Agenda item

The Section 151 Officer presented the report and a presentation to the Committee on the financial position of the Council following Quarter 2 2025/26’s budget monitoring exercise for the General Fund (GF), the Housing Revenue Account (HRA), Capital Programme and Treasury Management (TM) activity.

 

The services managed by Dragonfly Management (Bolsover) Ltd. (DML) were detailed in the report and continued to be funded in line with service level agreements.  Charges to Dragonfly Development Ltd. for the support services provided by the Council (incl. Legal, Payroll, HR, Finance, and Audit) were made.

 

As noted in the previous item, the Revised Budgets 2025/26 process was now complete.

 

The GF Revenue Account summary was attached at Appendix 1.  The revision showed that the Net Cost of Services had increased to £19.955m (£4.346m above original budget figures).

 

Considerable Section 106 expenditure budgets had also been added. 

 

Appendix 2 detailed the net cost of each cost centre by Directorate.

 

The original budget showed a balanced budget (neither a surplus nor deficit).  The current budget position before changes from the Revised Budgets 2025/26 process were included was a surplus of £0.126m.  This included the 2025/26 Council Tax increase of £0.142m.

 

Table 1 of the report showed the latest position of all years in the current MTFP:

 

	2025/26 Original Budget £’000	2025/26 Current Budget £’000	2025/26 Revised Budget £’000
Net Cost of Services	15,609	20,342	19,955
Net debt charges + investment interest	(1,635)	(1,635)	(1,787)
Net t/f to/(from) reserves + balances	1,209	(3,508)	(2,509)
Net t/f to/(from) NNDR Growth Protection Reserve	(49)	2,646	2,750
Parish precept	4,583	5,196	5,196
Funding from council tax, business rates and government grants	(19,717)	(23,167)	(23,605)
Use of GF balance	0	(126)	0

 

Table 2 of the report showed the main variances between the current and revised budget positions (£0.126m surplus and zero deficit or surplus).  Explanations of each of the variances were detailed in the report.

 

The Council had not been successful in obtaining flood insurance cover at Pleasley Vale Business Park.  The Council had established the Pleasley Vale Insurance Reserve with a value of £1m from 1^st October 2024 (using £0.825m from Transformation Reserve schemes which did not go ahead, and £0.175m from General Reserve schemes on the same basis) to self-insure the site.

 

Members had been kept informed on the position of the reserve via Quarter 1 and Quarter 2 Budget Monitoring Reports 2025/26.  It was hoped work on flood mitigation practices would enable the Council to obtain flood insurance at the renewal (September 2025).  However, insurance companies were still unwilling to insure Pleasley Vale Business Park when approached.

 

The reserve would be reviewed as part of the MTFP and brought before Members January 2026.

 

The Committee was informed the bracketed numbers in the report and presentation highlighted additional reserves / income.

 

The transfer details of the: General Reserve; Legal Costs Reserve; Building, Repair and Renewal Reserve; and NNDR Growth Protection Reserve were highlighted during the presentation.

 

To a question on Pleasley Vale Business Park, the Strategic Director of Services informed the Council’s current priority was to make safe and maintain the site through the flood mitigation works and the design and manufacture of support structure/s for Mill 1 (the latter the Council was awaiting financial figures for).

 

The Council had to focus on the most pressing matters first in the short-term before it could consider the long-term future of Pleasley Vale Business Park.

 

It was agreed the topic of Pleasley Vale Business Park could be questioned further at the closed stakeholder meeting of the Pleasley Vale Business Park Working Group 9^th December 2025.

 

The Section 151 Officer informed the Building, Repair and Renewal Reserve could be used if Pleasley Vale Business Park required small, ongoing maintenance, but the Council would have to borrow to finance large scale capital works.

 

The HRA revision for 2025/26 was attached at Appendix 3.  Details of the net cost of each cost centre within the HRA was attached at Appendix 4.

 

Expenditure showed a net decrease against current budgets of £0.015m.

 

There was a reduction in expenditure on Repairs and Maintenance of £0.053m (due to the recharge of DML’s cost being less).

 

Some variances appeared on other parts of the service where staff salaries had been moved between sections (as staff roles changed).

 

The increase on the Corporate Management Expenses was correcting an omission from the original budget, where the pension adjustment to pay for DML was missed.

 

Dwelling rents had reduced by £0.140m (mainly due to the removal of the Briar Close, Blackwell properties).  The revision had been set with an estimate for voids of 2.56% for the remainder of 2025/26 (based on the actual figure for 32 weeks).

 

Income from non-dwelling rents was also reduced as the budget for garage rents had been reduced by £0.038m.  However, income for the Repairs and Maintenance part of the service had increased by £0.101m (largely due to an increase in the Travis Perkins profit share and extra anticipated income from the Right-to-Buy administration allowance).

 

The reduction in debt charges and investment interest had meant the Council was able to transfer £0.598m into the HRA Development Reserve (in readiness for future expenditure requirement).

 

The current budget for 2025/26 showed a balanced budget with neither a surplus nor deficit – the Council had ensured that the Revised Budget 2025/26 showed this would still be the case.

 

The Capital Programme was attached at Appendix 5.  It had been updated from the original budgets to reflect approvals within 2025/26 and the profiling of the individual schemes following approved changes made by Members and from detailed discussions with budget officers.

 

As part of the revision process, the Council had estimated the likely level of spend in the current financial year, moving schemes to future years where they were not going to be spent during 2025/26.  The proposed estimated outturn for 2025/26 was therefore a budget of £34.394m.

 

The changes shown in the revised Capital Programme meant that the financing was adjusted accordingly to meet the anticipated spend.  There were no issues to report with regard to the financing of the 2025/26 Capital Programme.  The MTFP would show where schemes had been moved to future years when it was reported in January 2026.

 

The reserves and balances of the: GF balance; HRA balance; Transformation Reserve (uncommitted amount); NNDR Growth Protection Reserve; and HRA Development Reserve were highlighted during the presentation.

 

The Section 151 Officer noted the Council’s financial position was strong in the short-term, with a close eye required for the long-term.

 

The Fair funding Review 2.0 would affect 68 local authorities (which would need to manage larger losses than initially realised – the Council was one of them).

 

It was noted by a Member that Local Government Reorganisation would likely negate the need to find the future shortfall.  However, the Section 151 Officer informed the Council had to continue as normal until the future unitary authority was created.

 

It was agreed the Growth Team would be contacted to provide information on current projects and their impact from Local Government Reorganisation.

 

The Section 151 Officer informed the Minimum Revenue Provision (MRP) was revenue set aside to ensure the Council could afford to repay the borrowing it had undertaken to finance the capital programme – it was called the capital finance requirement.

 

It was noted the majority of the Council’s debt, the HRA, was due to the purchase of its housing stock for £94m, which it had to pay to the Government to buy out of the national housing subsidy system in 2012/13, along with the other housing authorities in England.

 

It was asked if the current debt information of the other local authorities that would form a future North Derbyshire unitary authority (with the Council) could be made available – this information might provide a useful steer to the Council when it considered investment in sites / projects like Pleasley Vale Business Park. The Section 151 Officer, said it was difficult to make such a comparison, because not all authorities still had their housing stock, and their debt positions would vary depending on their assets.

 

The Portfolio Holder for Resources thanked the Section 151 Officer for the report and presentation and noted the Council had to follow the Government’s prudential code when it came to its finances – it could only borrow what it could afford to repay.

 

The HRA had been a substantial financial outlay, but the Council was moving appropriately in the right direction.  A Member agreed, it was important to save for the future.  The Section 151 Officer was also thanked for the clear reports and updates the Committee received.

 

The Chair noted that the Council’s fiscal responsibility when compared with other local authorities was a testament to the Council.

 

Moved by Councillor Duncan Mcgregor and seconded by Councillor Steve Fritchley

RESOVLED that Finance and Corporate Overview Scrutiny Committee note the report and make any comments that they believe to be appropriate to be given verbally at the Executive meeting on the 1^st of December.