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Councillor Langdon-Morris introduced report ES-2698 which presented the General Fund Budget and Council Tax Report for 2026/27 ahead of it being presented to Full Council.
The Council was required to approve a balanced budget for the upcoming financial year and to set the Band D Council Tax rate. The report sets out the context and parameters in order to achieve a sustainable position for 2025-26 and to enable members to review, consider, and comment upon the Council's general fund revenue budget before making recommendations to Full Council.
A balanced budget would be presented for 2026-27 which is achieved by using £2.272 million from the business rate equalization reserve. The Band D Council Tax rate was proposed to be of £197.82, an increase of £5.67 or 2.95% which was the maximum permitted under the referendum limit. The government assumed that councils would apply the maximum permitted council tax increase when determining funding to local authorities to strengthen financial resilience. The general fund balance would increase from £6million to £8million, representing around 4% of gross expenditure. This would be the first increase to the general fund balance since East Suffolk was formed in 2019 and reflected the importance of maintaining adequate reserves and balances to manage risk.
The government's new multi-year funding settlement for 26/27 to 28/29 was the first in a decade and introduced major changes to the funding formula. These changes include a stronger link to deprivation, removal of sparsity and remoteness adjustments, abolition of the new homes bonus and consolidation of smaller grants into the main settlement. While this aimed to create a fairer system, it would significantly disadvantage councils like East Suffolk that have historically benefited under the current business rate system and have maintained healthy reserve balances. To manage this transition, East Suffolk Council would receive transitional protection but at a reduced level compared to most councils. Funding would be protected at 95% of current levels until 2028/29. East Suffolk therefore faces a funding cliff edge in 2029/30 when the current proposed transitional support ends. Over the three-year settlement, East Suffolk would receive £16.8 million in transitional funding, which represented 73% of the total transition support provided within Suffolk. However, this was temporary and did not remove the need for prudent financial planning over the multi-settlement period.
This budget would deliver and support the administration's strategic ambitions, environmental sustainability, housing, community well-being, and economic growth across East Suffolk. The budget included investment in market towns, additional support for cultural events and cultural strategy, extension of budgets for enabling community budgets and community partnerships for a further year into 27/28. It also included a proposal for the 'teenage project' including community cafes and youth access, and annual support for the Tour of Britain.
Future budget gaps remained challenging, with a gap of £8.6million in 27/28 and £10.4million in 2028/29. The strategy remains focused on efficiency, maximizing income, and careful use of reserves.
The report included the flexible use of capital receipt strategy at (Appendix A) which required Full Council approval each year. This sets out the Council's intention to use capital receipts to fund in part or whole its share of its Local Government Reorganisation transition costs. The mechanism for sharing these costs across Suffolk would be determined once a decision on local government reorganisation has been announced.
The Overview and Scrutiny Committee considered the 2026/27 budget and the Medium Term Financial Strategy at its meeting on the 29 January and gave very constructive feedback.
The final local government finance settlement was expected on 9 February and the final proposed budget would be presented to Full Council on the 25 February.
Councillor Candy stated she supported the budget and thanked Councillor Langdon-Morris for including the teenage project within the budget.
Councillor Packard noted that the maximum increase to Council Tax was 2.95%, but there had been reports about other Councils increasing this further by 5%. Councillor Langdon-Morris confirmed that County Councils had the ability to increase council tax by an additional 2% due to social care costs.
Councillor Jepson commented on the thorough consideration of this by Overview and Scrutiny Committee. In light of the current and future budget pressures it might become necessary to start challenging the 'nice to do' items within the budget so there could be focus on statutory obligations, although hopefully it would not come to this.
Councillor Topping noted that non-statutory obligations were important and often helped issues being prevented before they arose.
On the proposal of Councillor Langdon-Morris, seconded by Councillor Beavan it was
RESOLVED
That Cabinet recommended to Full Council that it approved:
1. The 2026/27 General Fund Budget as set out in this report and detailed in the Appendices C to F and notes the budget forecasts for 2027/28 and beyond;
2. The movements to and from Earmarked Reserves and the General Fund Balance for 2026/27 to 2029/30 as presented in Appendix G;
3. A proposed Band D Council Tax for East Suffolk Council of £197.82 for 2026/27, an increase of £5.67 (2.95%);
4. The Flexible Use of Capital Receipts Strategy attached as Appendix I;
5. No changes to the Council’s discretionary policy for Council Tax Discounts and Premiums for 2026/27 as set out in paragraphs 2.61 and 2.62 of the report; and
and that Cabinet noted;
6. For the Overview & Scrutiny Committee to receive an analysis of the first full year of the
increased car park fees and charges which were raised as part of last year’s budget and were
subject to call-in by the Committee.