21st February 2026
Agenda Item 8 — Medium-Term Financial Plan & 2026/27 Budget
This is the main decision of the entire meeting.
Everything earlier (like Item 7’s overspends) feeds into this one.
👉 Item 8 answers:
“Given rising costs and limited funding, how will the council balance its budget over the next four years?”
The financial situation
The report sets out a structural funding gap across the period 2026–2030.
That gap exists because:
Costs rising faster than income
Main drivers:
- Adult social care demand
- Children’s placements
- SEND transport
- Inflation on contracts
- Pay increases
Income not keeping up
Councils mainly rely on:
- Council tax
- Business rates
- Government grant
Government funding has not grown at the same rate as service demand.
What the council proposes to do
The plan combines four approaches:
1) Council tax increase
Proposed annual rise:
4.99% per year
Breakdown:
- 2.99% general services
- 2% adult social care precept
Meaning:
The council is using the maximum increase allowed without a referendum.
2) Savings programme (spending reductions)
A package of recurring savings must be delivered.
These usually come from:
- Service redesign
- Eligibility changes
- Staffing restructuring
- Contract renegotiation
- Digitalisation
Important:
They are typically not labelled as “cuts” but the practical effect can be reduced service access.
3) Transformation & efficiency
The council plans to change how services work rather than simply stop them.
Examples:
- Prevention instead of crisis support
- Online services instead of in-person
- Different delivery partners
- Earlier intervention to avoid expensive care
This is intended to permanently lower demand growth.
4) Use of reserves (limited)
Savings are phased in over time.
Reserves act as a temporary buffer while changes are implemented — but cannot be relied on long-term.
The 4-year forecast logic
The plan is basically:
| Year | Strategy |
|---|---|
| 2026/27 | Tax rise + start savings |
| 2027/28 | Larger service changes |
| 2028/29 | Transformation impact |
| 2029/30 | Balanced ongoing budget |
So the early years rely partly on reserves → later years rely on permanent change.
Why this matters
This item determines:
- Your council tax
- Which services change
- Speed of regeneration investment
- Future financial stability
Everything else in the meeting supports this plan.
The real policy trade-off
The council is choosing a balance between:
| Option | Consequence |
|---|---|
| Raise tax more | Politically difficult |
| Cut services faster | Social impact |
| Borrow more | Financial risk |
| Transform services | Long implementation time |
They chose a mixed approach.
The bottom line
Agenda Item 8 is the council’s survival plan for the next decade:
Raise council tax to the legal limit, gradually change how services work, and reduce costs over several years to close a long-term funding gap.
