URL: https://democracy.ribblevalley.gov.uk/ieDecisionDetails.aspx?ID=1414

Decision Maker: Policy and Finance

Outcome:

Is Key Decision?: No

Is Callable In?: No

Purpose:

Content: The Director of Resources and Deputy Chief Executive submitted a report asking Committee to approve the revised Revenue Budget for 2025/26 and to recommend a revenue budget and council tax requirement for 2026/27 to Council on 3 March 2026.   Cllr J Rogerson entered the meeting during the report.   The revised budget forecasted that instead of adding £307k from general fund balances as originally planned, £564k would be added. Service Committees had considered their detailed reports and main variations between the original and revised estimate were provided in Annex 1 to the report.   A significant element of the Council’s income was Business Rate Growth, and the report outlined the latest estimate of Ribble Valley’s share of business rate income for the current year. Based on the latest position the Council income from business rates was expected to be £2.735m after many adjustments. This was only slightly less than the amount originally estimated of £2.768m. For 2025/26 £2m was relied upon to fund the revenue budget, with the business rate growth reserve being used to fund the capital programme over the next 5 years.   The report detailed the forecasted transfers to and from earmarked reserves compared with the original estimate, and in summary, the net position was that £2.268m would be added instead of £543k to earmarked reserves in the current year. One of the largest variations was £1.304m of section 106 monies which had been received into the service revenue budget, however it had previously been agreed that this would be used to finance part of the capital programme. As such, these monies had been set aside in the Capital Earmarked Reserve, therefore had an overall net nil impact on the revenue budget.    The report went on to highlight the key elements of the Provisional Local Government Finance Settlement 2026/27, in summary:   ·       The new Fair Funding Allocation will be phased in over the next 3 years, with the Council receiving:  ? 2026/27 = 1/3 new FFA allocation + 2/3 of the previous allocation  ? 2027/28 = 2/3 new FFA allocation + 1/3 of the previous allocation  ? 2028/29 = the new FFA allocation in full   ·       The Council would receive a damping payment each year to ensure the allocation was not less than 95% of the adjusted allocation for 2025/26, which included some grants that had been ‘rolled in’ which were previously paid separately.   ·       The Business Rates Baseline had been reset   Given many uncertainties, including the impact of the new 2026 rating list, and the new Business Rates Baselines (not announced until the provisional grant settlement), the new banded levy calculation and how this would work in a new pool, it was felt the risks were too high to be a member of a business rates pool in 2026/27.    The Director of Resources estimated that the Collection Fund would produce an overall surplus of £360,406 for 2026/27. This consisted of a surplus for council tax of £467,802 and a deficit in respect of Business Rates of £107,396. The Council Tax surplus would be shared amongst all the major precepting authorities in 2026/27, with the Council’s share of the surplus being £40,007.   Regarding the revenue budget for 2026/27, the report outlined the provisional base position as agreed by Service Committees. Committee expenditure was set to increase by £673k, the reasons for which were set out for each Committee in the annex to the report. Capital adjustments and movements of other items were also reported. At this stage, a contingency of £400k was included for Local Government Reorganisation transition costs.   In an addendum to the report, Members were informed that the Government had announced the Final Local Government Grant Settlement on 9 February 2026 which contained some significant changes from the Provisional Local Government Finance Settlement published in December. The addendum summarised the key changes and the impact on the Council was as follows:   ·       Extra funding for Homelessness, Rough Sleeping and Domestic Abuse would result in extra amounts as follows: £22k in 2026/27; £16k in 2027/28 and £13k in 2028/29. These would not impact on the budget deficit as they would be used to fund extra expenditure that met the intention of the funding. ·       The Government had reconsidered the allocation of pooling gains and they would be shared 50:50 between tariff and top up authorities resulting in Ribble Valley BC being £466k each year worse off compared with the provisional settlement. However, a one-year one-off Adjustment Support Grant of £466k would be received for 2026/27 only.   The budget forecast had been updated following the release of the Final Local Government Grant Settlement and this predicted the following budget shortfalls each year:     Budget Gap £ 2026/27 OE 0 2027/28 771,991 2028/29 1,147,520 2029/30 2,584,718     It was pointed out that this was after the assumption that £250k would be taken from general fund balances each year.   The Budget Working Group had met throughout the year and on 10 February 2026 to consider the Council’s latest financial position, the impact of the Final Grant Settlement, and some further budget items. They had made the following recommendations for approval by Committee:   ·       Increase the Council’s Band D Council Tax by 2.99% to £175.79 ·       To bring in £791k of Extended Producer Responsibility Funding for each year of the future forecast. ·       To monitor closely interest rate changes during the year and capital spending. ·       That the request from Community Services Committee for extra funding for the Pool Refurbishment Capital scheme is approved at £1.240m and funded from general fund balances. ·       That £100k is added to the capital programme to fund solar panels at Ribblesdale Pool. ·       The further use of General Fund Balances to support the Ash Dieback Management growth item at a cost of £100k over 3 years. ·       That £450k is added to the four-year capital programme for the Cemetery Extension funded from General Fund Balances. ·       That £500k is added to the four-year capital programme for the Joiners Arms and Clitheroe Market Improvements funded from General Fund Balances. ·       That the resulting revised budget gap of £145,000 is taken from general fund balances in 2026/27. ·       Given the significant forecast deficit for future years, the financial pressures and remaining uncertainties the Budget Working Group recommend that they should continue to meet on a regular basis to review the budget position and assess how the budget gaps in years 2027/28 onwards should be addressed.    The Director of Resources and Deputy Chief Executive, as the Section 151 Officer, presented her report set out in Annex 7 which was required under Section 25 of the Local Government Finance Act 2003 to consider the robustness of the budget and the adequacy of the Council’s balances and reserves.  She concluded that the budget estimates for 2026/27 were robust, and the level of reserves and balances adequate.  However, it was stressed that the Council faced significant budget gaps beyond 2026/27. Whilst the level of General Fund Balances and Earmarked Reserves was relatively high, the use of reserves to fund budget gaps was not sustainable. She recommended that the Budget Working Group consider steps to address how a balanced budget could be set beyond 2026/27 as soon as practicable.   Committee were asked to consider the recommendations which would result in a balanced budget for 2026/27, as set out in the report.   The recommendation at 11.1 of the report was proposed and seconded. A vote was taken and the motion was carried.   Councillor K Horkin spoke against the Budget Working Group’s recommendation to increase Council Tax and proposed an amendment that the current Council Tax Band D equivalent remained at £170.69 and was not increased by 2.99%, to be funded from the unexpected savings generated by the reduction in superannuation payments of £177,000 as noted the report at 6.20. The impact of the increase on the revenue budget would be £131,850 for 2026/27.   The amendment was seconded by Councillor S Bibby.   Members debated the amendment and spoke both for and against the proposal.   A vote was taken and that was carried therefore this became the substantive motion.   Officers confirmed that the resulting revised budget gap for 2026/27 was £277k.   Councillor S Hirst proposed the recommendation at 11.2 of the report to approve recommendations of the working group, with the exception of the increase to Council Tax which should remain at £170.69 for a Band D property. Councillor M Hindle seconded the motion with the same exception. A vote was taken and the motion was carried.   The recommendations at 11.3 and 11.4 of the report were proposed and seconded. Separate votes were taken and the motions carried. It was therefore:     RESOLVED THAT COMMITTEE:   1.       Approved the revised budget for 2025/26.   2.       Approved the Budget Working Group’s recommendations set out in Section 8 of the report, with the exception of the increase to Council Tax which should remain at £170.69 for a Band D property and the difference be funded from general fund balances, which resulted in an amended budget and council tax requirement for 2026/27.   3.      Recommend the budget and council tax requirement to the Full Council meeting on 3 March 2026.       BUDGET AND COUNCIL TAX REQUIREMENT         £     RVBC Net Budget       8,923,150     Plus Parish Precepts (Annex 3) 696,139       9,619,289     Less - Settlement Funding Assessment     -4,470,295     Net Requirement Before Adjustments 5,148,994     Council Tax Surplus -40,007     Council Tax Requirement (Including Parishes) 5,108,987               4.    Asked the Budget Working Group to keep the Council’s financial position under review and make recommendations as to how the budget gaps in years 2027/28 onwards should be addressed.    

Date of Decision: February 10, 2026