Agenda item - 2026/2027 Budget and Financial Strategy

The report of the Director – Finance and Corporate Services is attached.

It was RESOLVED that Cabinet RECOMMENDS to Council that it:

a) adopts the budget setting report and associated financial strategies 2026/27 to 2030/31 and appendices (attached Annex), including the summarised Special Expenses budget at Appendix 1, Budget Summary at Appendix 2, use of Reserves at Appendix 4, Transformation and Efficiency Plan at Appendix 5, core spending power at Appendix 6 and Report of the Nottinghamshire Finance Officers on the Business Rates Pool at Appendix 7;

b) adopts the Capital Programme as set out in Appendix 3;

c) adopts the Capital and Investment Strategy at Appendix 9;

d) sets Rushcliffe’s 2026/27 Council Tax for a Band D property at £161.77 (no increase from 2025/26, a freeze for one year);

e) sets the Special Expenses for 2026/27 for West Bridgford, Ruddington and Keyworth, resulting in the following Band D Council Tax levels for the Special Expense Areas:

i. West Bridgford £67.40 (£64.84 in 2025/26)

ii. Keyworth £3.35 (£3.21 in 2025/26)

iii. Ruddington £3.40 (£3.14 in 2025/26); and

f) adopts the Pay Policy Statement at Appendix 8; and delegates authority to the Director – Finance and Corporate Services to make any minor amendments to the MTFS once the final Local Government Finance Settlement is received and advise the Finance Portfolio Holder accordingly, to be reported to Full Council.

The Cabinet Portfolio Holder for Finance, Transformation and Governance, Councillor Virdi presented the report of the Director – Finance and Corporate Services outlining the Council’s proposed budget for 2026/27, the five-year Medium Term Financial Strategy (MTFS) and accompanying information detailed in the report.

Councillor Virdi stated that this had been a challenging budget to prepare, due to significant, large scale, systemic changes to Local Government finance. He notified Cabinet of a minor technical correction in the report, the Band D Council Tax figure referred to in paragraph 4.2 c) and the MTFS Annex should read £161.77 rather than £161.76, and this would be corrected in the report to Full Council. He confirmed that this did not change the substance of the budget.

Councillor Virdi advised that this budget demonstrated the Council’s financial resilience, and despite ongoing reductions in Government funding, including some late changes he would refer to later, it was noted that Council Tax would be frozen, a strong financial position would be maintained, with a balanced budget across the five-year period, as the Council remained debt free. Cabinet was reminded that Rushcliffe continued to have the lowest Council Tax in Nottinghamshire and remained amongst the lowest quartile in the country, which Councillor Virdi felt everyone should be proud of. This was being achieved whilst the Council continued to deliver high quality services and to invest in its people and place, with the budget supporting a £24m Capital Programme, which was focused on supporting the vulnerable, improving communities and leisure facilities, enabling economic growth and reducing the Council’s carbon footprint. It was noted that the Council retained projected earmarked reserves of around £25m, providing resilience going forward, particularly with Local Government Reorganisation (LGR) on the horizon. He referred to the Council’s Transformation and Efficiency Plan, which highlighted how the Council continued to innovate whilst living within its means.

Councillor Virdi referred to key points in the report, as detailed in paragraph 4.2, and advised that this was the first multi-year settlement in over a decade, providing a three-year financial framework. However, Rushcliffe had seen a 2.25% reduction in core spending power, with Business Rates undergoing a national reset, which had significantly impacted the Council, details of which were highlighted in paragraph 4.2 b). Councillor Virdi confirmed that until recently, the budget was based on the provisional settlement; however, there had been a late, material change, following the final Local Government finance settlement, which was issued yesterday, and was referenced in the Addendum circulated at the meeting. The Government had changed the treatment of Business Rates pooling gains, reallocating a significant portion towards upper tier authorities, which particularly affected councils, including Rushcliffe that were members of the Business Rates Pool in 2025-2026. In 2026-2027, the Government was recognising the lateness of this change and would be providing a one-off transitional grant of £0.484m; however, from 2027, there would be an additional cost of around £1.2m, with detailed analysis set out in paragraphs 3.5 and 3.6 of the Addendum. He confirmed that the report to Full Council would be updated to reflect those changes. Taking this change and other late policy decisions into account, the overall MTFS showed a commutive deficit of £0.815m over five years. Councillor Virdi stated that this deficit was manageable, and the Council remained stable and able to set a responsible budget, whilst recommending a freeze on Council Tax, which reflected the strength of the Council’s financial position, and the continued pressure residents faced.

In respect of Special Expenses, Councillor Virdi advised that there would only be a modest increase, which, he as a West Bridgford Councillor felt provided excellent value for money, supporting a vibrant events programme. The Council remained committed to economic growth, and whilst it was disappointing that the New Homes Bonus (NHB) was no longer received, that had been anticipated and planned within the MTFS.

Councillor Virdi acknowledged the risks and uncertainties that remained, including the impact of national policy changes to Simpler Recycling as detailed in paragraph 4.2 k), inflation, and LGR remained the most significant strategic risks; however, the Council was well prepared and would remain vigilant.

Councillor Virdi highlighted two late policy changes, which were detailed in the Addendum. The first related to the second homes premium, and that Cabinet had expressed concerns regarding its effectiveness for bringing second homes back into use, and it would be recommending that this Policy was ceased. Secondly, it was proposed to explore a Council Tax discount for residents who were terminally ill, with £40k being committed per annum, with a scrutiny review to assess the risk demand and an appropriate scheme.

In summary, Councillor Virdi stated that this was a strong and responsible budget, delivered in exceptionally difficult and fast-moving circumstances, it balanced prudence with compassion, investment with restraint and resilience with realism. Councillor Virdi concluded by thanking the Director – Finance and Corporate Services and the Finance Team for their exceptionally hard work and professionalism in producing this budget during very challenging times and dealing with late national changes.

In seconding the recommendation, Councillor J Wheeler welcomed the freeze in Council Tax despite the pressures being faced, inflation and cost of living remained high, and he felt that it was important to support residents. The Council continued to invest millions of pounds in its fantastic facilities and services and ensuring that empty homes were being brought back into use. In welcoming the proposal to support the terminally ill, Councillor Wheeler felt that it was important to carefully and sensitively look at the proposal, to ensure an appropriate and timely delivery. In respect of second homes premium, Councillor Wheeler agreed that whilst this had been an appropriate action before, it was noted that there had been some negative impact, and it was important to review ways of how to encourage homeowners to bring empty properties back into use. He reiterated Councillor Virdi’s comments regarding the West Bridgford Special Expenses and welcomed the continued investment in facilities and events over the last year. He concluded by echoing thanks to officers for their continued hard work.

The Leader echoed Councillor Virdi’s comments that this was an extremely well run Council, being debt free and prudently managed. He referred to the two additional policy changes and felt that this showed that the Council did listen to residents’ concerns and that it could react accordingly, due to its stable financial position. He also echoed the thanks given to the Director – Finance and Corporate Services and his team for their continued hard work.