Content

(a)      Approve the Medium Term
Financial Strategy for the General Fund, 2025;
(b)      Note that the Scottish
Budget for 2026/27 has been announced as being presented to the
Scottish Parliament on 13 January 2026;
(c)      Note that the Scottish
Government published its latest Programme for Government in May
2025, followed by an updated Medium Term Financial Strategy in June
2025. This, in addition to the outcome of the Local Government
Settlement for 2025/26 and information included in the previous
MTFS from Scottish Government means the Central Scenario has been
updated to expect a cash increase of 1% per annum in grant funding
from the Scottish Government for future financial years. The
Council’s MTFS model will be updated for the Council’s
Budget meeting in March 2026 with details of the actual financial
settlement for 2026/27;
(d)      Note that inflation
remains above Bank of England target levels;
(e)      Note that the Capital
Programme, as included in the Council Financial Performance Quarter
1, 2025/26 report (CORS/25/181), is the basis for capital financing
costs and debt levels referred to in the MTFS;
(f)       Approve the Loans
Fund Repayment Policy for 2026/27 and beyond as described in Table
5 of the MTFS;
(g)      Note the 2026/27 Budget
will be discussed and set by the Council in March 2026 following a
public engagement exercise as required by the Scheme of Governance
and Budget Protocol, and that details of this consultation exercise
are contained in 5.10 of the MTFS. The results of the engagement
will also be reported to Council as part of the Budget setting
reports;
(h)      Note that the Financial
Resilience Framework shows that the General Fund has underlying
resilience of £12m (uncommitted reserves) which is a falling
percentage of the net General Fund budget. The aim is to move to a
target range (2–3%) of Net Expenditure and review this
annually based on risks and inflation. Therefore the Council should
determine during the 2026/27 budget - setting process how this aim
is addressed;
(i)       Note that the
Financial Resilience Framework also identifies that the total
value, and cost of servicing debt is rising. Careful consideration
will have to be given to each and every capital project to ensure
it fits with the Council’s Strategic priorities, and delivers
Best Value, as well as being affordable, sustainable, and prudent
in compliance with the Prudential Code. The Council approved a cap
on the cost of capital financing of 12% of Net Revenue Expenditure;
and
(j)       Note that the Chief
Officer – Finance will continue to develop the Financial
Resilience Framework with a view to embedding it across the
councils financial planning, financial monitoring, and financial
year end reporting arrangements.