Issue - meetings

To consider and scrutinise the Council’s financial outlook, provisional finance settlement and draft General Fund budget position prior to consideration by Cabinet and Council (report of the Director of Finance (Section 151 Officer) to follow).

Consideration was given to the report of the Director of Finance (Section 151 Officer) to consider and scrutinise the Council’s financial outlook, provisional finance settlement and draft General Fund budget position prior to consideration by Cabinet and Council. 

The Director of Finance (Section 151 Officer) and the Head of Finance Delivery SHDC (PSPS) attended for this item.

The Director of Finance introduced the report to members and the following main points were highlighted by way of a presentation (appended to the minutes at Appendix 1):

• The role of Overview and Scrutiny as part of the budget process;
• A recap of the process to date;
• Key headlines from the Provisional Local Government Finance (LGF) Settlement 2026/27 including significant complex changes and the release of illustrative figures for subsequent years, which will be updated on an annual basis;
• A summary of budget pressures;
• A summary of efficiency proposals;
• The provisional draft budget; and
• Next steps.

In addition, it was highlighted that:

• £5 million of grant funding towards Internal Drainage Board had been secured for 2026/27;
• Due to the late notification of the finance settlement from central government and the fact that further information was still awaited, the report had been prepared and presented with the caveat that work on the budget remained ongoing. This included, in particular, the following elements:
  • The Capital Programme and its funding arrangements, which were yet to be finalised; and
  • Financial assumptions relating to food waste collection and Extended Producer Responsibility, which had not yet been confirmed and would be incorporated into the budget when available. It was noted that these outstanding elements would have a consequential impact on the Treasury Management position and, in turn, on projected investment income;
• Work undertaken to date had reduced the 2026/27 initial funding gap from £2.5m to £250,000. It was noted that pressure was anticipated to increase in subsequent years and that, while further management measures would be required, the overall position was considered reasonable moving forward.

Members considered the report and made the following comments:

• Members queried whether grants consolidated within the finance settlement were ring-fenced for their respective purposes.
  • The Director of Finance explained that, while the consolidation of grants represented a departure from previous settlement approaches, the settlement documentation clearly identified the individual grant values and confirmed that these remained ring?fenced for their intended purposes.

• Members queried the likely impact of forthcoming changes to business rates, including the revaluation of licensed premises.
  • The Director of Finance explained that the business rates revaluation would potentially affect all ratepayers across the district. It was noted that, while the intention of the revaluation was that increases and reductions should broadly balance out at a national level, the impact would vary between individual businesses depending on their circumstances and ability to absorb change. Members were advised that the local implications would not be fully understood until detailed data was available later in the process.

• Members queried why government calculations overestimated Council Tax income by £109,000.
  • The Director of Finance explained that  ...  view the full minutes text for item 9