The Charter Trustees for the City of Durham were scheduled to meet to discuss the external audit and to consider the budget and council tax precept for 2026/27. The meeting was scheduled to take place in Committee Room 2, County Hall, Durham.

2026/27 Budget and Council Tax Precept

The Charter Trustees were scheduled to discuss the budget for 2026/27, and consider council tax levels for the period between 2027/28 through to 2029/30.

The report pack included two options for increasing the Band D council tax¹:

• Option 1: Increase the Band D council tax by 35% in 2026/27 (£0.70 per year), with planned future rises of 2% each year for the years 2027/28 and 2029/30.
• Option 2: Increase the Band D council tax precept by 15% in 2026/27 (£0.30 per year), a further 15% in 2027/28, a further 15% in 2028/29, followed by a 2% increase in 2029/30.

The report noted that Durham County Council had requested that Town and Parish councils advise them of their 2026/27 precept by 23 January 2026. The County Council also notified Town and Parish Councils that a grant currently paid to them to compensate them for the impact on the local Tax Base of the Local Council Tax Reduction Scheme² is to be ended entirely from 2026/27. The report stated that there was a clear deficit position between the net budget running costs of the Charter Trustees of £0.075 million per annum, and the estimated Council Tax the Charter Trustees can expect to generate at £2.00 per annum precept, and a Council Tax Base of 27,957.6 Band D Equivalents – which generates c. £0.056 million, of around £0.019 million per annum. It said that it was critical that Charter Trustees consider options to raise council tax precepts to bridge this gap.

The report recommended that the Charter Trustees act on the preferred option of the Treasurer, and approve Option 1 to raise council tax by 35.00% in 2026/27, with agreement in principle to raise Council Tax by an annual rise of 2.00% per annum in later years from 2027/28 onwards.

External Audit Annual Review

The Charter Trustees were scheduled to receive the External Auditors (PKF Littlejohn LLP) Annual Review of the Annual Governance and Accountability Return (AGAR) for the financial year ended 31 March 2025.

The audit opinion stated that the 2024/25 return had been completed in accordance with proper practices and there was no cause for concern that relevant legislation and regulatory requirements had not been met, except for two matters:

• Assets purchased/acquired/bequeathed during previous years of the Charter Trustee's history have inadvertently not been included in Section 2, Box 9 of the annual Financial Return.
• The Charter Trustees failed to approve the AGAR in time to publish it by 1 July 2025, and did not disclose this by answering 'No' to Section 1, Box 1.

The report noted two further matters raised by the auditors which did not affect the audit opinion:

• The internal audit highlighted weaknesses in relation to the risk management policies and the bank reconciliation process.
• The Trustees did not comply with Regulation 15 of the Accounts and Audit Regulations 2015 as it failed to make proper provision during the year 2025/26 for the exercise of public rights, since the period for the exercise of public rights did not include the first 10 working days of July.

The report stated that the Treasurer and the Clerk of the Charter Trustees had implemented the following actions to ensure that the matters are addressed before the 2025/26 return is completed and as part of the reporting arrangements for 2024/25:

• A full asset inventory check has been undertaken and a professional valuer is finalising the process of valuing the assets, which will be recorded in the 2025/26 AGAR with prior year adjustments included for the opening balance sheet date on 1 April 2025.
• The Standing Orders of the Charter Trust (Rule 4) were amended at the meeting on 22 October 2025 to reduce the quoram requirements for meetings from 10 Trustees to 6 Trustees.
• Meetings have been held with Durham County Council's Principal Risk and Governance team to review and update the Trust's risk assessment and schedule.
• Procedures have been implemented to ensure that bank reconciliations are signed, dated and authorised by a supervising employee in a timely manner.

The report recommended that the City of Durham Charter Trustees approve the Annual Governance and Accountability Return for the year ended 31 March 2025 including the External Auditor's Report and Certificate 2024/25, and note the actions which have been or will be taken to address the issues highlighted by the external auditors in the 2024/25 External Audit, in preparation for the 2025/26 return.