Issue - meetings

The Committee gave consideration to the Medium Term Financial Plan 26/27-30/31, the budget 26/27, capital programme 26/27-30/31. The Director of Finance and Assets (Section 151 Officer) explained that the report set out the Medium Term Financial Plan for 2026/27 onwards. The purpose of the Medium Term Financial Plan was to set a robust overall framework for the Council’s Financial Strategy and spending plans over the next five years. The report set out the revised financial plans within the Financial Analysis for changes in Government Funding, the economic environment and local engagement. The plan reflected the revisions to previous estimates and covered the period 2026/27 to 2030/31. The Medium Term Financial Analysis included the draft budget for 2026/27 for scrutiny and consideration prior to recommending to Full Council.

Members heard that the government conducted a spending review during 2025 and, this combined with the first reset of the business rates system, had been incorporated into the provisional local government finance settlement announced in December. At the time of writing the report, the final settlement had not been announced, this was subsequently announced on Monday prior to the meeting. It was explained that this was a three year settlement and the government had tried to simplify the funding landscape by removing a number of specific grant streams and combining them into a much smaller number. The draft settlement outlined that the Council had received small, below inflation rises, in core spending power, however the Council was then informed late in the previous week that, due to incorrect business rates data being used in the provisional settlement, the Council would receive substantially less funding in the final settlement which was a similar situation to a significant number of district councils.

Although the government had mitigated this in the 2026/27 funding figures, the Council had lost circa £730k over the last two years of the settlement between provisional and final settlements and therefore the report would need to be updated prior to going to Full Council. Due to the final settlement coming so late there was no option at this stage but to use reserves in 2028/29 to cover the shortfall. It was hoped that the government would reconsider this position in December when the final year two allocations were to be released.

Members heard that the government had delivered on its promise to deliver a three year settlement and so there was now more certainty of three years funding allocations making it easier to plan over the medium term. The spending power assumptions made by government were predicated on the Council increasing Council Tax by the maximum amount permitted. The Council had planned for this situation and therefore the Section 151 was pleased to present a balanced budget for the next three years with a small draw on reserves for 2028/29.

It was highlighted that the budget was predicated on Council Tax rises of 2.97% in 2026/27 and 2.99% thereafter which was included in the spending power assumptions. This meant for 2026/27 a  ...  view the full minutes text for item 99