Agenda item

To consider the three year projections of income and expenditure for the Council ahead of formulating its 2026/2028 Revenue and Capital Budgets.

Recommended                     -  That consideration be given to the report.

The Portfolio Holder for Resources and Council Operations, Councillor Alexander, submitted a report giving the Council’s Medium Term Financial Position for 2026/27 to 2028/29.  The report had been submitted to Cabinet on 18^th February 2026 with the accompanying Medium Term Financial Strategy and had been approved. 

The Leader of the Council reported that the Government had recently announced that Local Government Elections would now proceed in May 2026 and that local Councils across the 21 reorganisation areas would receive additional capacity funding.  The amount is not currently known.  The Council has since reported that this funding would be used to offset a zero Council Tax rise rather than the 2.99% increase originally proposed.  The charge for a Band D property would therefore remain at £276.46 for 2026/27.  Further details would be included in the final Budget papers due to be submitted to Council on 26^th February, 2026.

The Strategy was appended to the report and set out the three-year projections of income and expenditure for the Council ahead of formulating its 2026/29 Revenue and Capital Budgets.  The Strategy provided a summary of the main issues when setting the budget, including:-

-        The continuation of delivering the Council’s major capital projects including Levelling Up/Town Centre regeneration, Leisure transformation and progress on the Huncoat Garden Village project, which will provide over 1,800 new homes.

-        The consequence of both national and global issues. 

-        The Council’s own financial position including inflationary pressures and energy costs.

-        The financial forecasts over the next 3 years including facing the challenges of Government reforms and increased pressure on spending. 

-        The 2026/27 Local Government finance settlement (LGFS) introduced the major reforms consulted on as part of the Fair Funding Review including a multi-year funding approach and changes to grant funding and business rates.  The Council faces real term reductions.

-        Hyndburn had been identified in the Fair Funding Reform review as being amongst the authorities furthest from their assessed funding level.  As a result, the Council would lose 5% of its 2025/26 baseline funding by 2028/29.

-        The Council has addressed the £6.35m reduction through savings and use of resources.

As a consequence of the issues raised above, there is an anticipated loss of £6.35 m over the MTFS period but the multi-year settlement offered a level of certainty to enable the Council to prepare for future challenges.  The 3-year settlement represented a minimum level of funding and provided a certainty around government funding resulting in a relatively stable outlook across all scenarios, pessimistic, standard and optimistic.

The appendix attached to the report also provided more detail on:

·        Elements of the MTFS

·        Background

·        Resources

·        Government Grant

·        Council Tax

·        Business Rates

·        Changes in Costs

·        Budget Pressures

·        Capital Costs

·        Growth

·        Reserves

·        Other Assumptions

·        Scenarios and Scenario Breakdowns

·        Robustness of the Forecast

·        Overall Net Position

·        Details of each of the 3 scenario models

The following question was raised by Members and responded to at the meeting:

·        What proportion of the share of the £63 million from Government would Hyndburn receive?

The response was that this was unknown at the present time.

It was recommended that the report and any comments be noted. 

Resolved                               -  That the report be received and noted.