Agenda item

Budget and Council Tax Report 2026-27

Report from the Executive Director of Corporate Services.

Recommendations:

That Cabinet recommend to Council:

1. Approval of the Budget and Financial Strategy for 2026/27 as set out in the report and appendices, including a basic Council Tax increase of 1.95% and an Adult Social Care precept increase of 2%.

2. Approval of the extension to the Local Council Tax Support Top Up Scheme, that will provide up to £131.44 of additional support to low income households accessing the Council’s Council Tax Support Scheme. It will support those most financially vulnerable to rising household costs, through reduced Council Tax bills as described in Section 2.5.15

3. Approval of the updated Medium Term Financial Strategy (MTFS) to 2028/29, as described within Section 2.6.

4. Approval of the Reserves Strategy as set out in Section 2.8 noting that the final determination of Reserves will be approved as part of reporting the financial outturn for 2025/26.

5. To delegate authority to the Service Director of Planning, Regeneration and Transport in consultation with the Service Director of Financial Services and Cabinet member for Transport, Jobs and the Local Economy, to approve the specific detailed allocations and use of the Local Plan Reserve.

6. To note and accept the comments and advice of the Executive Director of Corporate Services (Section 151 Officer), provided in compliance with Section 25 of the Local Government Act 2003, as to the robustness of the estimates included in the Budget and the adequacy of Reserves for which the Budget provides as set out in Section 2.14.

7. To note the feedback from the public and partners following the public consultation on the Council’s budget for 2026/27 which took place from 28 November 2025 to 9 January 2026, attached as Appendix 5.

8. Approval of the proposed increases in Adult Social Care provider contracts and for Direct Payments as set out in Section 2.4.

9. Approval of the proposed approach and increases in Children’s Social Care costs as set out in Section 2.4.23.

10. Approval of the revenue investment proposals set out in Section 2.7 and Appendix 2.

11. Approval of the proposed revenue savings set out in Section 2.7 and Appendix 4.

12. Approval of the Council Fees and Charges for 2026/27 attached as Appendix 7.

13. Application of the Business Rates Reliefs as set out in Section 2.10, in line with Government guidance.

14. Approval of the proposed Capital Strategy and Capital Programme as presented in Section 2.12 and Appendices 3A to 3F.

15. Approval of the Treasury Management matters for 2026/27 as set out in Appendix 9 of this report including the Prudential Indicators, the Minimum Revenue Provision Policy, the Treasury Management Strategy and the Investment Strategy.

16. Approval that any changes resulting from the Final Local Government Finance Settlement 2026/27 be reflected in the Budget and Council Tax Report to Council on 4 March.

17. Continuation of the principles and measures adopted since April 2020 to make faster payments to suppliers on receipt of goods, works and services following a fully reconciled invoice as described in Section 2.11.

18. Approval of the procedure for Budget allocations for the Community Leadership Fund as set out in Section 2.9.

19. Approval that the Capital Programme Budget continues to be managed in line with the following key principles:

(i) Any underspends on the existing approved Capital Programme in respect of 2025/26 be rolled forward into future years, subject to an individual review of each carry forward to be set out within the Financial Outturn 2025/26 report to Cabinet.

(ii) In line with Financial and Procurement Procedure Rules 7.7 to 7.11 and 8.12, any successful grant applications in respect of capital projects will be added to the Council’s approved Capital Programme on an ongoing basis.

(iii) Capitalisation opportunities and capital receipts flexibilities will be maximised, with capital receipts earmarked to minimise revenue costs.

Minutes:

Consideration was given to the report which presented the Council’s Budget and Council Tax for 2026/27, based on the Council’s Provisional Local Government Finance Settlement for 2026/27, budget consultation and the consideration of Directorate budget proposals. A review of the financial planning assumptions within the Medium Term Financial Strategy (MTFS) had been undertaken.

The proposed Budget and Medium Term Financial Strategy reflected the Council’s priorities as set out in the Council Plan 2025-2030 and Year Ahead Delivery Plan. The development of the Budget proposals for 2026/27 and a further update of the MTFS took into account prevailing economic factors, supplier market factors, demand and complexity of care pressures, and the positive improvement in funding available to the Council following the impact of the Fair Funding Review 2.0 (FFR 2.0). Following the Council’s technical MTFS updates, proposed budget decisions within this report, the impact of the FFR 2.0 and Provisional Financial Settlement, the Council had been able to propose a balanced budget for 2026/27 and 2027/28 with a potential £9.3m funding gap in 2028/29.

During 2025, Government had consulted upon and delivered the Fair Funding Review 2.0. This had seen a significant shift in how Local Government was funded and how the resources for Local Government were distributed. The focus of funding distribution had moved more towards areas of greatest deprivation and need. The impact for RMBC of the Fair Funding Review, as confirmed with the Provisional Financial Settlement, was a positive one, with an additional £21.2m of funding per year provided to the Council by 2028/29 (£9.2m by 2026/27 and £15.1m by 2027/28). Though this was a significant shift in direction that the Council welcomed, the funding was necessary to address the demand and market pressures the Council had seen in recent years.

Though the position for Local Authority Funding had shifted positively, the Council remained committed to increasing efficiency and delivering on the priorities of residents. As such, in order to invest in key priorities, the Budget included savings proposals of £3.2m aimed to increase the efficiency of service delivery and reduce or remove spending on services that were no longer required or could be delivered differently, for example, through maximising grant funding opportunities.

In recognition of escalating cost pressures within Adult Social Care, relating to increased complexity of care and rising demand for the service, market inflation and transitions, the Council would provide for approximately £8.6m of additional funding to support the delivery of Adult Social Care services. Following work to assess the impact of market inflation, across recent years, on the cost of Children’s Social Care placements, the Council would provide approximately £4.8m of additional funding to support the provision of Children’s Social Care.

Further investment of an extra £0.5m per year would be provided to address unavoidable cost pressures in complying with Home to School Transport requirements and £1.7m would be invested into the Council’s staffing structure to ensure the Council remained an accredited Real Living Wage employer. In addition, the Budget would provide £2.8m additional investments to support with delivering on the Council’s ambitions for the Borough, largely focused on improving the quality of life of residents, with specific regard to the Council Plan core strategic outcomes.

In setting the proposed 2026/27 budget, Cabinet were asked to recommend to Council a 3.95% increase in Council Tax, made up of an increase of 1.95% in the Council’s basic Council Tax plus an increase of 2% for the Adult Social Care Precept. The Budget also proposed a further year of a Local Council Tax Support Top-up Scheme to operate across 2026/27 to provide continued additional support to low income working age households in the Borough, to assist them in managing the impacts of the cost of living crisis and support the most financially vulnerable households.

In introducing the report, the Leader stated that the Fair Funding Review, which had now been implemented, was good news for Rotherham, although he would have liked the Government to have done more. He stated that one of the consequences of having less money flowing through communities over the last 15 years had been that public spaces had suffered. The Leader was therefore glad that the Budget included proposals to support the high streets. The Budget also included a reduction in swimming charges for people aged over 65 and support for young people with additional needs.

In reference to Council Tax, the Leader explained that, for the seventh successive year, the increase would be less that the full amount allowed.

He thanked all those involved in preparing the budget, including officers, Cabinet Members, scrutiny members and people across the Council.

The Cabinet Member for Finance and Community Safety stated that the proposed Budget was responsible, prudent and realistic. The revenue budget would spend over £359 million of public money directly on services for residents. Following consultation with residents and partners, the proposed Budget would support the most vulnerable people.

The Deputy Leader and Cabinet Member for Children and Young People expressed her support for the Budget, which she stated would support families and children in Rotherham. This support included the expansion of the Healthy Holidays programme, additional funding for school uniform support and additional funding for universal youth work. An additional investment of £453,000 was proposed to ensure the effective delivery of educational psychology services, which played a vital role in improving learning, communication, and emotional well-being for children and young people.

The Cabinet Member for Street Scene and Green Spaces stated that the tourism industry in Rotherham had been growing and equated to £509million in economic impact for Rotherham. The Budget therefore included investments in the events team and programme. Investments were also being made in green spaces. Safety and maintenance would be improved at Rother Valley Country Park and investment were being made in the fleet and machinery for the parks service. The Cabinet Member also referenced the reduction in costs for over-65 to go swimming, stating that this would provide long lasting benefits to the NHS and people of Rotherham. The athletics track at Herringthorpe would also be resurfaced.

The Cabinet Member for Transport, Jobs and the Local Economy focussed on road safety. £80k of funding per year for two years was being proposed so that local councillors could develop road safety plans with the transportation service for their wards. A further £260k would be used to support the Council’s pedestrian crossing programme. £81k per year for the next four years would be used to continue the Council’s transport minor works programme. The Cabinet Member announced that the design of a scheme for improvements to Treeton Lane crossroads would be funded.

The Cabinet Member for Health and Social Care stated that she welcomed all the initiatives in the proposed Budget and looked forward to the outcomes in the coming years.

The Cabinet Member for Housing explained that investment would be made in the Selective Licensing scheme. The investment would maximise the impact of enforcement and regulatory activity, provide additional direct support to tenants, as well as provide increased capacity to ensure the stakeholder consultative groups were well run and well supported, overseeing the associated capital bid for physical improvements, and resulting spend. The proposal would also look at providing and enhancing wider service provision, utilising other funding sources, such as homeless prevention by providing increased tenancy advice and support, improving drop-ins and engagement of statutory services and providing a more holistic offer to align with the designations and their intended outcomes.

Reference was also made to the Welfare Rights Service. Macmillan Cancer Support currently funded a small team in the Council to provide specialist welfare benefits advice in Rotherham for people who had received a cancer diagnosis. During 2024/25, the team assisted with £3.7million in benefit claims and secured one-off payments for back pay of benefit exceeding £342,000. However, due to falling donations since the pandemic, Macmillan was no longer able to fund this support beyond the end of May. Due to the specialist nature of this advice and the ongoing need to support residents experiencing cancer diagnosis, it was proposed to invest £135,000 to continue to provide this service in the borough.

This report had been considered by the Overview and Scrutiny Management Board as part of the pre-decision scrutiny process and the Board fully supported the recommendations. Councillor Steele thanked all Cabinet Members for attending and presenting the Budget in a positive manner. He also thanked members of OSMB for scrutinising the Budget as a critical friend, and not on party political grounds. An additional recommendation was included relating to making all reports clearer, more concise and easier to read. Cabinet accepted this recommendation.

Full details on the discussion of the budget at the Overview and Scrutiny Management Board meeting held on 4 February 2026 can be found in the minutes of that meeting.

Councillor Steele wished to place on record his thanks to the Scrutiny Officers for their help in facilitating the scrutiny on the Budget.

The Budget and Council Tax Report would be presented for approval at the Council meeting on Wednesday 4 March 2026.

Resolved: