Issue - meetings

This report will follow in a supplementary pack.

Please note that under the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, the Council is required to take a named vote when a decision is made on the budget calculation at a budget decision meeting of the Council.

This report and appendices will follow in a supplementary pack for the meeting.

This item is due to be pre-scrutinised at a meeting of the Budget Scrutiny Working Group on 20^th February 2026. Any recommendations arising from the meeting will be published in a supplementary pack for the Executive Committee meeting.

The Interim Director of Finance and Section 151 Officer presented the Medium Term Financial Plan Budget Report 2026/27 (including Treasury Management Strategy, Capital Strategy and Investment Strategy).

It was noted that there were typographical errors in the report which referred to the District rather than Borough Council, but this would be corrected when the report was presented at the full Council meeting. 

It was highlighted that the Council was in a strong position to set a balanced budget across the three-years of the Medium Term Financial Plan, which represented a significant shift from the position the Council had been in previously. Members were informed that the report explained the reasons for this and how Members could be assured that the projections could be relied upon.

The Committee was advised that there were three key areas which had been transformational in offsetting pressures.

1. Pension payments. In the previous year it had been assumed that pension payments were going to increase. In contrast, pension payments actually decreased by £216,000.
2. Fairer Funding Review. The Council was not impacted as severely as initial assumptions had suggested.
3. Business Rates appeals. The Government had changed the formula for this and so by adopting the new formula this resulted in an additional £200,000 in the first year and a further £100,000 in the following year.

In relation to the Council’s earmarked reserves, Members were asked to note the Reserves Position. It was explained that a review of the reserves had been carried out which looked at what the funding was originally set aside for and whether this applied currently. For example, the business rates reserve had accumulated too much funding under the old formula. Members were advised that once the Council released reserves, the general balance would rise. This would then provide the opportunity for Members to consider what they would like to invest in moving forward and to earmark funding for those areas.

Three main areas had been identified which related to risk (£2.5 million allocated), readiness for Local Government Reorganisation (£1 million) and an earmarked reserve for community projects aligned to the Council’s priorities (£1.6 million).

It was noted that earmarked reserves could be used for revenue and capital. Members could choose to allocate the difference from the Community Investment Reserve in order to fund the Capital Programme and £1 million would remain available to be spent elsewhere.

Officers explained that the report outlined assurance and the mitigation of risks, it was an exhaustive Section 25 report which was designed to clearly explain the Council’s position.

Members were advised that the Housing Revenue Account (HRA) was due to repay its first tranche of debt in March 2027. It was explained that the HRA relied on debt and it was important to consider the whole picture across a thirty-year business plan. The current borrowing profile for the HRA did not currently lend itself to supporting growth at the top.

In relation to Council Tax, Worcestershire County Council was proposing to increase Council Tax by nearly nine  ...  view the full minutes text for item 93