Agenda item

To receive a report from the Deputy Chief Executive (S151) Officer and the Head of Finance, Property and Climate Resilience on the Draft Budget Report 2026/27.

The Cabinet had before it a report * from the Deputy Chief Executive (S151) Officer and the Head of Finance, Property and Climate Resilience on the draft Budget 2026/27.

The Leader of the Council moved an AMENDMENT that ‘and Amber’ be removed from recommendation 1,2,3 and 4 and recommendation 5 be deferred to the next Cabinet meeting.

Upon a vote being taken the AMENDMENT was declared to have been CARRIED.

RESOLVED that:

1. The Green pressures on the General Fund within Appendix 1 be AGREED.
2. The Green savings options for the General Fund for services reporting directly into the Cabinet, as shown within Appendix 2 be AGREED.
3. The Green savings options for the General Fund for services reporting into the five Policy Development Groups Cabinet within Appendix 3, taking into account the recommendations from the Policy Development Groups as noted in paragraph 2.11 be AGREED.
4. The Green savings options for the Housing Revenue Account within Appendix 4, taking into account the recommendations from the Homes Policy Development Group as noted in paragraph 2.11 be AGREED.

5. The pressures / savings options with a Red risk/deliverability rating within Appendices 1 – 4 and if any should be included within the 2026/27 Budget; was AGREED to be deferred to the next meeting of the Cabinet.
6. Any additional suggestions to balance the remaining shortfall for both the General Fund and Housing Revenue Account and any further savings identified by the Policy Development Groups and recommended back to Cabinet for approval, be considered.

Note: *Report previously circulated

The Cabinet had before it a report * from the Deputy Chief Executive (S151) Officer and the Head of Finance, Property and Climate Resilience on the draft Budget 2026/27.

The Cabinet Member for Governance, Finance and Risk outlined the contents of the report with particular reference to the following:

• The report provided an update on the development of the 2026/27 Budget. A funding shortfall of £1m to £3m was projected due to significant uncertainty around future government funding. Unfortunately, no further clarity had been provided, and the delay in the Autumn Budget meant the funding settlement was now expected just before Christmas.
• Despite the uncertainty, the Council agreed to proceed with the budget process using four main principles. Budget options had been developed in collaboration with senior managers and were presented in the following appendices:

Ø  Appendix 1: Avoidable budget pressures.

Ø  Appendix 2: Savings from services reporting to Cabinet.

Ø  Appendix 3: Savings from services under Policy Development Groups (PDGs).

Ø  Appendix 4: Savings for the Housing Revenue Account.

• It was recommended that Green and Amber savings options be approved (including “stretched” income increases), although these only offset new pressures and did not reduce the overall shortfall.
• Additional work would still be required to fully balance the 2026/27 budget.

Discussion took place with regard to:

• Members would appreciate that all budget options would require political support and therefore if some suggestions were deemed unacceptable then other savings would need to be proposed.
• The National Government funding changes had significantly impacted the rural areas as the Government were supporting more urban areas.
• The appreciation of the work that had been taken by officers and from the Policy Development Groups in regard to the draft budget.
• If the Green and Amber pressures were accepted by Cabinet this evening there would still be pressures on the budget.
• Any delay in implementing the Amber pressures, particularly the ones that related to revenue streams like ‘parking’ could delay those benefits coming into the Council.
• Did the Council know the current e-billing take-up rate and what level would the Council need to reach to deliver the £25k saving target? It was explained that the current Council Tax e-billing was at the figure of 6,441 that was 15.71% of the Council base. The Business Rates was at the figure of 657 that was 18.77% of the Council base. This Council was the highest in e-billing within Devon.
• How were the Council safeguarding residents who could not switch to e-billing due to digital exclusion? It was explained the Council were looking at different ways that customers could set up e-billing.
• Were there under-used areas in Phoenix House, and what actions were being taken to ensure opportunities for letting or partnerships were not lost?  It was confirmed that the Council did have space, however the Housing Revenue Account Team from Old Road had been allocated that space.
• Whether contracts that were agreed, pre the Local Government Reorganisation restructuring, would carry over and what were the risks?
• Given that third-sector partners were facing pressures, could the Council explore reduced-cost office space in lieu of some grant funding to strengthen shared service delivery.
• Were the Council fully applying internal recharges to service areas based at Phoenix House, as the report hinted there was further scope to expand that? It was explained that yes, the Council were recharging all internal areas.
• The pressures list showed a £14k increase for software - could it be confirmed whether this was a one-off upgrade or an ongoing annual cost, and whether it delivered any efficiency or integration that would help achieve the e-billing or other savings within the service? It was explained that the cost increased to enable more self-service where the system would calculate the change and issue and bill without officer interaction, the automation when fully integrated would free up officer time to help collect arrears.  The £14k increase for software was an annual fee which may be increased due to the software company increasing the cost. 

The Leader of the Council moved an AMENDMENT that ‘and Amber’ be removed from recommendation 1,2,3 and 4 and recommendation 5 be deferred to the next Cabinet meeting.

Upon a vote being taken the AMENDMENT was declared to have been CARRIED.

RESOLVED that:

1. The Green pressures on the General Fund within Appendix 1 be AGREED.
2. The Green savings options for the General Fund for services reporting directly into the Cabinet, as shown within Appendix 2 be AGREED.
3. The Green savings options for the General Fund for services reporting into the five Policy Development Groups Cabinet within Appendix 3, taking into account the recommendations from the Policy Development Groups as noted in paragraph 2.11 be AGREED.
4. The Green savings options for the Housing Revenue Account within Appendix 4, taking into account the recommendations from the Homes Policy Development Group as noted in paragraph 2.11 be AGREED.

5. The pressures / savings options with a Red risk/deliverability rating within Appendices 1 – 4 and if any should be included within the 2026/27 Budget; was AGREED to be deferred to the next meeting of the Cabinet.
6. Any additional suggestions to balance the remaining shortfall for both the General Fund and Housing Revenue Account and any further savings identified by the Policy Development Groups are recommended back to Cabinet for approval, be considered.

(Proposed by Cllr J Downes and seconded by Cllr G DuChesne)

Reason for Decision:

By undertaking regular reviews of the Medium Term Financial Plan, 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.

Note: *Report previously circulated