Agenda item

RECOMMENDATION:

It is recommended that scrutiny committee comment on the proposals within the attached cabinet report, ref CAB3541 which is to be considered by cabinet at its meeting on the 12 February 2026.

Councillor Neil Cutler, Deputy Leader and Cabinet Member for Finance and Transformation introduced the report, ref CAB3541 which set out proposals for the General Fund Budget 2026/27. The introduction included the following points.

1. The budget paper was prepared based on the Medium Term Financial Strategy (MTFS) and budget options presented to the committee in November 2025.
2. The priority remained on maintaining business as usual and prioritising key projects.
3. The provisional government spending settlement received on 17 December 2025 was worse than expected, potentially leaving a deficit of £3.5 million rather than the expected £1.8 million over a 3-year period.
4. It had been confirmed earlier this month that the government had made a calculation error regarding business rates pooling, the correction of which was resulting in a reduction of the settlement by just under £1.4 million per year.
5. The government had provided a special grant to cover this loss for the current year, meaning the 2026/27 budget remained balanced; however, the annual £1.4 million reduction would impact subsequent years.
6. The MTFS figures would be updated to reflect this change before being presented to the Cabinet on the 12 February 2026.

The committee was asked to comment on the proposals within the attached cabinet report, ref CAB3541, which was to be considered by the cabinet at its meeting on 12 February 2026. The committee proceeded to ask questions and debate the report. In summary, the following matters were raised.

1. A question was asked regarding the government recalculation, specifically whether this affected most councils in the same way or if Winchester City Council was particularly affected.
2. A question was raised regarding the statement that Shire Districts were mainly affected by the recalculation, and how this would affect LGR plans and the preservation of services for the new unitary councils.
3. Clarification was sought regarding paragraph 14.3 on the digital customer experience, and whether the system would track queries from residents who contacted the council by phone or in person.
4. A question was asked regarding recommendations four and six, specifically the reasons for the spending of £470k (one-off) and £89k (recurring) on “digital transformation” software.
5. Clarification was sought regarding the £60k income reduction for the Guildhall.
6. A question was asked regarding the Guildhall condition surveys, and the level of contingency included in the budget given the history of rising costs for building works.
7. Clarification was requested regarding page 75, specifically regarding risk reserves in support of the TC25 programme.
8. A question was asked regarding the debt write-off mentioned in paragraph 21, and whether lessons had been learned to avoid such positions in the future.
9. A question was raised regarding New Burdens Funding, and whether existing funding was adequate to cover additional duties resulting from the Renters' Rights Bill and homelessness requirements.
10. Clarification was sought regarding the employer's pension contribution reduction.
11. A question was asked regarding the reference to “parking overtime” of £30k in and whether this was a one-off or anticipated to be recurring.
12. Clarification was sought regarding the Community Infrastructure Levy (CIL) General Fund in Appendix C, and why the reserve balance appeared to plateau in 2027/28.
13. Further information was sought regarding Plant, Property, and Equipment (PPE) and Investment Properties and if the valuation matters previously highlighted in a recent Audit & Governance Committee should be reflected in this report.
14. Clarification was sought regarding Appendix D and the tree works undertaken in the Winchester Town area.
15. A question was raised regarding the reduction in the “night bus contribution” referred to in Appendix D.

These points were responded to by Liz Keys, Director (Finance), Councillor Neil Cutler, Deputy Leader and Cabinet Member for Finance and Transformation, Darren Kennedy, Finance Manager (Strategic Finance) and Simon Hendey, Strategic Director accordingly.

RESOLVED:

1.    That the report be noted.

2.    That whilst the committee had no specific recommendations to forward to Cabinet, that cabinet considers the committee’s comments raised during the discussion of the item.