The Finance & Corporate Services Overview and Scrutiny Committee met on Wednesday 04 February 2026 to discuss the draft budget and financial plans for 2026/27, the Treasury Management Strategy for 2026/27, and receive updates from Cabinet members. Key decisions included noting the draft budget and financial plans, and reviewing the Treasury Management Strategy.

Draft Budget and Financial Plans 2026/27

The committee reviewed the draft budget and financial plans for 2026/27, which aim to achieve a balanced budget through a transformation programme called Future Bexley, service reviews, and technical reviews. The budget includes £23.815 million for contract inflation, growth, and pay increases. The Finance and Corporate Services (FCS) directorate is forecasting an overspend of £0.684 million, while the Chief Executive's (CE) directorate is forecasting an overspend of £0.025 million as of November 2025.

Significant investment is planned for the Future Bexley programme, with projected savings of £1.650 million in 2026/27 from Customer Experience and Commercialisation initiatives. Service reviews have identified additional growth and inflation requirements of £0.921 million for FCS and £0.206 million for CE in 2026/27, alongside savings of £0.344 million for FCS and £0.013 million for CE.

A total of £10.572 million has been set aside for contract inflation uplifts for external providers in 2026/27. For FCS, £0.588 million of this is allocated, with £0.040 million for CE. Several major contracts are due for reprocurement in 2026/27, totalling £8.970 million per annum.

The report also detailed the Collection Fund performance, noting that the Council Tax collection rate at the end of March 2025 was 95.05% and Business Rates at 97.07%. As of November 2025, both were below target, potentially creating a deficit for 2026/27, which would be funded from the Collection Fund reserve. The number of working-age claimants for the Council Tax Reduction Scheme has decreased, as has the number of pension-age claimants.

Key policy and legislation changes discussed included the provisional Local Government Finance Settlement 2026/27 to 2028/29, which outlines draft funding allocations. Bexley's Core Spending Power (CSP) is projected to increase in cash terms but decrease in real terms in some years. Councils with social care responsibilities can increase Council Tax by up to 3% for general purposes and an additional 2% for adult social care without a local referendum. Each 1% increase in Council Tax for Bexley generates an additional £1.529 million. Changes to business rates multipliers were also confirmed for 2026/27, including new lower multipliers for Retail, Hospitality & Leisure (RHL) funded by a new High-Value Multiplier (HVM).

The current capital programme totals £169.726 million for FCS over the next four years, with significant allocations for BexleyCo development funding (£153.761 million) and ICT and Digital (£5.452 million). Additional capital bids for FCS total £7.685 million. The report also noted that Bexley has low sales, fees, and charges income compared to its nearest neighbours, with a proposed average increase of 4.3% for 2026/27.

Treasury Management Strategy 2026/27

The committee reviewed the Treasury Management Strategy for 2026/27, which outlines the management of the Council's borrowing, investments, and cash flows. The strategy aims to ensure liquidity and fund capital plans while managing risks and pursuing optimum performance. The Council is required to receive and approve three main treasury reports annually: the Treasury Management Strategy, a Mid-Year Treasury Management Report, and an Annual Treasury Outturn Report.

The strategy for 2025/26, which serves as a basis for the 2026/27 strategy, covers the current treasury position, treasury indicators, interest rate prospects, borrowing and investment strategies, creditworthiness policy, and the use of external service providers. The report highlighted the importance of adequate training for members responsible for treasury management, with CIPFA's Code of Practice requiring a formal and comprehensive knowledge and skills policy. The Council uses MUFG Corporate Markets as its external treasury management advisor.

The Capital Prudential Indicators for 2026/27 to 2029/30 were presented, showing the Council's borrowing need (Capital Financing Requirement - CFR). The CFR for General Fund Services is projected to be £329.534 million in 2026/27, rising to £331.105 million in 2027/28, and the CFR for BexleyCo is projected to be £106.800 million in 2026/27, increasing to £152.809 million in 2027/28. The Operational Boundary for external debt is set at £490 million for 2026/27, increasing to £535 million in 2027/28, with an Authorised Limit of £610 million for 2026/27, rising to £655 million in 2027/28.

MUFG Corporate Markets provided interest rate forecasts, predicting a fall in Bank Rate to 3.25% by 2027. The PWLB certainty rates are currently above this neutral level, suggesting that borrowing strategies should be reviewed. The Council is currently maintaining an under-borrowed position, meaning its capital borrowing need has not been fully funded by loan debt, with cash balances used as a temporary measure. This strategy is considered prudent given the expectation of falling medium and longer-dated borrowing rates.

The report detailed the maturity structure of borrowing as of 31 December 2025, with the majority of loans maturing between 30 and 40 years. The Annual Investment Strategy prioritises security, liquidity, and then yield. A creditworthiness policy is in place, with minimum credit rating criteria for counterparties, and additional information beyond credit ratings is used to assess suitability. Proposed counterparty limits were outlined, with UK banks having a maximum limit of £35 million for investments up to 12 months. The strategy also includes limits on non-specified investments and country-specific ratings.

The suggested budgeted investment earnings rates for returns on investments placed for periods up to about three months were detailed, with a forecast for 2026/27 at 3.40%. The upper limit for total principal funds invested for longer than one year is set at £30 million.

Cabinet Members' Update

Councillor David Leaf, Leader and Cabinet Member for Resources and Transformation, and Councillor Caroline Newton, Cabinet Member for Education and Corporate Services, provided updates on their portfolios. Councillor Leaf touched upon the budget, the Crisis and Resilience Fund, and ongoing representations to the government. Councillor Newton provided an update on corporate services, including the interim monitoring officer role, customer services performance, and ICT initiatives such as the laptop refresh and cybersecurity review.

Work Programme

The committee reviewed its draft work programme for 2025/26. Items for discussion included the Treasury Management Strategy, Cabinet Members' Updates, and the Draft Budget and Financial Plans 2026/27. The committee was also invited to consider performance data in the Bexley Status Report and identify any areas for further scrutiny or reality checking visits. A task and finish group reviewing the Procurement Act 2023 is nearing completion, with a final report expected in March. The committee also noted that the Local Authority funding and resourcing challenges scrutiny project sub-group had met and was preparing its recommendations.

Bexley Status Report - Quarter 2 2025

The committee was directed to the relevant performance data in the Bexley Status Report for Quarter 2 (July-September 2025). Indicators relevant to the Finance & Corporate Services OSC included debt on query hold, customer service call survey results, and energy usage and carbon emissions. The report noted that there were no indicators performing out of the normal range within the Finance and Corporate Services Directorate. Complaints and Freedom of Information data was also presented, with no Ombudsman complaints found against the Council in the Finance and Corporate Services Directorates during Quarter 2.