.21 days. A robust absence monitoring process is in place and a dedicated resource has been recruited to monitor and review the absence management process in Waste, through assisting supervisors with absence management meetings, referrals to occupational health etc and to support employees return to work. The statutory nature of the service requires additional resources and/or overtime to cover unforeseen absences resulting in additional costs. To help mitigate against this, resources out-with Waste Collections have received HGV training to help provide cover for collections. An overall review of the Waste service in light of legislative changes and current service demands is ongoing. The absence rates reflect an improving position, however they are still above target rates. 240 378 158% Transport Costs: Additional vehicles are currently in place to deal with ongoing pressures and demands. Transport needs are continuously under review and flexed depending on the operational needs of the service. 656 (117) (18%) Supplies & Services: Forecasted underspends mainly due to leachate of £0.057m, refuse containers £0.050m and materials/tools and implements of £0.023m. 6,726 (72) (1%) Third Party Payments: Projected underspends mainly from diverted waste of £0.135m due to anticipated reduction in tonnages as a result of the implementation of the HWRC booking system, the recyclables contract of £0.035m, and the organics contract of £0.032m, this is partially offset by a forecasted overspend in Special Uplift processing costs of £0.092m due to increased costs for POPs waste, additional street sweeping recycling costs of £0.019m and a change to costs of £0.018m from the purple bin contract as a result of the new contract. (5,109) (1,627) 32% Income: Income from the Extended Producer Responsibility (EPR) for packaging funds currently exceeds the amount included in the Budget by £0.703m. These funds are due to be received in 3 tranches from November 2025 and will be allocated to cover chargeable disposal costs. In 2025/26 these funds will help address the pressures faced by the service and support further investment to meet operational needs and deliver service improvements. An over recovery in special uplifts income of £0.085m is partially offset by a projected under-recovery in purple bin contract income of £0.187m due to reductions in recyclate market prices, the re-tendering of this contract has now been completed and resulted in a change to costs. (35) Other minor movements A request to earmark funds of £0.703m, these funds will be utilised to support waste pressures and investments in accordance with EPR funding requirements. (703)
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Appendix 3a Budget £000 Projected Variance £000 Variance as % of budget Section Note 5 Economic Policy Movement: There has been no significant movement since P8. 320 (56) (18%) Employee Costs: Underspend of £0.056m due to vacancy management and maximising available external funding. 1 Other minor movements. (55) Note 6 Business Movement: There has been a favourable movement of (£0.417m) since P8 due to receipt of income from West of Scotland Loans Fund. 624 (400) (64%) Income: £0.400m received from Business Loans Scotland for contributions to the West Of Scotland Loans Fund. 463 (10) (2%) Other minor movements. A request to earmark funds of £0.400m is being made to develop eligible business support projects once the shared economic development service consultation is complete, alongside supporting staff costs. The drawn down of these funds from Business Loans Scotland was planned as part of the EDGR Service Review and formed part of the overall budget for the Service. These funds can only be utilised for business support and development related activities, according to funding requirements. (410) Note 7 Property Management and Investment Movement: There has been favourable movement of (£0.043m) since P8 mainly driven by a reduction in employee costs due to vacancy management. 2,733 (172) (6%) Employee Costs: There is a projected underspend of £0.172m primarily due to vacancy management. (1,263) 40 (3%) Income: Projected under-recovery of fee income of £0.040m. 15 Other minor movements (117) Note 8 Property Running Costs Movement: There has been an adverse movement of £0.207m since P8 due to under-recovery of rental income of £0.176m and additional property costs of £0.031m. 7,408 177 2% Property Costs: Overspend of £0.104m due to Non Domestic Rates costs relating to the following properties: Moorpark Primary which is scheduled for demolition, and Annickbank Innovation Campus which now has a lease agreed. The NDR liability for Annickbank relates to the period it is unoccupied. There are also £0.035m of additional costs due to condition surveys for the commercial estate and higher service charges of £0.020m. (2,034) 476 (23%) Income: Under-recovery of income £0.476m largely related to rental property income linked to market pressures, the commercial property review is ongoing and we anticipate improvement in this position through recently agreed leases which will fully come into effect in 2026/27 along with anticipated future pipeline of income from the capital investment 653 Note 9 Internal Transport Movement: There has been a favourable movement of (£0.559m) since P8, this is mainly due to a reduction in projected overspend in Repairs and Maintenance of £0.040m, further projected underspend in Fuel of £0.054m, a favourable movement in projected costs for External Hires of £0.102m due to works being allocated to capital, a projected underspend in Pupil Transport of £0.306m mainly due to a change in projection from SPT and further projected over-recovery in Bus Transport Income of £0.062m and other minor movements 1,899 (198) (10%) Fuel: There is a projected underspend in fuel of £0.198m due to lower usage with a number of electric vehicles being operated within the fleet. 5,527 (306) (6%) Pupil Transport: There is a projected underspend of £0.205m in SPT due to changes in projections from SPT, which is mainly due to expired contracts with no renewal and savings on renewed contracts, linked to reduced levels of inflation, as well as a further £0.101m related primarily to operational efficiencies. 413 (43) (10%) External Hires: There is a projected underspend in Roads Plant Hire of £0.103m due to works being allocated to capital. This is partially offset by an overspend of £0.061m mainly within CAH due to replacement vehicles to cover extensive Vehicle Off Road time due to age of the current fleet and not having suitable zero emission alternatives readily available. 1,305 225 17% Repairs & Maintenance: There is a projected overspend of £0.225m due to additional repairs being outsourced as a result of difficulties recruiting Motor Mechanics (now resolved) during the first two quarters of the year along with maximising the life of assets due to the availability of suitable replacements. Automotive parts and third party labour cost continues to increase. (3,161) (142) 4% Income: There is a projected over-recovery of £0.084m in bus transport income and a projected over-recovery of £0.079m in hire of pool vehicle income which will support overspends in repairs and maintenance as end of life vehicles in pool are being retained for longer, offset with a previously reported under recovery in Enterprise Cars Income. 24 Other minor movements
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Appendix 4 COMMUNITIES AND HOUSING BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Objective Summary Annual Budget Projected Outturn Annual Variance Adverse or (Favourable) % Variance Note No £000 £000 £000 Directorate and Support 152 152 - 0% Housing and Public Protection Building Services (2,549) (2,549) - 0% 1 Planning Services 256 142 (114) (45%) 2 Protective Services 1,996 1,880 (116) (6%) 3 Other Housing 3,010 2,918 (92) (3%) 4 Total for Housing and Public Protection 2,713 2,391 (322) (12%) Connected Communities 12,666 12,818 152 1% 5 Net Total 15,531 15,361 (170) (1%) Transfer to Earmarked Reserves 230 - (230) Net Total 15,761 15,361 (400) Subjective Summary Annual Budget Projected Year End Outturn Annual Variance Adverse or (Favourable) % variance £000 £000 £000 Employee Costs 26,432 26,250 (182) (1%) Property Costs 3,090 3,333 243 8% Supplies and Services 6,988 6,991 3 0% Transport and Plant Costs 978 962 (16) (2%) Administration Costs 311 306 (5) (2%) Other Agencies & Bodies 11,832 11,867 35 0% Transfer Payments - - - 0% Other Expenditure 286 286 - 0% Capital Financing - - - Gross Expenditure 49,917 49,995 78 0% Income (34,386) (34,634) (248) 1% Net Expenditure 15,531 15,361 (170) (1%)
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Appendix 4a COMMUNITIES AND HOUSING BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Budget £000 Projected Variance £000 Variance as % of budget Section Note 1 Building Services Movement: There has been no movement since Period 8. 10,792 (78) (1%) Employees: a projected underspend in employee costs of £0.078m. This is due to vacancy management. 4,584 (185) (4%) Supplies & Services: a projected underspend in supplies and services of £0.185m. This is primarily as a result of an underspend in materials due to changes in the income profile detailed below. 884 72 8% Transport: a projected overspend of £0.072m in transport costs primarily due to scaffolding costs linked to increased number of factoring jobs received. 3,287 175 5% Third party payments: a projected overspend in third party payments of £0.175m. This is due to an overspend in payment to contractors of £0.253m as a result of a carry forward of storm damage works from the previous financial year. This is partially offset by an underspend of £0.078m in Agency costs. 17 Income: a projected under recovery in income of £0.017m. This is due to a reduction of £0.124m in voids works and £0.508m in Projects, mainly due to a reduction in demand for replacement bathrooms and wetrooms at void stage as well as a reduction in buybacks and the separation of communal windows from the window programme. There is also a reduction of £0.175m in Aids & Adaptations. This is partially offset by an increase in Responsive Repairs income of £0.248m as a result of an increase in storm damage works carried forward from last financial year partially offset by a reduction in other responsive repairs and a 5% productivity efficiency. There is also an increase of £0.422m in Planned repairs due to increased timber and damp works and an additional £0.123m in income mainly due to additional Estates Based Regeneration Programme fencing works. (1) Other minor movements - Note 2 Planning Services Movement: There has been a favourable movement of (£0.041m) since Period 8, this is mainly due to forecasted over recovery for additional planning fee applications. (684) (96) 14% Income: This is primarily due to the forecasted over recovery of £0.096m for additional planning fee application income. (18) Other minor movements (114) Note 3 Protective Services Movement: There has been a favourable movement of (£0.006m) since P8. 2,682 (86) (3%) Employee Costs: There is a projected underspend of £0.086m, this is primarily due to a delayed implemenatation in the Scheme of Delegation. - (30) Other minor movements (116) Note 4 Other Housing Movement: There has been a favourable movement of (£0.033m) since P8. This is mainly due to a reduction in forecasted employee costs partially offset by increased property costs. 3,732 (132) (4%) Employee Costs: There is a projected underspend of £0.132m due to vacancy management. 2,600 58 2% Property Costs: A projected overspend of £0.058m mainly due to additional maintenance costs to be addressed at the void stage in relation to homeless furnished units of £0.040m and property repair costs of £0.015m. - (18) Other minor movements (92) Note 5 Connected Communities Movement: There has been favourable movement of (£0.016m) since P8. 3,676 54 1% Employee Costs: There is a projected overspend of £0.110m related to the revised programming of implementation of the approved saving for the libraries 20% reduction efficiencies target with work ongoing as part of the Land and Property review. This is partially offset by a projected underspend of £0.056m due to vacancy management. 244 185 76% Property Costs: A projected overspend of £0.156m due to storm damage repairs at Eglinton Country Park. (1,847) (104) 6% Income: A projected over recovery of £0.104m mainly due to the forecasted over recovery of Harbour Arts Centre income of £0.044m and libraries income of £0.040m. 0 17 Other minor movements. 152
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Appendix 5 OTHER CORPORATE ITEMS BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Objective Summary Annual Budget Projected Outturn Annual Variance Adverse or (Favourable) % Variance Note No £000 £000 £000 Strathclyde Passenger Transport 2,262 2,254 (8) (0%) SPT Concessionary Fares 291 291 - 0% Ayrshire Joint Valuation Board 1,002 1,002 - 0% 3,555 3,547 (8) (0%) Other Corporate Costs Pension Costs 1,895 1,895 - 0% Central Telephones 350 350 - 0% Other Corporate Items (incl Transformation Costs, Bad Debt Provision, External Audit fees and other centrally held funding.) 12,479 11,416 (1,063) (9%) 1 Insurance Account 541 541 - 0% Housing Benefits 2,870 3,004 134 5% 2 21,690 20,753 (937) (4%) Transfer to/ (from) Earmarked Reserves 139 - (139) Net Total 21,829 20,753 (1,076) (5%)
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Appendix 5a OTHER CORPORATE ITEMS BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Budget £000 Projected Variance £000 Variance as % of budget Section Note 1 Other Corporate Items There has been an favourable movement of £0.056m since P8 primarily related to updated salary sacrifice cost. 12,479 (1,063) -9% The projected underspend is primarily related to centrally held inflationary cost provisions, which are being applied to offset pressures reported across other services (£0.235m), additional income from employee benefit schemes (£0.278m)and additional income to support the administration of Housing Benefit and Discretionary Housing Payments (£0.194m). (1,063) Note 2 Housing Benefit There has been an adverse movement of £0.053m from Period 8 due to updated Housing Benefit Subsidy data 2,870 134 5% Projected overspend of £0.134m due to Housing Benefit Overpayment Recovery Projections 134
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Appendix 6 MISCELLANEOUS ITEMS BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Objective Summary Annual Budget Projected Outturn Annual Variance Adverse or (Favourable) % variance Note No £000 £000 £000 Financing Charges 13,726 13,726 - - Contribution to Loans Fund Reserve 9,860 9,860 - - Scottish Government Funding (393,573) (393,597) (24) 0% Council Tax (72,009) (72,606) (597) 1% 1 Use of Earmarked Funds (5,995) (5,995) - - Net Total (447,991) (448,612) (621) 0% The projected over recovery reflects growth in the Council Tax base from additional new builds and properties previously registered as self catering holiday units for NDR purposes. Note 1 Council Tax There has been a favourable movement of £0.109m since P8 due to updated Council tax projections.
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Appendix 7 HOUSING REVENUE ACCOUNT BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Annual Budget Projected Outturn Annual Variance Adverse or (Favourable) % Variance Note No £ £ £ Employee Costs 5,222 5,224 2 0% Property Costs Responsive Repairs 7,406 6,738 (668) (9%) Void Repairs 4,656 4,623 (33) (1%) Planned and Cyclical Maintenance 6,047 6,663 616 10% Aids and Adaptions 1,792 1,533 (259) (14%) Other property costs 5,826 6,328 502 9% Total for Property Costs 25,727 25,885 158 1% 1 Supplies & Services 2,145 2,139 (6) (0%) Transport Costs 16 16 - 0% Administration Costs 2,114 2,110 (4) (0%) Third Party Payments 3,832 3,893 61 2% Transfer Payments 177 177 - 0% Other Expenditure 550 550 - 0% Capital Financing Costs 25,549 23,177 (2,372) (9%) 2 Gross Expenditure 65,332 63,171 (2,161) (3%) Income Council House Rents (62,568) (62,568) - 0% Other Rents (541) (431) 110 (20%) Recharges (1,212) (1,429) (217) 18% 3 Other Income (1,011) (1,068) (57) 6% Total Income (65,332) (65,496) (164) 0% Net Expenditure - (2,325) (2,325)
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Appendix 7a HRA BUDGETARY CONTROL 2025/26 REPORT FOR THE TEN MONTHS TO 31 JANUARY 2026 Budget £000 Variance £000 Variance as % of budget Note 1 25,727 158 1% 158 Note 2 25,549 (2,372) -9% (2,372) Note 3 (65,332) (164) 0% (164) B/fwd from 2024/25 Transfer to / from Reserves Use of Earmarked sums Earmarking of in year surplus Funding of Capital Projects Projected Balance at 31/03/26 £m £m £m £m £m £m 13.213 - - 2.325 (0.721) 14.817 5.000 - - - - 5.000 2.000 - - - - 2.000 1.758 - - - - 1.758 0.170 - - - - 0.170 22.141 - - 2.325 (0.721) 23.745 Council House Building Fund Sustainability Fund Transformation Programme Tenant led budget Unearmarked Section Property Costs Movement: there has been a favourable movement of £0.525m since period. This is due to favourable movements of £0.259m in Aids and Adaptations, £0.223m in Responsive Repairs and £0.221m in other property costs partially offset by adverse movements of £0.157m in Void Repairs and £0.021m in Planned and Cyclical Maintenance. A projected overspend of £0.158m in Property costs. This is primarily due to a projected overspend of £0.616m in Planned and Cyclical Maintenance mainly as a result of an overspend of £0.325m in storm damage works carried over from last financial year, as result of adverse weather conditions early in 2025, and £0.233m in Timber and damp works. There is also an overspend of £0.502m in other property costs, primarily due to overspends in relation to the maintenance of trees of £0.233m and Fire Safety works of £0.145m. This is partially offset by an underspend of £0.668m in Responsive Repairs and £0.259m in Aids and Adaptations. HRA reserves and balances Capital Financing Costs Movement: there has been a favourable movement of £0.172m since Period 8. A projected underspend of £2.373m in capital financing costs reflects continuing strategy to delay new external borrowing by utilising cash balances, resulting in savings on external interest costs, changes in the profile of the capital programme and projected investment income returns. Movement: There has been a favourable movement of £0.131m since Period 8. A projected over recovery in income of £0.164m primarily due to an over recovery of £0.217m in Recharges and £0.057m in other income partially offset by an under recovery of £0.110m in Other Rents. Income
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Appendix 8 Place Roads Network - Employee Costs T 0.069 Roads Network - Supplies & Services T 0.150 Roads Network - Third Party Payments T 1.263 Roads Network - Income T -1.482 0.000 Communities & Housing Community Development UKSPF Project - Employee Costs T 0.159 Community Development UKSPF Project - Supplies and Services T 0.021 Community Development UKSPF Project - Income T -0.180 Community Justice - Employee Costs T 0.119 Community Justice - Supplies and Services T 0.001 Community Justice - Administration Costs T 0.002 Community Justice - Third Party Payments T 0.110 Community Justice - Income T -0.232 0.000 Budget Management - 31 January 2026 Virement/Budget Adjustment Requests 2025/26 Perm (P) / Temp(T) Virement £m Directorate Total £m
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Integration Joint Board 13th March 2026 Subject: 2025-26 – Month 10 Financial Performance Purpose: To provide an overview of the IJB’s financial performance as at Month 10 (January). Recommendation: It is recommended that the IJB: (a) notes the overall integrated financial performance report for the financial year 2025-26 and the current overall projected year- end overspend of £2.802m reducing to £2.251m after assumed funding for the reduced working week; (b) notes the progress with delivery of agreed savings; (c) approves the budget reduction in para 2.10; and (d) notes the remaining financial risks for 2025-26. Direction Required to Council, Health Board or Both Direction to: - 1. No Direction Required X 2. North Ayrshire Council 3. NHS Ayrshire & Arran 4. North Ayrshire Council and NHS Ayrshire & Arran Glossary of Terms NHS AA NHS Ayrshire and Arran HSCP Health and Social Care Partnership MH Mental Health MDT Child & Adolescent Mental Health Services BRAG Blue, Red, Amber, Green UNPACS UNPACS, (UNPlanned Activities) – Extra Contractual Referrals NRAC NHS Resource Allocation Committee PAC Performance and Audit Committee MHOF Mental Health Outcome Framework MDT Multi-Disciplinary Team 1. EXECUTIVE SUMMARY 1.1 The report provides an overview of the financial position for the Partnership and outlines the projected year-end outturn position informed by the projected expenditure and income commitments; these have been prepared in conjunction with relevant budget holders and services. It should be noted that, although this report refers to the position at the end of January further work is undertaken following the Appendix 9
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month end to finalise projections, therefore the projected outturn position is as current and up to date as can practicably be reported. 1.2 The projected outturn is a year-end overspend of £2.802m (0.8%). This is a favourable movement of £1.677m from month 9. Financial balance will not be achieved in 2025-26, the projected outturn position is summarised below with the residual risk following already identified financial improvement actions: TOTAL Health/ NHS AA Social Care/NAC Projected Overspend @ mth10 2.802 0.861 1.941 Reduced Working Week (RWW) funding assumed (0.551) (0.551) - Residual Projected Overspend 2.251 0.310 1.941 The Integration Scheme describes the required approach where there is a projected overspend on the IJB integrated budget, which includes the requirement to agree a recovery plan to balance the overspending budget. Only if the recovery plan is unsuccessful will the Health Board and Council consider making available interim funds. At month 9 following approval by the IJB, the Chief Officer wrote formally to North Ayrshire Council and NHS Ayrshire and Arran to request additional in-year funding to support the remaining overspend. This was subject to pursuing further recovery actions. The amount requested at month 9 is shown below along with an updated month 10 position: Month 9 Month 10 Health / NHS A&A 1.111 0.310* Social Care / NAC 3.368 1.941 TOTAL 4.479 2.251 *assumes full funding of the RWW
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1.3 The movement in the projected outturn position for the 2025-26 financial year is illustrated in the graph below, this illustrates the movement in the gross and net projected overspend and the residual overspend or risk split between NHS and LA funding partners. This demonstrates significant progress in reducing the anticipated overspend since this was first projected at £5.187m in at Period 3 to the current projected outturn of £2.251m at Period 10. This has been achieved through tight financial management controls and the implementation of the actions in the financial recovery plan. As in previous years the impact of financial recovery actions is eroded by new demand and pressures, particularly in relation to social care and low volume high cost placements and areas where service occupancy is high and supplementary staffing costs are incurred. 1.4 From the core projections, overall, the main areas of pressure are: care at home, residential placements for children, physical disability care packages, supplementary staff in wards, staff costs in Montrose House and Unplanned Activities (UnPACs) within the lead partnership for mental health. The main areas of movement from Period 9 to Period 10 are: Favourable: • Care at Home • Physical Disability Care Packages • Lead Partnership for Mental Health • Care Experienced Children • Payroll turnover
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• Transition slippage • Savings inc contractual inflation Adverse: • Various smaller adverse variances 1.5 The projected IJB outturn position has been adjusted to reflect the impact of Lead Partnership services. The overspend in relation to North Lead Partnership services for Mental Health is not fully attributed to the North HSCP as a share has been allocated to East and South HSCPs, similarly the impact of the outturn on East and South led services has been shared with North, both on an NRAC basis in line with the agreed risk sharing mechanism. There is a requirement for the 3 IJBs to be aware of the position for Lead Partnership services and plans to deliver services from within allocated budge. Note that the information for East and South HSCPs is the previously reported month 9 information as they do not report at month 10. 1.6 Since the setting of the budget in March 2025 the 2025-26 financial position has been adversely impacted by the below factors out-with the control of the IJB. • National Care Home Contract (NCHC) – the increase to the NCHC rate to reflect the impact of the nursing pay award resulted in an additional unfunded cost of £0.175m. • NHS Board allocation for the Employers National Insurance increase confirmed at 60% of funding – full year impact £0.664m • The current allocation for the Agenda for Change costs in relation to the reduced working week are currently being queried with the NHS finance team to ensure we receive our ‘fair share’ of the funding. The current funding allocated is £0.659m, the cost of covering all reduced hours is £1.497m. A recent exercise collated from services on the actual impact and cost indicated that the cost of cover is £1.210m (84% of staff covered) which is £0.551m higher than the current allocation. A request has been submitted to NHS A&A to review the funding allocation on a recurring basis, NHS AA Director of Finance offered a compromise agreement to fund 50% of the shortfall, following the discussion at IJB the Chief Officer has communicated back that this is not acceptable. A response is awaited. • Pay settlements for both NHS and Local Government staff have been agreed for 2025-26. The NHS element has been funded, and the current assumption is that the shortfall between budget planning assumptions and actual settlements will be fully funded for Local Government staff. 2. CURRENT POSITION 2.1 The report includes an overview of the financial position including commitments against the available resource, explanations for the main budget variances and an update on progress in terms of savings delivery.
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2.2 FINANCIAL PERFORMANCE – AT MONTH 10 At month 10 against the full-year budget of £339.487m there is a projected year-end overspend of £2.802m (0.8%). The Integration Scheme outlines that there is an expectation that the IJB takes account of the totality of resources available to balance the budget in year. Following this approach, an integrated view of the financial position should be taken, however it is useful to note that this overall position consists of a projected overspend of £1.941m in social care services and a projected overspend of £0.861m in health services. Appendix A provides the financial overview of the Partnership position. The sections that follow outline the significant variances in service expenditure compared to the approved budgets. Appendix E provides information on the costs of bank and agency staff. 2.3 Health and Community Care Services Against the full-year budget of £99.611m there is a projected overspend of £1.978m (2%) which is a favourable movement of £0.979m and the main variances are: a) Care home placements – net projected overspend of £0.298m (£0.026m favourable). This includes an overspend on placements of £0.760m (£0.014m favourable) which includes a provision for an average of 5 interim beds and reflects the recent increase to the NCHC to reflect the impact of the nursing pay award resulted in an additional unfunded cost of £0.175m. The budgeted number of permanent placements was 765 and at month 10 there were 776 placements resulting in a projected overspend of £0.760m. The plan to manage down the number of permanent placements to reach the target is challenging due to the need to respond to referrals from hospital and to continue to support those in critical and substantial need in the community, this has led to a growing waiting list for access. The overspend is partially offset by income recovered from charging orders and gross funded placements which is projected to be £0.460m over recovered (£0.010m favourable). This income is challenging to predict as it depends on the length of the legal process and time taken to sell the property that the charging order is registered to and access to the funds or estate of service users. b) Care at home is projected to be £0.019m overspent (£1.124m favourable). The position reflects the cost of meeting the significant demand and level of provision for care at home support. The favourable movement is due to the action being taken to reduce the overall level of provision and reflects the contribution to specific SDS care packages from the Unscheduled Care funding received by
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NHS AA. The level of vacancies in the service has increased and whilst favourable it is coupled with increased levels of unmet need. c) Physical Disability Services – projected overspend of £0.230m (£0.096m favourable) split as follows: £0.963m over in residential placements, £0.416m under in direct payments due to increased clawbacks and £0.317m under in community care packages. d) Integrated Island Services is projected to overspend by £0.465m (£0.052m adverse). The most significant variance is a projected overspend at Montrose House of £0.358m which relates to the net overspend on agency staff (i.e. net of underspend on employee costs). There is also an under recovery of income and a write off of aged debt. In addition, outwith Montrose House there are overspends across property, continence and medical supplies, admin and transport. The Arran Patient Transfer contract is projected to overspend by £0.035m. e) Specialist Rehab wards – projected overspend of £0.206m (£0.011m adverse) (Redburn ward £0.191m overspend and Douglas Grant £0.015m overspend). The overspend is due to cover costs for vacancies as well as supplementary staffing for patients who require one to one support. f) Wards 1 and 2 – Projected overspend of £0.750m (£0.047m adverse). The overspend is due to increased use of supplementary staffing. All rehabilitation wards are operating at 100% occupancy supporting a high level of patient needs/complexity, which places pressure on staffing levels and the use of bank and agency staff to support additional patient observations. The projection for Health and Community Care services assumes that the allocation of unscheduled care funding will be fully utilised. 2.4 Mental Health Services Against the full-year budget of £118.613m there is a projected overspend of £1.374m (1.2%) which is a favourable movement of £0.346m prior to the re-allocation of the Lead Partnership variance to East and South HSCP. The main variances are: • Learning Disabilities are projected to overspend by £1.188m (£0.011m favourable). This covers for Children and Adults - residential placements, community packages, direct payments, property costs and an under recovery of charging income. • Community Mental Health services are projected to underspend by £0.113m (£0.002m favourable movement). The main reason for underspend in
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community packages is the availability and capacity of adult community providers to deliver new packages of care. • There is a projected underspend of £0.353m in relation to the cost of Hospital Based Complex Continuing Care (HBCCC), this reflects the impact of change in provision for these services. There were plans to reinvest this in the service, but these plans are on hold as holding the funding was agreed as part of the recovery plan at month 3. • The Lead Partnership for Mental Health is projected to be £0.641m overspent (£0.335m favourable) and the main variances are as follows: • Adult Inpatients – projected overspend by £1.473m (£0.044m adverse) due to very high levels of occupancy, patient mix and complexity and levels of continuous intervention which require additional supplementary staff and enhanced observations (1:1 and 2:1) and use of bank staff. • The UNPACS (Unplanned Activities) budget – projected overspend of £1.103m (£0.079m favourable) based on current placements. UnPACS placements are for individuals with very specific needs that require a higher level of security and/or care from a staff group with a particular skill set/competence. There are no local NHS secure facilities for women, people with a learning disability or people with neurodevelopmental disorder. This can necessitate an UNPACs placement with a specialist provider which can be out-of-area. The nature of mental health UNPACs spend is that it is almost exclusively on medium- or long-term complex secure residential placements which are very expensive so a small change in placements can have a high budgetary impact. Due to the complexity and risk involved, transitions between units or levels of security can take many months. Applications to approve a placement are made to the Associate Medical Director for Mental Health who needs to be satisfied that the placement is appropriate and unavoidable prior to this being agreed. Part of the additional control measures agreed in month 3 was to expand the high- cost care package review group to include all UNPACS placement requests, the projected position includes provision for any new placements approved. • Learning Disability Services – projected to overspend by £0.468m (£0.033m adverse). The overspend relates to the delay in achieving the saving from Ward 7A. Whilst the ward closed there are still legacy costs as the staff are still being redeployed and some patients remain within Woodland View.
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• Elderly Inpatients – projected overspend of £0.103m (£0.026m favourable) due to the use of supplementary staffing. The elderly mental health wards continue to operate at full occupancy with waiting lists, with several patients who are on enhanced observations and bank costs remain high. • Eating Disorders – projected to overspend by £0.137m (£0.002m adverse) due to the staffing level being higher than the funding allocation. This is being considered alongside the overall resource allocation. • Enhanced Mental Health Outcome Framework (EMHOF) – projected underspend of £0.624m (no movement). There was £0.624m of reserves held for EMHOF and the recovery plan approved the draw down of these reserves. • Psychiatry – is projected to overspend by £0.355m (£0.040m adverse) mainly due to junior doctor costs. A mitigation plan is being developed and the rota for junior doctors is being reviewed. A wholescale workforce review has been commissioned to determine longer term solutions for sustainability. • MH Pharmacy/Substitute Prescribing – is projected to underspend by £0.219m (£0.283m favourable). The favourable movement is due a further pharmacy rebate of £0.160m. Prior to this rebate there was an overspend due to increased demand and cost of medicines, and particularly the cost of Buvidal. This position is after investing £0.510m on a Pan Ayrshire basis (£0.170m per HSCP). • Action 15 – is projected to underspend of £0.412m (£0.037m favourable). There was £0.487m of reserves held for Action 15 and the recovery plan approved the draw down of these reserves which is the main reason for the underspend. The projected underspend is after considering the legacy costs from the 2024-25 review of funding. Innovation Fund – projected underspend of £0.021m (no movement) assuming that the posts to be redeployed as part of the EMHOF review are actioned. • The turnover target for vacancy savings for the Lead Partnership is held within the Lead Partnership as this is a Pan-Ayrshire target. There is a projected over recovery of the vacancy savings target of £1.412m (favourable movement of £0.065m) in 2025-26. Further information is included in the table below:
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Vacancy Savings Target (£1.160m) Projected to March 2026 £2.572m Over/(Under) Achievement £1.412m 2.5 Children and Justice Services Against the full-year budget of £42.320m there is a projected overspend of £1.413m (3.3%) which is a favourable movement of £0.214m and the main variances are: a) Care Experienced Children and Young People is projected to overspend by £1.996m (£0.150m favourable). Some of these costs are offset by the contribution from the Home Office for Unaccompanied Asylum-Seeking Children which is detailed below. The main areas within this are noted below: • The children’s residential placements are projected to overspend by £2.874m (£0.096m favourable) based 32 placements in month 10. There are several factors leading to this challenging position: o We have 32 places available in our internal children’s houses, due to demand these have been operating at 100% occupancy or over for some time, leading to increased use of external placements where residential care is required. o There remains an acute shortage of foster carers leading to residential care being necessary in emergency placement situations. o The requirement to support Unaccompanied Asylum-Seeking Children (UASC) under the National Transfer Scheme and to support trafficked young people who have been identified in North Ayrshire. o A number of young people in residential care have requested Continuing Care, whereby a young person can remain in their placement until age 21. o Where appropriate young people are placed to meet their educational needs, the cost of Residential School Placements in the most cases is shared 50/50 with Education services. o Contractual inflation has still to be agreed for 4 providers. If this is higher than the assumed contractual inflation and it is likely that this will increase the projected costs of residential places which is outwith the control of the service. o Children’s Services are continuing to work with other services including Education and Housing to address the challenges through the work of the ‘Brighter Pathways’ Programme and associated workstreams. Note that the costs associated with mobilising Boyle Street are being finalised and will be funded by an underspend in the Service Redesign Fund.
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• Looked After and Accommodated Children (fostering, adoption, kinship etc) is projected to be £0.820m (£0.031m adverse) underspent. • Residential respite – placements are overspent by £0.056m (no movement). These short-term placements are used to prevent an admission to full time care or to avoid placement breakdown. • Employee costs – are projected to overspend by £0.055m (£0.059m favourable), largely due to staffing levels in the children’s houses and the outcome of job evaluation for posts. • Care Leavers – projected underspend of £0.046m (no movement) in rent costs. • Section 29 Payments (Throughcare Team) are projected to overspend by £0.130m. b) Head of Service – is projected to underspend by £0.724m (£0.066m favourable). This consists of a projected overspend of £0.158m in relation to the previous staff reconfiguration saving in the children’s houses which was not achieved in 23-24 or 24-25 and this is offset by the grant funding in relation to Unaccompanied Asylum-Seeking Children (UASC), which is projected to amount to £0.779m £0.003m favourable) and which contributes to costs incurred across a number of C&F service areas. c) C&F Health Team – is projected to overspend by £0.127m (£0.010m favourable) mainly in relation to the Band 6 to 7 regrade for Health Visitors and the progression of posts up the Band 7 scale. Part of this recurring cost was incorporated into budget pressures for 2025-26. d) Lead Partnership – Children’s Services – projected underspend of £0.065m as monies carried forward from 2024-25 are being taken towards the overall underspend. In line with the Brighter Pathways Re-Modelling Care Options Plan which was approved by the IJB in November 2025, the budget for care experienced children and young people will be re-aligned moving into 2026-27 with progress monitored in line with the planned reduction and re-alignment of placements. 2.6 ALLIED HEALTH PROFESSIONALS (AHP) The non-employee costs element of the AHP services are projected to be on-line. All underspends in employee costs have contributed to payroll turnover.
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2.7 CHIEF SOCIAL WORK OFFICER This is projected to underspend by £0.109m (£0.036m favourable). The favourable movement is due to reduction in spend for young carers. 2.8 MANAGEMENT AND SUPPORT Management and Support Services are projected to underspend by £1.907m (£0.309m favourable which is primarily due to additional vacancy savings), the overall main areas of variance are: • There is projected slippage on the LD and MH transition funding of £0.631m (£0.098m favourable) due to delays in children transitioning into adult services. This involves complex planning by services with service users and families and can change over time based on assessed need when moving into adult services. • The 2024-25 budget included a budgeted deficit on the social care side of £0.437m which is offset by a budgeted surplus of £0.437m on the health side of the budget. • There is also a balance of overachieved savings of £0.181m (£0.044m favourable) and contractual inflation of £0.268m (£0.268m favourable). • NHS shortfall in savings of £0.124m (£0.106m favourable) which is not coded to specific areas and held centrally until recurring savings can be identified. • The funding for the Reduced Working Week (non-Lead Partnership element) is coded to Management and Support pending final confirming of the allocation. It is projected to underspend by £0.293m as the overspends in relation to these costs are shown on other lines outwith Management and Support. • An over-recovery of payroll turnover of £0.450m (£0.300m favourable) for social care services and an over-recovery of £0.469m (£0.187m favourable) for health services as outlined in the table below. The turnover targets and achievement for the financial year for Health and Social Care services outwith the Lead Partnership is noted below: Social Care Health Vacancy Savings Target (£3.400m) (£1.567m) Projected to be achieved by March 2026 £3.850m £2.036m Over/(Under) Achievement £0.450m £0.469m The areas contributing to the health and social care vacancy savings are spread across a wide range of services with vacancy savings being achieved in most areas. As part of the recovery plan, the vacancy scrutiny group has been enhanced with the Heads of Service and professional leads attending. Each post is scrutinised and
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filled only where deemed necessary with a recruitment freeze now implemented for all non-essential posts. For 2025-26 there will be a further recruitment delay with vacancy scrutiny approved vacancies being held for four weeks before they are advertised to create more payroll turnover. This will be for all vacancies except clinical or registered services vacancies or those which will incur cover costs. The turnover target for the North Lead Partnership for Mental Health services is detailed separately within the Lead Partnership information at section 2.4. 2.9 Savings Progress The approved 2025-26 budget included £4.019m of savings. BRAG Status Position at Budget Approval £m Position at Month 10 £m Red - 1.000 Amber 2.984 1.027 Green 1.035 - Blue - 1.992 TOTAL 4.019 4.019 Appendix B provides an overview of those service changes which do have financial savings attached to them and the BRAG status around the deliverability of each saving. Any shortfall in relation to the red and amber rated savings are already reflected in the projected outturn. 2.10 Budget Changes The Integration Scheme states that “either party may increase it’s in year payment to the Integration Joint Board. Neither party may reduce the payment in-year to the Integration Joint Board nor Services managed on a Lead Partnership basis…. without the express consent of the Integration Joint Board.” Appendix C highlights the movement in the budget position following the initial approved budget. Reductions Requiring Approval: Ref Description Amount (£000) 1 MAT Standards Funding Adjustment 6
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2.11 Pan Ayrshire Lead Partnership services and Large Hospital Set Aside Lead Partnerships: - There is a requirement for the 3 IJBs to be aware of the position for Lead Partnership services and plans to deliver services from within allocated budget. East and South HSCP do not report at month 10 so there is not updated pan Ayrshire report. Set Aside: - Work has been undertaken with partnerships to progress and develop set aside arrangements to fully implement the legislative requirement. This includes arrangements in relation to the use of Directions, Joint Commissioning Plans and overall progression towards fair share allocations of resources. Further work has been undertaken through the Ayrshire Finance Leads group to establish baseline resources for each partnership and how these compare to the NRAC “fair share” of resources. Ayrshire Finance Leads have now agreed a baseline methodology for set aside budgets which involves using the four full years prior to the pandemic, 2016/17 – 2019/20 inclusive. The HSCPs require to agree their final share of the baseline with each other, however the aggregate will remain unchanged. The table below shows the cost of the historic baseline at 2024/25 prices. The 2025/26 actual usage information is not known until later in the year. IJB Baseline at 2024/25 prices (£) East 31.870 North 39.966 South 34.488 Total 106.324 The annual budget for Acute Services is £496.7million. The directorate is overspent by £30.5 million after 10 months including legacy CRES. This was caused by overspends on medical and nursing staff, together non pay overspends on equipment and supplies. These are required due to the level of operational pressure experienced. Unfunded wards contributed an overspend of £5.7m after 10 months. Within the overall £30.5 million overspend Medicine are over by £12.2 million, Emergency Care by £9.9 million, Surgery by £3.8 million, Labs and Diagnostics by £3.4 million and Women and Children by £2.2 million.
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There is a material underlying deficit caused by: • Length of Stay (LoS) and emergency admission rates in NHS Ayrshire and Arran acute hospitals are above the Scottish average. • High expenditure on medical and nursing agency staff, high rates of absence and vacancies causing service pressure. • Delayed transfers of care and high acuity of patients. The IJBs and the Health Board work closely in partnership to maintain service and improve performance. 2.12 FINANCIAL RISKS There are a number of financial risk areas that impact or may impact on the financial position. • Current overspend areas, especially in low volume / high-cost services e.g. Children’s residential placements, UNPACs, and supplementary staffing across community, mental health and learning disability wards. • Growing demand for services. • Staff recruitment and retention challenges across a number of service areas. • The expectation that performance will continue to be maintained or improved despite the significant resource challenges. • Ongoing delivery costs of Scottish Government policy directives, particularly where these are not fully funded or inflation proofed. • Pay settlements for both NHS and Local Government staff have been agreed for 2025/26. The NHS element has been funded, and the current assumption is that the shortfall between budget planning assumptions and actual settlements will be fully funded for Local Government staff. • Unearmarked reserves are depleted, there is no scope to absorb in-year variances, with any overspends requiring additional funding from partners. • The ongoing review of the Integration Schemes, where there is a focus on financial arrangements and risk share. • The wider system financial challenges and impact across the whole system, for example the financial position of NHS AA and the decisions taken to reduce the Board’s deficit may have impacts on other parts of the health and care system. • Removal of brokerage for NHS Boards, NHS AA have been asked by Scottish Government to deliver further financial improvement beyond their Board approved financial plan and have now been escalated to Level 4 of the NHS Scotland Support and Intervention Framework. • The overall sustainability of commissioned care providers, with eNICs compounding historic challenges re financial sustainability, there is a heightened risk of provider failure leading to handing back of care and contracts. • The ongoing ability to source packages of care for service users.
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• Progress with the work to develop set aside arrangements and the risk sharing arrangements agreed as part of this. • The recurring underlying levels of overspend which may impact on the Partnership’s ability to continue to sustain service levels in the future. • The use of supplementary staffing for enhanced observations across a number of service areas and the use of high-cost agency staff to support frontline service delivery in areas where there are recruitment challenges. • Agenda for Change Pay Reform programme – including Nursing Band 5-6 re- grade, protected learning time and reduction to the working week. • Scotland Excel inflationary increases for children’s services have been significantly higher than assumed. • There is a risk in relation to recovering recharge income in relation to the LD Assessment and Treatment patients from outwith Ayrshire. • Risk related to NHS Reform investment being allocated by Scottish. These risks will continue to be monitored. Audit Scotland’s recent audit of the IJB Annual Accounts concluded that North Ayrshire IJB has effective financial management and reporting arrangements in place. The audit also highlighted success in achieving approved recurring savings. This demonstrates that the current financial recovery situation is not a result of inadequate financial oversight, poor reporting, or an inability to deliver efficiencies. Instead, the ongoing challenge relates to rising levels of need within the North Ayrshire population and the wider, and national, issue of ensuring the long-term financial sustainability of health and social care services. It is essential that the IJB works with all partners to accelerate and resource service redesign and transformation, in order to provide sustainable care for the future. An Internal Audit review of IJB transformation submitted to the September 2025 Performance and Audit Committee gave an opinion of substantial assurance in relation to the governance of the Transformation Plan. The next planned IJB Audit will focus on Financial Sustainability. 2.13 RESERVES The IJB opening reserves position are summarised in the table below. General Fund Reserve Earmarked Reserves Total Unearmarked External Funding HSCP £m £m £m £m Balance – 1 April 2025 - 2.381 0.780 3.161 Anticipated Drawdown - (2.381) (0.780) (3.161) Balance – 31 March 2026 - - - -
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The £0.780m HSCP earmarked reserve relates to the Service Redesign and Change Fund which is fully committed in 2025-26. Further detail on the reserves is given in Appendix D. 2.14 Financial Recovery Plan Since the initial recovery plan was agreed in June 2025 there has been a £2.833m reduction in costs. Whilst the full benefit of this has not been realised in-year in the bottom-line outturn, it has supported the delivery of mitigating a further deterioration to the position introduced through other in-year unexpected financial pressures of £2.168m. This has resulted in a net achievement of £0.665m recovery action per below: Given the proximity to the financial year end there is no new recovery plan action being proposed and instead a focus on continuing to progress the previously agreed actions and enhanced governance, oversight and escalation of spend and approvals. It is anticipated that the management and recovery actions developed during 2024- 25 and 2025-26 will require to continue into 2026-27. PROPOSALS 3.1 Anticipated Outcomes Continuing to closely monitor the financial position will allow the IJB to take corrective action where required to deliver services in 2025-26 from within the available resource, thereby limiting the financial risk to the funding partners.
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The transformational change programme will have the greatest impact on the financial sustainability of the partnership, the IJB require to have a clear understanding of progress with the delivery of the transformation plan. 3.3 Measuring Impact The final outturn will be reported to the IJB. 4. IMPLICATIONS 4.1 Financial The outturn is an overall year-end overspend of £2.802m (0.8%) . The report outlines the main variances for individual services. The IJB unearmarked reserve balance is zero. This current position poses a financial risk to North Ayrshire Council and NHS Ayrshire and Arran. 4.2 Human Resources The report highlights vacancy or turnover savings achieved during the year. Services will review any staffing establishment plans and recruitment in line with normal practice when implementing service change and reviews as per agreement with the IJB. Tight vacancy scrutiny management arrangements are in place for the HSCP. 4.3 Legal None. 4.4 Equality/Socio-Economic None. 4.5 Risk Para 2.12 highlights the financial risks. The report falls in line with the agreed risk appetite statement which is a low-risk appetite in respect to adherence to standing financial instructions, financial controls and financial statutory duties and a high-risk appetite in relation to finance and value for money. The ‘financial viability of the HSCP’ risk is on our strategic risk register. 4.6 Community Wealth Building None. 4.7 Key Priorities The ability to deliver on our strategic priorities may be compromised due to the greater financial risk faced in 2025-26 and the increased focus required on financial rather than service improvement. This will be kept under close scrutiny throughout 2025-26. If we are unable to successfully develop a financial recovery plan to achieve financial balance, consideration may be given to revising the strategic commissioning plan.
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5. CONSULTATION 5.1 This report has been produced in consultation with relevant budget holders and the Partnership Senior Management Team. 5.2 The IJB financial monitoring report is shared with the NHS Ayrshire and Arran Director of Finance and North Ayrshire Council’s Head of Finance after the report has been finalised for the IJB. Caroline Cameron, Director Author – Eleanor Currie, Chief Finance Officer [eleanorcurrie@north-ayrshire.gov.uk]
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PUBLIC INFORMATION 2025-26 Budget Monitoring Report–Objective Summary as at 31st January 2026 Appendix A Budget Outturn Projected Over/ (Under) Spend Variance Budget Outturn Projected Over/ (Under) Spend Variance Budget Outturn Projected Over/ (Under) Spend Variance £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 COMMUNITY CARE AND HEALTH 78,717 79,578 861 20,894 22,011 1,117 99,611 101,589 1,978 2,957 (979) : Locality Services 32,539 33,267 728 5,789 5,789 0 38,328 39,056 728 747 (19) : Community Care Service Delivery 41,957 41,730 (227) 0 41,957 41,730 (227) 803 (1,030) : Rehabilitation and Reablement 2,093 2,102 9 0 2,093 2,102 9 51 (42) : Long Term Conditions 904 952 48 10,628 11,584 956 11,532 12,536 1,004 944 60 : Community Link Workers 339 338 (1) 0 0 0 339 338 (1) (1) 0 : Integrated Island Services 885 1,189 304 4,477 4,638 161 5,362 5,827 465 413 52 MENTAL HEALTH SERVICES 41,157 42,242 1,085 77,456 77,745 289 118,613 119,987 1,374 1,720 (346) : Learning Disabilities 32,078 33,266 1,188 727 727 0 32,805 33,993 1,188 1,199 (11) : Community Mental Health 7,069 6,956 (113) 1,801 1,801 0 8,870 8,757 (113) (111) (2) : Addictions 2,010 2,020 10 1,879 1,880 1 3,889 3,900 11 9 2 : HBCCC 0 0 0 353 0 (353) 353 0 (353) (353) 0 : Lead Partnership Mental Health NHS Area Wide 0 0 0 72,696 73,337 641 72,696 73,337 641 976 (335) CHILDREN & JUSTICE SERVICES 36,425 37,801 1,376 5,895 5,932 37 42,320 43,733 1,413 1,627 (214) : Irvine, Kilwinning and Three Towns 3,249 3,292 43 0 0 0 3,249 3,292 43 46 (3) : Garnock Valley, North Coast and Arran 3,598 3,690 92 0 0 0 3,598 3,690 92 83 9 :Intervention Services 1,841 1,839 (2) 0 0 0 1,841 1,839 (2) 0 (2) : Care Experienced Children & Young people 22,791 24,787 1,996 0 0 0 22,791 24,787 1,996 2,146 (150) : Head of Service - Children & Families 1,413 689 (724) 0 0 0 1,413 689 (724) (658) (66) : Justice Services 3,101 3,101 0 0 0 0 3,101 3,101 0 0 0 : C&F Health Team 432 403 (29) 5,015 5,117 102 5,447 5,520 73 82 (9) : Lead Partnership NHS Children's Services 0 0 0 880 815 (65) 880 815 (65) (72) 7 CHIEF SOCIAL WORK OFFICER 1,959 1,851 (108) 0 0 0 1,959 1,851 (108) (73) (35) PRIMARY CARE 0 0 0 53,262 53,259 (3) 53,262 53,259 (3) (3) 0 ALLIED HEALTH PROFESSIONALS 0 11,489 11,489 0 11,489 11,489 0 0 0 MANAGEMENT AND SUPPORT COSTS 8,195 6,922 (1,273) 4,038 3,404 (634) 12,233 10,326 (1,907) (1,598) (309) OUTTURN ON A MANAGED BASIS 166,453 168,394 1,941 173,034 173,840 806 339,487 342,234 2,747 4,630 (1,883) Return Hosted Over/Underspends to East 0 0 0 0 (210) (210) 0 (210) (210) (320) 110 Return Hosted Over/Underspends to South 0 0 0 0 (183) (183) 0 (183) (183) (279) 96 Receive Hosted Over/Underspends South 0 0 0 0 33 33 0 33 33 33 0 Receive Hosted Over/Underspends East 0 0 0 0 415 415 0 415 415 415 0 OUTTURN ON AN IJB BASIS 166,453 168,394 1,941 173,034 173,895 861 339,487 342,289 2,802 4,479 (1,677) Over/ (Under) Spend Variance at Period 9 Movement in variance from Period 9 TOTAL Partnership Budget - Objective Summary Council Health 2025/26 Budget
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2025-26 Savings Tracker Appendix B Social Care: Ref Description Deliverability Status at budget setting Deliverability Month 10 2025/26 Saving Previously Agreed Savings (Full year impact) 1 Review of Day Care provision Green Blue 0.100 2 Service redesign (CAAST Team and Corporate Parenting team) Green Blue 0.034 Adjustments 3 Payroll Turnover Green Blue 0.099 Mental Health 4 LD Responder Service Amber Amber 0.150 Children, Families & Criminal Justice 5 Brighter Pathways Amber Red 1.000 Community Care & Health 6 Review of Day Care provision Amber Blue 0.107 7 Care at Home Amber Blue 0.500 8 Care Package Review (all services) Amber Blue 0.200 9 Deletion of vacant posts Green Blue 0.056 10 Increase to charging Green Amber 0.186 11 Admin Post Savings Green Blue 0.114 12 Financial Inclusion Green Blue 0.357 TOTAL SOCIAL CARE SAVINGS 2.903 Cross Service
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Health: Ref Description Deliverability Status at budget Deliverability Month 10 2025/26 Saving Adjustments 13 Increase recharge to East Ayrshire for beds at Woodland View Green Blue 0.010 14 Payroll Turnover Green Blue 0.079 Other Savings 15 Admin Savings Amber Blue 0.186 16 Trindlemoss House - move to social care model Amber Amber 0.250 17 EICT/Rehab Amber Blue 0.150 18 Community MH/Wellbeing Review Amber Amber 0.100 19 Ward 7A - Woodland View Amber Amber 0.341 TOTAL HEALTH SAVINGS 1.116 TOTAL NORTH HSCP SAVINGS 4.019
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2025-26 Budget Reconciliation Appendix C COUNCIL Period Permanent or Temporary £'m Initial Approved Budget 137.739 Adjustments to baseline 0.039 Revised Budget 137.778 Resource Transfer 25/26 1-3 25.026 Additional Funding - 24/25 Adult Social Care RLW 1-3 P 0.073 Additional Funding RLW 1-3 P 0.126 Additional Funding - Money Smart 1-3 P 0.094 ICT Transfers 1-3 P (0.005) Additional Funding - Whole Family Wellbeing Funds 1-3 T 0.179 CJSW - S27 1-3 P 3.280 Development of People working in Childrens SW 1-3 P (0.390) Change Fund Allocation - HSCP FIO Team 7 T 0.021 Internal Commerical Waste 7 P 0.009 ICT Transfers 9 P (0.004) CSC Pay Uplift 10 0.163 SRA Kinship 10 0.058 Change Fund Allocation - HSCP FIO Team 10 0.047 ICT Transfers 10 (0.004) Roundings 10 0.002 166.453 HEALTH Period Permanent or Temporary £'m Initial Budget exc set aside 161.934 Month 10-12 Adjustments and adjusting for the full year impact of part years amounts and temporary funding. 8.532 Revised Budget 170.466 Resource Transfer 24/25 24.640 Resource Transfer 25/26 (25.026) NORTH NATIONAL INS 25-26 AMBUS 1 0.997 PRESCRIBING 25-26 AMBUSH 1 2.754 PRESCRIBING CRES 25-26 AMBUSH 1 (0.715) Training Grade Adj - April 1 (0.058) Training Grade Rates Adj - April 1 0.030 MH: Anticipate PDS Dementia (North) 25/26 1 0.094 MH: Anticipate Delivery of Veteran Specific 25/26 1 0.105 Anticipated RWW from SG 1 0.659 Anticipate 20% Tranche 2 ADP 1 0.174 Social Care Budget Reported at Month 10
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HEALTH Period Permanent or Temporary £'m Training Grade Adj - May 2 (0.013) Bwp 25-26 East Chest Heart Stroke 2 0.001 Bwp 25-26 East Nest Expansion 2 0.023 Bwp 25-26 East - Sds Advice Service 2 0.013 Bwp 25-26 East Sub Prescribing 2 0.170 25-26 South Budget Paper - North Substitute Prescribing 2 0.170 25-26 South Budget Paper - Pan Ayrshire Chest Heart And Stroke 2 0.001 25-26 North Budget Paper - Pan Ayrshire (vision Support Service 2 (0.005) 25-26 North Budget Paper - Pan Ayrshire (communitystore) 2 (0.155) HD52: EARLY INTERVENTION PSYCHOSIS 3 0.100 25-26 Pay Award Increase North 3 1.179 Training Grade Adjustment (Dean Funding) 4 0.011 Medical Pay Award - Senior Medical - Additional 1% 4 0.086 Medical Pay Award - Specialty Doctors - Additional 1% 4 0.006 Virement to Medical Directorate from Mental Health Admin 4 (0.028) Transfer MAT Standards Psychiatrist 0.2 WTE 4 0.029 Primary Care Prescribing Tariff Reduction 4 (0.556) BBV transfer from Public Health 4 0.269 Training Grade Adjustment (Dean Funding) - August 5 0.129 Budget transferred to Capital for INV-3395435821 5 (0.006) Transfer from South - ANP contribution 5 0.030 Primary Care Prescribing Budgets reworked 5 0.130 HD157 3% pay award ADP North 5 0.057 North MDT funding to Arran Medical Group (Virement 11) 5 (0.043) Training Grade Adjustment (Dean Funding) - September 6 0.018 Transfer Methadone LES to East GMS 7 (0.008) Post to Medical records 7 (0.037) GP Prescribing budget adjustment 7 (1.094) ADP MAT Standards Allocation 7 (0.045) ADP ABI to East 7 (0.010) Drug Death Co-ordinator funding returned to PH (retiral - post funding returned) (0.040) BBV funding returned to PH (reduction in hours) 8 (0.008) Training Grade Adjustment (Dean Funding) - December 8 (0.071) Training Grade Rates Adjustment - December 9 0.086 Early Years funding 0.49 WTE Band 4 - MIN Alloca 9 0.020 GP Prescribing budget adjustment 9 (0.365) Training Grade Adjustment (Dean Funding) - January 10 0.019 Junior Doctors Pay Award - additional 0.25% 10 0.008 MAT Standards Adjustment 10 (0.006) ANTICIPATED BUDGETS INCL HERE (NOT IN LEDGER) 10 (1.150) Roundings (0.001) 173.034 TOTAL COMBINED BUDGET 339.487 Health Budget Reported at Month 10
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25-26 IJB Reserves Position Appendix D Area of Reserves Balance at 31 March 2025 Earmarked Funds £ : Alcohol & Drug Partnership 353 : Mental Health Action 15 135 : Primary Care Improvement Fund 46 : Service Redesign / Challenge Fund 780 : Family Wellbeing Fund 934 : Breastfeeding Network 36 : MH Recovery and Renewal /Enhanced MH Outcome Framework 365 : Early Intervention in Psychosis 92 : LD funding 82 : Donation (Police Scotland) 1 : Primary Care Improvement Fund IP 303 : GP Premises Improvements - tranches 1 and 2 3 : Dental Practice Improvement 29 : Appropriate Adult 2 Total Earmarked 3,161
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Bank and Agency Costs to Month 10 Appendix E 1) NHS 4863 (Registered) 4864 (Unregistered) 4853 (Registered) 4854 (Unregistered) 4865 (Agency Locum Consultant) TOTAL NORTH CORE SLT ADULT 3,098 3,098 WARD 1 WOODLANDS VIEW 47,525 235,032 282,557 WARD 2 WOODLANDS VIEW 25,567 346,633 372,200 ACH REDBURN REHAB WARD NRS 24,251 164,162 188,413 ACH DOUGLAS GRANT REHAB WD NRS 34,699 75,855 110,554 WARD 3 WOODLANDS VIEW NURSING 12,324 328,558 340,882 WARD 4 WOODLANDS VIEW NURSING 1,605 37,804 39,409 NEW CLONBEITH NURSING(JURA) 89,093 144,959 234,052 WVIEW THE GLEN ECT 5,197 11,959 17,156 WVIEW WARD 10 ACUTE MH NRS 5,576 238,505 244,081 WVIEW WARD 8 ACUTE MH NRS 23,316 760,489 783,805 WARD 5 WOODLANDS VIEW 4,033 47,347 51,380 WVIEW WARD 7B REHAB MH NRS 7,419 7,419 NEW DUNURE NURSING(CLONBEITH) 35,937 192,942 228,879 MH BED MANAGEMENT 21,726 21,726 TRINDLEMOSS 60,040 282,690 342,730 ARRAN HOSPITAL NURSING 69,006 41,701 110,707 CAMHS MANAGEMENT 1,944 1,944 CAMHS UNSCHEDULED CARE 1,903 1,903 EARLY YRS-C/F TEAM 1 923 923 EARLY YRS-C/F TEAM 3 974 974 IMMUNISATION NURSING 55,249 17,611 72,860 ARRAN HV 137 137 ARRAN DN 13,862 13,862 PACKAGE OF CARE (P) - AMG 109,773 109,773 PACKAGE OF CARE (P) - LMO 879 879 NC POC TEAM 2 990 990 NC POC TEAM 3 3,843 3,843 THREE TOWNS DN 1,187 1,187 FOXGROVE(NSAIS)ADVANCE RECRUIT 29,246 29,246 NORTH AHP MANAGEMENT TEAM 7,329 7,329 IRVINE DN 16,516 16,516 NORTH WEST COAST DN 31,318 31,318 GARNOCK VALLEY DN 53,541 53,541 LADY MARGARET NURSING 8,467 4,520 12,987 PREVENTION + SERVICES SPT TEAM 4,719 4,719 LD HEALTH CHECKS 12,238 12,238 NORTH CLDT 6,806 164 6,970 LDS MANAGEMENT 2,332 2,332 MHANPS MH UNSCHEDULED CARE 38,721 57 38,778 MHS INPATIENT MGT 15,845 520 16,365 CMHT NURSING-NORTH AYRSHIRE 9,362 5,890 15,252 WVIEW WARD 7C FORENSIC REHAB N 9,224 138,927 371 148,522 INTENSIVE COMMUNITY NURSING TEAM 44,893 3,978 48,871 ADULT MENTAL HEALTH LIASION TEAM 343 343 PCMHT NORTH 4,108 4,108 WVIEW WARD 6 LOW SECURE NRS 53,282 162,602 215,884 WARRIX AVE 110,637 83,409 194,046 ICFN - COMMUNITY PHLEBOTOMY 12,456 12,456 FORENSIC PSYCHOLOGY 3,248 3,248 CHILD HEALTH ADMIN 25,610 1,797 27,407 WVIEW WARD 7A LD A+T NRS 23,436 425,962 1,804 14,532 465,734 WVIEW WARD 9 ACUTE MH NRS 45,418 384,223 226 429,867 WVIEW WARD 11 ACUTE MH NRS 299,680 299,680 ADULT EAST 1,131 1,131 OLD AGE 60,253 60,253 1,063,557 4,605,590 2,401 14,532 61,384 5,686,080 2) SOCIAL CARE Mth 10 Spend 327,922 158,510 15,000 89,483 590,915 Mh Acm Agency Montrose House Brodick Unscheduled Care Funding Ld Acm Bank