Report attached.

Exempt Appendix A to this Report is not available for public inspection as it contains or relates to exempt information within the meaning of Paragraph 3 of Schedule 12A to the Local Government Act 1972.

This report is in the exempt part of the agenda because it refers to information relating to the financial or business affairs of any particular person (including the authority holding that information) and the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

Report title: 2026/27 Council Budget Report and 2026-2030 Medium Term Financial Strategy

Presented by: Councillor Chris Wilkins, Cabinet Member for Finance

Summary:

Cabinet:

1.         Noted the requirements of Section 106 of the LGA 1992 Act as set out in Section 1 of this report

2.         Noted the Medium-Term Financial Position and the Budget setting process of the Council as set out in Section 3 of this report

3.         Noted the key assumptions and risks to the 2026/27 budget as set out in Appendix A of this report

4.         Noted that the medium term financial strategy presented in this report still leaves a financial gap of £82.3m in 2028/29 even after the full impact of the fair funding review grant increases and a 4.99% Council tax increase for the next three years have been applied

5.         Noted the latest revenue monitoring position as set out in section 3 of this report;

6.         Noted the savings proposals as set out in Section 4.10 and Appendix C of this report, approved by Cabinet in November 2025. These savings reduces the Council’s budget gap by £23m from 2026/27 to 2028/29.

7.         Agreed the proposed Fees and Charges schedule as set out in paragraph 4.11 and Appendix D and for officers to proceed with implementation of the proposed fees and charges, subject to consultation where required.

8.         Agreed the proposed 2.99% increase in core Council Tax for 2026/27 and the proposed additional 2% Council tax increase for the Adult Social Care Precept as set out in paragraph 4.12, in line with the Referendum Limit approved by Government also referred to in paragraph 4.12,;

9.         Agreed the proposed Council Band D basic amount of Council Tax for 2026/27 of £1,914.15 being the amount calculated by the Council, in accordance with Section 31B(1) of the Act, as the basic amount of its council tax excluding the GLA precept for the year (as set out in section 4.13 of this report

10.       Agreed the proposed Council Tax requirement for 2026/27 to be set at £174.421m as set out Appendix E of the report, which is an increase from £164.361m in 2025/26.

11.       Agreed the budgets proposed in this report and as set out in Appendix F

12.       Noted the Schools budget and DSG as set out in Appendix G of this report

13.       Noted the S25 Statement of Robustness as set out in Appendix H of this report and the Council’s financial position of requiring Exceptional Financial Support in 2027/28 and 2028/29 on the current forecasts set out in the Medium-Term Financial Plan.

14.       Agreed the Council Tax Support Scheme for 2026/27 as set out in Appendix I to this report (unchanged from 2025/26).

15.       Agreed Council Tax discounts for early payment to be given at a rate of 1.5% as set out in Appendix J of this report.

16.       Agreed to direct officers to disregard War Pension income in the assessment of Housing Benefit as detailed in see Section 11 and Appendix J and authorises the Chief Executive to approve any policy required to effect the same.

17.       Agreed the policy change set out in Section 11 to include the disregard of Armed Forces Compensation in the calculation of contributions for Disabled Facilities Grants (DFG)

18.       Noted the Equalities Impact Assessment in respect of the Council Tax Support Scheme as set out in Appendix K to this report and the overall Equalities impact assessment for the Council report set out in Appendix L

19.       Noted that in the event the Capitalisation Direction is not awarded to the value requested before the Full Council meeting on the 4th March, the Strategic Director of Resources (S151 Officer) will be required to issue a S114 report.

Report title: 2026/27 Council Budget Report and 2026-2030 Medium Term Financial Strategy

Presented by: Councillor Chris Wilkins, Cabinet Member for Finance

Summary:

The Leader and Cabinet Members thanked the Strategic Director, Resources and her team for their work in preparing the Budget Documents.

This report presents the proposed 2026/27 budget and also an update of the Medium-Term Financial Strategy (MTFS) between 2026/27 and 2028/29 that will support the delivery of the Council’s objectives and priorities. The report includes a recommendation to increase the Havering element of Council Tax by 4.99% (including the Adult Social Care precept) to meet the new budget requirement, whilst maintaining tight financial control and ensuring prudent levels of reserves and balances are maintained.

Councillors are reminded that Section 106 of the Local Government Finance Act 1992 requires any Member who is two months or more in arrears on their Council Tax to declare their position and not to vote on any issue that could affect the calculation of the budget or the Council Tax. Any Member affected by Section 106 who fails to declare could be subject to prosecution.

The 2026/27 budget process has again been a difficult one due the accumulated shortall in funding which has led to the Council requiring Exceptional Financial Support to balance its budget for the last three years. Havering continues to experience significant increases in demand and costs particularly across Social Care and Housing. The Government has reformed the financial allocation system through the fair funding review which has resulted in much needed additional grant for the borough but nowhere near enough for the Council to balance its books without needing further Exceptional Financial Support from the Government moving forward

The main pressures the Council continues to face are in Housing Demand, Children Services and Adult Social Care

Cabinet:

1.         Noted the requirements of Section 106 of the LGA 1992 Act as set out in Section 1 of this report

2.         Noted the Medium-Term Financial Position and the Budget setting process of the Council as set out in Section 3 of this report

3.         Noted the key assumptions and risks to the 2026/27 budget as set out in Appendix A of this report

4.         Noted that the medium term financial strategy presented in this report still leaves a financial gap of £82.3m in 2028/29 even after the full impact of the fair funding review grant increases and a 4.99% Council tax increase for the next three years have been applied

5.         Noted the latest revenue monitoring position as set out in section 3 of this report;

6.         Noted the savings proposals as set out in Section 4.10 and Appendix C of this report, approved by Cabinet in November 2025. These savings reduces the Council’s budget gap by £23m from 2026/27 to 2028/29.

7.         Agreed the proposed Fees and Charges schedule as set out in paragraph 4.11 and Appendix D and for officers to proceed with implementation of the proposed fees and charges, subject to consultation where required.

8.         Agreed the proposed 2.99% increase in core Council Tax for 2026/27 and the proposed additional 2% Council tax increase for the Adult Social Care Precept as set out in paragraph 4.12, in line with the Referendum Limit approved by Government also referred to in paragraph 4.12,;

9.         Agreed the proposed Council Band D basic amount of Council Tax for 2026/27 of £1,914.15 being the amount calculated by the Council, in accordance with Section 31B(1) of the Act, as the basic amount of its council tax excluding the GLA precept for the year (as set out in section 4.13 of this report

10.       Agreed the proposed Council Tax requirement for 2026/27 to be set at £174.421m as set out Appendix E of the report, which is an increase from £164.361m in 2025/26.

11.       Agreed the budgets proposed in this report and as set out in Appendix F

12.       Noted the Schools budget and DSG as set out in Appendix G of this report

13.       Noted the S25 Statement of Robustness as set out in Appendix H of this report and the Council’s financial position of requiring Exceptional Financial Support in 2027/28 and 2028/29 on the current forecasts set out in the Medium-Term Financial Plan.

14.       Agreed the Council Tax Support Scheme for 2026/27 as set out in Appendix I to this report (unchanged from 2025/26).

15.       Agreed Council Tax discounts for early payment to be given at a rate of 1.5% as set out in Appendix J of this report.

16.       Agreed to direct officers to disregard War Pension income in the assessment of Housing Benefit as detailed in see Section 11 and Appendix J and authorises the Chief Executive to approve any policy required to effect the same.

17.       Agreed the policy change set out in Section 11 to include the disregard of Armed Forces Compensation in the calculation of contributions for Disabled Facilities Grants (DFG)

18.       Noted the Equalities Impact Assessment in respect of the Council Tax Support Scheme as set out in Appendix K to this report and the overall Equalities impact assessment for the Council report set out in Appendix L

19.       Noted that in the event the Capitalisation Direction is not awarded to the value requested before the Full Council meeting on the 4th March, the Strategic Director of Resources (S151 Officer) will be required to issue a S114 report.