Agenda item

Report of the Director of Finance and Resources

Cabinet considered a report of the Director of Finance and Resources (Section 151 Officer) that set out the pre-budget position for the Council for 2026/27.

The Council’s financial plans were heavily dependent on the allocation of Government grant resources, Government decisions which dictated councils’ tax-based income streams and the significant pressures seen primarily in social care in recent years. Following significant sector lobbying, including ourselves and the wider West Midlands, the Government consulted during 2025 on a set of ‘Fair Funding’ proposals intended to reform the distribution of resources on a more equitable basis.

The implication of the proposals was expected to be positive for Coventry, however until such time as the provisional settlement was provided, we were not able to accurately estimate the level of additional resources which the Council would benefit from. The Government were urging Council’s to wait for the Provisional settlement, which was expected to be published in late December 2025, after the date of this report. Once received, it would provide a stronger indication of the likely position for the year ahead and two subsequent years.

There were no service cost reduction options contained in the report, contrary to the custom of recent years.  However, section 2.5 of the report discussed policy priority themes for potential investment in services to further the achievement of the priorities as set out in the One Coventry Plan. The report sought approval to formally consult on these themes, the views of stakeholders from which would be reflected in the proposals in the final Budget Report in February 2026.

The report also seeks approval to consult on the potential level of Council Tax and Adult Social Care Precept increases for 2025/26.

A Medium-Term Financial Strategy (MTFS) was intended to be presented alongside the final Budget Report in February 2026. In addition to an updated 3-year funding position, this would include the current financial context facing the Council in relation to a continued impact of a higher than planned inflationary environment, together with the ongoing difficult market conditions faced within both adults and children’s social care.

The report also detailed a minor change to the Council’s Council Tax Support scheme with an associated Equality Impact Assessment included in Appendix 1 to the report.

Also included was an indication of the Council’s prospective Capital Programme for 2026/27 based on current knowledge. This would be updated in the February 2026 Budget Report, reflecting the most up to date programme information available. The draft programme was based overwhelmingly on pre-existing decisions and patterns of expenditure.

RESOLVED that Cabinet:

1)  Notes the position with regard to the Governments funding settlement.

2)  Approves the Capital Programme proposals in sections 2.6 to 2.8 of the report.

3)  Approves as a basis of consultation for a six-week period, the contents of this report as set out in sections 1 and 2.

4)  Approves a six-week public consultation period to commence on 17th December 2025 on proposed (minor) amendments to the council tax support scheme as detailed in the report and in Appendix 1 to the report, in accordance with The Local Government Finance Act 1992 (as substituted by the 2012 Act).