The Corporate Policy Development and Scrutiny Panel met on Tuesday 21 July 2026 to review the council's financial outturn for the 2025/26 financial year and its budget monitoring for the first quarter of 2026/27. The panel also discussed the Annual Performance Report and the council's work plan.

Revenue & Capital Outturn 2025/26

The council finished the 2025/26 financial year with an adverse revenue variance of £2.631 million. This figure includes a one-off pressure of £840,000 relating to irrecoverable invoices from the previous financial year. Excluding this, the underlying variance was £1.791 million, representing an overspend of just over 1% of the net budget. The capital programme underspent by £19.440 million, with the majority of this amount being re-phased into future years.

The main drivers for the revenue overspend were:

• Children's Services: An overspend of £10.182 million, primarily due to residential placements. A late surge of eight additional placements at the end of the 2024/25 financial year created a recurring £2.7 million pressure, compounded by further placements and extensions to meet safeguarding needs.
• Heritage Services: An adverse variance of £2.454 million, attributed to an aggressive income target that was not met by visitor numbers.
• Commercial Estate and Regeneration: Pressures of £0.511 million and £0.665 million respectively, linked to void floor space and delays in letting properties.

These pressures were offset by positive variances in other areas, including Adult Services (£1.077 million favourable) and Capital Financing and Treasury Management (£0.550 million favourable). The overall adverse variance of £2.631 million was funded from earmarked reserves: £1.176 million from the Commercial Income Risk Reserve and £1.455 million from the Revenue Budget Contingency Reserve.

The capital programme underspent by £19.440 million, with £19.279 million of this amount requested for carry forward into 2026/27 to cover re-phased project costs.

Revenue & Capital Budget Monitoring Quarter 1 (2026/27)

The first quarter monitoring report indicated a forecast adverse revenue variance of £5.320 million, before the release of corporate contingency and utilisation of the Commercial Income Risk Reserve. This figure is based on a risk-based assessment and is considered a worst-case scenario at this early stage of the financial year.

The primary areas of risk identified are:

• Children's Services: A significant risk exposure of £6.825 million, largely driven by continuing pressures in residential placements, market costs, and placement sufficiency.
• Commercial Estate: A risk range of £1.1 million to £1.65 million, primarily due to void floor space at Bath Quays South and other commercial properties.
• Corporate Estate: A risk range of £0.5 million to £1 million, linked to void property costs and the delivery of savings targets.
• Home to School Transport: A risk range of £0.4 million to £0.8 million due to increased demand and provider inflation.

Mitigation measures are being developed by all directorates, with recovery plans to be presented in the Quarter 2 monitoring report. Positive variances were forecast in Capital Financing and Treasury Management (£1.225 million favourable).

Annual Performance Report (2025/26)

Councillor Mark Elliott, Cabinet Member for Resources, introduced the Annual Performance Report, acknowledging its limitations due to the corporate strategy being at the end of its cycle and the need for refreshed indicators. He highlighted several key achievements:

• Cultural Life: Bath's cultural offering was ranked seventh in the UK and in the top 1% of attractions worldwide. The Jane Austen Festival celebrated its 250th anniversary, and the Roman Baths were included in TripAdvisor's Best of the Best 2025.
• Waste Services: Every resident now has weekly food waste recycling.
• Regeneration: £4 million was spent on the Midsomer Norton Town Centre regeneration, including the Market Square, Town Hall, and Travel Hub.
• Housing: Bath Western Riverside is progressing, with hundreds of new homes planned, including affordable housing.
• Education: A 120-place Special Educational Needs and Disabilities (SEND) special free school was secured at Culverhay, which is expected to improve outcomes for children with SEND and reduce out-of-area placements.
• Community Investment: The £20 million Pride in Place programme in Twerton-Whiteway was highlighted as a community-led investment initiative.
• Climate Resilience: The council is embedding climate resilience into service planning and has started the Connecting Catchments Project.

Councillor Jess David praised the work on climate resilience and the rollout of School Streets schemes. Councillor Duncan Hounsell raised concerns about an increase in road collisions and the lack of detail in the report regarding causes. Councillor Colin Blackburn questioned the accuracy of figures presented for Midsomer Norton regeneration and the Being Our Best programme.

Panel Workplan

The panel discussed future agenda items, with suggestions including an update on Aequus, a review of the commercial estate, a detailed report on the Being Our Best programme (including HR and financial elements), and a focused session on transformation initiatives within Children's Services. There was also a request for greater financial oversight and consistency in reporting across different scrutiny panels.