Agenda item

The Interim Finance Manager presented the Medium-Term Financial Plan (MTFP) 2026/27 to 2028/29 including Fees and Charges, Worcestershire Regulatory Services (WRS) Budget recommendations and outcome of the Budget Consultation report. This included information on the Chancellor’s Autumn Statement implications, fees and charges proposals, consultation outcomes, and key financial pressures.

 

This report enabled Officers to prepare for stage Two of the Council’s Budget setting process, supported the approach to Fees and Charges and the WRS uplift. In addition to this it confirmed the timetable to February Cabinet and March Council Tax Resolution.

 

In terms of the national context Officers explained that Chancellor’s Autumn Statement introduced major structural and funding changes for the future. This was underpinned by the outcomes of the Fair Funding Review. The review aimed to redistribute resources more equitably based on assessed local need. Key elements of the new funding framework included:

 

·       Needs-Based Formula - This incorporated an updated demographic and service demand data.

·       Resource Adjustment Mechanism - This reflected a Council’s ability to raise local income.

·       Area Cost Adjustments - This accounted for regional variations in service delivery costs.

·       Grant Consolidation - This resulted in multiple small grants merged into larger ring-fenced grants e.g.

o   New Homes Bonus funding would no longer be available, and funding would be redirected to a core settlement.

o   Homelessness Prevention, Rough Sleeping, Temporary Accommodation to be combined.

o   Discretionary Housing Payments and Household Support Fund proposed for consolidation.

 

In addition to the changes relating to the Fairer Funding Review and Grant Consolidation as detailed above, other key measures should be noted:

 

o   A high-value property surcharge from April 2028 - central Government would retain revenue in the future.

o   Council Tax flexibility remained unchanged at 2.99 per cent or £5 cap.

o   An £18m national investment for the upgrade of two hundred children’s play areas under ‘Pride in Place’.

o   Rent Convergence would be reintroduced from 2026. This would be in addition to the standard CPI + 1 per cent plus weekly adjustment.

 

As a result of these changes there would be an impact on Bromsgrove as follows:

 

·       The redistribution under Fair Funding would likely reduce Core Spending Power by 3.4 per cent over three years.

·       The simplification of grant funding would reduce flexibility.

·       The Council tax ceiling remained unchanged.

·       There would be the opportunity to bid for ‘Pride in Place’ funding.

 

Members were reminded that Council set a three-year MTFP 2025/26 to 2027/28 in February 2025 in February 2025. The position reflected a balanced budget for 2025/26 with a deficit position of £1.03m in 2026/27 and deficit of £399k in 2027/28. It was noted that the Council was operating in a high-cost environment and an assumption had been made that there would be no growth in business rates given the reset and the end of pooling.

 

Some of the corporate assumptions were provided to Members as follows:

 

·       Incorporation of a two per cent pay award of £389,000 and a further 1 per cent cost-of-living uplift of £195,000

• The cost of Councillors rejoining the Local Government Pension Scheme at a cost of £54,000.

It was noted that some of the extra costs were offset by the release of £230,000 from the utilities inflation budget and £250,000 corporate savings.Further savings had been generated from a change in forward funding rates for pensions of £358,000 in 2026-27 rising to £380,000 in 2028-29.

Fees and Charges were originally assumed at an increase of 2 per cent reflecting an increase of £100,000. Services have now provided more granular schedules resulting in a further income of £152,000 in 2026/27.

WRS required no uplift in 2026/27 due to pension rate changes, with pressures of £25,000 in 2027/28 and £59,000 in 2028/29 for salary and inflation. It was noted that WRS could not offset these through income generation.

 

It was reported that the funding gap had been narrowed as a result of the work undertaken as detailed above. However, further work was still being undertaken prior to the Final Settlement.

 

 

Following the presentation of the report members queried several areas including the following:

·       The proposed two percent pay award and one percent cost of living increase – Members raised that there needed to be careful consideration of the level of pay increase particularly as the Independent Remuneration Panel (IRP) had recommended a higher level of increase to Members Allowances of 4.6 per cent for the next municipal year.

·       WRS deficit – Members were surprised at the level of financial burden on the Council and concerned that all authorities included in the Service Level Agreement (SLA) for WRS were responsible for the appropriate amount of deficit. The Interim Section 151 Officer had previously been asked about this matter and at the time of writing a response was to be provided by a member of the Finance Team to the Leader, Cabinet Member for Finance and the Chief Executive. However, Members ere reassured that the Interim Section 151 Officer did attend WRS Board meetings. The Chairman of the Overview and Scrutiny Board explained that this report had been pre-scrutinised at a meeting of the Finance and Budget Working Group on 5^th January 2026. At this meeting, value for money was discussed in respect of WRS particularly within the context of Planning Enforcement. Members were reminded that the Planning Advisory Service (PAS) review had just been undertaken and it would e prudent to wait until the outcomes of that review had been provided before making any assumptions. It was noted that the Council paid a large amount of funding to WRS which looked to increase to £500,000 by 2028-29 and value for money needed to be established. Officers reminded members that WRS provided bespoke services to the Council which would result in an increase of costs incurred. It was requested that further work be undertaken in looking at value for money in terms of Planning Enforcement and the other services provided by WRS following the outcomes of the PAS review. It was suggested that the original business case for the establishment of Planning Enforcement by WRS be revisited as part of this work. It was further noted that Planning Enforcement took a considerable amount of time and that the numbers of cases would not decrease immediately due to the complex process.

 

The Policy Manager provided an update on the Budget Consultation which had closed on 2^nd January 2026. It was reported that there had been a disappointing response to the consultation. A total of two hundred and twenty-three valid surveys had bene received (one hundred and thirty-eight from the Community Panel and eighty-five from the general public). Members queried whether this might be an opportunity to look at the membership of the Community Panel for future years and contact neighbouring authorities to understand the results their consultation had received. There had been no responses received from the local school who had been contacted. A longer lead in time for the consultation might have provided an increased response and this should be looked at for the future. Engagement sessions had been carried out in the usual way. In speaking to residents in the District there were new areas that had been highlighted in face-to-face discussions such as immigration, housing, funding and taxes. These areas had not been highlighted as strongly when the survey was carried out previously.

 

It was reported that there seemed to be disillusionment from the public in respect of local government. However there were some clear indications that residents were interested in what was taking place in the local area with traffic congestion, public transport, increased numbers of houses and environmental damage to the local areas being identified as areas of concern.

 

In terms of Council Priorities Infrastructure and Environment had been the top priorities identified at 55 and 52.7 per cent respectively. The top three most important Council services were as follows:

 

1.     Environmental Services - 78.2%

2.     Planning & Leisure Services - 68.6%

3.     Regeneration & Property - 63.2%

 

Fees and charges were included in the consultation and 37.4 per cent of respondents felt that fees and charges (such as hire costs) should rise by four per cent to keep them in line with inflation and rising staffing costs.

 

The demographic of respondents was similar to previous years with the top three respondents ages as follows:

 

1.     60-69yrs - 26.6%

2.     70-79yrs - 23.9%

3.     80+ years - 7.3%

 

Suggestions for improvements to increase prosperity within the District were varied however the top three themes were the importance of infrastructure (roads, public transport, amenities, impact of development), Bromsgrove Town Centre, and supporting businesses. These topics had also been in the top three in the previous survey, suggesting consistency in both the publics priorities and areas of concern. These themes had many cross overs, from the impact of traffic (in particular the BREP), encouraging a diverse range of businesses into the town and reducing costs to businesses.

 

Further suggestions from respondents for increased prosperity within the District were as follows:

 

• Reducing business rates / relief
• Reducing parking costs (or make it free)
• Supporting independent retailers
• Bringing in key major retailers
• Larger variety of shops on offer on High Street
• Utilise empty shops
• Improve the market
• Make the town vibrant, attractive & distinctive - develop attractions, encourage visitors
• Improve the appearance & maintenance of the high street
• Improved public transport
• Ensure a district-wide view

 

Other comments were sought from residents on other budget ideas for reducing costs or increasing income to ensure Council services remained sustainable. These were suggested as detailed below:

 

• Stop expenses (in particular Councillors)
• Review staffing & wages (in particular management)
• Reduce waste
• Effective procurement
• Focus on essential services
• Effective maintenance
• Do more online
• Utilise technology, including AI
• Measure effectiveness and VfM
• Explore alternative methods of delivery e.g. partnerships, consolidation of services, VCS, franchises
• Reduce use of consultants
• Commercial opportunities e.g. better events
• Reduce events
• Promote events better to increase revenue
• Community use of buildings
• Increase enforcement e.g. fly tipping & littering
• Better coordination around highways and roadworks

 

Following the presentation of the consultation responses, the Policy Manager explained she would distribute the information to Members for their information.

 

Members were disappointed with the response rate and with such a small sample size it was difficult to ascertain what areas within the district were interested in which priorities and issues. This information culd be ciructted to Members following the meeting.

 

 

RECOMMENDED that

 

1)    Members take account of any feedback from the Consultation on the Budget 2026/27.

2)    Members endorse the further work / proposals being undertaken on the Medium-Term Financial Plan to produce a balanced position for 2026/27 – 2028/29 including the initial set of savings proposals and pressures including fees and charges increases.

3)    The recommended increases relating to Worcestershire Regulatory Services of £25,000 for 2027/28 and £59,000 for 2028/29 be approved.

4)    The updated three-year capital programme 2026/27 – 2028/29 along with available funding for further capital projects to be undertaken going forward and the proposed projects for funding along with revenue implications.