Subject:
Targeted Budget
Management (TBM) 2026/27 Month 6
(September)
Date of
meeting: Thursday, 12
November 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:
No
Reason(s)
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 for noting an indication of
forecast risks as at Month 6 on the council’s revenue and
capital budgets 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
£26.446m.
2.2
Cabinet notes the additional risks of £13.836m 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 £0.683m.
2.5
Cabinet notes the progress of transformation programmes shown in
Appendix 4 and the delivery of savings as detailed at 3.11 and 3.12
of the report.
2.6
Cabinet notes the aged debt position shown at Appendix 3.
3
Overview
3.1
The forecast outturn position at month 6 for the current financial
year 2026/27 is an overspend of £26.446m with an additional
table of risks (Appendix 2) totalling £13.836m.
3.2
The forecast has deteriorated by £2.611m between month 5 and
6.
3.3
The most significant movement has been within the Adult Social Care
service. This is driven by a combination of factors. Notably, there
was an expectation of an increase in provider fee uplifts
(£1.300m) which was previously highlighted as a risk and now
has been incorporated into the main forecast. Additionally, there
has been an increase in demand in terms of new client placements
(£0.707m).
3.4
The council has been awarded £6.4 million of transformation
grant by the Ministry of Housing, Communities and Local Government
(MHCLG) to fund transformation which addresses increasing adult
social care demands, homelessness and reduces pressure on temporary
accommodation. This will be used as transformation funding over the
next two years to improve prevention.
3.5
For the 2026/27 central Dedicated Schools Grant (DSG) there is
currently a forecast in-year overspend of £6.672m. The
estimated overspend of £6.672m will be an addition to the
final overspend position on the central DSG from 2025/26. At the
end of 2025/26 there was a net deficit on the central DSG of
£1.762m, meaning the cumulative overspend forecast totals
£8.434m. The council received notification in October that 90%
of the 2025/26 deficit would be offset by the high needs stability
grant allocation. This means the adjusted cumulative deficit after
allowing for the high needs stability grant allocation of
£1.586m reduces to £6.848m. The position is summarised
below:
|
Central DSG
Deficit end of 2025/26
|
£1.762m
|
|
In-year Central
DSG Deficit 2026/27
|
£6.672m
|
|
Cumulative DSG
Deficit
|
£8.434m
|
|
Indicative High
Needs Stability Grant
|
(£1.586m)
|
|
Revised
Cumulative DSG Deficit
|
£6.848m
|
3.6
The below graph shows the trajectory of the forecast compared to
previous years. Not only has this year’s forecast position
started higher than previous years, but has continued to rise
through the first part of the year, which is inverse to the
trajectory of previous years.
3.7
It’s important to note that in previous years, very similar
cost pressures existed but were offset by underspends in other
areas and by the application of centrally held one off funding
where available. The 2026/27 budget factored in a
proportion of these underspends in order to balance, meaning that
they are no longer available in the current year to counter the
underlying pressures. The council has been managing its finances
closely and continues to do so but like so many councils, the
continuing increases in demand and the rising levels of complexity,
and therefore cost, are overwhelming the savings being made. In
addition, elements outside of the council’s control (such as
rising fuel costs and inflation) have materially increased the cost
of service delivery. The council continues to pursue its
transformation agenda as the means of delivering true and long
lasting cost reduction and financial sustainability for the
future.
3.8
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.
3.9
Appendix 1 also shows the expected variances on the Housing Revenue
Account (HRA) and the DSG which, while outside the reported revenue
position of the General Fund are still the responsibility of the
Council to manage. These are showing overspends of £0.683m and
£6.848m 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, and has confirmed, subject to a final audit, that that
90% of the 2025/26 deficit would be offset by the high needs
stability grant allocation. At this stage, it is not clear whether
a similar arrangement will apply for central DSG deficits arising
in 2026/27 and 2027/28, however government has advised support will
continue and that this would follow ‘an appropriate and
proportionate approach’ but that this would not be
unlimited.
Savings &
Transformation Delivery
3.10 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 the Corporate Leadership
Team (CLT). An update on the current position of the projects is
shown at Appendix 4.
3.11 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. The
performance below shows the RAG rating for savings delivery –
paragraph 3.13 outlines what each RAG colour represents.
3.12 Savings in
service budgets, not linked to transformation projects, are also
delivering well with 78% either already delivered or strongly
expected to be.
3.13 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.
Treasury, Debt
and Capital
3.14 The report may
also include a Treasury Management update from time to time. This
is required to comply with the updated Treasury Management Code
which requires a minimum of quarterly reporting. Cabinet already
receives mid-year and end-of-year reviews and therefore at least
two additional interim reports will be provided via an appropriate
TBM report to ensure compliance with reporting requirements. A
Treasury Management update is not included in this report and will
be included at TBM Month 7 (October).
Collection
Funds
3.15 The Council Tax
Collection Fund is forecast to be in deficit by £4.500m at
year end, of which the Council's share is £3.802m. This
comprises a £1.172m brought-forward deficit and adverse
in-year variances relating to collection performance
(£1.159m), Council Tax Reduction (£0.858m), taxbase
adjustments (£1.267m) and backdated prior-year changes
(£2.034m), partly offset by increased Empty Property and
Second Homes Premium income and lower student exemptions. The
forecast remains uncertain due to operational backlogs and delays
in VOA updates, which may affect collection and the timing of
account adjustments. Further work is underway to assess these
impacts and refine the forecast.
3.16 The Business
Rates Collection Fund is forecast to be £2.178m in deficit, of
which the Council’s share is £1.067m, entirely relating
to the 2025/26 brought-forward deficit and expected to affect
funding in 2027/28 through the NNDR1 calculation. For 2026/27, the
forecast assumes 100% safety-net protection and no benefit from
business rates growth, pending clarity over the reformed retention
system. The forecast therefore remains provisional, particularly
given uncertainty around the 2026 reset, new baselines,
tariff/top-up arrangements and safety-net mechanism.
3.17 The in-year
collection rates for 2026/27 as at period 6 are 50.56% for Council
Tax, which is 0.88% below target, and 53.5% for Business Rates
which is 6.98% below target.
4
Analysis and consideration of alternative options
4.1
The forecast outturn on General Fund budgets
is an overspend of £26.446m with additional risks of
£13.836m. This exceeds the Council’s available reserves
and likely ability to mitigate and therefore will require
additional Exceptional Financial Support (EFS). A request to
MHCLG has been made for additional EFS to cover this and positive
conversations continue.
4.2
As the recommendations within this report are for noting, no
alternative options have been given consideration.
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.
6.2
The financial position of the council remains challenging and while
mitigations and further savings are constantly being developed and
implemented, as evidenced by the tables above, external demand
continues to overwhelm them. Going forward, the council is taking a
transformational approach to the closure of the budget gap but the
change required is and will continue to be, significant. The
authority’s reserves are insufficient to offset the overspend
and further EFS is required, whilst acknowledging that this in
itself is a short term solution and the repayment of it brings
additional cost in the coming years. It provides single year
mitigation for ongoing budget pressures, meaning that unless
additional funding and savings are found that exceed the current
overspend, the budget gap will not close, and, given inflationary
pressures and demand increases, continue to expand.
Finance
Officer consulted: Elizabeth Griffiths
Date: 28/10/2026
7.1
This report is to note and there are therefore no direct legal
implications arising from the report.
7.2
The Council is under a 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.
7.3
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 to note the risks and progress of transformation
programmes will assist in the discharge of that
obligation through ensuring oversight is maintained by Cabinet of
the budget position.
Lawyer
consulted: Elizabeth
Culbert
Date: 30/10/26
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 more significant risk is that if the Council’s request
for further EFS is not approved, the Council’s Chief
Financial Officer would be forced to issue a S114 report on the
grounds that expected expenditure in the current financial year
cannot be met by expected available resources.
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
TBM Month 6 is a significant projected overspend driven by
underlying pressures in service spending carried forward from
2025/26 and continuing into 2026/27 and increases in costs in the
current year. Savings have been evaluated based on current
expectations of delivery, which has increased the forecast
overspend but gives a more realistic and accurate expectation of
the authority’s year end position.
12.2 The reported
financial position has required the Council to approach MHCLG to
request more Exceptional Financial Support for 2026/27. This has
formally been requested as a sum of up to £30m. It should be
noted that this is additional borrowing, not additional
funding.
12.3 The MTFS
has been reforecast and includes any overspend or gap in savings
delivery from the current year that will continue into coming years
due to the nature of the expenditure. This will be published
with the draft budget in December and gives the authority a
realistic position from which to take action, increasing its focus
on transformation to work to close the budget gap.
Supporting
Documentation
Appendices
1.
Forecast
Dashboards by Service
2.
Additional risks
not included in the forecast
3.
Aged
Debt
4.
Update on the progress of Transformation programmes and key
risks
