The Leicester City Council meeting scheduled for Wednesday, 25 February 2026, was set to discuss the council's financial plans for the upcoming year, including the Housing Revenue Account budget, the overall capital programme, and the general revenue budget. Key decisions were scheduled regarding rent and service charge increases, significant capital investments across various city services, and the council tax for 2026/27.

Housing Revenue Account Budget (including Capital Programme) 2026/27

The council was asked to approve the proposed Housing Revenue Account (HRA) budget for 2026/27. This report detailed proposals to address financial pressures facing the HRA, including legislative and regulatory changes, the ongoing impact of Right to Buy sales, and inflationary pressures. To balance the budget, a core rent increase of 4.8% was proposed, aligning with the maximum permitted by central government. This increase was also proposed for garage rents, hostel rents, and service charges. Reductions were proposed for District Heating charges, with a 16% decrease in the variable charge for metered heat and a 22% reduction in fixed metered charges. The report also outlined a comprehensive capital maintenance programme, with a proposed capital budget of £11.66 million for 2026/27, focusing on essential works such as kitchen and bathroom refurbishments, boiler replacements, re-wiring, and re-roofing.

Consultation with tenants and leaseholders indicated a mixed response to the proposed rent increases, with a significant portion expressing concerns about affordability amidst the cost of living crisis. However, there was strong support for the proposed reduction in District Heating charges and the allocation of the Capital Programme.

Capital Programme 2026-27

The council was asked to approve a three-year capital programme for 2026/27 to 2028/29, amounting to £229.43 million for the General Fund element, in addition to the HRA capital programme. This programme is intended to fund works of lasting benefit, primarily financed by grant, tenants' rents, borrowing, and asset sales. Key areas of investment included:

• Grant-Funded Schemes (£143.66m): This encompasses significant funding for the Schools Capital Maintenance Programme, Highways Capital Maintenance, Local Transport Schemes, Consolidated Active Travel Fund, Local Authority Bus Grant, Disabled Facilities Grants, and the Pride in Place Programme.
• Own Buildings (£17.86m): This includes the Operational Estate Capital Maintenance Programme, IT Investment, Public Toilet Refurbishment, and Specialist Supported Living Schemes.
• Temporary Accommodation Acquisitions (£50.00m): A substantial investment was proposed for the purchase of self-contained accommodation units to address the increasing demand for temporary accommodation for homeless households.
• Routine Works (£13.3m): This covers a range of essential works including the Foster Care Capital Contribution Scheme, Historic Building Grant Fund, Local Environmental Works, Flood Strategy, Grounds Maintenance Machinery, and 3G Pitch Replacements.
• Corporate Estate (£1.10m): Funding for the council's property portfolio, including repairs and maintenance.
• Other Schemes and Feasibilities (£3.17m): This includes infrastructure works to enable capital asset sales and feasibility studies for potential future developments.

The capital programme aims to support the council's commitment to tackling the climate emergency, improving city infrastructure, and addressing specific needs such as disabled adaptations and temporary accommodation.

Revenue Budget 2026/27

The council was asked to approve the General Fund Revenue Budget for 2026/27 and the three-year budget strategy. Following a period of financial difficulty, the budget position had improved, allowing for a more sustainable approach. The strategy included continued efforts to constrain growth in demand-led services like Social Care and homelessness, alongside ongoing savings programmes.

Key proposals included:

• Council Tax Increase: A proposed increase of just under 5% for the Band D council tax, the maximum allowed without a referendum, including a 2% precept for Adult Social Care.
• Investment in Services: Limited additional investment was proposed for priority areas, including funding for a dedicated team to manage Ash Die Back, a team to tackle anti-social behaviour, and to replace lost funding from the UK Shared Prosperity Fund.
• Adult Social Care: Additional growth was budgeted to address increasing costs due to demographic and inflationary pressures, with a net budget increase to £191.5m.
• Children's Services: Growth was planned to meet increasing costs in children's social care, with a strategy to increase in-house provision for better quality accommodation and cost efficiency.
• Homelessness: Further investment in temporary accommodation acquisitions and leasing properties from the private sector was proposed to mitigate rising costs, alongside additional staffing for prevention work.
• Savings Programme: The savings target was revised to £19.5m by 2027/28, with adjustments made to reflect achievability across various departments.

The budget strategy also addressed the Dedicated Schools Grant (DSG) deficit, with government funding expected to cover 90% of the deficit accrued to March 2026, with local funding for the remainder.

Treasury and Investment Strategies 2026/27

The council was asked to approve the Treasury Policy, Treasury Management Strategy, and Investment Strategy for 2026/27. These strategies govern the management of the council's borrowing, cash balances, and investments.

• Treasury Policy: This document outlines the overall aims and principles of the council's treasury management activities, focusing on minimising net financing costs while maintaining liquidity and managing risk. It details 12 Treasury Management Practices (TMPs) covering areas such as risk management, performance measurement, decision-making, approved instruments, organisation, reporting, budgeting, cash management, money laundering, staff training, use of external providers, and corporate governance.
• Treasury Management Strategy: This strategy details the approach to borrowing and investing cash balances. It noted that the council had previously maintained healthy cash balances but now required prudential borrowing due to reduced reserves and capital resources. The strategy proposed continued borrowing from the Public Works Loans Board (PWLB) and consideration of other lenders if cost-effective. It also outlined the approach to investments, prioritising security and liquidity, with a diversified strategy including investments in UK banks, public sector bodies, local authorities, and pooled investments.
• Investment Strategy: This strategy defines the council's approach to making investments that benefit the people of Leicester while generating a return. The primary objective is security of capital, followed by yield and liquidity. Investments are categorised, including UK Banking Sector, UK Public Sector & Quasi Public Sector, International Development Banks, Environmentally and Socially Responsible Investments, and Other Pooled Investments. The strategy also outlined controls for each type of investment, including credit rating requirements and investment periods. The council has a limit of £130m for total exposure across all investment activities.

The strategies also included prudential indicators and treasury limits for borrowing and investments, aiming to ensure affordability, prudence, and sustainability. The potential effect of interest rate changes on the budget was also outlined.

The meeting also included minutes from various scrutiny commissions (Housing, Culture and Neighbourhoods, Economic Development Transport and Climate Emergency, Children Young People and Education, Adult Social Care, and Public Health and Health Integration) which had reviewed aspects of the draft budgets and capital programmes. These minutes provided feedback and recommendations from the commissions, which were to be taken into account by lead officers.