Agenda item

The Chief Finance Officer presented the Medium Term Financial Plan (MTFP) Scene Setting Report 2026/27 for the Executive Committee’s consideration.

The report detailed the proposed approach to setting the budget for the period 2026/27 to 2028/29.  Officers acknowledged that by the final year of the plan, the Council was no longer due to exist and would have been replaced by a unitary authority.  However, it was considered prudent to include this final year in case any changes were made to the Government’s timetable for Local Government Reorganisation in the meantime.

The main change that was being proposed to the budget setting process in 2026/27 was that this would be reported to Council on a single occasion, in February 2026, rather than in two tranches.  This change had been made to the process in recognition of the fact that the issues identified in the Section 24 Notice that was issued to the Council in 2022 had been resolved and therefore the additional steps that had occurred in the two tranche process were no longer necessary.  There would continue to be multiple opportunities for the Overview and Scrutiny Committee and Budget Scrutiny Working Group to challenge and scrutinise the content of the budget.  In addition, it was proposed that there would be check and challenge sessions for each of the Assistant Directors as well as a Star Chamber process reviewing the budget, which would help to challenge expectations.

Following the presentation of the report, Members discussed the content and in doing so noted that there were three key elements to this report:

·             Increased transparency

·             Increased simplicity

·             Enhanced performance monitoring

Members commented that the two-tranche process for budget setting had been very time consuming.  The approach detailed in the report would be more efficient and would enable Officers to also dedicate sufficient time to working on Local Government Reorganisation.

Consideration was given to the proposed pay award of 2 per cent that had been incorporated into the report alongside a cost of living increase of 1 per cent.  Members questioned whether this was prudent at a time when inflation was at 3 per cent.  Officers clarified that it was considered best practice to anticipate a pay increase that matched the Government’s guidelines for where inflation should be.  There was a risk that if the Council recorded an anticipated increase of 3 per cent or above this could raise expectations that staff would receive greater increases to their pay than the target inflation level.  However, Officers were anticipating that inflation would be higher than 2 per cent and for that reason, the 1 per cent cost of living increase had been included as a contingency.

Questions were also raised with regard to the Fairer Funding Review for local government and whether the outcomes of this review had been confirmed.  Clarification was provided that the Council had responded to the Government’s recent consultation on the Fairer Funding Review.  External experts consulted about the review had indicated that they were anticipating that Redditch Borough Council would benefit from this review by circa £900,000, due to the levels of deprivation in the Borough.  There was the possibility that, depending on the outcomes of further reviews of the indices of multiple deprivation in relation to Redditch, there might be more favourable outcomes for Redditch in the future.

During consideration of this item, Members noted that the Budget Scrutiny Working Group had pre-scrutinised this report at a meeting held on 28^th August 2025.  However, the group had not proposed any recommendations on this subject.

RESOLVED that

the proposed budget process be followed for the 2026/27 annual budget and for the Medium Term Financial Plan up to 2028/29.