Budget proposals for 2026/27 and Medium Term Financial Plan 2026/27-2029/30 (Phase one consultation)

The economic and local context

We approved our 2025/26 budget, and the current MTFP forecasts on 19 February 2025, and used £3.503 million from our reserves to balance the budget in 2025/26. This means we start the budget planning for 2026/27 with a £3.503 million deficit to address.

We have updated our budget estimates and proposals for the year ahead (1 April 2026 to 31 March 2027) and have updated our financial forecast for the 3 years after that. This includes an assessment of what additional funding we might receive from central government and from additional income and costs associated with new housebuilding. 

Our Cabinet recognise the importance of setting a balanced, sustainable budget, where the Council lives within its means. Following the local elections in May 2025, the focus has been on finding efficiencies and reviewing contracts with a clear focus on ensuring value for money.

Proposed approach

The proposed changes to the February 2025 savings for 2026/27 are:

• remove the £0.096 million of savings relating to legal services so that we have capacity to address breaches of licensing and planning conditions.
• move the potential £0.550 million of additional income from increasing the Council Tax premium for empty/second homes (Section 13(a) Policy) entirely to 2027/28 to reflect the assumed timing of increased income received by the Council. (Any changes to the premium will be amended from 1 April 2027 rather than from 1 October 2026). For more information see our Exceptions to the Empty and Unfurnished Properties and Second Homes Council Tax Premium consultation.
• reduce the planned savings from the reduction in the Neighbourhood Warden service from £0.360 million to £0.180 million across 2026/27 and 2027/28 so that we have capacity to address anti-social behaviour. 

The savings for 2026/27 and later years which are included in the updated MTFP projections now total £3.810 million for 2026/27, £1.662 million for 2027/28 and £0.189 million for 2027/28 - £5.662 million in total across the next four years.

If we do not implement these savings, the current budget deficit (gap) and the additional savings we will need totalling £71.019 million will increase. These savings relate to three areas:

Savings from back office and making efficiencies

Savings total = £1.993 million (35%)

Covering the review of:

• Legal Services, and Legal and Democratic Services non-staffing budgets
• corporate sponsorship, advertising and subscriptions arrangements
• Early Help, Inclusion and Vulnerable Children Services
• reduction in Historic Further Education Pension Fund Liabilities
• Human Resources, Employee Services and training budgets
• office accommodation
• Business Services
• Internal Audit and Insurance
• Transactional and Customer Services non-staff budgets, and Transactional and Customer Services
• Catering, Cleaning and Facilities Management

Raising additional income and reducing our third party contributions

Savings total = £1.162 million (21%) 

Covering the review of:

• fees and charges within Environmental Services
• pest control charging
• vehicle and bus lane enforcement income
• Local Council Tax Reduction Grant to town and parish councils
• charging for Learning Disability Transport
• Gypsy, Roma Traveller Service and Community Action
• allotment fees

Savings from changes in the way we deliver front line services

Savings total for 2026/27 = £2.507 million (44%) 

Covering the review of:

• Direct Payments and Reablement within Adult and Health Services to promote independence
• Support and Recovery arrangements within Adult and Health Services
• Neighbourhood Wardens
• Clean and Green Service
• grass cutting, to reduce cutting on central reservations of dual carriageway roads and reduce roadside verge grass cutting from 2 cuts to 1 cut per year
• Find and Fix Service
• weed spraying, to stop spraying to fence lines and obstacles on open space grassed areas
• Community Protection Service
• Local Networks
• Customer Access Points
• Councillor allowance budgets arising from the recent boundary review changes

Council Tax options and impact

Council Tax increase

Our new administration have indicated they do not wish to increase Council Tax, and if this aspiration is unavoidable, limit increases as far as possible, by increasing other income, growing the local economy, reviewing contracts, reducing costs and improving efficiencies to achieve improved service delivery and better value for money.

We have set out what the assumed budget deficit will be if no Council Tax increases are applied across the next 4 years, as well as providing a range of options around potential incremental Council Tax increases and the revised impact on the deficit.

If no Council Tax increases are applied there will be a significant funding gap. If this cannot be covered by additional Government funding, it will require further extensive cuts to, or major transformational efficiencies to be found in a range of services, particularly services which are discretionary (optional) rather than statutory (mandatory).

We need to carefully consider and balance the potential impacts of an improved or worsened financial position and the savings that will be required to balance the budget with the impact of applying Council Tax increases in the coming years.

4 scenarios are shown as examples to demonstrate the impact on savings with various levels of Council Tax increases. Council Tax increases applied in each year can also be different, provided that in any one year the annual increase does not exceed the referendum limit of 5%. (Please note all monetary figures are in millions)

Local Council Tax Reduction Scheme (LCTRS)

We have also consulted on a range of potential changes to the LCTRS to reduce the cost of the scheme. which provides a means tested reduction in council tax liabilities for pensioners and working age households based on their household income and circumstances. The proposed changes would only affect working age people.

Our current scheme is more generous than most other local councils, and therefore any increase in uptake in this scheme has an effect on our income generation. We have provided options to move towards an income banded scheme and to potentially cap the support provided, but this comes with the risk of potentially not recovering some of the additional Council Tax charges that would be levied as a result.

The financial impact of these proposals and any changes, are not factored into the MTFP forecast at this time, and the consultation results will be reviewed by our Cabinet on 19 November 2025.

For more information, visit Local Council Tax Reduction Scheme for working age people consultation.

Other options

Reserves: our reserves are available to support the budget. Presently there is £34.576 million set aside in our MTFP support reserve, after we have used the £3.503 million to balance the budget in 2025/26. However, it is not a financially sustainable strategy to delay decision making and use this to balance the budget or to avoid increasing Council Tax. We anticipate that we may have to again use some of this reserve to a balance the 2026/27 budget.

Service transformation: We are working to develop a transformation programme to deliver financially and operationally sustainable services, and a balanced budget that would limit the reliance on our reserves and on council tax increases. For this, we are continuing to explore how to work together to change how we deliver services, as it is becoming more and more evident that changes are needed to long standing and traditional approaches to directly delivered services. Where is makes sense to do so, we are considering working with our partners, residents and community groups to provide services that meet levels of demand and need as communities become more self-sufficient and independent.

Future savings

As work continues to develop a series of savings measures which will partly address this shortfall, we want to again understand where you would continue to prioritise savings. We have set out a list of front line services where we could make further savings. Without any council tax increases, further extensive savings would need to be made in these areas. It is also important to remember that savings in these areas will still be difficult to achieve and could have a significant impact.

• Community safety and protection - environmental health, trading standards, taxis and events, neighbourhood wardens, emergency planning, road safety and school crossing patrol services.
• Council Tax, benefits and other processing - processing of Housing Benefit, Council Tax Benefit and other Council Tax and business rates account changes.
• Culture - council owned museums and theatres, libraries and support to cultural events.
• Customer access and customer services - customer access points, call handling and contact arrangements to report issues / access services.
• Economic development - support for businesses, projects and support services to improve the county's economy, creating jobs and wealth.
• Environment and climate change - reduction of carbon emissions for the council, residents, and business, to tackle pollution and nature conservation.
• Housing services - homelessness, home adaptations for vulnerable people and housing advice.​
• Leisure and wellbeing - leisure centres, parks, play areas, playing pitches and allotments and associated activity programmes.
• Local community projects - support for community development including Local Networks and the voluntary sector.
• Local Council Tax support - which is provided to working age people. We could cap or cut the current level of support in future years.
• Planning services - provision of planning and building control services.
• Preventative services - community-based early intervention support for vulnerable people with their mental and physical wellbeing to maintain their quality of life and independent living, thus helping to reduce future statutory social care spending.
• Roads and transport - road and footpath maintenance, pothole repairs, gully cleaning, street lighting, winter maintenance, parking services, subsidised transport e.g. bus routes and bus passes.
• Street cleaning and grounds maintenance - including parks, cemeteries and open spaces, litter picking, fly tipping, dog fouling, grass cutting, flower beds and trees. 
• Waste collection, disposal and recycling - household and business bin collections and recycling centres.
• Welfare assistance and advice - advice and financial support provided to vulnerable people to help address poverty especially during the cost of living crisis.

Outcomes and next steps

Your feedback will help us shape and finalise our budget proposals for 2026/27, as well as look longer term to make future savings. We expect to consult you on further savings proposals in November 2025. Our Cabinet and full Council will then review all the proposals and agree our savings plan in February 2026. 

We expect further consultation on how to shape future savings proposals will be carried out next year.