The Performance and Finance Scrutiny Sub-Committee was scheduled to discuss the draft revenue budget for the upcoming financial year and the medium-term financial strategy. The meeting's agenda focused on the significant financial planning required to address projected budget gaps and the implications of national funding changes.

Draft Revenue Budget and Medium-Term Financial Strategy

The primary item scheduled for discussion was the draft revenue budget for 2026-27 and the draft Medium-Term Financial Strategy (MTFS) to 2028-29. This report, presented by Sharon Daniels, Strategic Director of Finance (S151 Officer), and Portfolio Holder for Finance and Highways, Councillor David Ashton, outlined the council's financial outlook and proposed strategies for the coming years.

The report indicated a significant budget gap, with an estimated £17.061m for 2026/27, £8.153m for 2027/28, and £7.325m for 2028/29. To address these gaps, the report proposed a core Council Tax increase of 2.99% and an Adult Social Care Precept increase of 2% for each of the three years.

The report also detailed the anticipated impact of national funding reforms, including the Fair Funding Review 2.0 and the Autumn Budget announcements. These reforms aim to redistribute grant funding based on factors such as deprivation and local costs, with potential implications for Harrow's grant income. The report noted that while initial modelling suggested a loss of grant funding for Harrow, subsequent government announcements of additional funding had reduced this projected loss.

The budget process included an examination of savings and growth proposals across various directorates, with significant growth anticipated in Adult Services and Housing, particularly concerning temporary accommodation costs. The report also provided an overview of the Public Health budget for 2025/26, noting that the definitive allocation for 2026/27 would be confirmed with the Provisional Finance Settlement.

Furthermore, the report touched upon school funding for 2026/27, outlining the provisional allocations for the Dedicated Schools Grant (DSG) and the proposed funding formula. It also highlighted the projected cumulative deficit for Harrow's DSG, estimated at £31.7m by the end of 2025/26.

The report also included details on the Better Care Fund (BCF) for 2026/27 to 2027/28, which aims to support integrated health and social care services. It also discussed the council's reserves and contingencies, noting a total of £48.8m in General Fund Reserves.

Finally, the report outlined the proposed consultation process for the draft budget, which was scheduled to run for six weeks from 19 December 2025 to 29 January 2026, before final approval by Cabinet and Council in February 2026. The report also detailed the risk management implications, legal considerations, and equalities implications associated with the proposed budget and MTFS.

The meeting was scheduled to consider recommendations from the report, including the approval of the draft budget and MTFS for general consultation. The report also noted that the budget would be updated once the Provisional and Final Financial Settlements were announced.

Attendance by Reserve Members

The meeting was scheduled to note the attendance of any duly appointed Reserve Members.

Declarations of Interest

Members present were scheduled to declare any disclosable pecuniary or non-pecuniary interests related to the business of the meeting.

Any Other Business

A slot was allocated for any other business that could not otherwise be dealt with.