Agenda item

Report attached.

Members considered a report of Councillor Vanessa Alexander, Portfolio Holder for Resources and Council Operations, introducing the proposals contained within the Revenue Budget Report 2026-2027, which was provided as Appendix A.  The covering report also provided an overview of key issues arising from the Medium-Term Financial Strategy.

 

The decision to set the Budget was a core decision of the Council.  The role of the Cabinet was to recommend a proposed Budget to Council.

 

Councillor Alexander introduced this report, highlighting key figures from the report.  She reiterated that the Council would set a balanced Budget for 2026/27 without the use of reserves or cuts to services or staff.  She reminded all that there had been some loss of Government funding for the forthcoming year.  The Council’s net expenditure for 2026/27 would be around £17.608m.  She also outlined the sources of funding and amounts proposed, including savings targets.  The Portfolio Holder also confirmed the proposal announced earlier in the meeting, not to increase Hyndburn’s element of the Council Tax, which would now remain at £276.46 for a Band D property. She added that the Budget report would be revised as necessary in advance of the Council meeting on 26^th February 2026.  This would also include the final Council Tax figures from the various precepting authorities.

 

Headline proposals included:

 

• Free car parking;
• A freeze on the green waste collection charge;
• Support available from the Cabinet Action Fund; and
• A freeze in Hyndburn’s element of the Council Tax.

 

Councillor Khan noted that £300k had been allocated for the operation of the Market Hall following the departure of the original contactor.  Councillor Pritchard clarified that the original contractor and Council had parted company by mutual agreement and the £300k was the estimate of the running costs of an in-house offer.

 

Councillor Khan also asked about the total amount being transferred to reserves in 2026/27.

 

Approval of the report was not deemed a key decision.

 

Reasons for Decision

 

The report set out the Council’s Revenue Budget for 2026/27.  This would require net expenditure of £17,607,700.

 

Initially it had been proposed that Council Tax for Hyndburn residents would incur a rise in charge for Hyndburn Council provided services and the charge for a Band D property would increase from £276.46 in 2025/2026 to £284.73.  However, this proposal had been revised in the light of the Government’s announcement on grant funding due to the reinstatement of the local elections in May 2026.  Accordingly, the current proposal was for a Council Tax freeze.

 

A number of national and global issues had undoubtedly had an impact on the Council’s budgets and this along with the impact of higher inflation and forecast pay settlements had contributed to the Council initially seeking to raise its element of the Council Tax by the maximum 2.99%, an increase of £8.27 annually on a Band D property.  However, this was no longer being proposed.

 

Lancashire County Council, the Police & Crime Commissioner and the Lancashire Combined Fire Authority had not yet formally taken their decisions on Council Tax Levels for 2026/27.  The County Council had proposed a Council Tax increase of 3.8%, as opposed to the maximum of 4.99% that would be possible without referendum.  The Police and Crime Commissioner had proposed an increase to the Band D Property charge of £15.00 (5.41%) and that the Lancashire Combined Fire Authority had proposed a £5.00 (5.57%) increase.

 

Altham Parish Council had set a separate precept for its activities.  This year the Parish Council had decided not to increase the Band D charge.  Accordingly, the charge for Altham Parish Council would remain at £44.33 for 2026/27.  The Parish Council would precept the Collection Fund for £14,141 for 2026/27.  Details of the proposed position on other Bandings for properties in Altham were shown in Appendix 6 of the report.

 

In setting the Budget for 2026/27, the Council faced continued volatility around some of the most significant items within its Budget.  Major reforms of local government finance had transferred the risk of business rate revenues and Council Tax benefits to the Council.  The certainty on which the Council could budget and manage its finances had therefore decreased since 2013 and it would be important going forward to plot any deviations away from the expected figures and take appropriate action if these should start to emerge.  This might result in the need to reduce spending during the year, if revenue monitoring started to indicate the amounts of funds received would fall short of the target or if the authority faced an upsurge in spending.

 

The Cabinet intended to continue the good financial stewardship of the Council’s affairs by continuing its successful policies to manage costs effectively and promote appropriate service investment.  This Budget would therefore deliver:

 

• A continuation of the Council’s established approach of limiting enhancements on early retirement, continuing its rigorous approach to absence management and committing to minimising borrowing costs.  These actions had already stemmed the build-up of unproductive costs within the organisation.  In each of these cases the authority had put a stop to the costly and financially damaging policies of the past and created a healthier and more financially stable culture within the Council.

 

• The Capital Programme for 2026/27 would continue to deliver key investment in council and public facilities adding another £7.86m to the £56.51m that the Council currently had approved.

 

• A large proportion of the capital programme would be phased over the next few financial years, and this included the continued delivery of £29m investment in the Huncoat Garden Village Project, with all the funding coming from Homes England, and finalising the Levelling Up works in Accrington Town Centre along with other complementing Town centre regeneration.

 

• The additions to the programme in 2026/2027 of £7.86m included:

 

a)    £689,000 of investment into Parks and Play areas of which the Council expected to be able to utilise £630,000 of external grant funding to contribute to the improvements.

b)    £1,359,906 to provide Disabled Facility Grants this year which was fully funded from the Better Care Fund.

c)    £2,161,135 to maintain and invest in its operational assets and vehicle fleet.

d)    £165,000 to improve and develop new ICT and technical equipment to deliver services in a more efficient way.

e)    £435,000 on Community projects that involved War Memorial restoration, Christmas decoration replacement and Maden Street Clock Towner lighting.

f)     £2,600,000 towards the future development of the Market Chambers building linked to a bid for additional grant from the Heritage Lottery Fund to re-imagine the interior and exterior of the building into a Heritage and Arts venue.

g)    £450,000 for the continuing repurposing of Mercer Hall Leisure Centre and the contribution towards Accrington Stanley Community Trust’s capital investment in sports initiatives.

 

• The Capital Programme for 2026/2027 was partly funded from the Government’s grants to deliver a Pride in Place Impact Fund.  Hyndburn would receive £1.5m to be committed to projects that would deliver visible improvements to community spaces; public spaces and high street and town centre revitalisation.  Despite costs of around £90,000 to provide car parking in Hyndburn for residents and visitors and particularly for shoppers, the authority would continue to provide this facility free of charge and not introduce charges for parking in Hyndburn.  The Council believed this action would help bolster its town centres through these difficult economic times and provide an incentive for people to shop locally rather than drive and pay to shop elsewhere across the North-West.  The Council had once again prioritised affordability for residents and cleanliness across the borough by freezing green waste charges at £35 per annum and offering bulky household waste collections free of charge.  This service currently cost the Council approximately £169,000 each year.

 

• Further reductions in the Council’s accommodation costs, building on the success over the last 15 years including further rationalising the authority’s accommodation and looking at more ways of using its accommodation more effectively.  The Council would also continue its actions to reduce its carbon emissions and energy costs and continue contributing to the improvements of its own environmental footprint by positive action.

 

The Council intended to continue to deliver all the above and remained committed to a radical agenda of improvement while managing within its available resources.  This would be more difficult in the years to come, given the authority’s reduced resources from the Government.  However, there remained a firm commitment and absolute determination amongst Members and Officers of the Council to control the finances of the Council, drive forward on the efficiency agenda and continue to improve service delivery.  The Council wished to continue to push forward on the drive for delivering value for money as a key priority.

 

The rewards of strong financial control remained clearly evident.  The Council had built itself back up from experiencing major difficulties in controlling expenditure and a position of negative reserves in 2003/04 to a situation by March 2026, in which general reserve balances were expected to be just under £1.9m.  The Council had been able to operate within its existing financial resources over the last four years, through good financial management and would continue to deliver strong financial performance in the years to come.

 

Within the Budget for 2026/27 there were a number of areas which were subject to the Council’s best estimation.  There were, therefore, a number of risks around the Budget, should these estimated costs or revenue amounts vary during the year.

 

After the introduction of the Government reforms to Business Rates Funding of Local Government, the Council now carried a significant risk around the level of monies available, fluctuating substantially from this source.  In addition, as the calculation of how much funds would be available was dependent on a number of factors including debt collection rates, the size of appeals against business rates assessment and the success of those appeals, new rules around levies, safety nets and pooling, the introduction of new multipliers on rates for retail, hospitality and leisure premises, as well as predicted levels of growth or decline in business activities and the estimation of a number of figures which would only truly emerge after the end of the financial year, the imprecision in these estimates was regarded as high and could be subject to variations of hundreds of thousands of pounds.  The volatility around these forecasts had increased due to the impact that recent national and global issues had had on the Business Community.

 

The detailed Revenue Budget Report 2026-2027, as set out at Appendix A of the report, included the following information:

 

• Background;
• Medium Term Financial Strategy;
• Continuation Budget;
• Growth and Inflation Pressures;
• Available Resources;
• Resources Summary;
• Budget Proposal;
• Budget Saving Proposals;
• Reserves;
• Risks and Management;
• Consultation;
• Conclusion; and
• Appendices Nos. 1 – 6 (comprising the detailed Budget figures for the Council and the proposed or estimated levels of Council Tax by property band for both Hyndburn Borough Council and all precepting authorities)

 

Alternative Options considered and Reasons for Rejection

 

There had been a wide number of individual proposals put forward to produce a Balanced Budget.  Options had been rejected on a variety of grounds including policy objectives, practicalities and the potential for additional costs to be incurred.  Further options might be presented at the Council meeting.

 

NOTE: An alteration was proposed and agreed to the wording of the recommendation at Paragraph 2.1 of the report to take account of the proposed freeze in Council Tax.  This is incorporated within Resolution (1) below.

 

Resolved                                (1)   That Cabinet recommends the proposal that the Council Tax for 2026/27 not be increased, thus the charge for a Band D property will remain at £276.46.

 

(2)   The Budget for 2026/27 will therefore be £17,607,700 as detailed in Appendices 1 to 3 of the Revenue Budget 2026-2027 report attached at Appendix Aof the report.

 

(3)   That Cabinet recommends approval of the changes in budget requirement through including inflation, growth and savings as identified in Appendix 3of the Revenue Budget 2026-2027 report, to ensure the Council can set and approve a balanced budget.

 

(4)   That Cabinet notes the significant improvement made in relation to budget monitoring and cost reduction within the Authority over the past 20 years and confirms its commitment to continuing this approach in the year ahead.

 

(5)   That Cabinet recommends during the financial year 2026/27, the Executive Director (Resources) be delegated responsibility to amend the Budget (following consultation with the Leader of the Council) for technical reasons, such as the restructuring of cost centres, the re-apportionment and re-allocation of overheads etc., provided such amendments have an overall neutral impact on the Budget.

 

(6)   That Cabinet recommends during the financial year 2026/27, the Executive Director (Resources) be delegated responsibility to amend the Budget (following consultation with the Leader of the Council) should the estimate of Business Rates not be sufficiently accurate, by drawing on reserves if needed or paying over additional contributions to reserves.

 

(7)   That, to aid future financial management planning, any surpluses generated during 2026/27 are set aside to help the Council reduce its cost base over the next three years, to support its long-term capital programme or to strengthen its overall reserve position.

 

(8)   That Cabinet recommends that any additional funds from Government that are not ring-fenced funding, as well as any other surplus funds, can be used, if required, to support capital expenditure as determined by the Executive Director (Resources) in the overall financing of capital expenditure or be transferred to reserves.