The Economy Overview and Scrutiny Panel of Worcestershire Council met on Friday, 23 January 2026, to discuss the draft budget for the upcoming financial year and the economic challenges facing the county's small towns. The panel also reviewed its work programme for the coming months.

Budget Scrutiny 2026/27

The panel was scheduled to discuss the draft budget for 2026/27 concerning services related to the economy. This discussion was part of a wider process involving various council committees and meetings, including Cabinet and Full Council, which had already considered the draft Medium Term Financial Plan (MTFP) and proposals for savings. The panel was expected to focus on the impact of Exceptional Financial Support (EFS) and the Council Tax proposal, as well as identify any further savings opportunities that the Cabinet should consider. The timeline for budget approval indicated that recommendations from this panel would be forwarded to the Cabinet on 5 February 2026, with final approval by Full Council on 26 February 2026.

The report pack highlighted significant financial pressures facing the council, including a growing service overspend, the use of reserves, and the need for borrowing to fund EFS. The Dedicated Schools Grant (DSG) showed a substantial and accumulating deficit, with a projected deficit of £194.1 million by the end of March 2026. Key recommendations from external auditors included the urgent need to address budget pressures, reduce reliance on EFS and reserves, and implement a savings and transformation programme at scale and pace. The Provisional Local Government Settlement for 2026/27 to 2028/29 indicated a net increase in grants of £6.9 million for 2026/27, but this was £7 million less than the council's MTFP calculations. The report also detailed proposed savings of £9.145 million across various directorates, with a significant portion relating to Home to School Transport. The overall council position for 2026/27 indicated a substantial gap to be funded, with reliance on Council Tax increases and potential EFS. The report stressed that issuing a Section 114 notice was not considered the answer, and the council needed to find a locally tailored path to sustainability.

Small Towns

The panel was scheduled to receive a report focusing on the economic challenges faced by small towns within Worcestershire. The report defined small towns as having populations between 5,000 and 25,000 residents and a retail core. The towns identified for focus were Droitwich, Pershore, Evesham, Upton upon Severn, Tenbury, Bewdley, and Stourport-on-Severn.

The report outlined common economic challenges affecting small towns, including the impact of online shopping, the rise of out-of-town stores, demographic shifts, variable transport connectivity, and a lack of business diversification. It presented various metrics comparing Worcestershire to the West Midlands region and England, covering aspects like median pay, economic inactivity, house prices, employment rates, and life expectancy. Data was also provided at a district level.

Specific town profiles detailed the unique challenges and initiatives within each area. For Droitwich, opportunities included developing the evening economy and utilising the canal for tourism, though the fire at the Raven Hotel presented a significant issue. Pershore was noted for its relatively thriving retail area, with aspirations for a marina and efforts to address traffic issues on its narrow High Street. Evesham's primary redevelopment priority was the vacant Riverside Shopping Centre, with ongoing work to address transport issues and improve the town centre's business mix. Upton-upon-Severn's vision focused on tourism and improved accessibility, with completed projects including enhanced car parking and flood alleviation considerations. Tenbury Wells aimed to offer a variety of retail, leisure, and cultural options, with a focus on flooding and tourism, and has seen success with shopfront enhancement grants. Bewdley, a historic market town, was investing in heritage sites and visitor spaces, with flood defence projects at Beales Corner. Stourport-on-Severn was undergoing regeneration efforts, with a focus on improving town centre appeal, heritage conservation, and economic viability, including a significant proposal for the Bridge Street area.

The report also covered countywide provision, including public realm works, flood risk management, and active travel schemes in various towns. Improvements to public transport, such as the Worcestershire on Demand bus service, were highlighted. Business support programmes like Enterprising Worcestershire and Elevate Worcestershire were mentioned, along with tourism initiatives by Visit Worcestershire, including consultancy services and support for local events. Connectivity through Gigabit Capable broadband infrastructure was also discussed, with progress towards national targets and ongoing work to improve mobile signal.

Work Programme

The panel was scheduled to review its work programme for 2025/26. The Economy Overview and Scrutiny Panel is responsible for scrutinising areas including the economy, workforce skills, strategic infrastructure, and broadband and communications. The attached work programme outlined specific issues for scrutiny, including Budget Scrutiny 2026/27 and the Economic Challenges of Small Town Centres, both scheduled for this meeting. Future items included the Worcester Six Business Park Development and Growth Hub Activity. Standing items such as Digital Infrastructure and Connectivity Annual Update, and updates from the Worcestershire Local Enterprise Partnership, were also noted. The panel was asked to consider any amendments to the programme and retain flexibility for urgent issues.