Agenda item

To submit the report of the Director of Function (Resources)/Section 151 Officer.

The report of the Director of Function (Resources)/Section 151 Officer incorporating  the detailed revenue budget proposals for 2026/27 was presented for final review by the Executive. The Executive was asked to agree the revenue budget for 2026/27, Council Tax level, use of reserves and updated Medium Term Financial Plan (MTFP) before final approval by the Full Council on 5 March 2026.

Councillor Gary Pritchard, Leader presented the report noting that the budget proposals have undergone an extensive process of discussion and challenge, including scrutiny by   the Corporate Scrutiny Committee at two separate meetings in January and February 2026. The proposals include a net revenue budget of £207.029m, a Council Tax increase of 5.1% taking the Band D charge £1,792.98, the use of £1.685m of reserves to help balance the budget and the continuation of the 100% Council Tax premium on second and empty homes. The proposed Council Tax increase is comparable to national increases and based on the latest information, Anglesey will still have the lowest Council Tax rates in North Wales and its increase will be among the lowest regionally.

The Director of Function (Resources)/Section 151 Officer confirmed that the final budget proposals remain unchanged from those initially presented. The risks to the budget are outlined in section 5 of the report with the main risk being uncertainty around future pay awards. As the Section 151 Officer he confirmed that, having considered all identified risks and mitigating actions in place, it is his view that the budget is robust and deliverable. He also noted that the Council’s healthy level of general balances and earmarked reserves provides sufficient mitigation against the risks identified.

The report also updates the Medium Term Financial Plan. Based on the assumptions in the MTFP which may change as 2027/28 approaches, further savings will be required in both  2027/28 and in 2028/29. The use of reserves again to balance the budget for 2026/27 creates an immediate funding gap in 2027/28. The Council may or may not be able to address this gap through reserves once more; otherwise budget reductions and/or Council Tax increases will be necessary unless funding improves. The MTFP currently assumes a Council Tax increase of 5% in 2027/28 and 3% in 2028/29. An updated MTFP will be presented to the Executive in September, 2026. However, it is important to note that the medium term financial outlook remains challenging and the Council may face the need to reduce costs, including through potential service reductions.

Councillor Jeff Evans, Chair of the Corporate Scrutiny Committee reported on the committee’s 18 February 2026 meeting at which members considered the final draft revenue budget report and proposals. Members discussed the additional allocations within the budget and noted the financial risks set out in the documentation. They also considered the comments of the Chair of the Resources Scrutiny Panel. Members noted that the overall budget proposals remained unchanged from those presented in January 2026. Having sought assurance on a number of questions, the committee resolved to support the final draft revenue budget proposals and to recommend them to the Executive.

Councillor Gary Pritchard thanked the Corporate Scrutiny Committee for its input over the two meetings and also thanked the Finance Service for its work throughout the budget setting process.

Executive members acknowledged that no one wishes to raise Council Tax more than necessary. Although the Welsh Government settlement increased by more than expected, it remains insufficient to meet inflation, pay pressures and rising demand for services – particularly in children’s and adults’ social care, homelessness and additional learning needs. It was emphasised that in setting the proposed budget, the Executive has sought to protect frontline services on which the most vulnerable depend, and to increase budgets to address growing demand in Adult and Children’s services while fully funding inflationary pressures in schools. The proposals also include investment in smaller services that are struggling to meet statutory duties.

Members highlighted the wide range of services the Council is responsible for and the challenges involved in balancing rising costs with limited funding. The proposed budget seeks to balance service pressures with a combination of savings, reserves and a council tax rise in a way that is deliverable and as fair as possible. A prudent approach to budgeting and spending  in previous years means that the Council is able draw on reserves  to balance the budget, although reliance on reserves in future is not certain. Nevertheless the Executive accepts that some people will be affected and for those who are struggling financially, support is available and can be accessed through the Council  or Citizens Advice.

The Director of Function (Resources)/ Section 152 Officer responding to a request also explained how the Fire Service levy is calculated and how its impact on the Council’s budget differs from that of the police precept and the town and community council precepts.

It was resolved –

·      To recommend to the Full Council that it accepts the draft revenue budget as proposed and increases the Council Tax Band D charge by 5.1%, taking the charge for 2026/27 to £1,792.98, noting that a formal resolution, including the North Wales Police and Town/Community Council precepts, will be presented to the Council on 5 March 2026.

·      To note the Section 151 Officer’s recommendation that the Council should maintain a minimum of £10.4m general balances.

·      To note the comments made by the Section 151 Officer on the robustness of the estimates made, as set out in section 5 of Appendix 1 to the report.

·      To authorise the Section 151 Officer to make such changes as may be necessary before the submission of the final proposals to the Council.

·      To agree that any unforeseen pressures on demand led budgets during the financial year will be able to draw upon funding from the general contingencies budget.

·      To request the Council to authorise the Executive to release up to £250k from general balances if the general contingencies budget is fully committed during the year.

·      To delegate to the Section 151 Officer the power to release funding from the general contingency up to £50k for any single item. Any item in excess of £50k not to be approved without the prior consent of the Executive.

·      To confirm that the level of Council Tax Premium for second homes and empty homes is maintained at 100%.