Agenda item

The Mayor submitted a report for Executive consideration, the purpose of which provided an update for Executive of the issues affecting the Council’s current Medium Term Financial Plan.

The report also sought approval of the budget development approach and timetable within which Officers would work with the Mayor, Executive and other elected Members to develop the 2026/27 budget and Medium-Term Financial Plan (MTFP) for the four-year period to 2029/30.

Each year the Council engaged in an annual financial planning and budget setting cycle with the intention to achieve a balanced annual revenue budget and MTFP. The cycle also set the council tax and set out the capital and treasury management strategy. A high-level overview of the annual financial planning cycle was summarised in Figure 1 at section four in the report. A more detailed timetable for the 2026/27 budget and MTFP was summarised in Table one and set out in Appendix 2 of the report.

The annual financial planning cycle involved the periodic review and updating of financial planning assumptions in the light of new information and data at key stages of the financial year to inform the Council’s budgetary control, financial forecasting and medium to long term financial planning. Areas of focus included The Council’s actual financial performance against its financial forecasts, Changes in information and intelligence concerning external factors outside the Council’s direct control, Internal factors relating to the design and operation of service delivery models and the level of reserves and forecast impact of all factors upon reserves.

The cycle needed to align with the Recover, Rest, Deliver Transformation Programme which itself aimed to improve, modernise, and transform the delivery of services by the Council, and potentially providing savings for use in the MTFP.

Funding of £26.7m had been allocated for the costs of the Transformation Programme from 2024/25 to 2028/29.

The report was the first stage of the budget development strategy for the four-year period 2026/27 to 2029/30. It built upon the MTFP approved by Council on 19 February 2025, the 2024/25 financial outturn reported to Executive on 11 June 2025, and the 2025/26 forecast financial position at Quarter One reported to the meeting. It set out the financial framework and timetable within which Officers would work with the Mayor and Executive, with input from elected Members, to develop budget proposals that would deliver the Council Plan within available resources.

OPTIONS

The Council was required by law to set a balanced budget and to operate robust and meaningful financial planning arrangements. The report set out the development process and timeline for achieving that objective. Therefore, no other options were submitted as part of the report.

ORDERED that the budget development approach and timetable set out in Appendix two of the report, for developing the 2026/27 Budget and Medium-Term Financial Plan (MTFP) to 2029/30, be approved.

AGREED that the update of the Council’s Medium Term Financial Plan (MTFP), be noted.

REASONS

The forward planning for, and setting of a robust budget and balanced MTFP, enabled the Council to provide and deliver services within its overall corporate and financial planning framework. The MTFP underpinned the delivery of the Council’s vision for Middlesbrough to be a thriving, healthier, safer, and more ambitious place where people wanted to live, work, invest, and visit, and where the Council would support its residents to live fulfilling lives, to ensure that its communities thrived.

All Council elected Members had a legal obligation to agree a balanced robust

budget and set the Council Tax by 11 March 2026. In addition, the Council had a

Best Value duty to demonstrate financial sustainability through the delivery of a

balanced MTFP over a period of at least three years. The setting of the budget was part of the budget and policy framework and therefore required Full Council approval

scheduled for 18 February 2026.

The Council was required to take a systematic, coherent, and controlled approach to

addressing its ongoing financial challenges over the medium-term, while enabling the

delivery of the Mayor’s vision and priorities for Middlesbrough through delivery of the

wider Council Plan.