Transformation programme and budget update

Southampton City Council has published papers on its Medium-Term Financial Strategy (MTFS) and transformation programme today (Monday 21 October) ahead of a Cabinet meeting on Tuesday 29 October

The council has a significant transformation programme underway to help it address its structural budget deficit. The papers published today confirm that the council has identified almost £50 million of potential savings opportunities so far across the five-year MTFS period. From the seven portfolio areas of the adapt | grow | thrive Transformation Programme, nearly £30 million of savings have been included for the 2025/26 financial year. As a result of the improvements and being able to deliver services more efficiently, an estimated 67 to 99 Full Time Equivalent (FTE) of redundancies will potentially need to be made over the next two years.  

For the current financial year, the month 6 position is an overall forecast underspend of £13.2 million against budget and includes £7.3 million of in-year transformation savings. The 2024/25 underspends contribute to a reduction in the cost of borrowing attached to the Exceptional Financial Support package agreed in principle by the Government in February 2024. 

The MTFS forecast for 2025/26 currently states a budget gap of £18.2 million but it is anticipated that over the next four months, further transformation and other savings will be included before the budget is set in February 2025. It is also noted in the papers that there are several assumptions made in the MTFS forecasts, some of which may be impacted by the Autumn Budget on 30 October 2024. If the Chancellor of the Exchequer's announcements alter any of the assumptions, an MTFS update report will be presented to the council’s Cabinet on 26 November.  

Councillor Lorna Fielker, Leader of Southampton City Council said:

“We are making significant progress on planning and delivering truly transformational change across the council, but we also recognise that the work needs to continue at pace and difficult decisions still need to be made. The Cabinet and officers are determined to deliver the savings we need to make, whilst at the same time putting in place ambitious but robust economic growth strategies that will benefit the residents and businesses of Southampton.”