The Overview and Scrutiny Committee met on 09 February 2026 to discuss the Housing Revenue Account Medium Term Financial Strategy and budget and rent setting for 2026-27, and the Medium Term Financial Strategy 2026-27+. The committee considered proposals for rent increases, budget adjustments, and new savings and income initiatives.

Housing Revenue Account Medium Term Financial Strategy and Budget and Rent Setting for 2026-27

The committee reviewed the Housing Revenue Account (HRA) budget proposals for 2026-27, which included a proposed rent increase of 4.8% for council homes, aligning with the national rent policy. Tenant service charges were also set to increase by 5.3%. These increases are intended to mitigate financial pressures on the HRA, which faces challenges from the cost of repairs, regulatory compliance, and inflation.

Several proposals were put forward to address these financial pressures, including moderating spending on legal disrepair cases, reducing spend on void works through improved project management, and improving rent collection levels. The committee also noted progress on existing savings proposals and considered funding for a Hardship Fund and an extension of the Downsizing Incentive Programme.

The report highlighted that even with the proposed increases, the HRA would still be under significant financial pressure. The committee was asked to submit comments to the Cabinet on these proposals.

Medium Term Financial Strategy 2026-27+

The committee received the Medium-Term Financial Strategy (MTFS) for 2026/27 to 2029/30. This strategy outlines the council's financial plan, balancing objectives and policies against resource constraints. The report indicated that, subject to agreement, the council would deliver a balanced budget for 2026/27. However, it also identified a forecast budget gap for 2027/28 of £35 million, rising to £101 million by 2029/30, contingent on the delivery of savings and containment of cost pressures.

Key elements of the MTFS include proposals for £35 million of investment in 2026/27, covering increased costs from demand and inflation, capital investment financing, and the Freedom Pass scheme. The strategy also details £7.1 million of new savings and income proposals for 2026/27, projected to increase to £8.2 million by 2029/30.

The committee was asked to submit comments to the Cabinet on these proposals, including the proposed increase in council tax by 2.00% for the adult social care precept and 2.99% for the main council tax rate. The report also detailed the utilisation of the Crisis Resilience Fund, with allocations for crisis payments, resilience services, and community-level support.

The MTFS acknowledged the impact of over a decade of government austerity, leading to significant financial challenges. It also noted the provisional Local Government Finance Settlement for 2026/27 to 2028/29, which provides some certainty, but highlighted a potential cliff edge in funding beyond 2028/29, particularly concerning the Recovery Grant Guarantee.

The committee was informed of the results of a public consultation on budget principles, which indicated a majority found the principles clear, but a majority also disagreed with increasing council tax. The report concluded by noting that the MTFS is a continuous process and will be updated in Summer 2026.

The committee was also presented with appendices detailing savings and income proposals, financial standing and risk assessments, and proposed new fees and charges for 2026/27 across various directorates.

Other Matters

The committee also noted the Forward Plan for upcoming executive decisions, which included items related to housing, finance, and various service reviews. The committee was asked to determine if any of these items warranted further scrutiny.