Agenda item

The Executive Member for Financial Sustainability introduced the report which set out an updated Medium Term Financial Plan for 2026/27 to 2030/31, which reflected the provisional Government settlement and several emerging financial pressures.

The Executive Member for Financial Sustainability said that although the Fair Funding review outcome was more favourable than expected, Government support will still decline, leaving Council Tax growth as the main driver of a modest rise in core spending power - one that remains below inflation. He said that additional pressures included £706k in new budget demands, anticipated Local Government Reorganisation costs, and slower?than?expected BEAM income - all requiring prudent contingencies.

The Executive Member for Financial Sustainability said that savings from the Hertfordshire Pension Fund valuation - nearly £1 million annually, would enable a balanced budget and the creation of new reserves to strengthen resilience. He said that the plan emphasised continued efficiency, increased income from fees and charges, and careful reserve management to maintain financial sustainability amid ongoing uncertainty.

The Chair thanked the Executive Member for Financial Sustainability for his report.

Members raised questions and concerns in relation to the decision to not raise Sunday car parking charges (citing this as a potential lost avenue for raising revenue for the Council), versus the adverse reactions from residents which the agreed increases had received. It was clarified that the Sunday charge would be increased in all but the rural carparks within the district, and that the increases did provide a significant figure towards the Council being able to produce a balanced budget. Members heard that should the increases not occur in the current year the Council would fall behind, leading to higher than inflation increases being made in future years. It was also acknowledged that the regime needed to be equal and fair, and although the district’s High Streets (with Buntingford being cited by ward Members) were under pressure, this was due to several factors such as the cost of Business Rates and the rise of online shopping.  

Members debated the Council’s reserves,  as shown at Appendix C of the report and it was confirmed that the presentation of the reserves earmarked for LGR over the next 2 years (as on page 53) would be amended from £500,000 for 2026/27 to show £250,000 for both 2026/27 and 2027/28. Discussion was had as to if the reserves earmarked for the costs of LGR were adequate, and Members heard that uncertainties/unknowns surrounding the reorganisation made an answer currently impossible.

Members agreed that LGR was both unwanted and a huge expense, which gave little benefit. They heard that the biggest LGR expenses would relate to officer resource, staff changes (including possible redundancies) and the harmonising of IT, all of which were advance costs, required to be in place from day 1. It was further explained that each of the proposed modules for LGR were expected to take somewhere between 3 – 6 years to yield savings or ‘break even’

Discussion around LGR continued, noting that there were currently 132 unitary local authorities in England – covering 71% of the population, with all authorities in Scotland, Wales and Northern Ireland unitary. It was heard that research on LGR had provided a mixed picture, with success reliant on implementation. It was also noted that previous unification was undertaken in less challenging times, with better Government funding, and when Councils had spare finances.  

Clarification was sought as to the difference between the Government and the Council’s figures relating to Council Tax revenue. Members heard that this was due to the Government’s method of estimation, with the Council using their own, more specific and up to date data within the budget.

Members discussed the risks associated with having disclaimed accounts and were given assurance that this was managed as much as possible. Acknowledgement was given that the valuation of assets was a potential related area of risk, however this was mitigated by reserves.

Members highlighted the Executive drawdown reserve and sought expansion on how this £250,000 would be used, ensuring that it be spent fairly across the whole district. Members heard that only initial discussions had been had, with the Executive welcoming Member’s suggestions for consideration. Suggestion was made that this should be for collective membership (instead of the Executive) to decide how this reserve be used.  

Members gave comments and asked questions relating to asset sales and heard that these were important to the budget. It was confirmed that the Council had approximately £15 million of assets to sell, and confidence was high that these would come to fruition. Members heard that Old River Lane made up more than half of this value, with progress with the developer ongoing. It was explained that as each Millstream tenancy expired the property would go to market - with 1 such property sold, 1 in the process of being sold and another actively on the market. This staggered approach also allowed the property team to manage the process with the resources available to them.

Members heard that multi-year settlements from the Fair Funding Review (FFR) were useful in the respect that they gave more clarity, allowing a balanced budget to be set, albeit they were monetarily less each year.  

Members debated service efficiencies, with focus given to partnership working and minor restructure. Members heard that £14,000 of such savings were inbuilt into the budget, but Leadership Team where constantly looking for opportunities for efficiencies, with the recent recruitment of a shared Lead Human Resources Officer with Broxbourne Council and options surrounding the replacement of the outgoing Director of Legal, Policy and Governance cited as examples. It was explained that the Transformation Team was being disbanded - with monies being used instead on technology implementation.      

Members discussed BEAM, and although recognised it as being a huge community asset expressed concerns regarding its ongoing loses and optimistic business plan in a climate where the arts were struggling. Members heard that although BEAM would show a loss this year, it was forecast to become self-sufficient, with improvements happening all the time under its new Director. They were told that year on year comparisons were now available for the venue and that a new business plan would also shortly come before Members. Members also heard that Hertford Theatre (as BEAM was before redevelopment) was subsidised by £300,000 per year, but it was felt that BEAM was a superior offering.     

It was moved by Councillor Nicholls and seconded by Councillor Swainston, that the recommendations, as detailed, be approved. It was noted that Councillors T Smith and Andrews abstained from the vote. After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED – that Members examine and comment on the Draft Budget 2026/27 and Medium-Term Financial Plan 2026-2031 contained within the reports.