The Resources and Performance Cabinet Panel met on Wednesday, 28 January 2026, to discuss the council's draft budget for 2026/27 and the medium-term financial strategy. Key decisions included the approval of a capital reprogramming request and the noting of the Quarter 3 finance budget monitor, which indicated a small overspend of £1.4 million. The panel also discussed the future of several council-owned land holdings, agreeing to declare land at Ickleford and the former Hexton JMI School surplus to requirements for disposal, while a more nuanced approach was taken for Heath Barn in Hemel Hempstead, allowing a community group a window to submit a bid.

Budget 2026/27 and Medium-Term Financial Strategy (Resources and Performance)

The panel reviewed the draft budget for 2026/27 and the medium-term financial strategy (MTFS), which outlines a £1.2 billion budget aimed at delivering vital services and supporting Hertfordshire's residents and businesses. Councillors noted the significant financial pressures facing the council, including a £42 million annual reduction in government funding over the next three years, rising demand for services, and persistent inflation. Despite these challenges, the budget proposes an additional £108 million investment in key areas such as children's services, SEND support, and adult social care.

Significant concerns were raised regarding the reliance on capital receipts to fund day-to-day spending and the potential impact on future years' budgets. Councillor Curtis highlighted that using capital receipts for revenue expenditure would leave a significant funding gap in 2027/28, and expressed concern about rising debt levels and the increasing gap between interest paid on debt and interest received on deposits. Officers explained that capital receipts are primarily used to fund the capital programme, thereby reducing the need for borrowing, and that any use for revenue purposes is restricted to one-off transformation costs associated with delivering the savings programme.

The budget includes a proposed 2.99% Council Tax increase, plus a 2% Adult Social Care precept, to help balance the budget and protect essential services. Savings of £55 million are targeted for 2026/27, rising to £109 million by the end of the MTFS period. Councillor Biddle expressed concerns that the administration's budget aims were not fully achievable and suggested a more radical approach might be needed.

The panel also discussed the challenges of local government reorganisation (LGR), with officers outlining a £10 million allocation within the budget to fund a dedicated transition team and resources for LGR preparations. Concerns were raised about the potential impact of LGR on IT systems and cybersecurity, with assurances given that investment in this area is planned.

The panel ultimately recommended to Cabinet that it endorse the proposals relating to the budget and MTFS for the Resources and Performance portfolio.

Finance Budget Monitor – Quarter 3 2025/26

The Quarter 3 Finance Budget Monitor reported a forecasted small overspend of £1.4 million against a total revenue budget of £1.2 billion. This represents a £4.8 million improvement from the previous quarter, demonstrating good control over the budget. The forecast does not include any drawdown on the £10 million contingency fund, which the council aims to keep intact for future financial challenges.

Significant demand pressures were noted in social care (Adults and Children's Services) due to rising costs and increased demand for packages of care. The Schools' High Needs funding block continues to be under extreme pressure, with an expected in-year deficit of £11 million, contributing to a cumulative deficit of £89 million by the end of the financial year.

The capital programme is forecasting a £16 million underspend for 2025/26, with a request to reprogramme £2.8 million into later years. The report also highlighted an increase in sundry debt, standing at £99 million, although aged debt has reduced over the last quarter.

Councillor Curtis welcomed the improvement in the financial position, attributing it partly to recommendations made by the Conservative group regarding children's services. However, he expressed concerns about the capitalisation of wage costs and the use of graphs that did not start at zero on the y-axis. Councillor Whatley questioned the impact of capital project delays on residents and asked about recurring overspend or underspend patterns. Officers explained that the capital underspend was mainly due to delays in roofing projects and the non-completion of a property purchase.

The panel unanimously recommended to Cabinet that it approve the proposed capital reprogramming of £2.8 million.

Future of Land Holdings at Ickleford

The panel considered proposals for the future of land holdings at Ickleford, which had been allocated for residential redevelopment in the North Hertfordshire Local Plan. The recommendation was to declare the land surplus to requirements and available for disposal.

Councillor Barnard, representing Ickleford Parish Council, raised significant concerns about the existing inadequate sewage system, the gridlocked A600 access road, and the need for a new primary school due to oversubscription of the current school. He suggested retaining the land for the moment to allow these issues to be addressed.

Officers explained that any future development would be subject to rigorous planning processes, requiring developers to demonstrate that essential infrastructure, including utilities and highways capacity, could support growth. They argued that bringing the site forward for disposal could provide an opportunity for developers to contribute towards improvements in the area. The exclusion of land for a potential primary school was to safeguard it, with ongoing discussions with education colleagues about future needs.

After considerable debate, the panel recommended to Cabinet that the land be declared surplus to requirements and available for disposal, with terms delegated to the Deputy Chief Executive and Executive Director of Resources in consultation with the Executive Member for Resources & Performance.

Future of the Former Hexton JMI School

The panel considered proposals for the future of the former Hexton JMI School, which closed in 2024 due to low pupil numbers. Officers had reviewed the property and found no viable alternative uses for the site, recommending its disposal.

Councillor Barnard, a former governor and parent of the school, supported the disposal, noting the school's decline and the dilapidated state of the building. He suggested that the site could be used for two or three affordable homes. Councillor Roberts also supported the disposal, acknowledging the difficult decision to close the school.

The panel unanimously recommended to Cabinet that the former Hexton JMI School be declared surplus to requirements and available for disposal, with terms delegated to the Deputy Chief Executive and Executive Director of Resources in consultation with the Executive Member for Resources & Performance.

Future of Heath Barn, Hemel Hempstead

The panel discussed the future of Heath Barn, a vacant Grade II listed property formerly used as a music centre. The recommendation was to declare the property surplus to requirements and available for disposal, with a three-month window for the community interest company Our Heath Barn to submit a viable bid.

Councillor England, the local member, proposed amendments to the recommendation, suggesting that the open marketing of the site be delayed to the end of the three-month window to allow the community group to develop their bid without parallel marketing. He highlighted concerns about the realistic valuation of the land and the potential for conventional development models to be unsustainable or pose a heritage risk. He advocated for a collaborative solution that combines financial return with community benefit, suggesting residential development of the farmhouse and community use of the barns.

Officers explained that while they would support the community group in developing their bid, they also had a fiduciary responsibility to obtain best consideration for the asset, which would involve market testing. They proposed a two-month exclusive window for the CIC, followed by a two-month marketing period, to allow the CIC time to develop its business case while also understanding market value. The panel ultimately agreed to a revised recommendation that included a two-month exclusive window for the CIC, followed by a two-month marketing period, with the results to be presented back to the panel.

The panel recommended to Cabinet that Heath Barn be declared surplus to requirements and available for disposal, with a two-month exclusive window for the CIC to develop its business case, followed by a two-month marketing period. The results of this process would then be presented back to the Cabinet Panel.