Statement on year-end accounts and budget review
Angela Hutchings, Chief Executive of Castle Point Borough Council said: “The completion of our 2025/26 year-end accounts revealed a significant overspend that had not been forecast as part of the financial monitoring process that reports to Cabinet every quarter.
"At the time decisions were taken, Members were entitled to rely on the financial forecasts and monitoring reports presented through the Council's formal reporting process. Those reports did not indicate the level of budget pressure subsequently identified through the year-end review.
"A review of quarter one of the current financial year has indicated that this situation will be repeated and immediate action is underway to balance the budget.
"I want to be clear that the unbudgeted overspend is not acceptable and an investigation is underway to establish why the year-end position was not identified through our normal reporting processes. We are working closely with our external auditors as part of that work.
“We have appointed an experienced interim finance specialist to support and lead this work. A comprehensive review of all budgets is now underway to ensure that future budgets accurately reflect the costs of delivering effective services.
“While it is too early to draw conclusions, initial findings suggest the position has arisen from a combination of factors, including one-off expenditure of an exceptional nature, increased operational cost pressures and weaknesses in the way some staffing and service costs have been reflected in budgets and financial forecasts.
“We are committed to being open and transparent. The reports being considered by Cabinet set out what we know at this stage and have been published in full on the Council’s website. We will continue to publish our progress.
“Our focus is clear: to understand exactly what happened, put the Council’s finances on a sustainable footing and maintain services for residents while we take the necessary corrective action.”
Notes
The Council's unaudited financial position for 2025/26 recorded a General Fund overspend of £431,000 after year-end adjustments, including reserve movements.
The reported £4.5 million figure relates to a Quarter 1 forecast for 2026/27. It is not the final position for the year and does not represent money that has already been spent or lost. It is an estimate of the financial pressure the Council could face if the issues identified at Quarter 1 are not sufficiently addressed.
The two figures relate to two different financial years and measure different things.