Pembrokeshire County Council, which has faced overspends on its budget in the millions in recent years, is predicted to end this year £4m in credit.

A report for members at the February meeting of Pembrokeshire County Council’s Cabinet, presented by Cabinet member for finance, Cllr Alistair Cameron, said the county’s approved budget for the 2025-26 financial year of £326.6m was, as of the third quarter of the year, predicted to end at £322.6m, representing a projected underspend of £4m.

A good chunk of that saving, as reported in previous financial quarters was due to slippage in the Capital Programme in 2024-25 which has resulted in higher levels of investment income and delayed borrowing costs.

“A projected underspend of £4.429m in Capital Financing Costs and Increased Investment Income of £0.050m has been able to more than offset [other financial pressures],” the report said.

The report also included comments from Director of Resources Jon Haswell: “We are now projecting a year end underspend of £4.0m at the end of Quarter 3, primarily due to the significant underspend in capital financing costs.

“At outturn, it will be proposed that any underspend is placed in the Initiative Fund reserve, to provide additional funding for future Accelerated Change Programme (ACP) bids.

“Both council tax and rent arrears appear to have stabilised, albeit urgent work is required over the coming months and years to recover them. All service budgets within the Resources Directorate are all projected to remain within budget, with the exception of Finance & Revenue Services/Resources and Procurement who will be overspent due to additional FIMS software costs.”

The £4m underspend compares with a predicted end-of-year underspend of £1m in the previous financial quarter, and predictions of a £2.2m underspend from figures from the first quarter of the financial year.

Pembrokeshire County Council actually ended the last financial year underspending by £2m, in part due to an extra £1.2m raised through second homes tax, councillors have previously heard.

In recent years the situation has been far bleaker, with third quarter projections for the 2023-24 budget of an overspend of £6.6m, £3m up from quarter two’s £3.6m, which in itself was a reduction of the previous quarter one figure of a £4.8m predicted overspend.

The end of the 2024 financial year reduced that to a £3m overspend, and by November 2024 – the 2024-25 year – the council was predicted to overspend by £3.9m, later, last February that prediction reduced to £1.4m, before the final underspend.

Cllr Cameron, who moved the report on the quarter three financial position was noted, said: The £4m is roughly one per cent under budget, any of us would agree that’s exactly where we’d want to be at this stage of the financial year, and certainly a lot better than previous years’ overspends.”

Leader Cllr Jon Harvey said: “It’s really good to see the departments, by and large, within budgets, on a more financially sustainable path.”

Members agreed to note the report.