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Agenda item

Revenue Budget 2026-27, Capital Programme and Medium Term Financial Strategy

Purpose:

To present the Revenue Budget for 2026/27, Capital Programme and Medium-Term Financial Strategy for 2026/27 to 2029/30.

 

Recommendations:

Cabinet is requested to consider and approve for recommendation to Council:

1.    the Medium-Term Financial Strategy set out in Annex B

2.    the Budget Pressures and Savings for inclusion in the budget, set out in Annex C

3.    the Council Tax Requirement of £7,419,716 for this Council

4.    the Council Tax level for Cotswold District Council purposes of £163.93 for a Band D property in 2026/27 (an increase of £5)

5.    the Capital Programme, set out in Annex D

6.    the Annual Capital Strategy 2026/27, as set out in Annex E

7.    the Annual Treasury Management Strategy and Non-Treasury Management Investment Strategy 2026/27, as set out in Annex F

8.    the Strategy for the Flexible use of Capital Receipts, as set out in Annex H

9.    that £2m is set aside in a new earmarked reserve Council Priority: LGR Transition through the releasing of £2m of the balance currently held in the Financial Resilience Reserve.

10. the balances and reserves forecast for 2026/27 to 2029/30 as set out in Section 7 of the report.

 

Cabinet is further recommended to approve delegation to the Council’s Deputy Chief Executive, in consultation with the Chief Executive, Leader, and Cabinet Member for Finance

1.    To agree changes to the General Fund Summary arising from the Final Local Government Finance Settlement and the Business Rates Retention Scheme estimates prior to submission to Council.

Decision:

The purpose of the report was to present the Revenue Budget for 2026/27, Capital Programme and Medium-Term Financial Strategy for 2026/27 to 2029/30 to Cabinet for approval.

 

Councillor Patrick Coleman, Cabinet Member for Finance, introduced the report.

It was noted that the Budget and Medium-Term Financial Strategy, had been prepared in the context of ongoing financial pressures and a significant medium-term budget gap. Members noted that, while funding reforms and a three-year provisional settlement provided increased certainty, savings and efficiencies would be required to maintain financial sustainability.

 

It was noted that there was no immediate risk of the Council requiring Exceptional Financial Support or issuing a section 114 notice. The 2026/27 budget was balanced through the use of reserves, with further gaps forecast in later years.

 

The Council noted proposals to increase Council Tax by £5 for a Band D property, which had received public support through consultation. Members also noted the planned use and maintenance of reserves, the continued requirement to deliver savings and transformation, and the proposed capital programme, including investment in waste and recycling infrastructure, funded without additional borrowing.

 

The recommendations were proposed by Councillor Coleman and seconded by Councillor Tristan Wilkinson.

 

RESOLVED that Cabinet considered the budget report and approved for recommendation to Council:

1.    the Medium-Term Financial Strategy set out in Annex B

2.    the Budget Pressures and Savings for inclusion in the budget, set out in Annex C

3.    the Council Tax Requirement of £7,419,716 for this Council

4.    the Council Tax level for Cotswold District Council purposes of £163.93 for a Band D property in 2026/27 (an increase of £5)

5.    the Capital Programme, set out in Annex D

6.    the Annual Capital Strategy 2026/27, as set out in Annex E

7.    the Annual Treasury Management Strategy and Non-Treasury Management Investment Strategy 2026/27, as set out in Annex F

8.    the Strategy for the Flexible use of Capital Receipts, as set out in Annex H

9.    that £2m is set aside in a new earmarked reserve Council Priority: LGR Transition through the releasing of £2m of the balance currently held in the Financial Resilience Reserve.

10. the balances and reserves forecast for 2026/27 to 2029/30 as set out in Section 7 of the report.

Cabinet approved delegation to the Council’s Deputy Chief Executive, in consultation with the Chief Executive, Leader, and Cabinet Member for Finance

11. To agree changes to the General Fund Summary arising from the Final Local Government Finance Settlement and the Business Rates Retention Scheme estimates prior to submission to Council.

 

Voting record:

7 For, 0 Against, 0 Abstentions.

 

Minutes:

The purpose of the report was to present the Revenue Budget for 2026/27, Capital Programme and Medium-Term Financial Strategy for 2026/27 to 2029/30 to Cabinet.

 

Councillor Patrick Coleman, Cabinet Member for Finance, introduced the report.

It was noted that the Budget and Medium-Term Financial Strategy, had been prepared in the context of ongoing financial pressures and a significant medium-term budget gap. Members noted that, while funding reforms and a three-year provisional settlement provided increased certainty, savings and efficiencies would be required to maintain financial sustainability.

 

It was noted that there was no immediate risk of the Council requiring Exceptional Financial Support or issuing a section 114 notice. The 2026/27 budget was balanced through the use of reserves, with further gaps forecast in later years.

 

The Council proposed to increase Council Tax by £5 for a Band D property, which had received public support through consultation. Members also noted the planned use and maintenance of reserves, the continued requirement to deliver savings and transformation, and the proposed capital programme, including investment in waste and recycling infrastructure, funded without external borrowing.

 

The Leader noted the good level of response to the public budget consultation despite it being concurrent with pre-election period and overlapped with the local plan consultation, and thanked all those who had responded to the consultation, noting that approximately two-thirds of respondents agreed or strongly agreed with the Council’s general approach, including the proposed 5% Council Tax increase, consistent with previous years. The responses to two specific questions were highlighted: 57% of respondents supported transforming services to be more cost-effective and customer-focused rather than maintaining the status quo, and 65% favoured prioritising delivery of capital projects within current capacity and finances rather than pursuing additional investment.

 

The Deputy Chief Executive and Chief Finance Officer, provided a brief update on the financial position. He noted that, as of 28 January 2026, the forecast for business rates had increased by £178,000 due to retained renewable energy schemes, and the reconciliation of Publica contract sums for 2026/27 was improving the overall position. He cautioned that the final government finance settlement, due on 9 February 2026 , could pose a small risk of change, particularly regarding business rates pooling, but advised that any adjustments were unlikely to be implemented immediately and would more likely affect future years.

 

The Leader invited questions or observations from Members on the report.

Councillors agreed that the Council’s financial position had been managed exceptionally well, highlighting the prudence in business rates forecasting, the three-year settlement which reduced immediate risk, and the absence of a “cliff edge” in the budget. They welcomed the substantial capital investment of almost £8.5 million in the waste vehicle fleet, noting that it secured a high-quality, environmentally friendly service for at least six to eight years without external borrowing. The contribution from extended producer responsibility funding of £1.721 million was also acknowledged as helping to offset service costs.

 

Councillors noted the positive impact of budget allocations on local residents, including continued funding for the home energy efficiency officer, and the benefits of digital transformation and AI to improve service efficiency, reduce administrative workload, and enhance resident services. They highlighted the Council’s support for local micro-businesses, of which there were approximately 9,000 in the district, and the importance of initiatives such as free two-hour parking in high streets like Bourton-on-the-Water to support local shops and maintain vibrant community centres.

 

Councillors agreed that the Council’s strong financial position reflected sustained, detailed work by officers and councillors over several years, including careful review of fees and charges, long-term planning, and management of costs to ensure financial stability while delivering quality services. They welcomed the outcomes of the recent public consultation, noting that around two-thirds of respondents supported the general approach and the proposed five percent Council Tax increase, 57% supported transformation of services, and 65% favoured focusing on delivering capital projects within current capacity. They acknowledged that some feedback was critical or misinformed, but agreed that the consultation provided valuable insight into community expectations and reinforced the Council’s commitment to prudent, accountable decision-making.

 

Councillor Coleman summed up saying that the Council had made significant progress in rationalising its financial reserves, reducing a long list of minor reserves to nine, with eight now considered significant. These included reserves for Local Government Reorganisation (LGR) transition, capacity building, the local plan, and the climate emergency, reflecting the Council’s priorities and focus on strategic objectives. Members noted that simplifying and clarifying the reserves structure made financial management more transparent and effective. It was also noted that the Council remained in a strong position, with no debt issues, well-maintained social housing stock, and high recycling performance, reflecting consistent good governance over time.

 

The recommendations were proposed by Councillor Coleman and seconded by Councillor Tristan Wilkinson.

 

The proposal was put to the vote and agreed by Cabinet.

 

Voting record:

7 For, 0 Against, 0 Abstentions.

Supporting documents:

 

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