To enable Cabinet to consider the updated financial forecast and budget proposals for 2026/27 for consultation with the Resources and Services Overview and Scrutiny Committee.

RESOLVED that Cabinet –

a)   approves the updated Financial Forecast and proposed budget position for 2026/27, as set out in the Portfolio Holder’s report (A.3) and its appendices;

b)   formally requests the Resources and Services Overview and Scrutiny Committee’s comments on this latest financial forecast and proposed position for 2026/27, as required by the Council’s Budget and Policy Framework Procedure Rules; and

c)   formally accepts, on behalf of the Council, funding of £210,298 from Sport England’s Place Partnerships Programme, and requests Officers to bring forward a separate report as part of the associated actions necessary to proceed with those projects. 

Cabinet considered a report of the Corporate Finance & Governance Portfolio Holder (A.3) which enabled it to consider the latest financial forecast and budget proposals for 2026/27 for consultation with the Resources and Services Overview and Scrutiny Committee.

It was reported that the financial position of Tendring District Council remained sound and the proposed budget assessed how the Council could successfully address future key cost pressures. The Council awaited the full financial implications of the Government’s Fairer Funding Settlement and the changing approach to business rates retention system, which would have an impact on the Council’s final position. Therefore, the forecast to date reflected the identification of key cost pressures which needed to be addressed in this report; however, when the final budget position was confirmed further opportunities for funding priorities and cost pressures would be determined. The budget proposals outlined in this report presented a two-year approach and sat with the revised key priorities to 2028 and the associated business plans and together formed an holistic approach to the two-year window leading up to 1 April 2028 (the potential vesting day for the new Unitary authority should Local Government Reorganisation (LGR) proceed on the Government’s current timetable for Greater Essex).

Cabinet was aware that the cost of the new waste contract had presented a significant financial challenge and when taken into account with the potential impact of LGR, which had emerged / evolved since the last forecast had been considered in February 2025, it presented an important financial ‘cross roads’ that set the financial context over the next two years, which could be the Council’s last two budget ‘cycles’ ahead of a successor Unitary Council being established and in place from 1 April 2028.

With the above in mind, it had been acknowledged that there was an underlying and critical need to revisit / revise the Council’s financial plans over the next two years and that Portfolio Holders and Officers would be undertaking a number of activities to enable the necessary detailed information and a funded two year financial plan (2026/27 and 2027/28) to be presented to Cabinet.

It was believed that such an approach would enable the Council to bring together a number of potential risks and opportunities that could be considered collectively and would place the Council in a strong position to support the continued protection of front line services, timely investment in other priorities, alongside meeting any emerging statutory obligations relating to the incoming new Unitary Council from as early as April 2028.

Members were informed that the above had included the identification of savings and responding to cost pressure and investment priorities. Although a significant amount of work had been completed to date, activities remained on-going that would culminate in final budget proposals being presented to Full Council in February 2026.

Based on the above approach, the forecast had therefore been updated to cover a shorter period of two years, along with a review of savings, efficiencies and cost pressures as set out in the respective appendices.

Cabinet was advised that a key element of the proposed two-year plan was to bring together a number of one-off existing budgets / reserves to be held in two Corporate Investment funds (one revenue and one capital).

It was highlighted that the revised forecast was set out within Appendix E, which included all of the elements highlighted above and presented a position that could be prudently funded / supported by the Forecast Risk fund over the two-year plan.

Cabinet was made aware that the forecast included a Council Tax increase of 2.99%. This was the maximum permitted amount without having to hold a referendum, and reflected the commitment made by the Government in its recent announcements.

Members were cognisant that the forecast remained subject to being updated in readiness for reporting to Cabinet in January 2026, which would need to take into account the multi-year Local Government Finance Settlement announced by the Government along with additional cost pressure items as necessary.

In terms of the Local Government Finance Settlement, a number of fairly complex changes were proposed that sought to address the inherent complexity within historic settlements. Such changes included the impact of the Government’s business rates ‘reset’ and the merging of various existing Government funding ‘pots’.

Cabinet was informed that, an annual review of reserves had also been undertaken, which highlighted the need to continue to maintain a number of reserves to support key actions / activities as part of the Council’s overall prudent and sustainable approach to managing its finances, but also enabled a limited number of reserves to be ‘released’ to support the proposed two year ‘work programme’ approach.

It was pointed out that the work that had been undertaken to date was captured across the various appendices to this report and together with the commentary set out within the report, a timely and comprehensive position was presented against which the necessary consultation with the Resources and Services Overview and Scrutiny Committee could be undertaken. 

It was considered that this report also provided a timely opportunity to consider / accept funding of £210,298 that had been made available through Sport England’s Place Partnerships programme, to complete priority actions from the Council’s approved Sport and Activity Strategy. This allocation formed part of a broader funding package totalling £814,798, with various partners serving as delivery agents.

The Corporate Finance and Governance Portfolio Holder placed on record his thanks to the Finance Team for all of their hard work.

In order to set out the latest financial forecast as part of the process of developing the budget proposals for 2026/27 for consultation purposes:-

It was moved by Councillor Stephenson, seconded by Councillor Smith and:-

RESOLVED that Cabinet –

a)   approves the updated Financial Forecast and proposed budget position for 2026/27, as set out in the Portfolio Holder’s report (A.3) and its appendices;

b)   formally requests the Resources and Services Overview and Scrutiny Committee’s comments on this latest financial forecast and proposed position for 2026/27, as required by the Council’s Budget and Policy Framework Procedure Rules; and

c)   formally accepts, on behalf of the Council, funding of £210,298 from Sport England’s Place Partnerships Programme, and requests Officers to bring forward a separate report as part of the associated actions necessary to proceed with those projects.