Agenda and draft minutes

Councillor Alcock was elected as Chairman for the duration of the meeting.

Where a Councillor has a Disclosable Pecuniary Interest the Councillor must declare the interest to the meeting and leave the room without participating in any discussion or making a statement on the item, except where a councillor is permitted to remain as a result of a grant of dispensation.

Councillor Brewis declared that he was a Director of PSPS.

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.

To consider and provide feedback on the Housing Revenue Account (HRA) Business Plan 2026-2056 and HRA Asset Management strategy 2026-2035 (report of the Assistant Director – Housing enclosed).

Consideration was given to the report of the Assistant Director - Housing which asked members to provide feedback on the Housing Revenue Account (HRA) Business Plan 2026-2056 and HRA Asset Management Strategy 2026-2035.

The Assistant Director – Housing and the Portfolio Holder for Strategic and Operational Housing attended for this item, with support from the Director of Finance.

The Assistant Director - Housing introduced the report to members and the following main points were highlighted by way of a presentation (appended to the minutes at Appendix 2):

• Background;
• Headlines;
• Consultation: November 2025;
• Sewage treatment works: update;
• Asset Management Strategy: outcome;
• Stock investment requirements;
• Approach to financing;
• A summary and next steps.

Members considered the report and made the following comments:

• Members reported that residents had given positive feedback regarding the tenant engagement work.

• Members had queried whether an alternative plan had been considered to avoid the Council going into further debt.
  • The Assistant Director - Housing had explained that, based on current modelling and government requirements for energy efficiency and Decent Homes standards, additional borrowing was necessary, however grants and potential rent-setting changes may reduce reliance on debt. The plan would be reviewed annually as part of the budget setting.

• Members asked if divesting housing stock had been considered.
  • The Assistant Director - Housing had confirmed that stock transfer had not been considered as part of this work.

• Members raised concerns about underinvestment in sewage treatment works and pumping stations and whether assets would fail before funding was available.
  • The Assistant Director - Housing responded that, in her opinion, there had not been an underinvestment. An intensive maintenance contract was in place, all sites had been surveyed independently approximately two years ago and are subject to ad-hoc inspections by the Environment Agency. While a capital programme was not in place at present, the existing Medium-Term Financial Strategy had a contingency for capital investment, and the programme would commence during 2026/27.

• Members queried whether South Holland Homes should be brought into the HRA.
  • The Assistant Director - Housing had noted that the acquisition of the units by the HRA was subject to ongoing discussion. Tenant consultation would be necessary; however they would benefit from additional rights under the HRA.

• Members had sought clarification on tenant feedback suggesting disposal of high-cost homes.
  • The Assistant Director - Housing had confirmed that an asset performance evaluation would be undertaken as part of the strategy to identify properties that might be costly to maintain or obsolete. Findings would be reported back to councillors.

• Members had asked whether investment in properties would increase stock valuation.
  • The Director of Finance (Section 151 Officer) explained that valuations were based primarily on rental income rather than component upgrades however poor-quality stock could negatively affect valuation;
  • The Assistant Director - Housing added that capital improvements reduced repairs expenditure and reduced fuel costs for tenants.

• Members had queried the borrowing strategy and options.
  • The Director of Finance (Section 151 Officer) highlighted that borrowing for investment was not inherently negative if affordable  ...  view the full minutes text for item 10.

There were none.