Agenda item

Report of the Corporate Director of Finance and Resources (S151 Officer). To be presented by the Cabinet Member for Finance & Corporate Services .

Declarations of interest for this item:

None

RESOLVED:

That Cabinet:

1.    Noted the Council’s current financial position as set out in this report which builds on the work undertaken since the previous report to Cabinet in July 2025. 

2.    Noted the proposed new savings, pressures and capital programme changes for 2026/27 – 2030/31 (Appendices 1 to 6).

3.    Noted the current estimated budget gap for 2026/27 and the remaining period of the Medium-Term Financial Strategy (MTFS) and the key changes since the last update in July 2025 (Section 13.5).

4.    Noted the new risks and uncertainties in Section 15. 

5.    Noted that the General Fund Revenue Budget, Capital Strategy, Capital Programme, HRA 2026/27 Budget and Business Plan and Treasury Management Strategy Statement will be presented to Cabinet on 11 February 2026 to be recommended for approval to the Full Council meeting taking place on 3 March 2026.

6.    Approved the launch of consultation on the revenue budget proposals and proposed changes to the capital programme as set out in this report.

Reasons for decision

The Council has a statutory obligation to set a balanced budget for 2026/27 and this report forms a key part of the budget setting process by setting out the approach to delivering this and a refreshed Medium-Term Financial Strategy (MTFS).  It also highlights key updates in terms of funding, expenditure, risks and issues since the last report in July 2025.  The final budget for 2026/27, Council Tax levels, Capital Programme, Treasury Management Strategy, Housing Revenue Account (HRA) budget and Business Plan will be presented to Cabinet on 11 February 2026 for recommending to Full Council on 2 March 2026.

Alternative options considered

The Cabinet must consider how to deliver a balanced 2026/27 budget and sustainable MTFS over the five-year period 2026/31, to be reviewed and adopted at the meeting of Full Council on 2 March 2026.

This report is a key tool in achieving this because it sets out the approach, scope and timetable to delivering the 2026/27 Budget.

The Cabinet Member for Finance and Resources, and Deputy Leader of the Council introduced the report.

It was explained that the setting of the Haringey Council budget had become more challenging every year, due to historic government underfunding, Haringey operated with around £143m less in real terms in core government funding than it did in 2010/11. At the same time, it was explained that the Council had seen rising demand for services, which cost more to provide. Despite year-on-year efficiency savings, spending reductions and increases in income, Haringey again utilised Exceptional Financial Support from government to balance its budget in 2025/26.

It was noted that Local Authorities across the country were struggling financially, but that Haringey faced some unique financial challenges, noting that the government grant was 15 per cent less than the national average, income from council tax was lower than average in Haringey, and we had been funded at lower levels than many neighbouring boroughs.

It was explained that the Council’s draft budget for 2026/27 did not contain new savings proposals capable of closing the budget gap. This reflected the difficulty of continuing to identify yet more savings and income generation opportunities year after year. More than 80% of service budgets were already spent on social care and temporary accommodation. Whilst these areas were not exempt from the need to achieve the best possible value for money, it limited the Council’s ability to reduce costs when so much was spent on meeting our legal obligations in these areas. However, it included £7m of new proposals, including spending reductions and income generation measures, in addition to more than £15m of measures that had been previously agreed to be delivered next year. The Council had focused relentlessly on achieving these savings alongside the delivery of the £30m of savings that were in that year’s budget.

It was explained that this was vital in order to reduce the amount of Exceptional Financial Support (EFS) we used. EFS was money the council was allowed to borrow to fill its funding gap, and that it was not a grant and needed to be repaid, with interest, in future years. It was noted by the Cabinet Member that, despite all the challenges, this was a budget which reflected the Council’s values as we continued to deliver services to the most vulnerable at the same time as maintaining vital investment in the things that mattered to every resident, including our fabulous parks, leisure centres and libraries

In response to comments and questions from Councillors Hakata and Cawley-Harrison, the following information was shared:

• It was explained that the Exceptional Financial Support was a capitalisation directive, which allowed the utilisation of borrowing and disposal of assets to resolve budgetary deficits. It was noted that the Council had developed and were utilising an internal Spending Control Panel, which ensured that all spend in the Council had appropriate oversight and ensured that the Council was not undertaking unnecessary spend.
  
  
• It was noted that there had been a reduction in agency worker spend within the Council, which had reduced some of the financial pressures from additional staffing costs.
  
  
• It was explained that a significant amount of spend across the Council was undertaken on statutory services, which ensured that the Council was unable to make significant changes to spend in many cases due to the limited amount of discretionary spend.
  
  
• It was stressed that Cabinet was reviewing and was responsible for savings made across the Council. It was explained that officers were focussing of making savings wherever possible. It was explained that the Council was undertaking changes to ensure that savings targets could be reached and that the Council had a tighter grip on finances across the organisation.
  
  
• It was explained by the Cabinet Member that political decisions had been made in order to ensure that some services were prioritised, highlighting work to protect vulnerable residents, library and resident services, as well as environmental improvements. It was additionally explained that Cabinet had been presented with other budget proposals by officers for Cabinet to consider as part of this process.
  
  
• It was explained that the funding formulae which had been provided by Central Government to the Council in the past and currently were not fair for the level of need that the Council had faced, and that the Council was in the position it was due to historic decisions and reduction in funding.

RESOLVED:

That Cabinet:

1.    Noted the Council’s current financial position as set out in this report which builds on the work undertaken since the previous report to Cabinet in July 2025. 

2.    Noted the proposed new savings, pressures and capital programme changes for 2026/27 – 2030/31 (Appendices 1 to 6).

3.    Noted the current estimated budget gap for 2026/27 and the remaining period of the Medium-Term Financial Strategy (MTFS) and the key changes since the last update in July 2025 (Section 13.5).

4.    Noted the new risks and uncertainties in Section 15. 

5.    Noted that the General Fund Revenue Budget, Capital Strategy, Capital Programme, HRA 2026/27 Budget and Business Plan and Treasury Management Strategy Statement will be presented to Cabinet on 11 February 2026 to be recommended for approval to the Full Council meeting taking place on 3 March 2026.

6.    Approved the launch of consultation on the revenue budget proposals and proposed changes to the capital programme as set out in this report.

Reasons for decision

The Council has a statutory obligation to set a balanced budget for 2026/27 and this report forms a key part of the budget setting process by setting out the approach to delivering this and a refreshed Medium-Term Financial Strategy (MTFS).  It also highlights key updates in terms of funding, expenditure, risks and issues since the last report in July 2025.  The final budget for 2026/27, Council Tax levels, Capital Programme, Treasury Management Strategy, Housing Revenue Account (HRA) budget and Business Plan will be presented to Cabinet on 11 February 2026 for recommending to Full Council on 2 March 2026.

Alternative options considered

The Cabinet must consider how to deliver a balanced 2026/27 budget and sustainable MTFS over the five-year period 2026/31, to be reviewed and adopted at the meeting of Full Council on 2 March 2026.

This report is a key tool in achieving this because it sets out the approach, scope and timetable to delivering the 2026/27 Budget.