To seek the views of the Scrutiny Management Board on the draft revenue budget proposals for 2026/27.

The Chair took the 2026/27 Draft Budget -Revenue report as read and opened the item up for debate. The key points of discussion included:

Medium-Term Financial Strategy (MTFS): Overall Position and Assumptions

1.     Cabinet members clarified that the MTFS was a forecast, not a budget proposal. It presented the most likely scenario based on current information and did not assume future savings, which resulted in a large headline gap.

2.     Officers explained that the £82m headline funding gap represented a worst-case forecast. The council was legally required to set a balanced budget each year, and delivery of recurrent savings in earlier years reduced the base budget, which in turn reduced gaps in later years.

Reliance on Growth and Economic Assumptions

3.     Cabinet members acknowledged growth is uncertain but stated that declining central government funding requires the council to grow council tax and business rates alongside delivering savings and efficiencies.

4.     Officers outlined ongoing phosphate mitigation measures being employed to address housing delivery constraints and stimulate economic growth, which included wetland schemes, engagement with developers and monitoring of national planning reforms. Some factors were noted to be outside the council’s direct control.

Recurrent Savings and Use of Reserves

5.     In response to a question about whether reserves were being used in place of recurrent savings, officers confirmed that reserves were treated as one-off measures - the MTFS explicitly reinstated reserve usage in future years and did not assume reserves as a permanent solution.

6.     It was confirmed by officers that the reduction in the funding gap from £82 million to approximately £11 million was based on the assumed delivery of recurrent savings and their cumulative impact on the base budget -- not on ongoing reserve usage.

Deliverability of Savings

7.     Cabinet members and officers acknowledged the unprecedented scale of the savings challenge. It was stated that planning had begun early, proposals had been developed collaboratively, and robust governance and monitoring arrangements were in place. A proportion of savings were expected to be delivered from the start of the financial year.

8.     The committee heard that the delivery of savings would be monitored through monthly cost controls, savings boards, and quarterly reporting arrangements to Cabinet and scrutiny.

Undelivered Savings and Rolling Risk

9.     Officers explained that the £1.4m undelivered saving linked to Hoople was identified as at risk in the current year outturn. The draft budget assumed delivery of all current-year savings; any shortfall would present as a budget pressure in the following year.

10.  Officers acknowledged the risk of undelivered savings rolling forward and compounding future pressures, and emphasised the importance of delivering savings in-year. Current monitoring indicated a small proportion of savings remained at risk.

11.  Members enquired why the MTFS did not include scenario planning where savings were not delivered. Officers explained that the MTFS presented the most likely and robust position, supported by sensitivity analysis. The approach had been reviewed by external auditors and was consistent with practice in other authorities.

Fair Funding Review

12.  Cabinet members confirmed that they had continued lobbying through national bodies, MPs, and central government, including senior officer meetings with relevant departments, to influence the Fair Funding impact.

External Economic Risks

13.  Officers confirmed global risks such as tariffs and supply change disruption were monitored through the corporate risk register, with inflation and interest rates already identified as key financial risks.

14.  Members asked whether the risk of late-year undelivered savings should be more explicitly reflected in the MTFS. Officers confirmed savings risks were monitored quarterly and stated the intention was to deliver savings before year-end rather than assume non-delivery.

Community Well-Being and Adult Social Care

15.  Officers explained that adult social care savings focused on commissioning and market management rather than withdrawal of care, with statutory and preventative services prioritised. The committee heardthat savings proposals had been developed in partnership with providers, including Hoople, and had not been imposed unilaterally.

16.  Officers advised that the final Care Quality Commission (CQC) report had not yet been received. No indications had been given that would suggest a requirement for the revision of savings or improvement plans. Any changes would be reported through Cabinet and scrutiny.

Statutory and Non-Statutory Services

17.  Cabinet members confirmed services had been reviewed using statutory, discretionary, and preventative criteria. Some non-statutory services were retained to prevent higher-cost interventions later.

Transparency and Presentation

18.  Members asked whether the presentation of savings could more clearly distinguish recurrent savings from reserve-funded measures. Officers confirmed most savings were recurrent and acknowledged a small element of reserve re-prioritisation. Members’ comments were noted for future reporting improvements.