Agenda item

To consider the report on the Medium term Financial Strategy 2026/27 - 2029/30 and the Section 25 Statement of the Section 151 Officer.

During consideration of this item, the Mayor was unable to continue to chair the meeting. The Deputy Mayor took the chair for the remainder of the meeting.

 

Consideration was given to the report on the Medium-Term Financial Strategy 2026/27 - 2029/30.

 

An Addendum to the report had been published which provided an update on the Exceptional Financial support and on changes to the employer pension contribution rates.  A revised Appendix B had been published to reflect these changes.

 

The recommendations in the report were proposed and seconded and during the debate, the following amendments were proposed and seconded.

 

Amendments

 

In the recommendations in section Full Council is asked to note

 

Add the following and renumber:

 

New recommendation 2:

Council welcomes the Government’s decision to refuse Labour/Independent-run Cheshire East Council’s request to increase the Council Tax by 9.99 percent for 2026/27, recognising that such an increase would hurt most those Cheshire East residents least able to mitigate an increase some three times current inflation.

 

New recommendation 3:

Council notes that the Government’s three-year funding strategy for Cheshire East does not fully cover expected inflation and represents an expected cut in spending power of 3%.

 

New recommendation 4:

Council notes that the Government’s welfare reforms have removed almost all discretion in relation to working age Council Tax benefit schemes and agrees to make no further changes to the scheme.

 

In the recommendations in section Full Council be recommended to approve

 

Amend current recommendation 2 to make add the following to the detailed revenue budgets set out in appendix B as follows:

·       Agree to cut the ward member budgets, with a saving of £43k in 2026/27.

·       Agree to reduce the members’ allowances budget by £44k in 2026/27. (Which recognises the current underspend only as a saving.)

·       Instruct officers to undertake an older people’s housing needs assessment to evidence the level of need for all forms of housing, included supported housing, extra care, and care homes. With this evidence, instruct officers to bring forward proposals for supplementary planning guidance to limit care home developments to the population needs of Cheshire East residents only.

·       Instruct officers to report on the feasibility and service delivery implications of increasing the vacancy rate from the proposed 5 percent to a revised 10 percent and use these savings to reduce the level of Exceptional Financial Support needed in 2026/27 and future years, with expected additional savings of £8,255k in 2026/27, and to explore options for introducing performance related pay for senior officers.

·       Agree that the current SEND Recovery Plan is not working, that the projected overspend for this year has increased from c£32m to c£41m and that the plan does not provide a balanced DSG High Needs budget until 2030. Recognises that the legal framework for assessing need and providing services is likely to change at some point during the period of the 2026 to 2030 MTFS, and

o   instruct officers to bring forward revised proposals for balancing the DSG High Needs budget before the statutory override is lifted; and

o   consider options for using unoccupied education assets for additional in borough alternative provision and provision for children with special educational needs.

Amend current recommendation 4 to delete £27.439m and replace with £19,408m.

 

Amend current recommendation 5 to add at beginning of recommendation the following:

Disappointed that the Transformation Programme is costing more and delivering less than promised, and notes that in the 2025/26 the programme has failed to deliver c£14m of cross cutting savings, with impacts on this and future financial years.

 

Amend current recommendation 8 to add at end:

Instruct officers to bring forward a ten-year capital strategy, to include details such as total budget, spend to date, spend against project plan, progress to date, and funding sources, and to include priority projects for future development subject to funding and an asset disposal strategy for member approval.

 

Following debate, the amendments were put to the vote, and a recorded vote was carried out with the following results:

 

FOR

Councillors S Adams, R Bailey, M Beanland, K Burton, D Brown, R Chadwick, J Clowes, P Coan, T Dean, S Edgar, S Gardiner, K Hague, E Hall, A Harrison, G Hayes, A Heler, S Holland, M Houston, T Jackson, R Kain, A Kolker, R Morris, H Moss, M Muldoon, C O’Leary, J Pearson, B Posnett, J Pratt, P Redstone, J Saunders, M Sewart, M Simon, L Smetham, L Wardlaw, H Whitaker and J Wray.

 

AGAINST

Councillors L Anderson, S Bennett-Wake, J Bird, L Braithwaite, J Bartherton, M Brooks, C Browne, L Buchanan, C Bulman, A Burton, C Chapman, D Clark, A Coiley, N Cook, S Corcoran, L Crane, B Drake, K Edwards, M Edwards, H Faddes, J Knight, R Fletcher, E Gilman, M Goldsmith, M Gorman, D Jefferay, N Mannion,  G Marshall, A Moran, R Moreton, J Place, J Priest, B Puddicombe, J Rhodes, H Seddon, G Smith, L Smith, J Snowball, R Vernon, M Warren, F Wilson and B Wye

 

NOT VOTING

Councillors D Edwardes, A Gage, John Smith and Julie Smith

 

The motion was declared lost with 36 votes for, 42 against and 4 not voting.

 

Following debate on the substantive recommendations, the recommendations were put to the vote, and in accordance with legislation, a recorded vote was carried out with the following results:

 

FOR

Councillors L Anderson, S Bennett-Wake, J Bird, L Braithwaite, J Bartherton, M Brooks, C Browne, L Buchanan, C Bulman, A Burton, C Chapman, D Clark, A Coiley,  S Corcoran, L Crane, B Drake, D Edwardes, K Edwards, M Edwards, H Faddes, E Gilman, M Goldsmith, M Gorman, M Houston, D Jefferay, N Mannion,  G Marshall, A Moran, R Moreton, J Place, J Priest, B Puddicombe, J Rhodes, H Seddon, G Smith, J Snowball, R Vernon, M Warren, F Wilson and B Wye.

 

AGAINST

Councillors S Adams, R Bailey, M Beanland, K Burton, D Brown, R Chadwick, J Clowes, P Coan, T Dean, S Edgar, J Knight, R Fletcher, A Gage, S Gardiner, E Hall, A Harrison, G Hayes, A Heler, S Holland, T Jackson, R Kain, A Kolker, R Morris, H Moss, M Muldoon, C O’Leary, J Pearson, B Posnett, J Pratt, P Redstone, J Saunders, M Sewart, M Simon, L Smetham, L Smith, L Wardlaw, H Whitaker and J Wray.

 

NOT VOTING

Councillor N Cook, John Smith and Julie Smith

 

The motion was declared carried with 40 votes for, 38 against and 3 not voting.

 

 

RESOLVED: That Council

 

1               note the Section 25 Statement at Appendix A and the professional assessment of the Chief Finance Officer in their deliberations on the budget for 2026/27 and Medium-Term Financial Strategy to 2030.

 

2               approve the Revenue estimates for the 2026/27 budget (Appendix B, Section 2, Overview) and the medium-term Capital Programme estimates 2026-2030, as detailed in the Medium-Term Financial Strategy Report (MTFS) 2026-2030 (Appendix B, Section 2, Capital budget).

 

3               approve the setting of Band D Council Tax of £1,975.95 representing an increase of 4.99%. This is currently below the referendum limit (including 2% ring-fenced for Adult Social Care) and arises from the provisional finance settlement (Appendix B, Section 1, Key Funding Assumptions).

 

4               approve the utilisation of up to £24.995m approved Exceptional Financial Support EFS (Capitalisation Direction) via borrowing to balance the 2026/27 budget shortfall (as reflected in Appendix B, Section 2, Balancing the Budget) and to delegate to the Chief Finance Officer (Section 151 Officer) to review the basis of funding through the 2026/27 year and report to the appropriate committee / Cabinet any recommended change to the funding basis of the Exceptional Financial Support.

 

5             approve the 2026/27 planned use of Flexible Capital Receipts as £15.000m to fund transformational projects within the Council (Appendix B, Section 1, Key Funding Assumptions).

 

6             approve the allocation of Revenue Grant Funding for 2026/27 of £406.178m (Appendix B, Annex 3), and delegates authority to the Chief Finance Officer, to approve supplementary estimates if the value of any named grant changes from the figures contained within Appendix B, Annex 3 (noting that all such variations will subsequently be reported to the appropriate committee / Cabinet, and that any new, previously unnamed, grants are subject to approval in-line with the Constitution).

 

7             approve the allocation of Capital Grant Funding for 2026/27 of £99.955m (Appendix B, Annex 4), and delegates authority to the Chief Finance Officer, to approve supplementary estimates if the value of any named grant changes from the figures contained within Appendix B, Annex 4 (noting that all such variations will subsequently be reported to the appropriate committee / Cabinet, and that any new, previously unnamed, grants are subject to approval in-line with the Constitution).

 

8             approve the Capital Strategy (Appendix B, Annex 5).

 

9             approve the Prudential Indicators for Capital Financing (Appendix B, Annex 5).

 

10          approve the Investment Strategy; including the financial limits for various classifications of investment, and the investment decision making process set out in the Strategy (Appendix B, Annex 6).

 

11          approve the Treasury Management Strategy (Appendix B, Annex 7) and the Minimum Revenue Position (MRP) Statement for 2026/27 to 2029/30 (Appendix B, Annex 5).

 

12          approve the Reserves Strategy (Appendix B, Annex 8), which includes proposed movements to and from reserves.

 

13          approve the Fees and Charges schedule for 2026/27 (Appendix D).

 

14          note that the Corporate Policy Committee considered the Budget Engagement exercise undertaken by the Council, as set out in the attached (Appendix C), and the results contained within that report.

 

15            note the reduction in Exceptional Financial Support required for 2026/27 due to the betterment in pension payover contribution rates as noted in Table 1 in the Addendum to the report.