To receive any apologies for absence.

There were apologies from Councillors Biggs and Powell. 

To receive declarations of interests in respect of Table A, Table B or Other Interests from members of the committee in respect of items on the agenda.

None.

To approve and sign the minutes of the meeting held on 18 December 2025.

Resolved:       That the minutes of the meeting held on 18 December 2025 be approved as a correct record and signed by the Chairperson.

To receive questions from members of the public.

Questions received and responses given are attached as appendix 1 to the minutes.

To receive questions from councillors.

Questions received and responses given are attached as appendix 2 to the minutes.

To receive reports from the Council’s scrutiny committees on any recommendations to the Cabinet arising from recent scrutiny committee meetings.

There were no reports from scrutiny committees for consideration at this meeting.

To present the draft 2026/27 revenue budget, Medium Term Financial Strategy and the Treasury Management Strategy. 

Councillor Stoddart, cabinet member for finance and corporate services introduced the report.  It was noted that the budget had been developed during a time of significant financial pressure, particularly due to changes in Government funding for rural areas. Despite these challenges, the council was proposing a balanced budget that protected essential services whilst investing in the county’s future.

Recent changes to the national Fair Funding Review meant that Herefordshire will see a £17.3m reduction in Government funding over the next three years. The new funding formula gives greater weight to urban pressures and does not fully recognise the higher cost of delivering services in rural areas. By 2028/29, Herefordshire’s Government funding per person is expected to be 40% lower than that received by urban councils.

To help protect services, the council proposed a 4.99% council tax increase made up of 2.99% core council tax and 2% adult social care precept. For a Band D property, this would mean a rise to £2,067.63, an increase of about £1.89 per week.

To balance the budget for 2026/27, the council proposed £20m in savings across all service areas, a new Contract Inflation Fund to manage rising costs and £3.2m from the Business Rates Risk Reserve to offset reduced Government funding.

Despite the financial challenges, the council would continue to support vulnerable adults and older people, improve children’s services following recent progress and a ‘Good’ Ofsted rating, deliver major projects and invest in the local economy, manage increasing pressure in waste services and home-to-school transport.

From April 2026, the council will introduce 30 minutes of free parking in all council-operated car parks, supporting shoppers, residents and local businesses. Parking tariffs will be adjusted by an average of 8–10% to help maintain car parks and transport infrastructure. Even with this change, prices remain below where they would have been had charges risen with inflation since 2023.

Every ward councillor will also receive £1,000 to support local community projects aligned with the Council Plan.

The Medium-Term Financial Strategy (MTFS) highlights further pressures ahead, including an estimated funding gap of £20m in 2027/28 and £83m over the full period to 2029/30.

The council will begin work immediately on its Future Financial Strategy to address these gaps.

External auditors have confirmed that the council has robust financial management and effective arrangements in place to identify and manage risks.

Lastly, it was noted that the Fair Funding Review had resulted in a substantial reduction in Government support for Herefordshire, creating a £30m funding gap. This shortfall was attributed to decreased national investment in rural areas rather than local financial mismanagement. Members were advised that the county now receives around 40% less funding per resident compared with urban authorities, and that the reduction in the Government’s contribution to core spending power has increased pressure on local taxpayers and businesses.

Despite these challenges, it was highlighted that the Conservative?led council had set a balanced budget for the year, prioritising the protection of vulnerable residents, the maintenance of essential services, and  ...  view the full minutes text for item 57.

To recommend to Council for approval the revised capital investment budget and capital strategy for 2026/27 onwards.

Councillor Stoddart, cabinet member for finance and corporate services introduced the report.  It was noted that the capital programme covers investment that provides benefit for more than one year, and that the baseline used was the capital programme approved by Council in February 2025, updated to reflect reprofiling undertaken in line with external audit recommendations.

It was highlighted that fourteen new capital proposals had been identified for 2026/27, totalling £44m.   These proposals support priorities within the Council Plan across People, Place, Growth and Transformation. Key areas of investment included the provision of temporary and emergency accommodation, alternative school provision and Pupil Referral Units, improvements to technology to support service efficiency, infrastructure to support housing growth, resilience measures across school and property assets, improvements to public rights of way, and continued investment in the highway network.

It was reported that £10m had been added to support the delivery of affordable housing, with the intention to fund this through borrowing supported by housing benefit income, reduced temporary accommodation costs, and potential Homes England grants. A further £5m had been allocated to establish an Historic Building Fund to support major heritage assets including the Museum & Art Gallery, Shirehall and Town Hall.

It was noted that a review of the current capital programme had identified projects that were no longer required or that could be funded through alternative sources. As a result, a total of £2.65m had been removed, alongside the removal of additional allocations for employment land, public realm investment, road safety schemes and school transport fleet purchases, now to be funded or managed through other routes.

It was noted that the Government has extended flexibilities allowing the use of capital receipts to fund transformation expenditure to 2029/30. The council intends to make use of this flexibility, with £1m of eligible revenue transformation activity in 2026/27 to be funded from capital receipts, subject to funds being available.

It was emphasised that inclusion in the capital programme did not constitute approval to proceed, and that each scheme will require a detailed business case and separate governance decision. The capital strategy, developed in accordance with CIPFA guidelines, sets out the framework for how capital priorities, borrowing levels and risk appetite are determined.

It was noted that environmental considerations will continue to be assessed during project development, and that monthly budget control meetings and project boards provided assurance regarding delivery, risk management and financial oversight.

In summary it was highlighted that the programme represented an ambitious but deliverable set of proposals aligned to the Council Plan. 

Comments from cabinet members:

Members raised several points in relation to the draft capital budget and strategy.

• It was explained that the capital allocation was intended to address a significant backlog of over 100 public rights?of?way bridges that were currently unusable or in poor condition. Some bridges had been out of action for six to seven years, and the funding will help replace as many as possible.
• It was also reported that £500k from this capital allocation had  ...  view the full minutes text for item 58.