URL: https://sandwell.moderngov.co.uk/ieDecisionDetails.aspx?ID=1176

Decision Maker: Cabinet

Outcome: Recommendations Approved

Is Key Decision?: Yes

Is Callable In?: No

Purpose: To consider the Medium-Term Financial Strategy and Draft Budget 2026/27.

Content: The Council had a track record of sound financial management and control. This had continued in 2025/26. The budget included £20m of income and expenditure changes and these were achieving high levels of success. Any emerging issues had been identified quickly and mitigated. Performance was published via reports to senior leadership and the Cabinet, and with ongoing reporting to the Council’s Scrutiny Boards. This activity had meant that, at quarter two, the Council was forecasting an underspend within the revenue General Fund.   The Council continued to report positive achievements against the strategic aims of the Council Plan. This had included the announcement of a ‘Good’ rating from OFSTED for Children’s Services and the Council was a finalist in the LGA Awards category for Most Improved Council. Such evidence indicated a positive direction of travel in relation to the assessment of value for money.   Reason for Decision The Medium-Term Financial Strategy (MTFS) showed how the Council could deploy resources to achieve its strategic objectives, as set out in the Council Plan. It showed how expenditure and income budgets change to ensure services were adequate to address local need and meet financial pressures from inflation and increasing demand.   The immediate objective of the updated MTFS was focused on achieving a balanced budget for 2026/27, but the principal aim was to provide a comprehensive, forward-looking framework over the MTFS period that ensured long-term financial sustainability, allowing the Council to deliver its key strategic priorities and statutory services within a balanced budget in future years.   Alternative Options Considered The Council was legally required to set a balanced budget by March each year. As such, there was no alternative other than to set a balanced budget.   Resolved:- (1)           that the Medium-Term Financial Strategy and Draft Budget Report 2026/27, including the appendix and annexes set out in Appendix A, is endorsed and recommended to Full Council for approval, incorporating the following recommendations:   a)             note the results of the consultation exercise at Annex 1;   b)             approve the budget growth proposals detailed in Annex 2 for inclusion in the General Fund base budget for 2026/27 and the Medium-Term Financial Plan for the financial years 2026/27 to 2030/31;   c)             approve the budget efficiency and income generation proposals, detailed in Annex 3 for inclusion in the General Fund base budget for 2026/27 and the Medium-Term Financial Plan Medium-Term Financial Plan for the financial years 2026/27 to 2030/31;   d)             note the change log of financial movements in the Medium-Term Financial Plan at Annex 4;   e)             approve the Fees and Charges Schedule for 2026/27, as set out within Annex 5;   f)               approve the General Fund net budget of £457.802m for 2026/27, as detailed at Annex 6, including the financial implications of:   i)               the directorate budget summaries at Annex 7; ii)              a proposed Council Tax increase of 4.99% for the Sandwell MBC element resulting in a Band D charge of £1,914.77, as set out in Annex 8; iii)            the Local Council Tax Reduction Scheme Policy as approved by Full Council on 9th December 2025; and iv)            an increased Council Taxbase of 81,818.4 as approved by the Cabinet on 10th December 2025.   g)             approve the General Fund Capital Programme budget allocation of £70.848m for 2026/27, and of £254.721m for the programme to 2030/31, as set out at Annex 9;   h)             note an assumption that the value of the ‘pipeline’ projects, as detailed in Annex 9B, is affordable, and that these projects will be included within the programme subject to successful completion of an appraisal and associated due process as prescribed by the Council’s Financial Regulations.   i)               approve the Housing Revenue Account revenue budget for 2026/27 as set out in Table 2 of Annex 10 including the draw of £8.857m from Housing Revenue Account reserves in 2026/27 and including the implications of the ‘Review of Council Housing Rents and Housing Related Property Charges Report’ approved by Full Council on 9 December 2025;   j)               approve the Housing Revenue Account Capital Programme as set out at Annex 11, including the budget of £88.774m for 2026/27 as set out in Table 2 of the report;   k)             endorse the Housing Revenue Account 30 Year Business Plan, as set out at Annex 13;   l)               in respect of the 2026/27 schools funding formula for Sandwell schools, Approves adoption of the Dedicated Schools Grant allocation by block, as per Table 1 of Annex 12 and agrees the amount of funding available for distribution from the Schools Block at £387.046m, as set out at Table 2 of Annex 12 including:   i)               set aside of £0.450m as Pupil Growth contingency; ii)              set aside of £1.511m as Falling Rolls Funding contingency: and iii)            transfer of £0.522m to Central Schools Services Block to fund the attendance service.   m)           approve the Capital Strategy at Annex 14;   n)             approve the Capital Financing Strategy at Annex 15;   o)             approve the Flexible Use of Capital Receipts Strategy at Annex 16, and delegate authority to the Section 151 Officer to make any submissions to the Ministry of Housing, Communities and Local Government (MHCLG) for application;   p)             approve the Investment Strategy at Annex 17;   q)             approve the Treasury Management Strategy at Annex 18, including:   i)               the Borrowing and Investment Strategies (para 67 and 97); ii)              the Minimum Revenue Provision Policy Statement (para 43); iii)            the Treasury and Prudential Indicators as set out within the report and summarised at Annex 18F; and iv)            the forecast new borrowing requirement of £100m.   r)              approve the Reserves Strategy at Annex 19, including:   i)               the reallocation of earmarked reserves within 2025/26, as set out in Annex 19B; ii)              the transfers to/from earmarked reserves, with a total net value of £1.527m transfer from reserves, as set out in Annex 19B, be included within the General Fund revenue budget for 2026/27; iii)            a contribution of £0.750m to the General Fund balance be included within the General Fund revenue budget for 2026/27.   s)             note the financial approval limits at Annex 20 that form part of the Section 151 Officer’s scheme of financial delegation;   t)               endorse the Revenues and Benefits Policy Framework at Annex 21; and   u)             delegate authority to the Section 151 Officer in conjunction with the appropriate Cabinet Member to:   i)               amend any of the fees and charges included within the schedule within the 2026/27 financial year; ii)              make any financial corrections or amendments to the Medium-Term Financial Strategy and annexes as may be required in the final preparation of papers for Full Council on 24 February 2026. iii)            make any in-year financial corrections, technical adjustments or virements in the event of variations in indicated funding allocation made by Government and existing funding partners, subject to these being allocated in accordance with the principles set out in this report. iv)            adjust the funding sources applied to the Capital Programmes during the year to maximise flexibility in use of capital resources and minimise borrowing costs where possible.   (2)           That delegated authority is given to the Section 151 Officer in conjunction with the relevant Cabinet Member and Monitoring Officer to make any necessary financial corrections or amendments to the Medium-Term Financial Strategy and annexes as may be required in the final preparation of papers for Full Council on 24 February 2026.  

Date of Decision: February 4, 2026