Agenda item

To receive an update from the Deputy Chief Executive (S151) Officer on the Budget update 2026/27.

The Cabinet had before it a report * from the Deputy Chief Executive (S151) on providing a further update on the progress towards balancing the budget for 2026/27 and future years.

RESOLVED that:

1. The updated General Fund budgetary position included within Section 2 was NOTED.
2. The headline update from the recently announced Local Government Finance Settlement within Section 3, and that work continues to understand the implications for the Council be NOTED.
3. The updated Housing Revenue Account (HRA) budgetary position included within Section 5 was NOTED, and the specific savings proposals contained within paragraph 5.4 were AGREED.

Note: *Report previously circulated

The Cabinet had before it a report * from the Deputy Chief Executive (S151) on providing a further update on the progress towards balancing the budget for 2026/27 and future years.

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

·         The report gave the latest position on the 2026/27 budget.  By way of a reminder, at the outset the Council had set out three possible scenarios for the budget, depending on what would happen to funding nationally.

·         Through the Policy Statement issued by Ministry of Housing, Communities and Local Government (MHCLG) (in full), the Council had confirmation that the worst-case scenario was not happening; the growth achieved in business rates over the last dozen years had been retained within the Councils funding settlement.

·         To balance the budget for 2026/27, budget options were identified using a RAG (Red/Amber/Green) traffic light system.  In October the Green budget options were agreed but these added up to a new additional pressure of nearly £1m, almost doubling the Councils forecasted shortfall.

·         Several Amber budget options were considered and would be brought into the budget if necessary, following the settlement. In many instances, these had now crystallised, for example, greater clarity was available on maintenance costs, projected fuel costs, business rates on the Councils properties etc. In addition, the indicative Extended Producer Responsibility Funding had increased, and the outcome of the Tri-Annual Pension Review had been confirmed, which had resulted in a reduction in contribution rate. These items brought the remaining shortfall back to broadly £1m (c6% of £15m base budget), in line with the initial projection.

·         The last fundamental part of the process was then to bring in the outcomes of the funding settlement, announced on 17 December 2025. This work was to continue and would be included in the next report to Cabinet in February 2026, although the headlines were included within Appendix 1.

·         The report also provided an update on the Housing Revenue Account (HRA) budget position for 2026/27. Again, several items had crystallised, and the budget position became clearer. As listed within the report, there were some additional costs that needed to be offset, and how this could be achieved was also outlined. This left a small shortfall to be addressed. This could be offset if the Government approved the rent convergence which was yet to be announced.

RESOLVED that:

1. The updated General Fund budgetary position included within Section 2 was NOTED.
2. The headline update from the recently announced Local Government Finance Settlement within Section 3, and that work continues to understand the implications for the Council be NOTED.
3. The updated Housing Revenue Account (HRA) budgetary position included within Section 5 was NOTED, and the specific savings proposals contained within paragraph 5.4 were AGREED.

(Proposed by Cllr J Downes and seconded by Cllr J Lock)

Reason for 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, several key assumptions underpinned the reported position, which would be refined as greater clarity was received through the budget setting process.

Note: *Report previously circulated