Issue - meetings

STOCKTON-ON-TEES BOROUGH COUNCIL

CABINET/COUNCIL DECISION

PROFORMA

Cabinet Meeting ........................................................................ 9 February 2026

Consideration was given to a report on the Medium Term Financial Plan Update and Strategy.

This was the final report in setting the Council’s 2026/27 Budget and Council Tax and outlining the Medium Term Financial Plan (MTFP) position to 2029. The report also included an update on the financial performance for 2025/26.

The report outlined the budget for 2026/27 and indicative MTFP for future years. The provisional finance settlement was announced on 17 December 2025, and this indicated the funding for 2026/27 along with provisional allocations for 2027/28 and 2028/29, with the final allocations to be confirmed in February.

The MTFP provided an indicative financial envelope to support sustainable decision making and prioritisation over the planning period. It would be reviewed and refreshed annually to reflect updated demand, inflation, funding assumptions and delivery progress.

Like many councils across the country, the Council continued to see greater demand for council services and rising costs which had resulted in overspending against it’s budget. The areas that were experiencing the greatest budgetary challenges were Adults Social Care, Children’s Social Care and Home to School Transport. As a result, the Council had needed to use reserves to dampen the impact; the Council needed to ensure it had healthy reserves to mitigate for future unpredicted pressures and therefore these need to be replenished. The report included a Reserves Policy outlining the plan of how this would be achieved.

Across the MTFP the Council was predicting the continued rising demand and cost pressures seen in recent years, which would exceed the increase in funding available. This had resulted in a budget gap of £6.7m in 2026/27, with a predicted budget gap of £13.8m in 2027/28 and £18.4m in 2028/29.

In response to bridging this gap, a renewed Phase 2 of the Powering Our Future programme encompassing Outcome based reviews, Council wide initiatives and efficiency reviews had been identified. This programme built on the positive progress made through the Powering our Futures Phase 1 transformation reviews already identifying £9.9m of savings by 2028/29. Residents feedback through the Let’s Talk Money budget consultation had been used to help identify the areas for review.

The scale and pace of savings required, particularly in the later years of the plan, represented a significant delivery challenge. While the Council had a strong track record through Phase 1 of Powering Our Futures, Phase 2 would require early validation of assumptions, rigorous governance through the established gateway process, and regular reporting to Members. Given the low level of reserves, timely corrective action would be required where delivery risk emerges, including adjusting sequencing, scope or mitigations as necessary.

RECOMMENDED to Council that:-

1. In accordance with the Local Government Act 2003, Members note that the Section 151 Officer confirms that the following recommendations:

a)       represent a robust budget which has been prepared in line with best practice;

b)       provide adequate working balances;

c)       set out that reserves and provisions are adequate for their purpose.

General Fund Budget

2.       A 2026/27 Council Tax requirement for  ...  view the full minutes text for item 92