The report of the Interim S151 Officer is attached.

Contact: Duncan Whitfield (01743) 254928

The Committee received the report of the Section 151 Officer’s which provided an update on the External Assurance Review linked to the Council’s application for Exceptional Financial Support for the 2026/27 financial year. It was explained that approval of the support had been subject to an independent appraisal commissioned by the Department for Levelling Up, Housing and Communities and undertaken by CIPFA, which had been completed earlier in the year and subsequently published following ministerial consideration.  The Section 151 Officer summarised that the findings of the review were highly critical, reflecting the scale of the Council’s financial challenges, including a significant adverse budget variation of approximately fifty million pounds in the 2025/26 financial year and the cancellation of major capital schemes, including the North West Relief Road.

Members were advised that the findings of the external review were consistent with previously identified financial pressures and the Council’s wider improvement programme, and therefore did not contain unexpected conclusions. It was further explained that the Council was required to respond formally to the review by the end of the month, and that draft management responses had been prepared for submission. It was also noted that these responses would subsequently be incorporated into a refreshed and consolidated improvement plan due to be presented later in the year, in order to ensure a single coherent framework for monitoring progress.

A detailed discussion followed regarding the Council’s financial position and the credibility of its recovery planning. Concern was raised regarding the statement within the report indicating that it was unlikely the Council would be able to bridge the entire financial gap through currently viable plans at this stage. The Committee challenged whether it was appropriate to continue seeking Exceptional Financial Support without a clearly articulated and deliverable plan to achieve financial sustainability, noting that all councils face uncertainty but are still required to set balanced budgets and medium-term financial strategies.

In response, the Section 151 Officer stated that the Council’s financial position was extremely challenging due to the scale of the budget gap, the high proportion of statutory services, particularly in social care, and the inherent unpredictability of demand-led services. It was emphasised that external factors such as demographic pressures, inflation, and borrowing costs could not be reliably forecast. The Officer stated that it was not considered responsible to present figures that could not be delivered, and that discussions with government were therefore focused on explaining the level of uncertainty and the constraints faced, rather than committing to precise numerical solutions that would not be achievable.

The Chief Executive supported this position, stating that the Council must avoid undermining its credibility by presenting unrealistic savings assumptions, referencing previous years where savings had been planned but not achieved. It was noted that loss of credibility could increase the risk of direct intervention or the appointment of commissioners. It was also stated that other local authorities were facing similar pressures, with some experiencing even more severe financial distress, and that the Council’s approach needed to be realistic and grounded in deliverability.

Further discussion took place on the allocation of Exceptional Financial Support nationally. It was queried why a number of other councils had received additional financial support following similar reviews, while the Council had not been included in that allocation. It was clarified by the Section 151 Officer that the Council’s position differed because it had already requested a significant element of transformation funding within its own Exceptional Financial Support application. It was explained that some other authorities had not included equivalent requests within their submissions, which influenced the distribution of additional support. Reference was also made to the fact that some authorities previously in similar support arrangements had subsequently re-entered such frameworks due to ongoing financial difficulties.

Members further discussed the Council’s medium-term financial planning position. The Section 151 Officer explained that the Medium-Term Financial Plan had recently been refreshed, reducing the projected gap from approximately £120m to around £90m, and that a further update was planned. It was noted that the intention was to establish a more realistic base budget position, which would improve the Council’s ability to identify achievable efficiencies and savings over time.

The Committee also considered the relationship between the Exceptional Financial Support process, the external assurance findings, and the Council’s wider governance and improvement arrangements. It was acknowledged that the external review, the Improvement Plan, and the Council’s financial recovery activity were closely interlinked and would be brought together into a single consolidated framework to support ongoing monitoring and accountability.

RESOLVED:

to note the report and recommendations contained therein and to support the overall direction of travel whilst continuing to seek stronger evidence of delivery and progress tracking.