Purpose

To present a balanced revenue budget for
2026-2027 aligned to the Our City: Our Plan and an update on the
Medium Term Financial Strategy to 2028-2029, for recommendation to
Council.

Content

That Council be recommended to approve:

1.     
The net budget requirement for 2026-2027 of £396.2 million
for the General Fund services.

2.     
The Medium-Term Financial Strategy (MTFS) 2026-2027 to 2028-2029 as
detailed in Sections 4 and 11, and the key assumptions underpinning
the MTFS as detailed in Appendices 2 to 5 of the report.
 

3.     
A Council Tax for Council services in 2026-2027 of £2,209.30 (Council element) for a
Band D property, being an increase of 4.99% on 2025-2026 levels,
which incorporates 2% in relation to Adult Social Care.
 

4.     
The refreshed Reserves Strategy as detailed in Appendix 9 to the
report.
 
That
Cabinet approved:

1.     
The updated assumptions used in the Budget for 2026-2027 and the
MTFS up to 2028-2029 as detailed in the report and Appendices 2 to
5 to the report. 

2.     
That the budget for 2026-2027 is in balance without the use of
General Fund Reserves, but that £2.0 million of one-off
resources (earmarked reserves / capital receipts) are required to
balance the budget / fund transformational activity. And that
authority be delegated to the Section 151 Officer to determine the
allocation of reserves / capital receipts as determined prudent in
2026-2027.
 

3.     
That due to the favourable financial settlement, and to reflect
Cabinet priorities, that revisions are made to the Our Future
Council (OFC) approved savings proposals as detailed in Appendix 5
to the report.  The favourable financial
settlement had allowed us to reprofile some approved savings
proposals in order to lessen the impact on service delivery and any
incidental consequences.
 

4.     
That in order that we continue to stay ahead of the curve and in
recognition of the risks and uncertainties from 2028-2029, services
are allocated minimum Productivity and Efficiency Targets as
detailed in Appendix 5 to the report.
 

5.     
The establishment of a £2.5 million budget to provide
additional investment in priority projects and that authority to
approve any virements, required to allocate the £2.5 million
budget, be delegated to the Section 151 Officer.
 

6.     
That the Council increases the budget set aside to fund specific
targeted support with regards to Council Tax payments from
£300,000 to £500,000. 
Noting that this would be funded from the £2.5 million
priority projects budget and that authority continues to be
delegated to the Cabinet Member for Resources and the Section 151
Officer to approve any changes to the Council Tax Discretionary
Support Scheme.
 

7.     
That, in accordance with the refreshed Reserves Strategy, the
General Fund Reserve is increased by £1.0 million taking it
to £20.0 million.  This would be
funded in-year (2025-2026) by one-off efficiencies; further detail
would be provided in the Performance and Budget Monitoring Report
to Cabinet in March 2026.

8.     
That authority is delegated to the Cabinet Member for Resources in
consultation with the Section 151 Officer to allocate funds from
the corporate contingency budgets to support cost pressures.
 

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 2026-2027 and future years to be passported to
the West Midlands Combined Authority (WMCA).
 

10.  
That the Council enter into the Better Care Fund Section 75
Agreement along with the necessary ancillary agreements from the
main agreement for 2026-2027 with the Black Country Integrated Care
Board, and that authority be delegated to the Cabinet Member for
Adults and the Cabinet Member for Resources, in consultation with
the Director of Adult Services and the Section 151 Officer to
approve the final terms of the agreement.
 

11.  
The continuation of the ‘Our Future Council’ Programme
of work, designed to deliver savings and transformation as set out
in the report.
 

12.  
The introduction of eligible pubs and live music venues
Discretionary Business Rates Relief for one year from 1 April
2026.
 
That Cabinetnoted:

1.     
The outcome of the Final Local Government Finance Settlement
(funding settlement), and the implementation of a new ‘Fairer
Funding’ system, which redistributes funding to councils,
like ours, with higher levels of deprivation and lower Council Tax
bases.

2.     
That the Council warmly welcomes the funding settlement, and the
additional funding, including the continuation of the Recovery
Grant, which better reflects the needs of our city and the
increasing demand on our services.
 

3.     
That the funding settlement is the first multi-year settlement in a
decade, covering the period of 2026-2027 to 2028-2029, providing
much needed clarity on funding levels for this period. The
settlement confirms funding levels for 2026-2027 and provides
illustrative amounts for 2027-2028 to 2028-2029.  It is important to note that these illustrative
amounts are therefore subject to change.
 

4.     
That the settlement is in keeping with the Our Future Council
strategy approved by Cabinet in July 2025, which anticipated
additional funding, meaning we can continue to deliver great
services and invest in what matters most to our residents.
 

5.     
That significant progress continues to be made in response to the
Council’s financial challenge over the medium term to
2028-2029, through the Our Future Council programme, transformation
and cost reduction.
 

6.     
That in the opinion of the Section 151
Officer, the budget estimates and assumptions included in the
2026-2027 budget (and MTFS to 2028-2029), are robust.  That corporate contingency budgets are held
centrally for 2026-2027 to mitigate budget related risk (which
includes the risk of increases in demand, emerging pressures, and
uncertainties with regards to any under-delivery against
savings proposals). And that in the event these budgets are not
required, they would be used to reduce the need to call upon
one-off resources in 2026-2027 and support the financial challenge
over the medium term.
 

7.     
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 budgets noted above and reserve as
noted below.
 

8.     
That we would continue to engage with Government with regards to
any future polices that may have a detrimental impact the financial
position of the Council.
 

9.     
That the Council is confident that along with the additional budget
built in to support increases in demand and inflation, the impact
of the 2026-2027 pay award and other corporate contingency budgets
held to support demand pressures, we remain above the notional
allocation for Adult Social Care as published by Government.
 

10.  
That the Council continues to deliver against the recommendations
from the Corporate Peer Challenge which was undertaken by the Local
Government Association in September 2024, with a follow up visit in
June 2025.
 

11.  
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 2026-2027 is prudent and
proportionate for 2026-2027, but that this is not a sustainable
solution to the Council’s underlying medium term estimated
financial gap to 2028-2029. See Appendix 11 – Section 25
Statement.
 

12.  
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 £3.8 million of budget reductions need to be
identified for 2027-2028, rising to £14.8 million by
2028-2029 in order to address the budget deficit.
 

13.  
That Councillors must have due regard to the public sector equality
duty (Section 149 of the Equality Act 2010) when making budget
reduction decisions.
 

14.  
The outcome of the public consultation on the budget as set out in
Section 14 and Appendix 10 to the report and that the Council
continues to engage with residents, businesses and other key
stakeholders throughout the year with regards to people’s
priorities for Wolverhampton.
 

15.  
That external auditors have provided independent assurances with
regards to the Council’s arrangements for financial
sustainability, governance and value for money.
 

16.  
That, as a consequence of the size of the financial challenge, the
need to deliver planned approved 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 continue
to be assessed as Red.