The Public Accounts Select Committee is scheduled to discuss the council's budget for the upcoming financial year, 2026-27, which will involve a detailed review of proposed spending, savings, and income generation. The committee will also consider its work programme for the remainder of the municipal year, ensuring its scrutiny activities align with the council's strategic priorities.

Council Budget 2026-27

The committee is set to examine the council's budget for the 2026-27 financial year, a comprehensive report that spans over 400 pages. This document outlines the overall financial position of the council for 2025-26 and sets the budget for 2026-27. It includes proposals for revenue budget reductions necessary to balance the budget, the allocation of budget growth to address inflation and service overspending, and the planned use of reserves. The report also details the steps to address the budget requirement for 2026-27 and future years as part of the Medium Term Financial Strategy (MTFS).

Key areas scheduled for discussion within the budget report include:

General Fund Revenue Budget and Council Tax

The report details the proposed General Fund Revenue Budget for 2026-27, which is £422.220 million. This budget is to be funded by the provisional Fair Funding Allocation, forecast Council Tax receipts, and includes an assumed increase in Council Tax of 4.99% for Lewisham's services. This comprises a 2.99% increase in the core Council Tax and a 2.00% increase for the Adult Social Care precept. The report also outlines £30.070 million of revenue budget reductions included for 2026-27 and the planned use of £2.442 million of reserves to balance the budget.

The council tax base for 2026-27 has been set at 93,758.10 chargeable dwellings, reflecting a 1.3% increase from the previous year. The report details the statutory calculations for Council Tax levels across different property bands, as well as the provisional precept from the Greater London Authority (GLA).

Dedicated Schools Grant (DSG) and Pupil Premium

The report provides an overview of the 2026-27 Dedicated Schools Grant (DSG) allocation, which is £418.82 million, a 5.8% increase. This includes funding for academy schools. A breakdown of the DSG funding is provided for the Schools Block, Central Services Support Block, High Needs Block, and Early Years Block. The report notes a net decrease of 700 pupil numbers, the fifth consecutive year of falling rolls, and highlights the projected deficit in the High Needs Block, which is expected to reach approximately £21 million by year-end.

Housing Revenue Account (HRA)

The proposed annual expenditure for the Housing Revenue Account (HRA) for 2026-27 is £275.7 million, including the capital and new build programme. A proposed rent increase of a minimum of 4.8% (an average of £5.95 per week) is outlined for dwelling rents, subject to government proposals on convergence. The report also details proposed changes to service charges on a range of chargeable services.

Treasury Management Strategy 2026/27

The report updates the Council's Treasury Management Strategy for both borrowing and investments. The proposed approach and risk levels remain prudent, in line with the previous year. Officers continue to explore alternative investment options and opportunities to undertake debt restructuring to reduce cashflow and balance sheet risk, and to best fund capital plans.

Capital Programme

The proposed Capital Programme budget for 2026-27 to 2029-30 is £539.3 million, with £110.0 million allocated for the General Fund and £429.3 million for the HRA. Of this programme, £213.6 million is allocated for 2026-27, with £76.2 million for the General Fund and £137.4 million for the HRA. The report details the financing for this programme, including capital receipts, reserves, grants, and prudential borrowing.

Climate Budget 2026/27 – 2028/29

The council is publishing its third annual Climate Budget, which supports the ambition for the borough to be net zero carbon by 2030. The budget sets out the council's carbon emissions for the period 2018/19 to 2023/24, noting a reduction of just over 25% in that six-year period. The estimated total cost of full decarbonisation of both corporate and housing assets is approximately £743 million, with £21 million estimated for the three-year period from 2026/27 to 2028/29.

Consultation on the Budget

The report summarises the outcomes of statutory consultation exercises undertaken with citizens, including rent setting and housing panels, and business ratepayers. Feedback on the council's corporate priorities, what the council does well, and areas for improvement has been gathered and is being considered.

Select Committee Work Programme

The committee will also review its work programme for the remainder of the municipal year. This includes considering items scheduled for the next meeting, such as an update on IT and Digital Services, and reviewing the forward plan of key decisions to identify any further areas for scrutiny. The committee will be asked to specify the information and analysis it requires from officers for these items.