This report provides an update on the development of the Council’s Medium Term Financial Strategy 2026/27- 2028/29.

The Committee received a report providing an update on the development of the Council’s Medium Term Financial Strategy (MTFS) 2026/27-2028/29.  The following documents were attached to the report:

·         Appendix 1 - Summary of the Proposed General Fund Budget 2026/27 to 2028/29

·         Appendix 2 - Summary of General Fund Budget Changes 2026/27 to 2028/29

·         Appendix 3 - Summary of HRA Budget 2026/27 to 2028/29

·         Appendix 4 - General Fund Capital Programme 2026/27 to 2028/29

·         Appendix 5 - HRA Capital Programme 2026/27 to 2028/29

The report set out the national and local context for the development of the MTFS, noting that the Council was facing significant financial challenges in line with those being experienced at a national level: General Fund revenue adverse variances totalling £19.6m across the last three financial years, and a cumulative deficit of £24.9m on the High Needs Block of the Dedicated Schools Grant.  The 2025/26 Quarter 2 Performance & Monitoring report (minute 53 above refers) showed an adverse net variance of £3.968m, including a net deficit of £5.424m on Children’s Services.

The report explained that the MTFS Update included the current working assumptions following the announcements made by Central Government in the Local Government Finance Policy Statement and the Autumn Budget.  These assumptions would need to be reviewed once the Provisional Local Government Finance Settlement had been published.  It also outlined the key planning assumptions relating to Adult Social Care and Children’s Social Care pressures, pay award, capital financing and Council tax, and noted that, despite the actions taken to date, the Council still had a significant projected budget gap across the three years of the MTFS.  A public consultation on the MTFS update, including where future savings would best be focused, would take place between 18 December 2025 and 17 January 2026.  Following the conclusion of the consultation and the announcement of the Provisional Local Government Finance Settlement, a further report would be submitted to Policy Committee on 16 February 2026, recommending approval of a balanced budget to Council in order that it could approve its budget and associated Council Tax level for 2026/27 at the meeting on 24 February 2026.

Resolved –

            That the Medium-Term Financial Strategy update as set out in the report and the associated appendices be noted, including:

a)    The Council’s General Fund Budget Requirement of £210.975m for 2026/27 and an assumed increase in the band D Council Tax for the Council of 2.99% plus an additional 2.00% Adult Social Care precept, or £105.66 per annum representing a band D Council Tax of £2,223.18 per annum;

b)   The current forecast budget gap of £4.449m for 2026/27 which would need to be addressed in order to present a balanced budget to Council in February 2026;

c)    The proposed savings, efficiencies and increased income, fees and charges for 2026/27 of £8.649m already included within the current gap position as shown in Appendix 2;

d)   The overall savings, efficiencies and increased income, fees and charges currently proposed within the MTFS of £13.792m;

e)    The Housing Revenue Account budget for 2026/27 to 2028/29 as set out in Appendix 3, which included an assumed increase in social dwelling rents of 4.8% for 2026/27;

f)     The General Fund and Housing Revenue Account Capital Programmes as set out in Appendices 4 and 5 respectively.