Agenda item

To receive a report from the Deputy Chief Executive (S151) presenting to Member’s the updated Medium Term Financial Plan (MTFP) which covers the period 2026/27 to 2028/29 and to discuss initial options for cost pressures/savings or income related to the services covered by this Policy Development Group (PDG).

The Group had before it, and NOTED, a report * from the Deputy Chief Executive (S151) presenting the updated Medium Term Financial Plan (MTFP) which covered the period 2025/26 to 2028/29 for the General Fund (GF) and considered initial savings options.

The Head of Finance, Property and Climate Resilience presented the report and the following was highlighted:

·       The MFTP was different this year to that in previous years due to a raft of changes that were expected in terms of funding from 2026/2027.

·       It also reflected the longer term restrictions placed upon the Council by the Local Government Reorganisaton (LGR). 

·       A projected shortfall could not be provided as there was no knowledge of where funding might be next year.

·       However, there were a range of shortfalls based on the information that the Council did have from the government which were between £1m and £3m for next year.

·       The Chancellors statement which was normally expected at the end of October 2025 would now be delayed until November 2026.

·       The Government’s Cabinet reshuffle and the loss of the Cabinet Minister for the Council’s sector could also have a potential impact.

·       This could mean significant changes for the level of funding and the priorities that the Government may have.

·       The Council had an obligation to balance the budget in the normal way as was required by statute, this meant not relying on reserves, optimising income where necessary and diverting money to ensure that services were protected and ensured that capital spending delivered the best value for money.

·       Given the timescale of the shortfall and the restricted timeframe in which to tackle it, it was likely that the Council would need to draw on reserves in order to help balance the 2026/2027 budget.

·       Appendix 2 in the report identified the pressures and Appendix 3 the savings for the Group to consider.

·       The Green and Amber options were officer recommendations.  Options shown as Red were doable but came with implications.

Discussion took place regarding:-

·       The pressures of additional agency costs.

·       The baseline budget for climate change.

·       Whether fees were set nationally.  It was explained that the Government set the level of statutory fees nationally.  The Council set the discretionary fees.

·       The reduction of Section 106 monitoring fees and whether this would mean receiving less money or proportionately less per house which would affect the quality of the facilities being provided. It was explained that the Council would seek as much money as possible however contributions were subject to a viability assessment. There may be a lower contribution across the whole development globally which would also then break down to individual units. This would mean a potential reduction in terms of contributions.

·       The concerns regarding Section 106 finance and the Group being uncomfortable with the underlying assumptions.

·       Whether Section 106 Monitoring could be considered further due to a reduction of income putting pressure on the quality of facilities being provided to residents.  The Director of Place and Economy explained that that Council would have to take a view in terms of where it chose to spend the Section 106 contributions to ensure the best outcomes were derived and money was spent to offset pressures associated with development. He confirmed that along with the Head of Finance, Property and Climate Resilience he would look further into the technical details and that would be reflected in any future reports.

RECOMMENDED to the Cabinet that:-

(i)              It notes the Planning, Environment and Sustainability Policy Development Group’s questions and concerns regarding the reduction of Section 106 Finance and that it considers this further in light of the comments made.

(ii)             The budget proposals as set out in the Appendices 2 and 3 be approved.

(Proposed by Cllr G Czapiewski and seconded by Cllr C Harrower)

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.

Note:  * Report previously circulated.