Agenda item

To consider the report on the Medium Term Financial Strategy Consultation 2026/27-2029/30.

The committee received an update on the development of the Medium-Term Financial Strategy (MTFS) for 2026–2030.  Members noted that the Council continued to face significant financial challenges, with a forecasted budget gap of £18.2m for 2026/27, reduced from £33.3m following recent refinements.

The committee was referred to paragraph 8 of the report and requested to take into consideration information that referred to future years’ financial positions, which outlined the potential for significant risk and uncertainty that could not be reflected in the current figures provided.

The report outlined key updates to financial assumptions, including revised growth allocations for Adult Social Care and Children’s Services, the introduction of a 5% vacancy factor across staffing budgets, above-inflation increases in fees and charges, and the reprofiling of transformation pump priming budgets funded through capital receipts. Additional service budget adjustments and contingency for inflation were also highlighted.

In relation to fees and charges, the committee was informed about price elasticity and its impact on service charges, essentially how changes in price affected demand.  An example cited was the enhanced mobile registration service for births at hospital bedsides, which was considered relatively price inelastic as those who could afford it were likely to pay regardless of cost.  In contrast, fees for core services should be set to encourage usage.

Regarding the 5% vacancy factor, it was explained to the committee that a £7m cross-cutting workforce saving for 2026/27 would be delivered through a 5% vacancy factor, which was a mechanism for achieving the previously approved saving – it was not an additional reduction.  There was currently no separate budget for vacancy factor, though it was apparent that services were already using vacancy control to manage budgets.  Analysis of FR2 indicated an average delivery of approximately 4% across the authority, with variations by service area.  It was noted that roles such as social workers, waste operatives, and care workers were not likely to be expected to be held vacant to meet this factor.  Further discussion regarding the proposals would take place at relevant service committees.

The committee considered the draft savings proposals, which totalled £57.8m for 2026/27, with further savings planned through to 2029/30.

In terms of consultation, the committee noted that service committees would receive reporting on the budget for 2026/27 and the MTFS, with specific risks relating to their budgets described in those reports.  These would be provided as background information to the next meeting of this committee in January 2026.  For the public, a programme of engagement activity would take place during November and December 2025 to support the 2026/27 budget setting and consultation process.

The committee noted that, in relation to Exceptional Financial Support (EFS), without this the Council would have been at risk of entering Section 114 proceedings.  The Best Value Notice contained four key actions, all of which needed to be delivered.

The committee queried blank entries in Table 4 (page 125) for financial years 2028/29 and 2029/30, and the reference to Outbound Mail (page 133).  It was clarified that at the time of publication, further options were still to be identified for Children and Families, Corporate Policy, and Corporate Policy – Council Wide Transformation. Future transformation plans would provide clear accountability and ownership.  Regarding Finance Sub-Committee - Central Budgets, the figure of £14.95m reflected the application of increased capital receipts, which would reduce to £10m by 2029/30.  This assumed that by 2029/30, flexible use of capital receipts would no longer be required to drive transformation. Officers would continue to monitor this position.  The Outbound Mail budget line would also be subject to ongoing review.

The committee queried the Biodiversity Net Gain (BNG) credit figures identified on page 134.  Reference was made to the New Towns Taskforce and proposed plans for development at Adlington, and consideration given to opportunities for BNG in other areas if this was not possible on the Adlington development site.  It was explained that this would be revisited if the New Towns Taskforce work was progressed.

RESOLVED (unanimously):

That the Finance Sub Committee:

1. Note the updated budget position for the period 2026/27 to 2029/30 as set out in Table 3 of the report.
2. Note and feedback on the list of budget savings proposals that are contained in the budget consultation launched in November 2025 as contained in Annex 1 of the report.
3. Note the risks identified in paragraph 8 of the report and apply them to their scrutiny of the budget proposals.
4. Note that Corporate Policy Committee have been asked to approve the conditions for successful budget delivery as noted in paragraph 8 of the report.
5. Note that all service committees are being presented with the opportunity to review the savings proposals within their remit as part of the November cycle of meetings.