Here's a summary of the Merton Council Cabinet meeting held on 20 October 2025. The Cabinet approved procuring a new school meals catering contract, the establishment of a Merton Legacy Fund, adjustments to revenue budgets and the capital programme, and new savings proposals for the 2026/27 budget. These decisions are subject to call-in¹.

School Meals Catering Contract

The Cabinet approved recommendations to proceed with procuring a school meals catering contract for primary, secondary, and special schools, starting 1 August 2026 for an initial three-year term, with the option to extend for up to two more years. The Cabinet also agreed to delegate the authority to award the contract and any extensions to the Executive Director for Children Lifelong Learning and Families, in consultation with the Cabinet Member for Jobs, Skills and Education, Councillor Sally Kenny. The new contract will ensure all catering staff are paid the London Living Wage.

The report noted that the council is not obliged to provide a catering service to schools, as it is delegated to the governing bodies, but has chosen to do so to support schools in delivering cost-effective services. The council's costs are met by the contractor. The council is able to ensure the standard of school food is of a good quality and the menu is nutritionally balanced, particularly for families who benefit from and rely upon free school meals. The council will seek to increase the options of plant-based dishes to support reduced meat consumption.

Merton Legacy Fund

The Cabinet approved the establishment of a Merton Legacy Fund Board to oversee capital projects that create a lasting legacy in Merton, using £15 million from capital receipts. The Cabinet recommended that the Full Council approve allocating £15 million to the Legacy Fund, using capital receipts from the sale of CHAS² in 2023, and delegate the distribution of the funds to chosen capital projects to the Cabinet, based on advice from the Legacy Fund Advisory Board, and in consultation with the Chief Executive and the Executive Director of Finance & Digital, Asad Mushtaq.

The Advisory Board will have the following membership:

• The Council's Cabinet Member for Finance and Corporate Services, Councillor Stephen Alambritis MBE (Co-chair)
• Appointed representatives from across all towns in the borough, from a diverse range of backgrounds and roles
• The Council's Executive Director for Finance and Digital (statutory s151 Officer³) – Adviser to the board

The report noted that in May 2023, the council sold CHAS 2013 Ltd for £186 million, resulting in a significant capital receipt to invest in legacy projects. The council carried out consultations on £15 million of the £75 million earmarked for legacy projects, to understand what the public and stakeholders identified as priorities and received ideas for community and locality-based projects.

Budget and Medium Term Financial Strategy

The Cabinet considered and agreed to new savings proposals for 2026/27 to 2029/30 and referred them to the Overview and Scrutiny panels and Commission in November 2025 for consideration and comment. The Cabinet also considered emerging draft Equalities Impact Assessments for each saving, where applicable, and referred them to the Overview and Scrutiny panels and Commission in November 2025 for consideration and comment.

The report provided an update on progress towards achieving a balanced budget for 2026/27 and sets out the latest Medium Term Financial Strategy position. The initial report to Cabinet in September updated the MTFS for known changes arising since the budget was agreed by Council in February 2025, including revised inflation assumptions for pay and prices.

Since the report to Cabinet in September there have been further updates to areas that have implications for the MTFS 2026-39

The latest MTFS 2026-30 includes the following assumptions on pay and price inflation

Given the continuing level of inflation in excess of 3.0% which is forecast to continue for a further year it is considered that the current provision of 2% for the 2026 pay award is unlikely to be sufficient and it is proposed to increase this to 3.0%. The cost of an additional 1% on pay is as follows:-

The latest MTFS 2026-30 includes the following provision for excess inflation

As reported to Cabinet in September, based on expenditure for the first quarter (three months to June), there was a forecast net adverse variance of £6.5m, consisting of unfavourable variances of £8.5m in services offset by a favourable variance of £2m in corporate provisions.

The main pressures are in the following services:-

• Children's Social Care and Youth Inclusion £3.088m
• Housing Temporary Accommodation/Homelessness £6.522m

Work will continue throughout the year to strive to bring the forecast for 2025/26 back to balance.

However, in recognition that these pressures at this stage of the year are likely to continue at least in part, it is proposed to provide £4m for service pressures in the medium term forecast.

Since the start of the financial year, directorates have been reviewing their budgets to identify initial savings and fees and charges proposals towards achieving a balanced budget in 2026/27.

Initial savings and fees and charges proposals for each directorate for those initiatives that meet the criteria, and are deliverable, are summarised in the following table:-

The updated assumptions including savings and service pressures will have the following impact on the budget gap:-

Amendments to Revenue Budgets and the Capital Programme

The Cabinet approved adjustments to the Capital Programme as detailed in Appendix 1 of the report. The Cabinet noted that the new scheme for Sir Joseph Hood Memorial Playing Fields Artificial Pitch detailed in Appendix 2 will require Council Approval.

The report requested Cabinet approval for budget adjustments which ordinarily would be recommended as part of the financial monitoring reports.