Issue - meetings

(A report by Russell Stone, Director of Finance (S151 Officer))

The Committee received a report introduced by the Director of Finance (S151 Officer), supported by the Head of Finance Delivery – BBC (PSPSL), which presented the draft Budget Overview for 2026/27–2030/31. The Director of Finance delivered a detailed presentation setting out the national and local financial context, including the implications of the Provisional Local Government Finance Settlement, released on 17^th December 2025, and the range of technical changes arising from it. Members were advised that the draft budget had been developed during a period of significant national change to the local government finance system. Service budget reviews commenced in May 2025, supported by a Star Chamber process undertaken in August, with further refinement through late 2025. This work identified emerging cost pressures and realistic efficiency opportunities forming the basis of the draft budget before Members. The Director of Finance emphasised the important role of scrutiny in providing independent challenge and constructive suggestions during budget development.

The Director explained that the Fair Funding Review had introduced a new methodology which placed greater emphasis on population and deprivation, resulting in the removal of the flood and coastal protection factor weighting and the rural sparsity adjustment, both of which had previously benefitted the Council. This shift altered the composition of funding, including a significant increase in Revenue Support Grant offset by reductions in other elements. In addition, extensive reforms to the business rates system were set out, including the introduction of five separate rating multipliers, the move from net to gross rates payable and the removal of Section 31 grant compensation. It was confirmed that, following the withdrawal of a partner authority, the Lincolnshire business rates pool would not operate for 2026/27.

In relation to Council Tax, the Members were advised that referendum limits remained at the higher of 3% or £5 and that Government?assumed increases to the tax base exceeded the Council’s own projections. Members were informed that the apparent increase in Core Spending Power primarily reflected Government?assumed Council Tax rises and the rolling?in of ring?fenced grants, rather than any real?terms increase in funding. Grants relating to homelessness, rough sleeping and domestic abuse had been consolidated into Core Spending Power, and while the Internal Drainage Board levy grant had been confirmed for 2026/27, there remained uncertainty beyond that year. Members were also informed that Government had indicated that new burdens funding for food waste was included within the overall settlement and would not be issued separately.

More than £800,000 of service pressures had been identified across several areas, including contractual uplifts, housing benefit subsidy write?offs, adjustments to income assumptions in planning and bereavement services and Local Plan?related costs. While many pressures were small individually, several larger items accounted for a significant proportion of the total. Dialogue with PSPSL indicated that contractual uplifts were likely to be lower than originally anticipated, reducing overall pressure. Efficiency proposals included ICT cost reductions, increased building control income, application of Renters’ Reform Bill funding and a range of smaller  ...  view the full minutes text for item 79