Issue - meetings

Purpose of report

To seek approval for, and make recommendations to the Council regarding:

·       Revenue Budget 2026/27 and Medium Term Financial Strategy to 2028/29

·       Capital Five Year Spending Plan

·       Treasury Management and Capital Strategy

·       Housing Revenue Account Budget 2026/27 and Medium Term Financial Plan

Considered a joint report of the Chief Executive and the Corporate Director Resources setting out the financial issues and risks for North Yorkshire Council and asking the Executive to make recommendations to the Council regarding the Revenue Budget for 2026/27, the Council Tax for 2026/27, the Medium Term Financial Strategy (MTFS) to 2028/29, the Capital Five Year Spending Plan, and the Housing Revenue Account Budget 2026/27 and Medium Term Financial Plan.

Revenue Budget for 2026/27 and Medium Term Financial Strategy to 2028/29

The Executive Member for Finance and Resources, Councillor Gareth Dadd introduced the report. He thanked officers for the quality and clarity of the budget papers and emphasised the scale of the financial challenge facing the authority, notably the reductions in government funding as a result of the Fair Funding Review and loss of Rural Services Delivery Grant, increases in employer National Insurance contributions and increasing demand for services, particularly within children’s and adults’ services. He highlighted that the proposed budget sought to balance financial sustainability with protection of priority and frontline services, made essential use of council tax flexibility to protect the vulnerable through the Council Tax Reduction Scheme, and built on the benefits of the substantial local government reorganisation savings. Further, he was pleased to note that the Council Tax Second Homes Premium introduced in 2025-26 was starting to bear fruit in the form of the delivery of low cost social housing.

The Corporate Director Resources, Gary Fielding then highlighted the following key points:

·       The proposed budget resulted in a £17m deficit in 2026-27 increasing further to £25m by 2028-29. If no new savings were brought forward then the authority would need to use £59.3m of reserves over this period. Further work was therefore required to reduce the underlying deficit.

·       The proposed budget included £27m of additional growth funding, reflecting significant demand and cost pressures across particularly children’s services and adult social care. The Whitby Harbour court judgement resulting in income being ring‑fenced for harbour purposes also placed additional pressure on the General Fund.

·       The combined impact of inflation and service growth exceeded the maximum permitted Council Tax increase, making the delivery of savings unavoidable. Ongoing uncertainty remained around national policy changes, including SEND reform, adult social care funding and the national waste strategy, reinforcing the need for continued medium‑term financial planning.

·       The budget proposed a council tax increase of 2.99%, together with a 2% adult social care precept, resulting in a total increase of 4.99%.

·       In the recent public consultation a majority of respondents supported an increase in Council Tax, with a significant proportion supporting levels consistent with those proposed in the report.

·       In terms of his Section 25 statement, Mr Fielding confirmed that the council was not at risk of issuing a Section 114 notice and that its financial position remained sufficiently robust. However, he cautioned that delivery of the savings programme and the development of further proposals to address the medium‑term deficit were essential to maintaining this position in future years.  ...  view the full minutes text for item 833