Agenda item

To approve: The General Fund Budget and HRA Budgets for 2026/27, including the use of reserves, Medium Term Financial Strategy, Capital Programme and Strategy, Treasury Management Policy/Strategy and the Annual Delivery Plan including the approval of Council Tax levels (report of the Director of Finance (Section 151 Officer) enclosed).

(Please note that in accordance with The Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, a recorded vote will be taken on Budget recommendations).

(Members are reminded that if they are two months or more in arrears, they must disclose the fact and not vote on any item to set tax or any decision which may affect its calculation).

Consideration was given to the report of the Director of Finance (Section 151 Officer) to approve the General Fund Budget and Housing Revenue Account (HRA) Budgets for 2026/27, including the use of reserves, Medium Term Financial Strategy, Capital Programme and Strategy, Treasury Management Policy/Strategy, the Annual Delivery Plan and Living Wage Supplement, including the approval of Council Tax levels.

The Portfolio Holder for Finance introduced the report by thanking the Finance Team for their diligent work in producing a balanced budget, and expressed appreciation to Cabinet Members, Assistant Directors and officers for their commitment throughout the process. The following main points were highlighted:

• The Annual Delivery Plan document reflected the anticipated impacts of Local Government Reorganisation and set out a broad programme of activity to support communities;
• Ongoing partnership work continued to influence national discussions on Local Government Reorganisation and Internal Drainage Board (IDB) levies;
• Investment in a new Local Plan was highlighted, as were savings achieved through the South and East Lincolnshire Councils Partnership which had exceeded the initial £42m savings target, and the recent procurement of a leisure operator, which would deliver further efficiencies;
• It was noted that the budget had been prepared amid significant financial pressures, changes to the Local Government Finance system, increased reliance on Revenue Support Grant and locally raised Council Tax;
• Provision had been made for the introduction of a food waste collection service, and members were advised of continued Internal Drainage Board (IDB) pressures, with the 2026/27 levy exceeding £3.7m and accounting for 55% of the Council Tax retained by the authority;
• Despite challenges, the proposed budget delivered a balanced and sustainable position with no in-year efficiency target for 2026/27 whilst protecting services and maintaining capacity for investment. The Capital Programme totalled over £25m, and Treasury Management activity had supported the balanced position through increased returns;
• The proposed Council Tax of £214.92 for a Band D property equated to an increase of 12 pence per week from the 2025/26 position. Members were asked to note that 74% of properties in South Holland fell within the A to C Council Tax brackets and therefore increases were lower, as follows: Band A, 8 pence; Band B, 10 pence; and Band C, 11 pence;
• The following minor amendments to Fees and Charges at Appendix 5 were to be noted:
  • In respect of ‘Private Hire and Hackney Carriage Licences’ at page 225 of the agenda pack, the word ‘renewal’ needed to be added at the second row, with the 2026/27 fee amended to £229 instead of £240; and
  • In respect of ‘Scrap Metal’ at page 226 of the agenda pack, the third row needed to be removed; and
• Further proposals included a significant investment in the Housing Revenue Account (HRA) and HRA Capital Programme, focussing on Decent Homes and Major Adaptations and Green Homes Energy Efficiency. Use of the Spalding Special Expense Reserve for parks and play areas was also proposed, with a detailed plan to follow.

In conclusion, the Portfolio Holder stated that the budget responded to a highly challenging financial environment and demonstrated strong planning and commitment to local services whilst positioning the Council for a stable future.

The following issues were raised:

• The Leader congratulated the Finance team and Section 151 Officer for preparing a balanced budget under challenging circumstances. On this point he noted that the Government settlement had assumed a 3% Council Tax increase, which if not applied would have resulted in a reduction of resources of approximately £250,000. Also, that a significant number of grants appeared to have been rolled into the overall funding allocation which blurred the clarity on whether the Council was receiving a greater or lesser level of support than in previous years. The savings delivered through the partnership were therefore crucial and contributed to the Council’s financial stability, exceeding the targeted £42 million to achieve £47 million over five years.

• Members referred to the significant (55%) proportion of district Council Tax being directed to Internal Drainage Boards and raised concern regarding the associated impact on local services. The efforts of the Internal Drainage Board Special Interest Group were noted, and disappointment expressed that concerns had not been recognised nationally.

• Members praised officers for the presentation of a balanced budget under challenging circumstances and stated that their involvement in the process over the preceding months had served to minimise queries at the current meeting.

DECISION:

That, incorporating the presented minor amendments in respect of Fees and Charges, Council approved the following recommendations as considered by Cabinet,:

1)    The Medium-Term Financial Strategy (at Appendix 1) be approved;

2)    That it be noted that the Council Tax Base for South Holland District Council of 31,567 and 9,746 for Spalding Special Expenses (Band D equivalent) has been set for 2026/27 and on the 23 December 2025 by the Director of Finance & Section 151 Officer under offer delegation in line with the Constitution;

3)    That the Revenue Estimates for the General Fund, HRA and Spalding Special Expense for 2026/27 (Appendices 1,1a,1b and 1c) be approved;

4)    The additions to and use of reserves (as detailed at Appendix 1) be approved;

5)    The Capital Programmes and Capital Strategy (Appendices 2a,2b and 3) be approved;

6)    That the Treasury Management Statement, Treasury Management Strategy Statement, MRP Policy and Annual Investment Strategy and Treasury Management Practices (Appendix 4a,4b and 4c) be approved;

7)    The Fees and Charges Schedule 2026/27 (Appendix 5) be approved;

8)    That it be noted that on 28 January 2026 Council approved the housing rent increase for 2026/27;

9)    That the report of the Section 151 Officer, under Section 25 of the Local Government Act 2003 on the robustness of the estimates made for the purposes of the budget calculations and adequacy of proposed financial reserves be noted (Paragraph 11);

10)That the Council Tax for a Band D property in 2026/27 be set at £214.92 (£6.39 per annum increase on 2025/26 levels) for South Holland District Council and £23.40 (£0.27 per annum increase on 2025/26 levels) for Spalding Special Expenses.

11)That Annual Delivery Plan for 2026/27 (Appendix 6) be approved; and

That Council:

12)Approved the application of the Living Wage Supplement to be paid to all employees whose current hourly rate fell below the Real Living Wage Foundation rate of £13.45 with effect from 1 April 2026 as outlined in paragraph 10.2 of this report.

In accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014 a recorded vote was taken on each Budget decision. The vote was as follows: