Purpose

To consider the report of the Cabinet Member for Finance and Resources detailing the 2026/27 Budget and Medium Term Financial Strategy.

Decision

GENERAL FUND REVENUE

To recommend to Council:

(i)  Have regard to the Section 25 Statement of the S151 Officer as set out in paragraphs 100 to 110 on the robustness of the budget and the adequacy of the council’s reserves, when approving the following recommendations.

(ii)  The balanced 5 year Medium-Term Financial Strategy 2025/26 to 2029/30 as set out in table 2 and appendix 1.

(iii)  The Revenue Budget for 2026/27 as set out in tables 4 and 5 and Appendices 1 and 2.

(iv)  The inclusion in the budget of General Fund pressures totalling £23.8M in 2026/27, increasing to £34.2M in 2029/30, as detailed in paragraph 46.

(v)  The inclusion of commitments totalling £4.2M in 2026/27, increasing to £8.4M in 2029/30, as detailed in paragraph 48.

(vi)  The inclusion of savings proposals totalling £20.8M in the 2026/27 General Fund Revenue Budget, increasing to £26.2M in 2029/30 as detailed in paragraphs 52 to 56.

(vii)  An increase in the ‘core’ council tax of 2.99% and an increase in the Adult Social Care precept of 2.00%, allowable under general powers to increase council tax without a referendum.

(viii)  A Band D Council Tax for Southampton City Council of £1,998.18 for 2026/27, a Net Budget Requirement of £285.2M and the Council Tax Requirement for 2026/27 at £135.5M as per Appendix 6. The Council Tax increase comprises a core increase of 2.99% and 2.00% specifically for Adult Social Care.

(ix)  Note the changes to fees and charges as set out in paragraph 76 and Appendix 8.

(x)  Approve the Procurement Forward Plan for 2026/27 that the MTFS is based on contained at Appendix 9.

(xi)  Delegate authority to the relevant Executive Director, after consultation with the relevant Cabinet Member(s), to take all actions necessary to enter into all contracts contained in the Procurement Forward Plan for 2026/27 at Appendix 9 for the contract duration stated including any contractually permitted extension options providing that this is within the budget envelope available for the contract for the projects contained in the Procurement Forward Plan 2026/27 at Appendix 9.

(xii)  Delegate authority to the relevant Executive Director, after consultation with the relevant Cabinet Member(s), to take all actions necessary to extend all contracts contained in the Contract Forward Plan for 2026/27 at Appendix 10 for the extension period permitted by the contract providing that this is within the budget envelope for the extension period.

(xiii)  Note the outcome of the budget engagement exercise that took place between 20 November and 21 December 2025 as set out in paragraphs 89 to 94 and Appendix 13.

Cabinet is recommended to:

(xiv)

(xiv)  Approve Southampton City Council to act as the accountable body for the receipt of strategic authority Government funding in 2026/27, prior to the establishment of the Mayoral Combined County Authority.

(xv)  Approve Southampton City Council to act as the accountable body for Pride in Place.

(xvi)  Approve the creation of a Waste Strategy Reserve to hold monies to be used for waste service improvement projects.

(xvii)  Agree to receive quarterly financial reporting during 2026/27 for the general fund revenue account and capital programme, and HRA. 

Reasons for the decision

The Council’s Constitution requires Full Council to set Council Tax and agree the Budget for the forthcoming financial year.

Alternative options considered

Alternative options for revenue spending and savings have been considered in formulating these budget proposals. The Council has a duty to set a balanced budget by 11 March. Council may consider different savings proposals as far as they comply with the delivery of the council’s statutory duties and ensure that the council tax can be set by balancing the overall budget. It is important to note that the Council decision is to set Council Tax whereas implementation of the budget is an executive function for the Leader and Cabinet.