Subject:
Targeted Budget Management (TBM) 2026/27
Month 4 (July)
Date of meeting:
Thursday, 17 September 2026
Report
of:
Cabinet Member for Finance & City
Regeneration
Contact Officer: Elizabeth
Griffiths, Director of Finance & Property
Haley Woollard, Deputy Chief Financial Officer
Email: elizabeth.griffiths@brighton-hove,gov.uk
haley.woollard@brighton-hove.gov.uk
Ward(s) affected: (All Wards)
Key Decision:
Yes
Reason(s) Key:
Expenditure which is, or the making of savings which are,
significant having regard to the expenditure of the City
Council’s budget, namely above £1,000,000 and is
significant in terms of its effects on communities living or
working in an area comprising two or more electoral divisions
(wards).
For general release
1.1
The Targeted Budget Monitoring
(TBM) report is a key component of the council’s overall
performance monitoring and control framework. This report sets out
an indication of forecast risks as at Month 4 on the
council’s revenue budget for the financial year
2026/27. Effective financial management is a core component of
providing a well-run council, a key priority within the Council
Plan that demonstrates that the council manages within its finite
resources and optimises the use of those resources.
2
Recommendations
2.1
Cabinet notes the forecast risk position for the General Fund,
which indicates a potential forecast overspend risk of
£20.852m
2.2
Cabinet notes the additional risks of £16.949m included in
the table at Appendix 2 which are not included in the forecast
figure above.
2.3
Cabinet notes the forecast overspend risk for the separate Housing
Revenue Account (HRA), which is an overspend of £0.991m.
2.5
Cabinet notes the current RAG rating of the transformation
workstreams at Appendix 3.
2.6
Cabinet approves the addition of new projects to the capital
programme totalling £0.671m as set out in the Part 2
report.
3
Overview
3.1
The forecast outturn position at month 4 for the
current financial year 2026/27 is an overspend of £20.852m
with an additional table of risks totalling £16.949m
3.2
Month 3 monitoring was undertaken
as part of the monitoring cycle and used by directorates and
corporate leadership, but not reported publicly, therefore the
comparison in the movement of the variances reported above relate
to month 3. For reference, the position at month 3 is shown
below:
3.3
The forecast has deteriorated slightly but remains relatively
stable. The key movement is that some of the risks previously
reported in City Ops have crystallised and become part of the
forecast meaning that the projected overspend has increased and the
risks reported on the risk table have reduced.
3.4
Forecast income in City Ops is higher than in 2026/27 but lower
than the budgeted expectation. With the summer season
bringing a significant increase in parking income, if the
projection has not improved in the next few weeks, it may not
recover before year end.
3.5
In FCW, overspends have been mitigated by a significantly improved
position in the schools PFI contract. This had been
anticipated to be a continuing pressure but has stabilised and
continues to level off, which bodes well for the remainder of the
contract term through 2027/28.
3.6
There is a concern however that in previous years, the number of
residential placements reaches a notable peak over the summer
months. This combined with the potential for a large increase
in the cost of home to school transport when schools return in
September means that there is anticipated risk in the forecast that
cannot be quantified but, if realised, the financial implications
will be felt in the coming quarter. There are currently some
residential placements that cost around £20k per week which
means that a very small change in numbers either way can change the
overall forecast significantly.
3.7
In HASC, additional rough sleepers grant in year will help support
some areas of high financial pressure while providing broader and
more wholistic solutions for mental health, drug and alcohol
related issues.
3.8
The overspend on the HRA is improving. There was a
recognition that when using properties for temporary accommodation,
readying the property takes longer. While tenants moving into
properties requiring minor repairs or decoration can be given an
allowance to carry out the works, for TA use, the works are done
ahead of the move. This leads to longer void periods and
reduced rental income. The service has invested in new
framework contractors and additional staff to turn the properties
around faster. This means that people can be housed sooner
and we avoid long periods with no rental income.
3.9
All services continue to report
good progress on their transformation programmes which are having a
positive effect on their position but are currently unable to keep
pace with the rise in numbers and costs. The transformation
programmes are overseen by the Innovation and Savings Delivery
Board which reports into CLT. An update on the current
position of the projects is shown at Appendix 3. Workstreams
have two RAG ratings. One for project delivery and one for
savings delivery. This is because it is entirely possible to
have a well managed project which is delivering according to plan
(and therefore RAG’d green) but because demand or other
factors are overtaking the outcomes, the anticipated savings are
not being realised. It should be noted that even when the
anticipated savings are reduced, a successful project provides
significant cost mitigation against a position which would have
been worse.
3.10 
Savings in service budgets, not
linked to transformation projects are also delivering well with 67%
either already delivered or strongly expected to be.
3.11 Savings are
RAG’d as follows:
·
Grey
– the actions required have not yet been planned.
·
Red
– the actions are understood but unlikely to happen or have
an effect.
·
Amber
– the actions are underway but the outcome is still
uncertain.
·
Green
– there is a strong expectation of a successful
outcome.
·
Blue
– the saving has already been delivered.
3.12 Detailed reports
on all areas are included in Appendix 1 which shows forecasts,
explanations for notable variances, current and planned
mitigations, savings delivery and supporting data for each service
area.
3.13 Appendix 1 also
shows the expected variances on the Housing Revenue Account (HRA)
and the Dedicated Schools Grant (DSG) which, while outside the
reported revenue position of the Council are still the
responsibility of the Council to manage. These are showing
overspends of £0.991m and £8.925m respectively with the
large overspend in the DSG being driven by increased demand in the
High Needs Block. The Department for Education continues to
scrutinise closely the past expenditure on the DSG, as it is doing
with all Councils currently in preparation for the partial write
off of overspends. This is seen as a low risk as previous
BHCC expenditure has been compliant and the overspends relatively
low compared to other councils, but since the overall value of DSG
expenditure is so high, this is acknowledged as a potential
threat.
CIPFA review /
Financial controls
3.14 BHCC has
undergone a review by CIPFA on behalf of MHCLG which scrutinised
our financial resilience and our organisational response to the
budgetary pressures that we’re facing.
3.15 A list of
recommendations was received which are either in the course of
being implemented or have already been implemented. These
will be updated to CIPFA when they return at the end of September
for a follow up visit. All of the areas highlighted were
areas that the organisation was already aware of and had started to
address. One of the points raised was the volume of the
financial reports which they felt could have been more focused to
highlight the key concerns to users. This has been addressed
in the new format with information being updated in a timely
manner, on a more frequent basis, and the key concerns being
summarised succinctly for the user.
3.16 In response to
the forecast overspend, Directorates have been keeping strong
oversight of recruitment with all vacancies being approved at DLT
level by directors / corporate directors. CLT ultimately
oversees all expenditure and savings and receives monthly reports
from Finance in conjunction with the Innovation and Savings
Delivery board on the forecast, the performance against savings and
the delivery of transformation programme workstreams.
New Capital
Expenditure
3.17 Additional
capital funding is being requested for investment in a new system
as detailed in the part two report.
3.18 A full update on
the capital programme will be included in TBM5.
4
Analysis and consideration of
alternative options
4.1
The forecast outturn
on General Fund budgets is an overspend of £20.852m with
additional risks of £16.949m. This exceeds the
Council’s available reserves and likely ability to mitigate
and therefore will require additional EFS.
5
Community engagement and
consultation
5.1
No specific consultation has
been undertaken in relation to this report.
6
Financial
implications
6.1
The financial implications are
covered in the main body of the report and appendices. Financial
performance is kept under review on a monthly basis by the
Corporate Leadership Team and Cabinet and the management and
treatment of strategic financial risks is considered by the Audit,
Standards & General Purposes Committee.
Finance Officer consulted: Elizabeth Griffiths
Date: 31/08/2026
7.1
Decisions taken in relation to
the budget must enable the council to observe its legal duty to
achieve best value by securing continuous improvement in the way in
which its functions are exercised, having regard to a combination
of economy, efficiency and effectiveness. The council must also
comply with its general fiduciary duties to its Council Tax payers
by acting with financial prudence, and bear in mind the reserve
powers of the Secretary of State under the Local Government Act
1999 to limit Council Tax & precepts.
7.2
The Council has a legal
obligation to set a balanced budget on an annual basis as
prescribed in the Local Government and Finance Act 1992 and
associated Regulations. The recommendations contained in this
report will assist in the discharge of that
obligation.
Lawyer consulted: Elizabeth
Culbert
Date: 09/09/2026
8.1
The risk in the forecast
figures has been outlined in Appendix 2 which contains estimates of
further risk from all services that have not yet been included in
the forecast figures because of their level of
uncertainty.
8.2
The larger risk is that if our
request for further EFS is not approved, the Council’s Chief
Financial Officer would be forced to file a S114 report on the
grounds that expected expenditure in the current financial year
cannot be met by expected income.
9
Equalities
implications
9.1
There are no direct equalities
implications arising from this report.
11
Health and Wellbeing
Implications:
11.1
The council’s budget
includes many statutory and preventative services aimed at
supporting vulnerable children and adults. The budget prioritises
support to these core and critical services including management of
any emerging in-year pressures to minimise impacts on statutory
provision.
12.1 The position at
TBM4 is a significant projected overspend driven by underlying
pressures in service spending carried forward from 2025/26 and
continuing into 2026/27 and additional spend above budget agreed
earlier in the year. Savings have been evaluated based on
current expectations of delivery which has increased the forecast
but will continue to be pressed not only to increase the chances of
success but to continuously find alternative savings to mitigate
the position.
12.2 The forecast
position has required the Council to approach MHCLG to request more
Exceptional Financial Support for 2026/27, expected to be a sum of
up to £30m. It should be noted that this is additional
borrowing, not additional funding.
Supporting Documentation
Appendices
1.
Forecast Dashboards by Service
2.
Additional risks not included in the forecast
3.
Update on the progress of Transformation programmes and key
risks
