Agenda item

To Receive and Consider the Medium Term Financial Plan (MTFP)  for the period 2026/27 to 2028/29.

The Group had before it a *report from Head of Finance, Property and Climate Change presenting the updated Medium Term Financial Plan (MTFP) which covered the period 2026/27 to 2028/29 and which discussed initial options for cost pressures/savings or income related to the services covered by the Policy Development Group.

The following was highlighted:

·         The report was a little different to that provided in previous years. This was due to the raft of changes expected from 2026/27 and the longer term restrictions placed upon the Council by Local Government Reorganisation (LGR). The report did not give a forecast shortfall to be addressed. Instead it highlighted the unprecedented level of uncertainty faced by all councils in respect of funding from 2026/27 onwards and estimated a range that the shortfall could fall within.

·         The Chancellor’s Autumn Budget would not be available until the end of November 2025. This would have a knock on effect of delaying the detail at individual local authority level. The uncertainty regarding future funding could not be overstated.

·         Given the potentially extreme reduction in funding within option 1c, and the very limited timeframe for obtaining full clarity, it was highly likely that a degree of flexibility would be required and a draw from reserves might be required.

General Fund Budget Options

·         Over the summer officers had identified a range of budget options to address the budget shortfall, using the Red, Amber and Green (RAG) assessment, which were being presented to the relevant Policy Development Groups for discussion, with the recommendation to support the Green and Amber options.

·         These included newly identified budget pressures in appendix 2 and savings options in appendix 3, there were options to stretch savings further, for example increasing fees beyond inflation and appendix 4 showed all savings options for context.

Discussion took place regarding:

·         Concerns around the ceasing of Community Development grants and how this would impact those affected.

·         Clarification around the out of date leases, these were dependent upon market conditions at the time, the income might reduce and may result in the loss of tenants.

·         Clarification and confirmation of the when the funding announcement from Government would be and what methodology would be used to distribute those funds. 

·         How were the Council liaising with Town and Parish Councils?- it was confirmed that the Head of Finance, Property and Climate Resilience would be attending the State of District Debate to give a presentation on Finance and Assets.

·         Why this Council had been targeted as part of a minority group of around 50 authorities that would be one of the biggest losers based on their initial draft calculations on funding?

RECOMMENDED to Cabinet that:

a)    The updated MTFP position for both the General Fund and the Housing Revenue Account covering the years 2026/27 to 2028/29 be NOTED.

b)    The budget proposals as set out in Appendices 2 and 3 and agreed to remove the Cease Community Development grants be approved.

c)    That the Cease Community Development Grant not to be included in the saving options.

(Proposed by Cllr M Farrell and seconded by Cllr H Tuffin)

Reason for the decision

By undertaking regular reviews of the MTFP the Council could ensure that its Corporate Plan priorities were affordable. The implications of the budget gap were set out within the paper. Many areas required greater clarity, particularly around national funding and possible changes to Government Policy. Therefore a number of key assumptions underpinned the reported position, which would be refined as greater clarity was received through the budget setting process.

Notes: * Report previously circulated      

(i)            Councillors: D Broom, M Farrell, B Holdman and A Stirling declared personal interests as they were members of Tiverton Town Council and budget savings were included in appendix 4 regarding CCTV.

(ii)          Councillors: B Holdman and A Stirling also declared a personal interest in that they were members of Tiverton Town Councils Finance Committee.

(iii)         Cllr A Cuddy declared a personal interest in that he was business owner.