URL: https://democracy.northdevon.gov.uk/ieDecisionDetails.aspx?ID=4488

Decision Maker: Strategy and Resources Committee, Council

Outcome:

Is Key Decision?: No

Is Callable In?: No

Purpose:

Content: Councillor Clayton briefly left the meeting and Councillor P. Leaver took the Chair in his absence.   The Committee considered a report by the Director of Resources and Deputy Chief Executive (circulated previously) regarding the Revenue Budget 2026-27, Capital Programme and Medium Term Financial Strategy 2026 to 2031.   Councillor Walker, Lead Member for Commercialisation and Resources introduced the report to the Committee.   The Committee received a presentation by the Director of Resources and Deputy Chief Executive and highlighted the following:   Finance Policy Statement November 2025 – outlining the key issues, leading Ministry of Housing, Communities and Local Government proposal in consultation and the confirmed policy position. Finance Policy Statement November 2025 – summary of transitional arrangements. Draft 2026/27 Settlement.  In 2025/26 to 2026/27 there was a 5.7 increase in core spending power across all Local Government.  In 2025/26 to 2028/29 that was a 15% increase in core spending power across all Local Government.  This differed depending on which sector you were in. Of £11.1bn growth in core spending power, £9.75bn was from council tax or business rates (88%).  Of £11.1bn growth in core spending power, £667m was from protection mechanisms (6%). Core Spending power from 2026/27 to 2028/29.  Year on year change in core spending power including Council Tax percentages.  Change in core spending power over the settlement period percentages by type of authority. Core Spending Power for North Devon Council which included the Government grant and the ability to raise Council Tax.  Cash reduction on the level of resources to deliver services when inflation had currently been running at 3% annually.  This assumed Council Tax raising to the maximum threshold.  A real terms reduction over the 3-year period of -10%. Business Rates 2026/27 revaluation.  There was a periodic reassessment of market rents to establish valuations. Nationally the valuations were supposed to be net revenue neutral (i.e. so increasing or decreasing market rents nationally does not change the cost to business of business rates).  Therefore when valuations have increased nationally the multiplier decreased nationally. Business Rates 2026/27 revaluation – 2026 by region Business rate 2026/27 revaluation – average regional changes in 2026 compared to 2023. Business rates multiplier from 2017/18 to 2025/26. Business rates 2026/27 – appeals.  Revaluation would trigger business rates appeals. To compensate for this, nationally the multiplier was not decreased by the same percentage as the increase in rateable values.  An allowance was made for the future loss in rateable values following appeals. Business rates multiplier with rounding. Business rates multiplier including new multipliers. Fair Funding Review 2.0 – business rates.  A Business Rates event had been scheduled to be held on 11 February 2026 at Node for local businesses to attend. Medium Term Financial Strategy approved in February 2025 for 2025-2031.  Summary budget position for 2026/27. Green Lanes – 2021/22 to 2024/25 there was a cumulative net return of (£972,600).  The 2025/26 budget included rates and net rent reduction of £275,000 in line with the original net rental cashflow presented in June 2021. Council Tax – in 2025/26 increased Band D by £6.29 (equivalent of 2.99%.  Rural Councils could increase up to 3% or £5 (whichever higher).  £6.48 would increase the £216.68 to £223.16 (increase of 2.99%) Draft Revenue Budget 2026/27 (Appendix A). Draft budget 2026/27 assumptions – 3% increase on salary costs, 2.99% (£6.48) increase on Band D Council Tax, garden waste subscription increased from £60 to £65.  Grants as detailed in Appendix B. Reserves (Appendix C).  The General Fund balance forecast level at 31 March 2027 was £1.238m (6% of net budget).  The recommended level was 5%-10%. Earmarked reserves – forecast level at 31 March 2027 was £5.337m.  In compliance with the Local Government Act 2003, the Chief Financial Officer assured members of the robustness of the estimates and the adequacy of the proposed financial reserves. Medium Term Financial Strategy refreshed for 2026 to 2031 period – funding and costs (Appendix D). Capital Programme – investment plans for 2025/26 to 2027/28 of £27.772m. Draft Capital Programme (Appendix E). Projected borrowing need. Risks that could affect financial plans. Timeline for the approval of the budget. Future options to consider in relation to commercial ventures and additional growth through Business Rates Retention.   Councillor Clayton suggested writing a letter to Government regarding the requirement for the Council to spend money preparing for Local Government Reorganisation, which should be funded centrally rather than local Council Tax payers having to pay.   Councillor York addressed the Committee in her capacity as Trustee of Age Concern, Barnstaple and North Devon in relation to funding to be potentially awarded to the organisation and then left the meeting.  She circulated a copy of the Garfield Weston core funding application and leaflet detailing the services provided by Age Concern.   RESOLVED that it being 1.00 pm that the meeting continue in order for the remaining business to be transacted.   In response to questions from the Committee, the Director of Resources and Deputy Chief Executive advised the following:   ·       That the £15,000 from the North Devon Community Lottery central fund had been included within the budget.  The Committee could take a decision on the allocation of this fund at the meeting of Council on 25 February 2026 as other information may be presented from other recipients of strategic grants. ·       In relation to Local Government Reorganisation, there would be a need to understand the level of debt from other Councils that would move into the new Unitary Authority.   In response to questions from the Committee, the Chief Executive advised the following:   ·       Informal meetings of the Strategy and Resources Committee would be arranged to start to prepare for Local Government Reorganisation.  Part of these discussions would be in relation to budgets, medium term financial strategy and borrowing.   RESOLVED that:   (a)      the latest forecast for Budget 2025-26 and the proposed contributions to earmarked reserves be noted; (b)      the Chief Financial Officer’s assurance on the adequacy of the reserves and the robustness of the budget in paragraph 4.1.4.7 of the report be noted; (c)      the Chief Financial Officer’s highlighted areas of risk identified within the budget process set out in paragraph 4.1.4.8 and section 4.3 of the report be noted; (d)      the latest Medium Term Financial forecast for 2026-2031 as shown in section 4.1.5 of the report be noted.   RECOMMENDED that:   (e)      there be an increase of 2.99% (£6.48) in the level of Council Tax charged by North Devon Council for 2026-27 with a Band D Council Tax level of £223.16 (f)       the actions identified in sections 4.1.2 to 4.1.4 of the report, which are required to ensure a balanced budget is achieved and therefore recommend to Council the approval of 2026-27 General Revenue Account Budget. (g)      the Medium Term Financial Strategy 2026-2031 in section 4.1.5 of the report be adopted as part of the Policy Framework. (h)      the Capital Programme 2025-26 to 2027-28 as highlighted in section 4.2 of the report be approved; (i)       Council determine the allocation of the North Devon Community Lottery central fund of £15,000.  

Date of Decision: February 2, 2026