Decision

Cabinet received a report updating the General Fund Medium Term Financial Strategy (MTFS) for 2026/27 to 2030/31, setting out the Council’s projected expenditure and income, including inflation assumptions, known budget pressures, savings requirements and growth allowances.

The Portfolio Holder for Resources and Performance advised that the report had been prepared prior to the Government's announcement that local government reorganisation would be postponed and should therefore be considered in that context.

The Portfolio Holder thanked the Strategic Director and Chief Financial Officer and her team for their prudent financial management which had enabled investment in key community projects, while maintaining adequate reserves and preparing for future financial risks.  He then reported on a programme of public realm improvements funded from the 2025/26 underspend, including restoration of the War Memorial, enhancements to an Old Town underpass, town centre cleaning and greening initiatives, and improvements to public spaces across the borough. 

In addition, Members noted that £550,000 of Neighbourhood Community Infrastructure Levy funding would support a range of projects, including new multi-use games areas, cycleway and trim trail improvements, play equipment, youth facilities, environmental enhancements, and renewable energy initiatives.

In response to a number of questions, the Strategic Director and Chief Financial Officer advised that in relation to the delay in Local Government Reorganisation, provision would continue to be made until the outcome of the Government's review was known.  She also responded to a question regarding the ongoing pressures relating to homelessness and rough sleeping and advised that the costs associated with temporary accommodation would continued to be closely monitored through performance and budget reporting, with current projections remaining manageable but carrying a risk of increased future pressure.  Members were also advised that accommodation demand, including the use of bed and breakfast provision, was being tracked regularly to ensure any emerging financial risks could be identified and addressed.

It was RESOLVED that:

1. That the MTFS principles, as outlined in paragraph 3.6 of the report be approved.
2. That, for modelling purposes, Council tax increases be set at the threshold assumed by the Government in the Fair Funding three-year settlement in order to support the resilience of the Council’s finances as set out in paragraph 4.7.6 of the report.
3. That the updated inflation assumptions used in the MTFS as set out in section 4.1 of the report be approved.
4. That the budget pressures and reductions as set out in section 4.2 of the report be approved.
5. That the revised use of Business Rates reserve (NNDR reserve) to fund the set aside and minimum revenue provision (MRP) for the Local Enterprise Partnership (LEP now Herts Futures) loans as set out in paragraph 4.3.7 of the report be approved.
6. That the approach to the ‘Balancing the Budget’ options as set out in section 4.10 be approved.
7. That the Balancing the Budget options identified of £76,880 be noted.
8. That the Balancing the Budget target of £1.2Mllion, be approved for the period 2027/28- 2030/31, as set out in section 4.10 of the report, (subject to decisions made after 2027/28 by the new Unitary Authority).
9. That the additional allowance for Local Government Reorganisation be approved as set out in paragraph 4.12.1 of £500K in 2026/27.
10. That the inclusion of £200K in 2026/27 and 2027/28 to help fund works arising from the stock condition survey on the Council’s assets as set out in paragraph 4.12.2 of the report be approved.
11. That the additional funding to be set aside in an earmarked reserve for the Council’s Queensway LLP of a further £40K per year, (paragraph 4.12.3) be approved.
12. That it be noted that the 2026/27 General Fund budget and MTFS reflect the latest financial position for the Swingate JV.
13. That the General Fund growth allowance of £75K be noted and approved for the use of the Council’s MSEB priorities.
14. That the Council tax support scheme as set out in section 4.8 for 2027/28 be approved.
15. That a minimum level of balances for the General Fund of £3.92million be approved for 2026/27 as set out in paragraph 4.13.7 of the report.
16. The MTFS be regularly reviewed and revised to reflect any material financial pressures, so forecasts are updated and re-presented to the Cabinet for approval.
17. That the Trade Unions and staff be consulted on the key messages contained within the MTFS and more specifically when drawing up any proposals where there is a risk of redundancy.