Issue - meetings

Medium Term Financial Outlook

Meeting: 26/08/2025 - Cabinet (Item 6)

6 Medium Term Financial Outlook 2025-2030 PDF 210 KB

Additional documents:

Minutes:

Background:

Katey Durkin, the Council’s Chief Finance Officer, who would shortly be leaving the Council, was thanked for her excellent work and support of the administration.

This report set out initial projections of the Council’s income and of the cost of services for 2026/27 and across the medium term.

The report set out that the Medium Term Financial Outlook 2024-2029 presented to the Cabinet in August 2024 indicated a potential budget gap for 2025/26 of £28.844million, or £45.147million excluding Exceptional Financial Support (EFS). This cumulative projected gap rose to £114.205million across the medium term. During the following months the projections were refined based on the latest activity data, challenging costs and reassessing the trends projected. That work had reduced the potential gap to £26.177million by the time the Draft Budget was presented to the Cabinet in November 2024.

The provisional Local Government Finance Settlement resulted in an increase of £10.833million to the Council’s resources compared to the Draft Budget projections. The Government agreed in principle to the Council’s EFS request and the final budget for 2025/26 was balanced with £18.484million through a capitalisation direction.

Alongside the 2025/26 Budget, in February 2025 Council agreed an updated set of medium term projections for 2026/27 and beyond. These represented growth on the net budget requirement of £25.208million, while funding was projected to grow by £33.536million. There was therefore a projected budget gap of £10.070million, however an error in the calculation omitted £1.484million of expenditure from that gap, which should have been £11.554million.

Due to an administrative error the report in the main agenda pack did not contain the first page of the report, which included the recommendations. A version of the report that included this missing page had been published within Supplementary Agenda Number 1.

Decision number:	Decision:
	The Cabinet noted the projected budget requirement, the Council’s resource assumptions, and the resultant projected budget shortfall for 2026/27 of £29.942million and a cumulative £191.257million shortfall over the medium term.
110/2025	The Cabinet instructed Directorate Management Teams to continue to work with Portfolio Holders to identify savings and income generation proposals to balance the 2026/27 budget.
111/2025	The Cabinet recommended to Council the declassification of £1.597million from the Collection Fund Adjustment Reserve to increase the General Reserve balance.

Reasons:

The Medium Term Financial Outlook (MTFO) provides the framework that underpins the budget setting process for 2026/27 and beyond.