Decision

Purpose of
Report
 
Under the Council’s Constitution, the
Council is required to set a balanced Revenue and Capital Budget
and set the Council Tax for each financial year. This report:
 

·        
Provided the context for budget setting, both in terms of the
Council’s strategic objectives for the city and the local
government landscape nationally

·        
Sets out the Service Director for Finance’s (Section 151
Officer) budget robustness statement as required by law

·        
Summarised financial risks and associated mitigations

·        
Sets out revenue budget planning assumptions in respect of income,
approved savings plans, resource requirements

·        
Sets out the Capital budget, Capital Financing Strategy and the
Treasury Management Strategy for 2026/27

·        
Sets out the Medium-Term Financial Plan for the period 2026/27
– 2030/31

·        
Sets out indicative Council Tax levels for 2026/27, prior to
approval of Fire Precept

·        
Sets out proposed Fees and Charges for 2026/27 for Cabinet
Approval

·        
Set outs the Tamar Bridge & Torpoint Ferry Joint Committee
2026/27 Revenue Budget and Capital Programme and the 2026/27 draft
Business Plan

·        
Sets out Cabinet Savings Proposals for approval
 
Decision
 
Cabinet agreed to:
 
1. Note the Financial Risks as set out in
Appendix 3.
2. Note the section from the Council’s
Section 151 Officer (Chief Finance Officer) on the robustness of
the budget estimates and the adequacy of the level of reserves.
3. Note that the Fire Precept will not be
confirmed until after the Cabinet meeting and delegate to the
Section 151 Officer to make final amendments to Council Tax
Resolution prior to Full Council.
4. Recommends the following to Full Council,
subject to amendments by the Section 151 Officer in consultation
with the Leader reflecting any final technical adjustments and
changes upon receipt of the Final Local Government Finance
Settlement.
i) The Revenue
Budget 2026/27:
 £329.275m
ii) The drawdown of a maximum of £3.618m
of flexible capital receipts, as set out in the report
iii) The Capital Budget 2026/27
£113.938m and five-year programme £319.725m
iv) The Capital Financing Strategy 2026/27
v) The Treasury Management Strategy 2026/27
(incorporating the Non-Treasury Management Strategy and the Minimum
Revenue Provision Statement)
vi) The Medium-Term Financial Plan for the
period 2026/27 to 2030/31
vii) The Tamar Bridge & Torpoint Ferry
Joint Committee 2026/27 Revenue Budget and Capital Programme and
the 2026/27 draft Business Plan, as referenced in Appendix 16, and
the longer-term forecast to 2029/30 is noted.
5. Approve the partial reversal of up to
£31m of the council’s Interest Rate Swap to provide a
net£9.7m one-off benefit to the council’s revenue
budget position in 2026/27, noting the overall financial impact and
alternative options set out in Section 20 of the report.
 
6. Approve Fees and Charges Setting 2026/27
(Appendix 15)
7. Approve the Cabinet Savings Proposals
2026/27 (Appendix 5)
 
Reason:
 
Setting a balanced budget is a statutory
requirement. The obligation to make a lawful budget each year is
shared equally by each individual Member, discharged through
Council. Options for achieving a balanced budget have been
considered in the preparation of the proposed budget set out in
this report. Using part of the value created through the
council’s beneficial Rate Swap arrangement will enable the
council to set a budget in2026/27, whilst driving forward its
transformation plans to achieve a more sustainable financial
position in2027/28 and beyond.
 
Alternative options
considered and rejected
 
1) Not to bring forward proposals in respect
of the 2026/27 Budget – rejected on the basis that there isa
legal requirement for the Council to agree a balanced budget, and seeking support for further development
of the recommended proposals will enable this to happen.
 
2) Funding demand pressures at a lower level
or increasing savings – despite extensive work to reduce and
contain demand, independent review of forecasts for key pressure
areas (SEND, Adults and Children’s Social Care, and
Homelessness), and the development of £17.2m in recommended
savings with further transformation savings planned for later
years, the S151 Officer cannot recommend this option because it
would fail to deliver a robust, balanced budget position.
 
3) Exceptional Financial Support via
Capitalisation Direction or Council Tax referendum limits
–rejected because a capitalisation direction is anticipated
to create higher financing costs than current proposals, while
raising Council Tax to the average rate would still fail to close
the budget gap and would place an additional burden on residents.