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Agenda item

Budget 2026/27 & medium term financial strategy

Purpose

This report provides an update on the developing budget for 2026/27 following the provisional government funding settlement announcement on 17 December 2025.

 

To consider:

1) The Draft Base Budget for 2026/27

2) The Draft Medium Term Financial Strategy (MTFS)

3) The Draft Capital Programme for 2026/27 to 2030/31

4) The Capital Strategy 2026/27

5) The Investment Strategy 2026/27

6) The Treasury Management Strategy 2026/27

 

Recommendation

That the Overview and Scrutiny Committee resolves to:

1.              Note the report and agree any recommendations it wishes to submit to the Executive.

Minutes:

Councillor Alaric Smith, Executive Member for Finance, introduced the Budget and Medium-Term Financial Strategy, highlighting that:

-      The associated strategies for treasury, capital and investment had been considered by the Audit and Governance Committee.

-      The budget was balanced based on the 3-year government settlement.

-      There was a contribution to general fund reserves of £650,884 before growth items, which would help the Council to deliver its priorities.

-      There were sufficient reserves to see the Council through to vesting day for the successor authority, although there were a number of unknowns.

-      The Committee was considering the second draft of the budget. Version 3 had been published for the Executive the previous day and included some changes from version 2, including savings related to the Ubico contract and the reallocation of Publica costs, which had been favourable for the Council.

-      Officers were thanked for their work in delivering a satisfactory budget.

 

The Committee asked questions and the following points were noted from the responses:

-      More information was requested on the £156k growth item for sovereign posts. Negotiations were underway with a small number of employees in shared posts about working 100% for the Council and the Director of Finance agreed to consult SLT on providing more specific information to the Committee.

-      There would be costs associated with local government transformation but those costs unknown at this stage and may differ depending on the future unitary model.

-      The capital programme reflected the Council’s intention to invest in temporary emergency accommodation to better support people experiencing homelessness and, at Woodford Way, the delivery of affordable housing.

-      All growth requests included in the budget had been subject to an internal approval process involving the Council’s senior leadership team. Where posts were being funded for fixed periods, these could potentially be extended through the same process if there was a business case for doing so.

-      An additional Environmental Crime Officer post would provide additional capacity to address offenses such as fly tipping and meet the demands on that service.

-      The change to the bottom line from version 2 to version 3 of the budget was only £32k but within that there a number of changes, including:

o   Additional external audit costs (fees were set externally).

o   An increased Council Tax surplus.

o   Reduced interest on external borrowing as the Council was now not expected to undertake prudential borrowing in 2026/27.

o   Adjustments to commercial property income.

o   The inclusion of mileage costs for Council employees who undertake site visits (previously employed by Publica).

o   Reduced costs related to the Ubico contract and the rebasing of the Publica cost model.

o   £50k for exploratory work on undertaking a community governance review following a Council motion.

 

The Committee thanked the Executive Member and officers for providing clear explanations.

 

The Committee agreed to consider how to approach scrutinising the budget next year. Members commented that it would have been helpful for the changes in version 3 to have been circulated to the Committee prior to the meeting, or alternatively for the meeting to have been held closer to the February Executive meeting to enable scrutiny of a later version.

Supporting documents:

 

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