The Economy Overview and Scrutiny Panel met to discuss the Shrub Hill Quarter development, performance and budget monitoring, and the panel's work programme. Representatives from the council and partner organisations were expected to be present to answer questions from the panel. The meeting was scheduled to be recorded and made available on the council's website.

Performance and Budget Monitoring

The panel was scheduled to review performance and financial information for Quarter 2 (July to September 2025) related to the economy. This included a performance information dashboard and in-year budget information, including a summary of reserves.

The Budget Monitoring Information for Period 6 Quarter 2 presentation indicated that the council was forecasting to break even, after using £11.3 million of reserves and £33.6 million of exceptional financial support. Increased overspends were predicted in adult and children's social care, but these were expected to be offset by underspends in other services and corporate budgets. Of the £12.5 million in savings, 88% were rated green, meaning they were delivered or expected to be delivered.

Forecast reserves were expected to decrease from £93.7 million to £72.5 million by the end of the financial year, with only £19.6 million being unearmarked and considered usable as risk reserves. A transfer of £6.5 million of uncommitted reserves to the risk reserve was requested.

The council was also forecasting a £95.3 million overspend in high needs within the Dedicated Schools Grant¹ (DSG), with a forecast deficit of £193.7 million by March 2026. A statutory override was in place to allow the deficit to be extended until March 2028.

The capital programme was valued at £495.8 million, with £159 million planned for 2025/26 and £39 million spent by Quarter 2. External sources, such as developer contributions and government grants, funded 57% of the programme, with the remainder funded by borrowing, capital receipts, and revenue funding.

Specifically regarding Economy and Infrastructure (E&I), Highways and Transport Skills and Skills, a net forecast underspend of £0.9 million was expected. Key variances from the budget included:

• A £0.5 million underspend in waste management due to higher waste tonnage and additional trade waste income.
• A £0.2 million underspend in road lighting due to the ongoing LED rollout.
• A forecast net underspend of approximately £0.1 million in passenger transport due to increased income.
• An overspend in highways operations due to vacancy management and vehicle maintenance costs.

A net forecast underspend of £2 million was expected for Home to School Transport, an improvement from the £1 million underspend at Quarter 1. The number of children with an Education, Health and Care Plan² (EHCP) had increased by 20% compared to September 2024, with a similar increase expected in the number of children requiring transport.

The Open for Business and The Environment Capital Programme was valued at £268 million, with £94 million planned for 2025/26 and £32 million spent by Quarter 2. Borrowing funded 35% of the E&I Capital Programme, and grants funded 61%, with the remainder coming from Section 106 contributions³.

Shrub Hill Quarter

The panel was scheduled to receive an update on the redevelopment of the Shrub Hill Quarter in Worcester.

In January 2024, Worcester City Council approved the consultation of a Supplementary Planning Document⁴ (SPD) for the Shrub Hill Quarter, which was adopted in September 2024.

In 2021, the county council secured a £1 million Brownfield Land Release Fund⁵ (BLRF) grant to support the release of brownfield land for housing. In 2024, a further £1.1 million BLRF grant was secured to demolish a building on the Shrub Hill Industrial Estate⁶ (SHIE). A new shared-use link to improve walking and cycling access was nearing completion, funded by the Towns Fund⁷ and delivered in partnership with Worcester City Council. The Towns Fund grant also supports the development of a 5,000m2 Enterprise Centre in the Isaac Maddox House building.

In February 2025, the cabinet approved the procurement of a development partner for Shrub Hill, with the first phase of development planned within the county council-owned SHIE. However, the tender process did not receive a sufficient response. Feedback from the market indicated concerns about the weighting of the SPD towards commercial uses and a desire for more influence on third-party land.

The report pack noted that the Procurement Act 2023, which came into effect on 24 February 2025, allows for a competitive flexible procedure with dialogue and/or negotiation to further develop the requirement. The council and its agents were preparing a recommendation to bring the site back to market.

Work Programme

The panel was scheduled to review its work programme for 2025/26 and consider any amendments. The work programme is part of the council's rolling Annual Work Programme, which was discussed by the Overview and Scrutiny Performance Board⁸ (OSPB) on 16 October and agreed by the council on 6 November 2025.

The panel's responsibilities include scrutiny of the economy, workforce skills, strategic infrastructure, and broadband and communications.

The following items were listed for future meetings:

• Budget Scrutiny 2026/27 (13 January 2026)
• Economic Challenges of Small Town Centres (13 January 2026)
• Digital Infrastructure and Connectivity Annual Update (July 2026)
• Annual Update from Worcestershire Local Enterprise Partnership⁹ (September 2026)
• Tourism Annual Update (November 2026)

Possible future items included:

• Role of the council in encouraging the development of commercial space and support for specific growth sectors identified in the Economic Strategy 'Plan for Growth 2020- 2040'
• Growth Hub Activity
• Malvern Hills Science Park
• Worcester Six Business Park Development
• Workforce Planning