Agenda and minutes

The Council welcomes engagement from members of the public. To speak at this meeting please register no later than 24 hours prior to the date of the meeting via democracy@southkesteven.gov.uk.

There were none.

Apologies for absence were received from Councillors Charmaine Morgan, Chris Noon, Gloria Johnson, Pam Bosworth, and Susan Sandall.

Councillor Pam Byrd substituted for Councillor Charmaine Morgan and Councillor Helen Crawford substituted for Councillor Zoe Lane.

Councillors Emma Baker, Habibur Rahman, and Max Sawyer sent apologies that they were delayed but would be joining the meeting.

Members are asked to disclose any interests in matters for consideration at the meeting.

There were none.

From 14 January 2025.

The minutes from the previous meeting held on 14 January 2025 were AGREED as an accurate record.

To present the draft fees and charges proposals for 2026/27.

The Fees and Charges Proposals for 2026/27 report was introduced by the Leader of the Council.

The report outlined the following proposed changes to discretionary services for 2026/27:

The report outlined that details of regulatory fees and charges for 2026/27 were contained within Appendix B.

Planning charges were expected to be increased by Government in line with the Consumer Price Index as of September 2025 (3.8%). Formal confirmation of an increase was expected by March 2026.

It was expected that statutory licensing charges would remain as outlined within Appendix B of the report.

Following an internal audit recommendation, the Charging Policy was reviewed, and an updated version was included within Appendix C of the report.

During discussions, Members commented on the following:

-       The Leader of the Council noted that he had received a significant list of questions from a Member, some of which he had responded to. He agreed to respond to the remaining questions following the meeting.

-       A Member suggested adding a surcharge to houses of multiple occupants (HMOs) of 6-beds or more. The Leader noted the suggestion and was not opposed to the principle. An officer noted that there were 61 licenced HMOs within South Kesteven, 51 of which contained 6-bedrooms or less. It was suggested that the Housing Overview and Scrutiny Committee considered this issue following benchmarking against neighbouring authorities.

10.19am – Councillor Habib Rahman arrived.

-       A Member exclaimed that price increases could freeze out individuals from accessing services. The Section 151 Officer confirmed that all impacts had been analysed during the budget setting process.

-       Regarding the Charging Policy, a Member queried the rationale of how fees were tested and cost structures established. The Leader noted the cost structures had been set following a review, the result of which was both increases and decreases to some fees. Ultimately, the Charging Policy was the framework within which the fee structures could be subsequently set.

-       Confirmation was sought that the service quality would remain in instances where prices had increased. The Leader confirmed this to be the case but noted that there were proposed changes to the Green Waste Service, as would be discussed by the Environment Overview and Scrutiny Committee at their meeting later in the day.

Given the implications  ...  view the full minutes text for item 63.

To present the draft Budget proposals and estimates for 2026/27 for the General Fund.

The Budget Proposals for 2026/27 and Indicative Budgets for 2027/28 and 2028/29 – General Fund was introduced by the Leader of the Council.

The report brought together the conclusions of the budget preparatory work and covered a number of areas:

• The funding position for the General Fund (section 3)

• Draft General Fund budget proposals (section 4)

• The draft Capital Programme 2026/27 – 2028/29 (section 5)

• Capital Financing (section 6)

• Reserves and Balances (section 7)

The funding position for the General Fund

The provisional settlement was announced on 17th December 2025 and included:

·       a full baseline reset (for the first time since the Business Rate Retention were introduced in 2013-14), 

·       major changes to all the Relative Needs Formulas (RNFs), and

·       the simplification of many grants.

This was a three-year settlement with each of the latter two years subject to an annual settlement process and therefore considered to be indicative.

The core principle of the Fair Funding Review was to maintain an equal balance of local authorities Core Spending Power (CSP) which took into account Core Government Grants, Specific Grants and Council Tax. The Government modelled the base CSP for 2025/26 at £20.592m which has formed the base over the next 3 years.

The Government stated there was funding certainty over the 3 year

period although this was only achieved by assuming maximum Council Tax

increases. As such, a Council Tax increase of 2.99% was suggested. If Council tax increases were excluded, the Council’s actual funding from Government reduced from £10.711m to £9.893m in 2028/29 – a reduction of £0.818m. Without confirmation that sufficient funding had been made available to fund the new weekly food waste collection service, the decrease was even greater.

Lincolnshire authorities had intended to apply for Pool Status for 2026/27 as this had been financially beneficial for all Lincolnshire Councils over previous financial years.  However, following the provisional settlement announcement and clarification of the business rate reset guidelines whereby the Government was providing a 100% safety net, there was no financial business case to remain in the Lincolnshire Pool.  This decision was confirmed by the Councils financial advisors who had confirmed there was no financial benefit for being part of a Pool.

General Fund Budget Proposals

The Council was legally required to produce a balanced budget each year and Table 5 showed this could be achieved for 2026/27 without reliance on reserves. However, the 3-year outlook remained difficult as the Council transitioned towards its newly established baseline funding levels following the Fair Funding Review and Business Rate Reset. It was therefore recommended that a transfer was made to the Budget Stabilisation Reserve to ensure financial resilience if the financial outlook remained difficult.

The budget proposals for 2026/27 incorporated a number of service changes

required to meet operational demands. These proposed increases were

formulated in response to a combination of Cabinet priorities, changes in statutory responsibilities and service delivery pressures. The proposals were set out in Tables 7 and 8 of the report.

Capital  ...  view the full minutes text for item 64.

To present the draft Budget proposals and estimates for 2026/27 for the Housing Revenue Account.

The meeting resumed at 12.09.

The Budget Proposals for 2026/27 and indicative Budgets for 2027/28 and 2028/29 - Housing Revenue Account (HRA) were introduced by the Leader of the Council.

The HRA budget was set in the context of balancing the sustainable 30-year financial business plan, with the following priorities outlined within the Housing Strategy:

1.    The commitment to deliver new affordable and specialist housing in

partnership. 

2.    Continual improvement of the quality, standard and safety of homes.

3.    Support people to live healthy and independent lives in their homes.

4.    Facilitate housing to be sustainable.

5.    Support our communities to be sustainable.

Financial challenges of the HRA required Council in 2025/26 to allocate further financial resources during the financial year in response to increasing revenue costs.  These pressures continued into 2026/27 and this financial growth was reflected in the proposed revenue budgets shown at Appendix A.  Line 27 of Appendix A also showed the full extent of the decline of the balances and the Major Repairs Reserve balance reduced from £10.508m as at 31 March 2026 to £2.796m as at 31 March 2029.   

To avoid creating an unsustainable medium-term outlook for the HRA,

corrective actions were carried out across all budget areas of the HRA.

This analysis enabled a more accurate and targeted capital programme but

within a financial limit which did not put the HRA under financial pressure in the medium term.  However, in the longer-term HRA Business Plan projections indicated a potential need to draw on further reserves before potential falling in a deficit position by 2032/33. Therefore, spending plans would need to be reviewed to take corrective action to avoid a deficit. SKDC were also waiting on the outcome from Government review of rent convergence proposals, which if positive may have provided an increase in revenue income to help potentially bring the business plan back into balance. 

The provisional capital programme for the following 3 Financial Years was shown within Appendix B of the report.

Rent setting proposals increased the annual budgeted rental income from

£29.856m in 2025/26 to £31.091m in 2026/27. The average weekly rental

increase for individual properties was £2.65. The average rent in 2026/27 was £100.77 with a minimum of £66.12 and a maximum of £204.20.

Garage rents were proposed to increase by 2% and service charges were proposed to increase 3.8%.

In setting the budget for rental income for future years, in addition to the 4.8% rent increase, the following assumptions were made:  

-       Void rent of 1.5%

-       Following Government changes to the Right To Buy (RTB) discount rates the sales forecast was set at 15 for 2026/27 based on the reduced activity levels during 2025/26 since the changes were introduced.

The 2026/27 Capital Programme (excluding any carried forward) was included as Appendix B.

The Major Repairs Reserve (MRR) was the primary source of funding for the HRA capital programme. It was proposed that it would fund investment in the housing stock over the following 3 years.

Based on the current  ...  view the full minutes text for item 65.

There was none.

The meeting concluded at 13.00.