DORSET Council has recorded its first-ever budget underspend since becoming a unitary authority in 2019, in what leaders are describing as a major turnaround in the authority’s finances.

A report due to be discussed by cabinet next week shows the council finished the 2025/26 financial year £169,000 under budget from a total spending plan of £417 million.

While the underspend represents a tiny fraction of the overall budget, it marks the first time the council has spent less than planned since it was formed seven years ago.

Council leaders said the result follows a year of tighter financial controls, stricter spending management and efforts to tackle growing budget pressures.

The improved position also means the council’s overall financial risk rating has fallen from “high” to “medium”, while reserves have increased, giving greater protection against future financial shocks.

For residents, the stronger financial position is intended to help safeguard key services, including adult social care, road maintenance, waste collection and community facilities.

The council has also reviewed its long-term capital investment programme, removing projects that have stalled and focusing funding on schemes that are ready to be delivered.

Planned investments include projects across Dorset, with work earmarked in towns including Wimborne, Weymouth, Bridport, Blandford, Swanage and Shaftesbury.

Future spending will focus on areas such as highways, coastal protection, schools, transport infrastructure and community buildings.

Cabinet member for finance and capital strategy Cllr Simon Clifford said the result showed the council was beginning to regain control of its finances after a challenging period.

“After a very challenging period, we are getting a grip of the council’s finances – and this year’s underspend is a clear sign of progress,” he said.

However, he warned that significant pressures remain, particularly in social care, while inflation and wider economic uncertainty continue to affect local government budgets.

The council is now preparing a new three-year financial plan aimed at maintaining spending discipline while continuing to invest in services and infrastructure across Dorset.