Further Detail

The Head of Finance provides the routine finance report which outlines the year to date and forecast position for the revenue, capital, and reform budgets.

Appendix A provides the detailed quarter two (Q2) finance report and Appendix B provides budget revisions for approval.

Quarter 2 summary

Revenue

The Q2 net expenditure forecast is in line with budget and funding.

The Q2 forecast position presents a number of challenges, particularly when viewed in the context of the emerging cost pressures. Key risk areas include overtime, ill-health pension costs, liability claims, and a potential inflation guarantee payment that may be triggered as part of pay award agreements.

It is critical that spend is tightly controlled over the remainder of the financial year to ensure a balanced position in line with funding.

The forecast will be closely monitored alongside the financial threats and opportunities detailed on page 19 (Appendix A), with appropriate action to be taken if required.

Funding discussions are ongoing with regards to Op Roll (POTUS visit) and Op Oclate (VPOTUS visit) totalling £24.1m. Confirmation of funding is not expected until the Spring Budget Review is completed in the early part of 2026, and as such costs are reported separately to the BAU financials in Appendix A.

The year-to-date actual position at period 6 is £4.5m over Q1 forecast and £0.7m under budget.

Capital

The capital forecast at Q2 is £73.1m, £2.1m above the budget position of £71.0m. The forecast overspend is fully funded by additional capital receipts and other grants.

Capital delivery plans and forecasts have been updated by business areas to accurately reflect current timelines and spend profiles at Q2 forecast.

The Q2 capital forecast requires £5.9m of slippage to be achieved throughout the remaining part of the financial year.

Committed and uncommitted spend will continue to be monitored throughout the year and tracking of these is highlighted in Appendix A.

Finance are engaging regularly with business areas to support delivery of their capital plans.

The year-to-date capital spend at period 6 is over Q1 forecast by £4.8m and over budget by £0.9m.

Reform
The reform forecast at Q2 of £20.8m, £0.4m (fully funded) above the budget position of £20.4m.

The reform forecast has removed £15.9m of the £16.2m overprogramming included as part of the approved budget, leaving only £0.3m of slippage still to be achieved across the remainder of the year.

Committed and uncommitted spend will continue to be monitored throughout the year and tracking of these is highlighted in Appendix A.

The year-to-date reform spend at P6 is under Q1 FC by £0.4m and under budget by £0.2m.