Agenda item

The Medium-Term Financial Plan Stage 2 Budget Report 2026/2027 to 2028/2029 (including Capital Strategy, Investment Strategy and Treasury Management Strategy) will be published in a supplementary papers pack.

It is anticipated there will be exempt information contained in one of the appendices to this report which may need to be considered in exempt session.

The Interim Director of Finance and Section 151 Officer presented the Medium-Term Financial Plan (MTFP) Stage 2 Budget Report 2026/2027 to 2028/2029 (including Capital Strategy, Investment Strategy and Treasury Management Strategy) for the consideration of Cabinet.

In doing so, the following was noted:

·       The report provided transparency on the Council’s Budget Setting process. A significant amount of work had been carried out by the Finance team in order to provide the report. All Members had been engaged in this process which had been welcomed. Assistant Directors and budget holders had also been consulted with during this process and had provided detailed information, in order to ensure that information was accurate and clear. It was reported to Cabinet that the Council’s Budget was balanced with no reliance on Reserves to fund recurring costs.

·       It was proposed that there be an increase in Council Tax of 2.99 per cent for the 2026/2027 financial year.

·       Following a comprehensive review process, there were new allocations proposed in respect of the Earmarked reserves. These new allocations were detailed as follows:

1)    A new Financial Resilience Reserve of £2.5million – this was to provide stability for the future and in order to mitigate any future risks to the Council.

2)    A Local Government Reorganisation Reserve of £1million – this allocation was to provide any areas of funding required as a result of the LGR process currently underway (at this current early stage).

3)    A Community Investment Fund of £1.250million - This would provide funding for any emerging needs for local communities and for which Members wished to provide funding. Members were keen to note that any funding distributed from this earmarked reserve needed to be in line with the Council’s Strategic Priorities and subject to strict criteria and allocated accordingly. The governance of this funding would be robust in order to provide the best outcomes for local communities. It was noted that all Members should be made aware that this must be the approach taken in respect of this funding. It was noted that if this reserve allocation was approved by Members at the full Council meeting on 25^th February 2026, a formal report would be provided to ensure Members were aware of the strategic nature of this funding and the clear criteria under which it would be allocated. Officers stated that similar funding had been made at other Councils and Officers agreed to provide Members with further information following the meeting. Lessons could also be learnt from the successful allocations and projects funded by the UK Shared Prosperity Fund (UKSPF) previously. This, it was noted, had been a successful initiative for the Council.

·       The Council was in a sound position in terms of Reserves with General Fund Balances of £13.38million and Earmarked Reserves of £11.27million.

·       There was a small clarification to the Pay Policy and Members confirmed their commitment to the real living wage for the coming budget year.

A typographical error was highlighted within the report at paragraph 3.46. This would be amended prior to the publication of the report for the Council meeting to be held on 25^th February 2026. In addition to this, any comments or amendments as a result of discussions at this Cabinet meeting would be included in the updated report.

It was reported that this had been a complex Budget setting process for the Council in terms of Council Tax setting. Worcestershire County Council had proposed to set their Council Tax later than anticipated which had resulted in more uncertainty than in previous years. However, it was noted that the Finance team had worked hard to ensure that all areas that were known at the time had been included in the proposals. The Democratic Services Team were thanked for their significant support and flexibility during this process which had been greatly appreciated by both Officers and Members.

Following the presentation of the report, Members discussed the following in detail:

·       The collection of Council Tax and any potential difficulties as a result of the proposed increase – It was reported that this would be mitigated by provision of signposting to residents who found themselves in financial difficulties. Work would be undertaken by the Council’s Collections Team to look at additional areas of support that the Council could provide in the future and proposals provided to Members in due course. This might include advice on managing debt and access to alternative benefits. Members were encouraged by this approach. It was queried whether any advice could be included when the Council Tax bills were sent to residents such as information and contact details for the Citizens’ Advice Bureau (CAB). It was stated that this kind of information would perhaps be more useful further along in the financial year as usually residents started off the Council Tax billing cycle being able to pay, however difficulties might arise three or four payments into the payment cycle. Therefore, the work undertaken by the Collections Team, as detailed above, would provide necessary support.

·       Minimum Revenue Provision (MRP) – It was noted that this was a complex area of Local Governement finance.

·       Capital Programme – Members queried specific projects which had been included in the Capital Programme. It was noted that the Sweetpool Lane project was included as the Council was responsible for this land. It was hoped that the allocated funding would result in works being carried out to alleviate flooding risks in the area and prepare it for potential adoption of the road in the future. Members also requested clarification on the status of Sherwood Road. Officers undertook to provide further information on this matter following the meeting.

·       Planning Appeal Costs – this was taken into account in preparing the budgets for the Planning service area.

·       Tech1 System – Members were concerned about the system and the issues surrounding the cash receipting module which had been reported previously and had resulted in manual interventions by the Finance team. The Finance team had worked hard within the system to ensure the information was correct although it was accepted that there had been limitations whereby Officers had to create work arounds for. It was noted that the Finance service area had experienced a turbulent time recently and it was important to ensure that the service was resilient and reliable going forward. Recruitment was currently underway for a Director of Finance who would provide stability with a view to looking at the structure of the whole team in the future.

·       External Auditors – Members requested that the external auditors, Ernst & Young meet with the Audit, Standards and Governance Committee and the Leader of Bromsgrove District Council.

·       Value Added Tax (VAT) – Members queried the status of the Council’s VAT claim to His Majesty’s Revenue and Customs (HMRC). Cabinet was informed that the VAT claim was currently being looked at in liaison with HMRC and other Council finance advisors. It was suggested that a report be provided to the Audit, Standards and Governance Committee on this matter in the future.

In conclusion, Members felt that this was an upbeat Budget for the Council and despite the risks and uncertainties in terms of WCC Council Tax setting Bromsgrove District Council had a lot to be proud of in terms of how finances were managed.

The Cabinet Member for Finance took the opportunity to thank the Interim Director of Finance and Section 151 Officer and the Assistant Director of Finance and Customer Services for their hard work during this period. They had provided significant support during the Budget setting process and had gone above and beyond in providing answers to queries from Members.

In proposing the recommendations, it was noted that along with the recommendations contained in the report, two further recommendations had been tabled at the meeting in respect of the proposed level of Council Tax for 2026/2027 and the Fees and Charges for Commercial Waste.

RESOLVED that

1)         The updated position and assumptions be noted in respect of the 2026/27 annual budget and for the Medium-Term Financial Plan up to 2028/29.

2)         Cabinet has considered and noted the comments and implications set out in the Section 151 Officer’s Robustness (Section 25) Statement of the 2026/27 to 2028/29 Medium Term Financial Plan in its commitment to maintaining the delivery of good quality services and investment to meet local needs within a sustainable financial position.

RECOMMENDED that

3)         The Growth proposals of £67,639 in 2026/27, £64,719 in 2027/28 and £64,719 in 2028/29 approved.

4)         The Directorate Pressures of £565,655 in 2026/27, £545,295 and £741,514 in 2027/28 and 2028/2029, be approved.

5)         The Savings proposals of £621,899 in 2026/27, £665,991 in 2027/2028 and £690,206 be approved.

6)         The Capital Programme 2026/2027 to 2029/2030, including bids of £4.738m for new capital projects, be approved.

7)         Earmarked Reserves of £12.245m be carried forward into 2026/2027, be approved.

8)         The new allocations within the carried forward earmarked reserves as set out in paragraph 3.30, namely the creation of a new Financial Resilience Reserve of £2.5million, a Local Government Reorganisation Reserve of £1m, a Community Investment Fund of £1.250m and a reserve for Particulate Monitoring of £102k be approved.

9)     Increases relating to Worcestershire Regulatory Services of £25k for the Food Standards Agency on an ongoing basis be approved.

10) The Flexible Use of Capital Receipts Strategy be approved.

11) the proposed Council Tax increase of 2.99% for the 2026/2027 be approved.

12)     The updated fees and charges for Commercial Waste Services be approved for adoption in the 2026/2027 financial year.