The item was presented by Councillor Mark Lowry (Cabinet Member for Finance) who highlighted the following key items:  

a)    The draft revenue budget for 2026/27 was presented, totalling £318.075 million, which represented a significant increase on previous years. The increase was primarily due to the Government’s decision to roll several former standalone grants into the Revenue Support Grant (RSG). The RSG was expected to rise from approximately £12 million to around £69 million; 

b)    It was highlighted that the introduction of a three?year financial settlement allowed for more effective long?term planning. Previously, annual settlements had severely limited planning capability across services. The new approach would strengthen the Council’s Medium?Term Financial Strategy; 

c)    Pressures within four major statutory service areas were outlined as continuing to rise significantly. These areas were Children’s Services, Adult Social Care, Homelessness, and Special Educational Needs and Disabilities (SEND). Demand within these service areas continued to grow at a rate that exceeded increases in government funding and council tax; 

d)    The budget identified approximately £25.8 million of financial pressures arising from these statutory areas. To help mitigate this, the Council had identified £17.4 million in savings and efficiencies, with further work continuing to reduce projected overspends; 

e)    A number of strategic programmes were noted as essential to addressing long?term demand pressures, including proposals to develop Council?owned residential property for children’s placements, strengthening of prevention programmes, implementation of a “No Wrong Door” approach to reduce adolescent entries to care, and an increased focus on reablement within Adult Social Care. Further national guidance was awaited through the forthcoming SEND White Paper; 

f)     Alongside the revenue budget, a five?year Capital Programme of £319.725 million was presented; 

g)    The document remained a draft budget, subject to amendments pending receipt of the final Local Government Settlement. Ongoing discussions were being held with government ministers to address irregularities within the settlement figures. The draft would be submitted to Budget Scrutiny for detailed examination over two days before returning to Cabinet; 

David Northey (Service Director for Finance) added:

h)    The draft budget demonstrated a balanced position, although significant and difficult decisions were required to reach this stage; 

Helen Slater (Assistant Head of Finance) added:

i)     The importance of using the new multi?year settlement to drive long?term sustainability rather than short?term decision?making was emphasised. It was noted that many officers had become accustomed to working within 12?month financial horizons and that practice would need to evolve; 

In response to questions raised it was reported that:

j)     Broader economic developments and regeneration activity within the city were highlighted. Footfall in the city centre had increased by 6%, significantly above the national average, and vacant retail units had reduced substantially. Plymouth was increasingly attracting attention for investment, including through emerging sectors such as marine autonomy and cultural initiatives; 

k)    It was noted that Local Government Reorganisation (LGR) was expected within the next two years. While this was unlikely to fundamentally change the Council’s financial envelope, it was anticipated to strengthen the city’s influence within the wider region; 

l)     The issue of council tax was considered. It was noted that Plymouth remained one of the lowest?charging authorities in the South West, with the average council tax bill approximately £250 lower than Cornwall. The priority remained to keep council tax as low as practicably possible while maintaining high?quality services; 

m)  The statutory pressures faced by top?tier local authorities nationally were discussed, particularly in relation to the growing proportion of the budget being directed towards statutory services. It was noted that discretionary services continued to shrink as a proportion of overall spending; 

n)    The forthcoming scrutiny sessions were expected to provide detailed challenge, with the associated papers to be made publicly available; 

o)    Cabinet acknowledged the substantial work undertaken by officers and members to produce the draft budget under complex and demanding circumstances. The draft remained subject to change pending the final settlement and the outcome of scrutiny. 

Cabinet agreed to:

1.    Note the report and acknowledged that it is subject to change in line with any Final Settlement adjustments and further changes required as proposals are developed;

2.    Endorsed the recommended 5-year Capital Programme of £319.725m;

3.    Agreed to present the draft budget report to the Budget Scrutiny Select Committee for consideration when full savings proposals highlighted in the report had been developed further.