Purpose

To present a
balanced revenue budget for 2025-2026 aligned to the Our City: Our
Plan and an update on the Medium Term Financial Strategy (MTFS) for
the period 2025-2026 to 2027-2028, for recommendation to
Council.

Content

That Council be recommended to approve:

1.   
The net budget requirement for 2025-2026 of £361.3 million
for General Fund services, reflecting the work of the Our Future
Council Programme over the last 12 months.

2.   
The Medium-Term Financial Strategy (MTFS) 2025-2026 to 2027-2028 as
detailed in Sections 4 and 8, and the key assumptions underpinning
the MTFS as detailed in Appendices 2 to 9 of the report.

3.   
A Council Tax for Council services in 2025-2026 of £2,104.29
(Council element) for a Band D property, being an increase of 4.99%
on 2024-2025 levels, which incorporates 2% in relation to Adult
Social Care.

4.   
The refreshed Reserves Strategy as detailed in Appendix 13.

5.   
The establishment of an Executive Director of
Families post and subsequent recruitment that would be subject to a
Special Appointments Committee as per the Council’s
Constitution.

6.   
The redesignation of the Director of Transformation
post to Director of People Services and subsequent recruitment that
would be subject to a Special Appointments Committee as per the
Council’s Constitution.

 
That Council be asked to note:

1.   
That the Deputy Chief Executive would retain Section 151 Officer
responsibility, allowing the Director of Finance post to become
vacant, as a result the budget for this post would be given up as a
saving. 

 
The
Cabinet approves:

1.   
The updated assumptions used in the Budget for 2025-2026 and the
MTFS 2025-2026 to 2027-2028 as detailed in the report and
Appendices 2 to 9.

2.   
That the budget for 2025-2026 is in balance without the use of the
General Fund Reserve, but that £5.0 million of capital
receipts and / or earmarked reserves is required to fund
transformation activity and to balance the budget. And that
authority be delegated to the Section 151 Officer to allocate this
between capital receipts and reserves as determined prudent during
2025-2026.

3.   
That savings proposals totalling £12.8 million (of which
£8.4 million are one-off, and £4.4 million recurrent)
as detailed in Appendix 6, are approved by way of the
report.

4.   
That savings proposals
totalling £5.2 million (recurrent), as detailed in Appendix
7, are approved subject to implementation plans being set out
within an Individual Executive Decision Notice (IEDN) and that
authority for this is delegated to the relevant Cabinet Member and
the Cabinet Member for Resources in consultation with the relevant
Director and Section 151 Officer.

5.   
That savings proposals and savings targets totalling £5.6
million (recurrent), as detailed in Appendix 8, are approved and
would be implemented and actioned in line with the existing
delegations outlined in the Council’s
Constitution.

6.   
That savings proposals and savings targets totalling £10.2
million (recurrent), as detailed in Appendix 9, are approved
subject to implementation plans being set out in a future report to
Cabinet.

7.   
That £300,000 continues to be set aside to fund specific
targeted support with regard to council tax payments, and that
authority continues to be delegated to the Cabinet Member for
Resources in consultation with the Section 151 Officer to approve
any changes to the Council Tax Discretionary Discount Scheme
 

8.   
That the General Fund Reserve is increased by £2.0 million in
order it can be maintained at approximately 5% of net budget over
the medium term (which is in line with the Reserves
Strategy).  This would be funded in-year
by one-off efficiencies, further detail would be provided to
Cabinet in the Performance and Budget Monitoring Report to Cabinet
in March.

9.   
That authority is delegated to the Section 151 Officer, to approve
the calculation and allocation of growth in the central share of
business rates for 2025-2026 and future years to be passported to
the West Midlands Combined Authority (WMCA).

10. That authority be
delegated to the Cabinet Member for Resources, in consultation with
the Section 151 Officer to allocate budgets from the Corporate
Contingency budget for inflation / demand and emerging pressures
once business cases have been completed.

11. That the Council
enter into the Better Care Fund Section 75 Agreement along with the
necessary ancillary agreements from the main agreement for
2025-2026 with the Black Country Integrated Care Board, and
delegate authority to the Cabinet Member for Resources, Cabinet
Member for Adults and Wellbeing, in consultation with the Director
of Adult Social Care and the Section 151 Officer to approve the
final terms of the agreement.

12. That authority is
delegated to the Cabinet Member for Resources and the Cabinet
Member for Children, Young People and Education, in consultation
with the Section 151 Officer and the Director of Children’s
Services, to approve changes to the local funding formula for
Schools including method, principles and rules adopted.

13. The
continuation of the ‘Our Future Council’ Programme or
work, designed to identify and deliver required savings and
transformation, as set out in Section 3 and Appendix 1.
 
That Cabinet notes:

1.   
The significance of the continued financial distress in the sector
as summarised in Section 3.  

2.   
The significant progress made in responding to the Council’s
financial challenge through the ‘Our Future Council’
programme of transformation and cost reduction, as set out in
Section 3.

3.   
That, in the opinion of the Section 151 Officer, the budget
estimates and assumptions included in the 2025-2026 budget (and
MTFS) are robust. That a corporate contingency of some £3.0
million will be held centrally for 2025-2026 to mitigate budget
related risk (which includes the risk of increases in demand,
uncertainties with regards to future funding and any under-delivery
against savings proposals).

4.   
That, due to external factors, in particular the impact of the
increasing demand for services, cost of living and inflationary
pressures, budget assumptions remain subject to significant change,
which could therefore result in alterations to the financial
position facing the Council, and that this risk is mitigated by way
of the corporate contingency noted above.

5.   
That there continues to be a considerable amount of uncertainty
with regards to future funding streams for local authorities over
the medium term.  At the point that
further information is known it would be incorporated into future
reports to Councillors. Any reduction in the Government’s
allocation of funding to the Council would have a significant
detrimental impact and further increase the budget deficit forecast
over the medium term.

6.   
That, in the opinion of the Section 151 Officer, the proposed
levels of reserves are adequate in respect of the forthcoming
financial year. And that, the proposed use of earmarked reserves
during 2025-2026 is prudent and proportionate for 2025-2026, but
that this is not a sustainable solution to the Council’s
underlying medium term financial gap.

7.   
That the 2025-2026 budget and MTFS incorporates £6.8 million
of savings proposals (£6.3 million of which are recurrent and
£500,000 one off) approved in previous reports.

8.   
That the 2025-2026 and MTFS assumes the delivery of savings
proposals / targets totalling £40.7 million (of which
£31.8 million are recurrent and £8.9 million one-off),
are included in this budget and that these proposals are in line
with the Our Future Council programme, its vision statements,
guiding principles and approach as previously approved by Cabinet
and set out in Appendix 1. And that (subject to approval) these
savings need to then be actioned and delivered, and that monitoring
is in place to help ensure this. Savings proposals can be found in
Appendices 5 to 9.

9.   
That the work of the Our Future Council programme, and its focus on
savings and transformation, would continue and that it is estimated
that a further £17.2 million of budget reductions need to be
identified for 2026-2027, rising to £23.5 million in
2027-2028 in order to address the projected budget deficit.

10. That Councillors
must have due regard to the public sector equality duty (Section
149 of the Equality Act 2010) when making budget reduction
decisions.

11. The outcome of the
public consultation on the budget as set out in Section 12 and
Appendix 14 and that the Council continues to engage with
residents, businesses and other key stakeholders throughout the
year with regard to people’s priorities for
Wolverhampton.

12. That the Budget
and MTFS (including savings proposals) has been subject to thorough
scrutiny as set out in Section 12.

13. That external
auditors have provided independent assurances with regards to the
Council’s arrangements for financial sustainability,
governance and value for money (including borrowing).
 
14.That, as a consequence of the
size of the financial challenge, the need to deliver planned
savings and the level of uncertainty across both demand for
services and funding levels, the overall level of risk associated
with the Budget and MTFS continues to be assessed as Red.