To receive any apologies for absence.

There were no apologies from members of the cabinet.

There were apologies from Councillor Terry James. 

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 20 January 2026.

To follow. 

Resolved:       That the minutes of the meeting held on 20 January 2026 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.

Scrutiny Management Board recommendations from 23^rd January 2026 are included at Appendix G for item 7: 2026/27 Budget, Medium  Term Financial and Treasury Management Strategy - Revenue

The Scrutiny Management Board (SMB) met on 23^rd January 2026.  The chair of SMB, Councillor Proctor, made the following points. 

It was noted that the Fair Funding review had placed Herefordshire in a very difficult position but Cabinet had approached the funding challenge rationally.  It was noted there was a risk associated with the delivery of savings for next year and scrutiny would be working with cabinet to ensure these savings can be delivered. 

He key areas of focus in the council’s Medium Term Financial Strategy appeared sensible but needed more detail. 

It was positively noted that there were investments in the proposed capital programme that would reduce revenue costs. 

Lastly, SMB noted it had a long standing position that the council should be better at showing the links between the capital programme, the revenue budget, service delivery and ultimately the outcomes.  It was raised that the draft Delivery Plan should be presented alongside the draft budget. 

In response it was noted that there was confidence in the budget proposals given the challenges the council has faced with the unfair allocation of funding for local government and thanks were extended to the SMB for their positive contribution. 

It was confirmed that the recommendations were acknowledged and responses had been included in the reports which were covered below. 

To recommend to Council the proposed 2026/27 revenue budget, Medium Term Financial Strategy and the Treasury Management Strategy. 

Appendices E, G and H to follow. 

Councillor Stoddart, cabinet member for finance and corporate services introduced the report

The Cabinet received an update on the consultation undertaken during the development of the 2026/27 draft revenue budget. Members were advised that extensive briefings had been provided to Group Leaders, political groups, Scrutiny Committees and council employees throughout the process.

The public consultation ran from 9 December 2025 to 4 January 2026, generating 359 responses, an increase from 201 in the previous year. Feedback indicated strong opposition to reductions in highways maintenance and street lighting, and significant support for asset development and digital service improvements over service reductions. A majority favoured increased charges for non?statutory services.

The Scrutiny Management Board considered the budget proposals at its meeting on 23 January. Cabinet noted the additional assurances provided and the formal responses set out at Appendix G to the report.

Cabinet noted the provisional local government settlement published on 19 December, confirming significant reductions arising from the Fair Funding Review. The final settlement was awaited.

The draft balanced revenue budget for 2026/27 totals £234.1m and includes a council tax increase of 4.99%, resulting in a Band D charge of £2,067.63. Savings proposals of £20m, use of £3.2m from the Business Rates Risk Reserve, and establishment of a Contract Inflation Fund were included.

Cabinet acknowledged that local authorities continue to face significant pressures due to rising demand for statutory services and reductions in central government funding. Analysis indicated a £17.3m reduction to Herefordshire’s allocation following the Fair Funding Review, with rural councils significantly disadvantaged compared with urban authorities.

Members noted that although 30 councils received Exceptional Financial Support (EFS) in 2025/26, Herefordshire Council would not seek such support, instead maintaining responsible financial management.

The Cabinet considered the proposed base budgets for 2026/27:

Community Wellbeing: £89.667m, reflecting pressures linked to rising complexity of needs, temporary accommodation demand, and inflation.

Children & Young People: £58.413m, with continued delivery of multi?year savings and stable workforce arrangements following an underspend in 2024/25.

Economy & Environment: £38.291m, supporting major projects, waste contract pressures and the new public realm operating model.

Corporate Services: £22.496m, including £1,000 per Ward Member for community projects and £0.6m capital receipts for transformation.

Central: £25.253m, driven by increased interest payments and capital programme commitments.

Cabinet noted a total of £19.954m in savings proposals across all Directorates, covering cost control, demand management, income generation and efficiencies. It was reported that £6.9m (35%) was expected to be delivered from 1 April 2026.

The Cabinet noted that external auditors had identified no significant weaknesses in financial planning arrangements and that all financial planning measures were assessed as green. Herefordshire continued to be one of the first authorities nationally to publish audited accounts.

Cabinet received the Medium-Term Financial Strategy (MTFS) for 2026/27 to 2029/30, noting an estimated cumulative funding gap of £83.418m, largely attributable to the Fair Funding Review. Work to address the 2027/28 gap would commence in April 2026.  Key areas of future focus include maximising commercial income, efficiency improvements with specialist partners, review of  ...  view the full minutes text for item 65.

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

It was noted that Councillor Harvey had to leave the meeting and Councillor Hitchiner acted as substitute for Group Leader for the remaining items.

Councillor Stoddart, cabinet member for finance and corporate services introduced the report. 

The Cabinet received the final version of the 2026/27 Capital Investment Budget and accompanying Capital Strategy. It was noted that the capital programme reflects long?term investment (over one year) and that inclusion in the programme does not constitute approval to proceed; all projects will be subject to full governance and business case processes.

No changes had been made since the draft report was previously presented on 20 January 2026.

Public consultation (November to December 2025) showed strong support for the proposed additions, particularly for maintaining investment in highways maintenance and street lighting. The Scrutiny Management Board (SMB) reviewed the programme on 23 January 2026 and had no comments on the capital programme.

The proposed additions to the 2026/27 Capital Programme will enable the Council to:

• Increase temporary and emergency accommodation (£10m).
• Address revenue pressures through alternative school provision and Pupil Referral Units.
• Improve technological infrastructure and innovation.
• Support housing growth through new infrastructure.
• Strengthen school and property assets.
• Improve public rights of way access.
• Continue investing in the county’s road network.

Appendix A set out the 14 capital proposals totalling £44m, funded through prudential borrowing, capital receipts, and revenue reserves.

It was noted that responding to housing needs remains a high priority; an additional £10m has been allocated to deliver new housing solutions, reducing reliance on temporary accommodation and lowering revenue costs by £1.7m per year. The Strategic Housing Team has supported the delivery of over 1,491 homes since April 2020.

A new £5m Historic Building Fund has been created to support works at key heritage buildings. The S151 Officer will allocate funds once final contract prices are confirmed.

A review of the current capital programme took place which has removed or re?funded several projects (identified at paragraph 13 of the report), releasing £2.65m and reducing reliance on borrowing.

The Capital Strategy (Appendix D) has been developed in line with CIPFA guidance and outlines the Council’s approach to prioritisation, borrowing, and risk.

The Cabinet Member endorsed the report, highlighting alignment with the Council Plan and the administration’s commitment to delivering for Herefordshire, and commended the three recommendations to Cabinet for approval.

No comments from cabinet members. 

Group Leaders were invited to offer their views:

The Liberal Democrat Group outlined their views and noted that:

Support was expressed for progressing Phase One of the bypass, noting it should have been completed years earlier to avoid the current revenue impact. They also welcomed the temporary accommodation investment for affordable housing, recognising the benefits for homeless individuals and families. However, they highlighted the absence of significant investment in expanding social and affordable housing within the capital programme. Although work on a housing development company had been ongoing since December 2023, and a business plan indicated longer?term viability, no capital funding had been allocated.  ...  view the full minutes text for item 66.

Councillor Stoddart, cabinet member for finance and corporate services introduced the report. 

The Cabinet received a report on the annual review of Earmarked Reserves and the General Fund for 2026/27. The report outlined the rationale for each reserve and the reasons for maintaining them at their stated levels, ensuring the Council can meet known future commitments and mitigate unforeseen financial risks.

It was noted that earmarked reserves support specific priorities, contingencies, and cash?flow management, while the General Fund acts as a strategic reserve for emergencies. As at 31 March 2025, the General Fund balance stood at £10.1m (4.3% of the 2025/26 net revenue budget), within the required 3–5% threshold.

Earmarked reserves totalled £80.7m at 31 March 2025, including reserves for liabilities and risk (£16.8m), budget resilience (£14.1m), strategic priorities (£9.3m), accounting reserves (£1.8m), grants and contributions (£27m), and schools?related balances (£11.7m). This included £18m in unspent grant funding carried forward in line with CIPFA guidance.

Forecast balances indicated that earmarked reserves were expected to reduce to £65.2m by 31 March 2026 and £41.6m by 31 March 2027, before accounting for any new grants received. The Quarter 2 Budget Report (2025/26) projected a £7m overspend, reduced to £3.7m after management action, with any final overspend to be funded from reserves.

The Medium?Term Financial Strategy highlighted ongoing financial risks and the need to minimise and replenish reserve usage to maintain resilience. Annual review of reserves aligns with CIPFA best practice, and the Section 151 Officer’s statutory responsibilities under Section 25 of the Local Government Act 2003 were noted.

No comments from cabinet members.

Group Leaders were invited to offer their views:

The Independent for Herefordshire Group outlined their views and noted:

Concern was expressed about the significant projected reduction in reserves, falling from around £80m to approximately £41 to 42m around a 50% decrease. It was queried how reserves could realistically be rebuilt through grants, with scepticism that substantial additional funding would be forthcoming from central government. It was suggested that the financial position was moving in a worrying direction over the coming years.

The Green Group outlined their views and noted:

It was noted that reserves exist to provide a cushion for unforeseen expenditure and emerging risks. Reference was made to the increasing impact of climate change, including higher levels of rainfall and flooding, which are causing significant damage to council assets beyond what can be managed within normal road?maintenance budgets. It was highlighted that further pressures on assets and residents are likely, and that this may necessitate drawing on reserves. Concern was expressed that the council is moving into an increasingly challenging financial position.

The Liberal Democrat Group outlined their views and noted that:

No comments. 

In responding to the comments raised, the Cabinet Members noted that:

It was clarified that while no additional central government funding was expected, any future financial surpluses identified through the council’s financial strategy will be directed into reserves.

It was further noted that the costs associated with cancelling the bypass  ...  view the full minutes text for item 67.

To recommend to Council the 2026/27 local Council Tax Reduction (CTR) scheme. 

Councillor Stoddart, cabinet member for finance and corporate services introduced the report. 

The Cabinet received a report proposing that the Council Tax Reduction (CTR) Scheme for 2026/27 be maintained at the current maximum discount level. Members were informed that over 11,000 households in Herefordshire receive CTR, including more than 6,000 working-age claimants. The existing local working-age scheme, approved in February 2025, continues to mirror the nationally set pensioner scheme by offering up to 100% discount unless household income exceeds the threshold.

The administration noted that public consultation undertaken during November–December 2025 showed strong support for maintaining council tax discounts for those most in need. Although no changes are proposed for 2026/27, feedback from the consultation will be used to improve future engagement.

It was highlighted that additional council tax discounts are also available and listed on the council’s website.

Maintaining the maximum CTR discount is expected to help reduce financial pressure on vulnerable residents. The report’s recommendation was endorsed for Cabinet approval.

Comments from cabinet members:

None

Group Leaders were invited to offer their views:

The Green Group outlined their views and noted:

Full support was confirmed for maintaining the scheme, noting it is essential given the maximum council tax increase being proposed and expressing their appreciation that it is being continued.

The Independent for Herefordshire Group outlined their views and noted:

It was noted that the Conservative administration had previously set the maximum Council Tax Reduction discount at 80%, and that the former Independent / Green Alliance administration had increased this to 100%. Appreciation was expressed that the current Cabinet was continuing the full discount. Reference was also made to a previous decision to allocate interest earned on council deposits to support the scheme, and it was queried whether this approach was being applied under the current proposals.

The Liberal Democrat Group outlined their views and noted that:

No comments

In responding to the comments raised, the Cabinet Members noted that:

It was imperative that the council has this option to address hardship and it would be checked when the 100% reduction was introduced. 

The Leader of the Council concluded the discussions. Cllr Stoddart proposed and the Leader of the Council seconded for the decision before them which is that Cabinet:

Recommendations:

That: Cabinet recommends the following to Council

a)    The Council Tax Reduction Scheme for 2026/27, with the same parameters as the existing scheme, be recommended to Council for approval.

The recommendations were unanimously approved.

The purpose of this report is to present cabinet with the outcome of the Inspection of Local Authority Children Services (ILACS) that took place 10-21 November 2025 and was published 12^th January 2026.

Councillor Powell, cabinet member for children and young people introduced the report. 

The Cabinet received a report outlining the outcome of the Ofsted inspection of Children’s Services, which awarded an overall judgment of Good, with all service areas rated Good and the impact of leaders on social work practice judged Outstanding. This was described as a significant achievement for Herefordshire, reflecting the work of practitioners, managers, elected members and partners in delivering the improvements set out in the Children’s Services and Partnership Improvement Plan.

Ofsted found that children’s services are treated as a high priority by the council and praised the visible and effective leadership of the Corporate Director, whose aspirational and child?focused approach has driven rapid improvement. The report highlighted that, at the time of her appointment in July 2024, permanent social worker levels were low (29%), and the pace of change had been a concern; permanent staffing has since risen to around 70%.

Key strengths identified by Ofsted included:

• A strong culture that places children at the centre of service delivery.
• Mature and effective partnership working that has improved quality and consistency.
• Successful workforce stabilisation, supported by nurturing and visible leadership.
• A comprehensive quality assurance framework enabling a clear understanding of practice and impact.
• Effective early help, well?considered assessments, and appropriate application of safeguarding thresholds.
• Skilled practitioners supporting children to remain with or return to their families where appropriate.
• A strong multi?agency response to children at risk of exploitation.
• Good support and training for foster carers, including kinship carers.
• A robust service for care leavers, supported by dedicated personal advisers.

Two areas for development were noted: management oversight of the Local Authority Designated Officer (LADO) function and identification/assessment of children in private fostering arrangements. Ofsted acknowledged that improvement plans were already in place.

The Cabinet Member expressed thanks to the Director of Children’s Services, the children’s workforce, partners, scrutiny members, the Chief Executive and the Leader for their contribution. Appreciation was also extended to families who provided feedback, with 85% reporting they felt able to share their views and 83% confirming the council’s intervention made a positive difference.

Significant improvement was also reported in financial performance: following £10.8m investment in 2024/25, the directorate delivered £2.5m savings last year, is forecast to deliver £3.9m this year, and has proposed £2.7m savings for next year. An underspend of £2.7m was also delivered, totalling £12.5m in savings and underspends over two years.

Comments from cabinet members:

It was highlighted that the Ofsted outcome demonstrates it is possible to deliver high?quality, high?value services while also achieving savings. Thanks were expressed to the Director of Children’s Services, the leadership team and the workforce for their dedication and the significant improvements delivered for children and families in Herefordshire. It was noted that the combination of strong technical grip, such as effective performance management, and a compassionate, child?centred approach had driven a remarkable turnaround. Members praised the substantial improvement in recruitment and expressed confidence that the service is now  ...  view the full minutes text for item 69.