Agenda item

REPORT OF THE DIRECTOR – RESOURCES

For Council to approve the Medium Term Financial Strategy 2026-30.

RESOLVED: That Council approved the Medium-Term Financial Strategy, as attached at Appendix A.

REASON FOR DECISION: Adoption of a Medium-Term Financial Strategy (MTFS) and communication of its contents will assist in the process of forward planning the use of Council resources and in budget setting for 2026/2027 onwards, culminating in the setting of the Council Tax precept for 2026/27 in February 2026. Alongside the Council Plan, this will support the Council in setting a budget that is affordable and aligned to Council priorities.

Audio recording – 8 minutes 18 seconds

Councillor Ian Albert, as Executive Member for Resources presented the referral from Cabinet and the report and highlighted that:

·         When the report was presented at Finance, Audit and Risk Committee, there was cross-party consensus with the proposed Strategy.

·         The Strategy had been delayed to allow time to received further clarification from central government regarding future funding.

·         The Government published their funding policy statement on 20 November which has left fewer unknown figures from the original report; however, modelling of this kind can never be certain. 

·         Further clarity would come with the Local Government Settlement in late December 2025.

·         After incorporating Business Rate gains and with Council Tax included the current estimate 2028/29 position would show a small increase in real terms.

·         The Council had the pension triennial valuation results and due to the positive performance of the fund there would be a reduction in employer contribution by approximately £1.3 million per annum.

·         It was therefore likely that a balanced Revenue Budget could be achieved with no, or minimal, savings.

·         The Council should also have maintained a strong General Fund balance well above the minimum recommended level.

·         The strategy set out in Appendix A follows the same format as previous strategies with specific references to Fair Funding Two, as well as the current uncertainty, which appeared to be reducing.

·         The spread of £2.6 million on table one of Appendix A did not show worst- and best-case scenarios but two possible scenarios that could happen depending on government decisions.

·         If savings were required, the Council would not look to make huge savings in 2026/27, but would make total savings by the end of 2028/29.

·         The discretionary Council Tax scheme for those with terminal illnesses was being explored with Marie Curie.

Councillor Ian Albert proposed and Councillor Daniel Allen seconded.

As part of the debate, Councillor Paul Ward stated that:

·         The final report had included an assessment of impact on the General Fund Reserve Balance, which was included at page 51, following a request at Finance, Audit and Risk Committee.

·         There was a high degree of uncertainty in the financial outlook and indicated that in the positive case, at the proposed spending level and with no savings the Council would need to use 21% of general reserves and in the negative case that rises to 62%.

·         However, this would still be above the minimum reserves levels of the Council in both cases.

·         The Cabinet would need to consider what savings were required in the new year, having taken into account the priorities of residents.

Having been proposed and seconded and, following a vote, it was:

RESOLVED: That Council approved the Medium-Term Financial Strategy, as attached at Appendix A.

REASON FOR DECISION: Adoption of a Medium-Term Financial Strategy (MTFS) and communication of its contents will assist in the process of forward planning the use of Council resources and in budget setting for 2026/2027 onwards, culminating in the setting of the Council Tax precept for 2026/27 in February 2026. Alongside the Council Plan, this will support the Council in setting a budget that is affordable and aligned to Council priorities.