The Budget and Performance Panel of Lancaster City Council met on 17 September 2025 at Lancaster Town Hall to discuss the council's financial and project performance. The agenda included updates on strategic risk management, review of the capital programme, and a discussion of the panel's work programme. The panel was also scheduled to consider the provisional revenue, capital and treasury management outturn for 2024/25.

Projects and Performance: Q1 2025-26

The Budget and Performance Panel were scheduled to receive an update on strategic projects and corporate performance during the first quarter of 2025/26. The report of the Chief Executive included updates in Appendix A - 2025-26 Q1 Performance Report and Appendix B - 2025-26 Q1 Projects Report.

The report noted a change in how the 'number of properties improved' figure was recorded, due to a government pilot to record more detailed datasets for housing standards. It also noted that while still relatively high, the 'occupancy rates for commercial properties' figure had decreased because the NHS vacated Moor Lane Mills 1 & 2 in mid-June 2025. The report stated that the estates team were actively marketing the property to mitigate any void period and resulting rental loss, and early indications suggested good demand for the accommodation.

The report also provided updates on corporate programmes and projects, including:

• Heritage Action Project: A project review report was expected to follow.
• Canal Quarter Phase 3: Officers were scheduled to continue developing options for temporary surface parking, permanent additional parking, and long-term parking solutions to mitigate concerns around potential loss of car parking sites on Canal Quarter in line with the recently approved Lancaster City Centre Parking Strategy.
• Our Future Coast: Monitoring of installations was ongoing, with plans to install more items in the coming months.
• Fair Work Charter: A report was expected to follow.
• 1 Lodge Street Urgent Structural Repairs: Work had slowed on site while the M&E Design had been advanced.
• Centenary House: Development of a tender brief to secure a housing developer partner was underway.
• Frontierland: The Competitive Dialogue Procurement was progressing, but there had been some slippage in the programme, pushing timescales back.
• Heysham Gateway: A Pre-Planning Application had been submitted and meetings had been held with city council planning officers.
• Canal Quarter - Coopers Field: The project was on hold.
• Eden Project Morecambe: The project had completed a re-baselining of costs, design and programme which had demonstrated that the project was still deliverable for the funding available and was able to achieve the outputs and outcomes required.
• Lune Flood Protection, Caton Road: The project had been brought to a close pending discussions with a developer.
• Williamson Park (Café and Play Development): An OBR working group had commenced and reviewed business cases for the project.
• Burrow Beck Solar Farm: A contractor had been appointed and pre-commencement planning conditions were being completed.
• Public Sector Decarbonisation Scheme Phase 3c: Energisation of the site was expected in November 2025.
• Salt Ayre Data Centre: The project had been approved by cabinet and development pool funding released.
• Roof Mounted Solar Array – Gateway, White Lund: A contractor had been appointed to undertake the Burrow Beck and roof mounted solar project at Gateway.
• My Mainway: Finalisation of business plan development for Skerton School and the wider Mainway regeneration was continuing.
• Outcomes Based Resourcing (OBR) / Fit for the Future (FFTF): The majority of the phase 1 projects were still progressing and set to deliver the intended benefits.
• UK Shared Prosperity Fund (UKSPF): The project was in full delivery phase.
• High-Capacity Fibre Cable Network Provision: A project review report was expected to follow.
• White Lund Depot: Phase 1 had been completed and Phase 2 was expected to be completed by the end of Q2.

Strategic Risk Management

The Budget and Performance Panel were scheduled to receive an update on the authority's progress in updating the Strategic Risk Register. The report noted that the impact vs likelihood matrix had been changed from a 4x4 to a 5x5, bringing the council into line with best practice and allowing greater differentiation of risk severity.

The report also noted that all strategic risks would be reviewed quarterly, with the exception of those which are red rated, which would be reviewed monthly.

The report included a summary of the main changes to the council's Strategic Risk Register made during the reporting period 13 May to 17 July 2025. These included:

• Risk reviews had been run against all 25 Strategic Risks.
• The risk name and description for risk SR02 had been updated to reflect planning for the next financial year.
• Control measure details had been updated or added for risks SR03, SR07, SR16, SR20, SR24 and SR29.
• Action plan descriptions had been updated or added for risks SR04, SR06, SR08, SR09, SR14, SR24 and SR28.
• Action plan due dates had been updated for risks SR04, SR05, SR06, SR08, SR09 SR14, SR20, SR24 and SR28.
• Under the new risk matrix and scoring, all of the council's Strategic Risks were within the risk appetite.
• Risk SR26 which related to increasing costs of temporary accommodation for the homeless had been closed as a strategic risk, following significant progress in reduction of B&B costs.

The report included a Strategic Risk Register Update Report and an Appendix A - Strategic Risk Report v2 - Unrestricted.

The register included details of the risk, the risk owner, a description of the risk, the risk category, existing control measures, target risk level, action plan, action plan owners and due dates.

Provisional Revenue, Capital and Treasury Management Outturn 2024/25

The Budget and Performance Panel were scheduled to consider the provisional outturn for 2024/25, including treasury management. The report of the Chief Finance Officer provided summary information regarding the provisional outturn for 2024/25, including treasury management, and set out information regarding the carry forward of capital slippage.

According to the report, all local authorities have a legal duty to produce an annual Statement of Accounts, and the draft Accounts must be published on the Council's website and submitted for audit by 30 June 2025. The draft Statement of Accounts were completed and signed off on that date by the Chief Finance Officer.

The Cabinet Provisional Outturn Report 24-25 included the following recommendations for Councillor Hamilton Cox:

• That the provisional outturn for 2024/25 be endorsed, including the transfers to and from Reserves and Balances actioned by the Chief Finance Officer as set out in 5.1 and Appendix 5 of the Outturn 24-25 Appendix Pack.
• That Cabinet approve the treatment of year end overspends and endorse the do-nothing approach in-light of the current situation.
• That Cabinet note and endorse the ongoing projects funded by reserves set out at Appendices 5a and 6.
• That the requests for capital slippage and the adjustments to reflect accelerated capital spending on projects as set out at Appendices 7 and 8 be endorsed, with the Capital Programme being updated accordingly.
• That the Annual Treasury Management report and Prudential Indicators as set out at Appendix 2 be noted and referred on to Budget & Performance Panel and Council for information.

The General Fund accounts for income and expenditure associated with the day to day running of all the services that the Council provides, except for Council Housing. On 28 February 2024 Council approved a General Fund Revenue Budget for 2024/25 of £25.008M. At the end of the financial year, the General Fund was underspent by £1.246M, and this amount has been transferred to the General Fund unallocated reserve.

In 2024/25 the Council retained its comparatively low risk appetite towards investments. The average daily amount invested reduced to £26.82M with short term investments on 31 March 2025 totalling £14.60M. The overall return on investments was £1.336M at an average interest rate of 4.98%. The Council undertook no short-term borrowing in 2024/25. Total long-term debt at 31 March 2025 amounted to £55.89M all of which relates to PWLB borrowing.

At the end of the financial year, the Council owned 3,602 homes generating rental income of c.£16.7M. The net overspend on the HRA was £0.694M resulting in a net deficit for 2024/25 of £0.598M, which has been transferred from the HRA unallocated reserve. As at 31 March 2025, the HRA's unallocated reserve balance stood at £0.152M, £0.598M below the minimum recommended level for 2024/25 of £0.750M.

During 2024/25, the General Fund called on the use of its general unallocated reserve to support various projects/initiatives which are outside the budget framework. Taking all this into account has resulted in the amount in the unallocated reserve as at 31 March 2025 being £10.028M. The overall level of General Fund Reserves has increased to £29.435M.

In 2024/25 the Council spent £15.220M in total on capital schemes. Total spend on the General Fund was £8.828M against a budget estimate of £17.337M, with the HRA spending being £6.392M against a budget estimate of £8.345M.

Delivering Our Priorities: Q1 2025/26

The Budget and Performance Panel were scheduled to receive a report from the Chief Executive & s151 Officer providing an update on financial performance during the first quarter of 2025/26.

The Delivering Our Priorities Report Q1 25-26 included the following recommendation for Councillor Hamilton-Cox:

• That Cabinet consider the update on financial performance for Quarter 1 2025/26.

The report stated that the 2025/26 Budget and Medium-Term Financial Strategy (MTFS) 2025-2030 approved by Council in February 2025 set a balanced budget for the year based on the assumptions made at that time.

The report included the following appendices:

• DoP Appendix Pack Q1 25-26
• General Fund Service Analysis
• General Fund Subjective Analysis
• HRA Service Analysis
• General Fund Capital Projects
• HRA Capital Projects
• Reserves Projected Outturn
• Approved Savings Monitoring
• Service Analysis
• Aged Debt Summary By Service
• Treasury Management Quarterly Update

The report noted that the National Employers' latest offer of an increase of 3.2% on all NJC pay points was agreed in July 2025, and for the purposes of the projected outturn calculations, the agreed offer of 3.2% had been included.

The report also provided an update on Outcomes Based Resourcing, stating that as part of the 2025/26 budget setting process, members approved savings and budget proposals to save the Council £0.025M in 2025/26.

Following a review of the Council's commercial and corporate property portfolio, members approved an ongoing programme of capital and revenue works over the next ten years to initially address the immediate issues whilst formulating an ongoing strategy to maintain the asset portfolio. This was included as part of the 2025/26 budget setting process and year one (2025/26) included a base budget amount of £1.541M which once adjusted for inflation amounted to £1.426M for specific work and £0.150M for project management costs.

At the end of Q1 (July 2025) a year end underspend of £0.374M was projected against the Council's approved original net revenue budget of £27.201M.

Capital Programme Mid-Year Review 2025/26

The Budget and Performance Panel were scheduled to consider a report of the Chief Finance Officer providing information regarding the latest position regarding the delivery of the approved capital programme for 2025/26.

The Capital Programme Mid-Year Review 2526 included the following recommendations for Councillor Hamilton Cox:

• That Cabinet endorse the adjustments to the capital programme as set out in Appendix C of the report and refers to Council for full approval.
• That Cabinet note that relevant revenue adjustments in respect of minimum revenue provision and future borrowing requirements will be built into projected revenue estimates and considered alongside future reports to Cabinet in respect of the budget and policy framework updates.

The report stated that the latest 10-year capital programme was approved by Council on 26 February 2025, and the General Fund Capital Programme had been updated to include the following fully grant funded schemes:

• UKSPF Affordable Warmth £0.038M
• UKSPF 25/26 External Projects £0.163M
• REPF 25/26 External Projects £0.150M
• UKSPF 25/26 Local Area Action Plan £0.095M

Additionally, amounts relating to Wheelie Bins and Salt Ayre Data Centre were moved into the main body of the Capital Programme from Schemes under development following decisions by Cabinet on 20 May 2025 and 8 July 2025 respectively.

The HRA Capital Programme had been updated to include the following fully grant funded scheme:

• Warm Homes: Social Housing Fund £0.780M (split over 2025/26-2027/28)

In addition, a virement of £0.042M from Housing Renewal & Renovation to Lift Replacements had been included within the update.

The report requested a reprofiling of the current approved programme, and the proposed revised capital programme could be found at Appendix D - Revised Capital Programme.

Budget and Performance Panel – Work Programme

The Budget and Performance Panel were scheduled to consider their Work Programme. The joint report of Chief Officers Finance and Governance requested that the Panel consider and agree what was to be included in the Panel's Work Programme.

The report noted the existing Work Programme attached at Appendix A - Work Programme, and the items that had been raised and referred to the Panel by the Overview and Scrutiny Committee at Appendix B - Referrals.

The report stated that in accordance with the Constitution all Councillors, the Chief Executive and the public had been asked for issues that should be considered for inclusion in the Scrutiny Work Programme.

The report also noted that the Overview and Scrutiny had resolved that a report be provided to an O&SC meeting and that Members of B&PP be invited to attend regarding an update on Fit for Future.

The existing Work Programme included the following agenda items:

• Delivering Our Priorities Q1 2025/26
• Provisional Revenue and Capital Outturn
• Annual Treasury Management Outturn
• Treasury Management Mid-Year Review
• Budget and Policy Framework General Fund Revenue Budget – Public Consultation
• Capital Strategy (Investing in the Future)
• Treasury Management Strategy
• Strategic Risk Management
• Projects and Performance

The report also noted that the Panel had previously been provided with training on Treasury Management, Budget and Project Monitoring, and Introductory Capital Financing.