Agenda item

Quarter 2 Financial Monitoring Report 2025/26

 

Council considered the Quarter 2 Financial Monitoring Report 2025/26.  Members were advised that an overspend was envisaged for 2025/26 as well as for subsequent years, with the primary cause being a relatively low local government financial settlement for District Councils.  There was therefore a need to be prudent.

 

The Council retained reserves above the minimum threshold and officers were working hard to ensure that a balanced budget could be achieved.  In the meantime, oversight of departmental budgets had increased and some potential savings had been identified.

 

The recommendations were proposed by Councillor Ian Woodall and seconded by Councillor Juma Begum.

 

Homelessness Prevention Grant Funding 2026/27 to 2028/29 (including Rough Sleeper Grant) and Domestic Abuse Grant

 

Consideration was given to a report detailing proposed arrangements for the distribution of homelessness grant funding, including rough sleeper and domestic abuse grant funding, received from the Government for the financial years 2026/27 to 2028/29.  Members were asked to note that the report had been scrutinised in detail at a meeting of the Overview and Scrutiny Committee, where the proposals had received support and a request had been made for arrangements to be introduced to monitor use of the funding on an ongoing basis.

 

Reference was made to the impact that homelessness grant funding had had in recent years and Members were asked to note that this had been used effectively, resulting in a reduction in costs associated with use of Bed and Breakfast accommodation.  There were four organisations that received a significant amount of the funding, including Redditch Borough Council, which had allocated some funds to support the employment of particular officer posts.

 

In discussing the matter, Members commented that homelessness was a complex issue which extended beyond, although included, consideration of rough sleeping.  The Council’s preferred approach was to attempt to take action that would help to prevent homelessness from occurring.

 

The recommendations were proposed by Councillor Bill Hartnett and seconded by Councillor Juma Begum.

 

Pay Policy 2026 – 2027

 

Members were advised that there was a statutory requirement for an annual report to be presented to Council in respect of the pay awarded to staff at the authority.  There was a need for the authority to be transparent about pay scales as well as to remain competitive in order to attract and retain staff.

 

The recommendation was proposed by Councillor Jane Spilsbury and seconded by Councillor Ian Woodall.

 

Independent Remuneration Panel Recommendations 2026/27

 

The Independent Remuneration Panel’s (IRP) report in respect of proposed allowances payable to Members in the 2026/27 financial year was presented for Council’s consideration.

 

Members were advised that in reaching their conclusions, the IRP had reviewed current allowances and had also considered benchmarking data.  Based on the evidence that had been gathered, the IRP was proposing that the basic allowance payable to Councillors should increase to £6,095 in 2026/27 as well as changes to the Special Responsibility Allowances (SRAs) payable to Councillors in particular positions of authority.  Council was informed that Members did not have to approve the IRP’s recommendations but did need to give due regard to the IRP’s proposals.

 

At the Executive Committee meeting held on 13^th January 2026, Members had endorsed the IRP’s proposals in respect of travel expenses, subsistence allowances and the carer’s allowance.  However, the Executive Committee had proposed that SRAs should remain unchanged, which involved SRAs being paid as a multiplier of the basic allowance in 2023/24 of £4,732.  The Executive Committee had not made any proposals in respect of the basic allowance and had instead referred this matter for the consideration of Council.

 

The basic allowance that had been proposed by the IRP was discussed.  Members noted that in the IRP’s report the suggested basic allowance of £6,095 had been recorded as a 4.62 per cent increase on 2025/26.  However, Council was informed that the IRP assumed its previous proposals had been accepted by District Councils and did not take into account, when recording this information, that Redditch Borough Council had not been increasing allowances in recent years in line with the level proposed by the IRP.  When this information was taken into consideration, the basic allowance proposed by the IRP would actually represent an increase of 21.53 per cent in Redditch if it was accepted.  The suggestion was made that an increase to the basic allowance on this scale would be difficult for Members to justify. 

 

As an alternative, the proposal was made that the Council’s current basic allowance of £5,015.35 per year should increase by 3.4 per cent, in line with inflation, to £5,185.87.  This would represent an additional cost to the Council overall of £4,604.04.  Members discussed this proposed increase and in doing so noted that if this approach was agreed, the allowances paid to Redditch Borough Councillors would continue to be lower than that paid to other District Councillors in Worcestershire.  However, Members agreed to support this proposal, noting that allowances would need to be considered further and standardised when work on Local Government Reorganisation was completed.

 

During consideration of this item, questions were raised about the allowances paid to the Mayor and Deputy Mayor and the reasons why these were not addressed in the IRP’s report.  Clarification was provided that the IRP was not tasked with reviewing allowances paid to the Mayor and Deputy Mayor, which were discretionary payments that the Council chose to make.

 

The recommendations were proposed by Councillor Sharon Harvey and seconded by Councillor Jane Spilsbury.

 

Business Rates – Discretionary Rates Relief Policy 2026/27

 

The Business Rates – Discretionary Rates Relief Policy 2026/27 was discussed and Members noted that the policy enabled the Council to grant discretionary relief to eligible Voluntary and Community Sector (VCS) organisations.  The policy also provided the authority with the power to grant relief to businesses based in rural locations.  This was considered to be helpful as often only a small number of businesses operated in rural areas and this relief could help to ensure that the businesses remained sustainable.

 

Members noted that the policy had been scrutinised at a meeting of the Budget Scrutiny Working Group.  In considering the matter, the group had concluded that many eligible organisations would not be aware that this relief was available and the suggestion was made that the policy needed to be actively promoted through ongoing communications.

 

The recommendations were proposed by Councillor Ian Woodall and seconded by Councillor Sharon Harvey.

 

Council Tax Base Report 2026/27

 

Council was advised that a report was presented every year on the subject of the Council Tax Base for the local authority area.  This report needed to be approved in order for Council Tax to be resolved for the following financial year.

 

During consideration of this item, Members noted that Redditch Borough Council was responsible, as a District Council, for collecting Council Tax on behalf of precepting authorities operating in the Borough.  Questions were raised about whether one of these precepting authorities, Worcestershire County Council, had clarified their arrangements for setting their Council Tax precept in 2026/27.  Clarification was provided that Worcestershire County Council had a Council meeting scheduled to take place on 26^th February 2026 when the authority’s budget, including Council Tax, was due to be considered.  Worcestershire County Council had also announced that it would have a reserve date for an extra Council meeting on 6^th March 2026 in case needed for Council Tax and budget setting purposes.  Council Officers continued to liaise with Worcestershire County Council regarding their arrangements and any developments would be taken on board when setting Redditch Borough Council’s budget and considering Council Tax resolutions.

 

The recommendations were proposed by Councillor Ian Woodall and seconded by Councillor David Munro.

 

Council Tax – Empty Homes Discounts and Premiums 2026/27

 

Members were informed that the Empty Homes Discounts and Premiums Policy 2026/27 provided the Council with the flexibility to use discretion in respect of Council Tax, on a case-by-case basis, where residents were experiencing personal difficulties. 

 

In respect of empty homes, Members were asked to note that the proposals would help to address Council Tax arrangements for second homeowners.  In Redditch, the number of householders in this position were likely to be lower than in some Districts.  However, there were other reasons why properties might be empty and the policy would also apply in relation to these homes.

 

The recommendations were proposed by Councillor Ian Woodall and seconded by Councillor Bill Hartnett.

 

Council Tax Support Scheme 2026/27

 

The Council Tax Support Scheme 2026/27 was considered by Members.  It was noted that the scheme was reported annually, thereby enabling the Council to provide support to eligible residents.  Within the scheme, support was linked to income bands for residents who were of working age.  Members were asked to note that there were separate arrangements in place in terms of Council Tax Support available to eligible pensioners.

 

The recommendation was proposed by Councillor Ian Woodall and seconded by Councillor Sharon Harvey.

 

Discretionary Council Tax Reduction Policy 2026/27

 

Council considered the Discretionary Council Tax Reduction Policy 2026/27 and in doing so noted that this policy would provide the Council with the discretion to act in a compassionate manner and to reduce Council Tax when people were diagnosed with a terminal illness and were no longer able to work.  The potential for Councils to provide a discount to Council Tax for residents in this position had been encouraged by the organisation, Marie Curie.

 

Members discussed the discretionary relief available for people who had been diagnosed with a terminal illness and in so doing questioned whether residents would be aware of this support.  To address this situation, the suggestion was made that the availability of this discretionary relief should be actively promoted by the Council.

 

Reference was also made to the Council Tax discounts available through the policy to care leavers living in Redditch.  This approach had been in place in the Borough for some time and Members suggested that it had had a positive impact on local care leavers.

 

During consideration of this item, questions were raised about whether the discounts that had been proposed following promotion by Marie Curie would only benefit residents receiving support from Marie Curie.  In response, clarification was provided that the discounts would be available to residents who had been diagnosed with a terminal illness and they would not need to be in receipt of support from Marie Curie to be eligible.

 

The recommendation was proposed by Councillor Ian Woodall and seconded by Councillor Monica Stringfellow.

 

Housing Revenue Account Rent Setting 2026/27

 

The Housing Revenue Account (HRA) Rent Setting 2026/27 report was presented for Council’s consideration.

 

Members were advised that there had been a lot of investment in Council housing, including the purchase of new properties and the introduction of a Damp and Mould team.  Increases were proposed in the report to the rent paid by tenants and to service charges.  The fees, even once increases had been applied, would continue to compare favourably to other service providers in the social housing sector, in terms of affordability for tenants on low incomes.

 

During consideration of this item, concerns were raised about the impact that an increase in rent and service charges could have on tenants on low incomes.  Reference was made to the fact that there were areas of deprivation in the Borough.  Concerns were raised that some tenants would struggle to afford the increased fees and this could result in an increase in demand for support from local food banks.  However, in response, it was noted that Council tenants were paying some of the lowest rents available locally, although the rent levels also compared favourably at a regional level.  In addition, Members were asked to note that Tenancy Officers employed by the Council could help to arrange for advice and support to be provided when tenants reported that they were struggling with their finances. 

 

Questions were also raised about the services that tenants could expect to receive as a result of the increase in rent and service charges.  Clarification was provided that the service charges helped to cover maintenance costs associated with buildings in which Council House properties were located.  In addition, it would help to pay for new Totalmobile software and it was anticipated that this would have a positive impact on the efficiency of service delivery.  There were also ongoing costs for Housing Services, including the need to install kitchens and bathrooms where properties needed to be refurbished.

 

 

The recommendations were proposed by Councillor Bill Hartnett and seconded by Councillor Ian Woodall.

 

Medium Term Financial Plan 2026/27 to 2028/29 Fees and Charges and Consultation Outcome including Worcestershire Regulatory Services Budget Recommendations

 

A report was presented on the Medium Term Financial Plan (MTFP) 2026/27 to 2028/29 proposed fees and charges and recommendations from the Worcestershire Regulatory Services (WRS) Board in respect of budget contributions.

 

In considering the report, Members were asked to note that the financial settlement from Government for District Councils had been challenging in recent years.  An additional sum of funding had been received but this would not offset the higher rate of inflation impacting on costs.  In the medium-term, the Council was therefore currently forecasting a deficit position for 2026/27 and 2027/28.  However, it was anticipated that the deficit could be reduced for 2025/26, which would have a positive impact on the starting position for subsequent financial years.

 

Public consultation had been held in respect of budget proposals over the festive period and there had been a positive response rate.  This had included a significant number of residents who had indicated that they would support a 4 per cent increase to fees and charges in order to ensure the continuing delivery of valuable services.

 

The content of the report was discussed in detail and in doing so Members commented on the projected deficit in the budget of circa £435,000 for 2025/26 and potentially in excess of £1 million in 2026/27.  Questions were raised about how the Council would generate funding or savings to address these gaps in the budget.  In response, Members were asked to note that the Council had £27 million in earmarked reserves which could potentially provide funds to help address these gaps.  In addition, Members were asked to note that the figures for 2025/26 were based on data as at the end of the second quarter of the financial year and it was likely that the position would change by the end of the financial year.  In the meantime, there would be a need to remain financially prudent.

 

Consideration was given to the public consultation exercise that had been undertaken in respect of the proposed budget.  Members welcomed the responses that had been received from the public, although expressed disappointment that the number of responses had declined compared to the previous year.  In future, hopes were raised that the Council would be able to engage with a more diverse cohort of local residents and the suggestion was made that all Members could assist with this aim, by encouraging residents living in their wards to respond during consultation processes.

 

Reference was made to Local Government Reorganisation and the potential restraints that would be placed on Council expenditure as Worcestershire progressed towards Vesting Day for the new Unitary Authority(ies).  In this context, the suggestion was made that there was a need for careful management of the Council’s assets and budget and the local authority would not be able to spend all of the earmarked reserves to achieve a balanced position.

 

The recommendations were proposed by Councillor Ian Woodall and seconded by Councillor Jane Spilsbury.

 

RESOLVED that

 

1)          the minutes of the Executive Committee meeting held on 25^th November 2025 be approved and all recommendations adopted; and

 

2)          the minutes of the Executive Committee meeting held on 13^th January 2026 be approved and all recommendations adopted, subject to the following addition in respect of Minute Item No. 74:

 

a)    the basic allowance payable to Members in the 2026/27 financial year be increased to £5,185.87 per year.