Agenda item

Due to the closing date of the budget consultation, the consultation responses (Appendix D to this report) will be published in an additional papers pack to this agenda.  

The Assistant Director of Finance and Customer Services presented the Medium Term Financial Plan 2026-27 to 2028-29 Fees and Charges and consultation outcome including Worcestershire Regulatory Services (WRS) Budget Recommendations report. Appendices C and D to the report were contained within the Additional Papers pack 1.

The report provided an overview of the Council’s current financial position and outlined the next steps that would be taken as part of the budget setting process, WRS recommendations and fees and charges.

Members were informed that the income position was a deficit of £435,000 and £345,000 respectively at the starting points for 2026/27 and 2027/28. In addition, there was a funding gap of over one million pounds for the existing budgets. It was reported that inflation remained high at just over 3 per cent which was impacting on service costs.

The financial pressures on the Council were highlighted to Members. At Quarter Two, the overall revenue financial position was a £381,000 overspend position with savings of £2.342 million of which £1.145 million was yet to be delivered. Plans would need to be put in place to mitigate the in-year overspend.

The provisional Local Government Finance Settlement was announced on 17^th December 2025. This set out the detail of funding allocations for individual councils including details of the new funding distribution model (Fairer Funding Review 2.0).

Overall, District Councils Core Spending Power (CSP) within the Provisional Settlement was lower than other councils, coming out at an estimated 3.4 per cent increase in CSP over the following three years. Compared to 2025/26, the Council had a net increase in CSP of £0.8 million in 2026/27, £1.3 million in 2027/28 and £1.7 million in 2028/29. However, this included the Recovery Grant of £350,000 which had not been confirmed beyond 2028/29.

In addition to the changes relating to the Fairer Funding Review, the Recovery Grant had been confirmed on an ongoing basis for the following three years. This would result in the Council receiving £326,000 per annum for the subsequent three years.

The key pressures were identified as:

• The additional 0.2 per cent Pay Award increase from 2025/26 which was above the assumed increase in the budget of 3 per cent, amounting to £18,000 going forward.
• A further 1 per cent Cost of Living of £126,000.
• Funding gap from 2025/26 budgets of £1.062 million.
• Additional costs relating to Worcestershire Regulatory Services which were £18,000 for 2027/28 and £50,000 for 2028/29.

These pressures had been offset by changes in the pension rate of £216,000 in 2026/27, reducing slightly to £198,000 in 2028/29. As well as council tax income and fees and charges.

Members were also provided with an update on the Budget Consultation for 2026/27 which ran from 17^th November 2025 to 29^th December 2025.

An invite had been sent directly to all members of the Community Panel and links had been sent to partners to share with their contacts. The survey was publicised in local media and numerous times on social media. It was noted that the response rate was significantly lower than the previous year, however at least one response had been received from every area within the Borough.

The notable responses were highlighted to Members as follows:

• How important are the current Redditch Borough Council priorities to you? Green, Clean and Safe received scored 54.2 per cent
• The top three services voted as most important for the Council to invest in were: Community Safety, Parks and Open Spaces and the local economy.
• Nearly 50 per cent of respondents said they supported fees and charges rising by 4 per cent to keep them in line with inflation and rising staffing costs.
• 52 per cent of respondents owned their own homes.
• Over 33 per cent of respondents had a long-standing health condition or disability.

The Portfolio Holder for Finance thanked the Assistant Director of Finance and Customer Services and the team involved in producing the detailed report. It was noted that although the Council had received more funding from Government, that there would still be a tight financial settlement for the following few years. Reassurance was given that savings would be made where possible and the Council would be delivering value for money.

RESOLVED that

1) The updated position in respect of the 2026/27 annual budget and for the Medium-Term Financial Plan up to 2028/29 be noted;

2) To note that a further report in February would include additional information from the Local Government Settlement to give a final financial position for the Council.

RECOMMENDED to Council that

3) the feedback from the Consultation on the Budget 2026/27,attached as Appendix D, be noted.

4) the proposed fees and charges for 2026/27, including proposed fees and charges for Worcestershire Regulatory Services, attached as Appendices C and D, be approved.

5) The increases to the Council’s budget for Worcestershire Regulatory Services of £18k for 2027/28 and £50k for 2028/29,as recommended by the Worcestershire Regulatory Services Board, be approved.