Decision details

RESOLVED:

That the Cabinet approves for recommendation to Council:

1)    The General Fund and Housing Revenue Account revenue budgets and Capital Programme budgets for 2026/27 and the Medium-Term Financial Strategy, including savings proposals, fees and charges as detailed in Appendices A, B and H1, having taken the Select Committees’ comments, public consultation responses and Equality Impact Assessments conscientiously into account as set out in Appendices C, D and E.

2)    The use of up to £62.0m in Exceptional Financial Support to balance the 2026/27 budget.

3)    An increase in the Hillingdon element of the 2026/27 Council Tax of 4.99% (including the Adult Social Care precept of 2.00%), with a charge of £1,534.95 per Band D property.

4)    The Flexible use of Capital Receipts Strategy to deliver efficiency savings, including utilisation for redundancy costs, as detailed at paragraphs 39 to 45 and Appendix F, and the use of £2.733m of capital receipts for this purpose.

5)    The Capital Strategy, Treasury Management Strategy Statement, Investment Strategy, and Minimum Revenue Provision Statement for 2025/26 to 2030/31 as detailed at Appendix G.

6)    The Reserves Policy set out in paragraphs 50 to 60.

7)    The proposed London Borough of Hillingdon Pay Policy Statement for 2026/27 set out at Appendix I.

8)    A rent increase of 4.8% (CPI +1%) from 1 April 2026 in line with the maximum increase for social rent set by the national rent policy, whilst noting that the Council continues to set rents for re-lets (both new tenants and transfers) up to formula target rent.

9)    That tenant service charges be varied in line with estimated actual costs for 2026/27, from 1 April 2026 (noting the estimated charges set out in Appendix H2).

10)A budgeted drawdown from DSG Reserves in 2026/27 of £8.2m.

11)That use of general reserves or balances, including any virement between the General Fund budget, Housing Revenue Account budgets or Capital budgets during the MTFS financial years 2026/27 to 2028/29 be delegated to the Cabinet, in respect of those functions which have been reserved to the Cabinet.

12)Note the Council Tax Resolution resulting from the proposed budget as set out in Appendix J to this report and recommend Full Council to approve it.

13)That the Council’s relevant basic amount of Council Tax for 2026/27 is not excessive in accordance with principles approved under Section 52ZB Local Government Finance Act 1992 and therefore a referendum will not be triggered.

That Cabinet:

14)Notes that the budget is balanced on the assumption of sufficient Exceptional Financial Support being agreed by the Ministry for Housing, Communities and Local Government (MHCLG) through an in-principle capitalisation support decision, and that this will need to be formally confirmed before full Council can approve the budget.

15)Notes the Council’s request for Exceptional Financial Support (EFS) from the MHCLG of up to £88m for 2025/26 and £62m for 2026-27, decreasing thereafter in 2027/28 with the aim to not need any further EFS in 2028/29.

16)Notes and acknowledges that in recommending the budget to full Council, due consideration has been given of the Equality Impact Assessments on individual savings proposals and the cumulative impact of the budget on groups with protected characteristics as set out in Appendix E and paragraphs 123 to 132.

17)Agrees that all drawdowns from general and other central contingencies will require Cabinet approval under the advice of the Corporate Director of Finance.

18)Authorises the Corporate Director of Finance to make any technical adjustments to the budget such as virements to align the budget with the proposals and recommendations within this report, to allocate inflation or correct budget allocations of growth and savings to service areas as may be required.

Reasons for decision

The Cabinet Member for Finance and Transformation introduced the 2026/27 budget proposals to be recommended to full Council, highlighting key points ahead of the full budget speech the following week. The report and appendices built on the draft budget issued in December 2025, which had been subject to public consultation; Cabinet noted the responses summarised in Appendix D. The budget was balanced on the basis of planned Exceptional Financial Support (EFS), subject to Government approval, which was expected the following week. The previous request for 2024/25 support had been withdrawn following near finalisation of the accounts, and the updated EFS request totalled £150 million across 2025/26 and 2026/27.

The Cabinet Member clarified that the paper presented a one year budget alongside a three-year medium term forecast and a five year capital programme. He reiterated that Hillingdon had been underfunded for many years, a position now recognised in the new Fair Funding formula. Core spending power was due to rise by £105.3 million over three years, although £28.7 million of this would come from annual Council Tax increases proposed at 4.99% and further amounts from inflation and assumed business rate growth.

Following refinement of growth and savings proposals, the final budget gap stood at £62 million. Temporary accommodation demand added £1.6 million to growth and increased future year pressures. It was noted that Council Tax was proposed to increase by 4.99%, retaining one of the lowest rates in London, and fees and charges were assumed to rise by 10%. Errors in the Ruislip Lido parking charge from the December report had been corrected.

The Cabinet Member advised that the proposed five year General Fund capital programme totalled £268.5 million, including projects such as the Hillingdon Outdoor Activity Centre, Care Home and £8.3 million for roads. The Housing Revenue Account was underpinned by a 30?year business plan, with rents proposed to rise by 4.8% (CPI + 1%) and investment continuing in both stock improvements and new homes. Regeneration schemes in Hayes Town Centre and Avondale would deliver 236 new homes across phases 2, 3 and 5, alongside further schemes at Haydon Drive, Falling Lane, Otterfield Road, homes in in Uxbridge and Nelson Lane.

Cabinet considered the equality impact assessments in Appendix E and agreed the report’s recommendations, including the use of EFS to balance the budget.

The Leader of the Council noted the increased response rate to the consultation and the value of resident feedback.

Two minor corrections to the Council Tax resolution in Appendix J were agreed. Following consideration of all the information presented, Cabinet, therefore, resolved to recommend its budget proposals to the Council meeting on 26 February 2026 for final consideration.

Alternative options considered and rejected

The Cabinet could have chosen to vary the proposals in its budget before recommending it to Council.