The Corporate Scrutiny Committee met on Thursday, 22 January 2026, to review the draft budget for 2026/27 and receive an update on the Council's financial position for the 2025/26 financial year. The committee was asked to provide comments on the draft budget reports for Cabinet's consideration, and the report noted a forecast underspend on the General Fund revenue budget.

Draft Budget 2026/27

The committee was presented with the draft budget reports for 2026/27, which Cabinet was due to consider on 3 February 2026. These reports covered the robustness of budget estimates, the capital strategy, treasury management strategy, prudential indicators, the General Fund budget and Council Tax, and the Housing Revenue Account (HRA) budget and rent setting. The committee was asked to provide any comments it had on these reports for Cabinet's consideration.

The draft budget documents indicate that the Council is in a strong financial position over the medium term, with sufficient funding available to set a balanced budget for 2026/27 and the following two years without the need for additional savings measures or cuts to services. This is partly due to the business rates reset and the fair funding review, which have benefited North West Leicestershire. The Council plans to build up its business rates reserve to support the capital programme and one-off investment initiatives.

A significant proposal within the draft budget is the creation of a £2 million Legacy Grant Fund to support community projects. This fund will be financed from the Business Rates Reserve and will be available for applications from May 2026, with grants ranging from £10,000 to £250,000.

The HRA budget proposes a 4.8% rent increase for 2026/27, in line with the Rent Standard (CPI + 1%). The HRA capital programme is also set to increase significantly, with a total of £66.64 million planned over three years, an increase of £20.1 million compared to the previous three-year programme. This includes substantial investment in stock improvements and new housing supply, with a particular focus on Zero Carbon initiatives.

The committee was also presented with proposed fees and charges for 2026/27, which in most cases have been increased by 3.8% (September CPI). Some charges, such as Electrical Vehicle Charging and car parking, have seen higher increases.

Finance Update - 2025/26 Quarter 2

The committee received an update on the Council's financial position for the 2025/26 financial year as at Quarter 2 (30 September 2025).

For the General Fund, a forecast underspend of £496,000 is projected for the year. This is based on data from April to September 2025 and reflects variances across directorates, with overspending in Community Services and Resources, offset by a surplus in the Corporate and Democratic Core. The Council faces ongoing financial challenges common to local authorities, necessitating a focus on mitigating overspends and ensuring financial sustainability. The report also noted that savings targets for the year are largely on track.

The Housing Revenue Account (HRA) is currently forecasting a break-even position for 2025/26. This is due to total income being slightly below budget and operating expenditure exceeding budget by £305,000. Significant variances include an overspend on repairs and maintenance, attributed to addressing historic repairs, and an overspend on supervision and management, partly offset by staff vacancy savings. Interest income is projected to exceed budget due to high market interest rates.

The HRA capital programme has a revised budget of £14.9 million, with a forecast outturn of £17.2 million, indicating a £2.3 million overspend. This overspend is expected to be covered by budget slippage from previous years. Several projects within the active programme are experiencing delays, leading to anticipated slippage into future years.

Cabinet Response to Scrutiny Recommendations

The committee reviewed Cabinet's responses to recommendations made in previous meetings. Cabinet noted scrutiny comments regarding the Customer Experience Strategy, the Zero Carbon Update, and the Environmental Policy. Cabinet's decision to adopt the Environmental Policy as presented was made at a previous meeting. Cabinet also noted scrutiny's recommendations regarding the Zero Carbon update, stating they would be taken into account as part of wider budget proposals.

Outstanding Actions Update

Members queried the circulation of information requested regarding capital receipts and local plan examination costs. Officers agreed to investigate and re-circulate this information.

Items for Inclusion in the Future Work Programme

Members discussed the timing and format of Net Zero reporting, with officers proposing an alternative method of reporting via enhancements to the quarterly performance report, rather than an annual report. Members indicated they would discuss this further outside of the meeting.

The future work programme was noted.