Decision Maker: Full Council

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: No

Date of Decision: February 25, 2026

Purpose:

Content: THAT It is recommended by the S.151 Officer that the Council approve the following, all subject to receiving an "In Principle" decision from Central Government for Exceptional Financial Support:   (a)            (amended recommendation) The revised Revenue Budget for the financial year 2025/26 and the Revenue Budget for the financial year 2026/27 as set out in the General Fund Summary (Appendix 1 amended) which includes: (i)              Exceptional Financial Support of £12.9m (ii)             Additional spending in Adult Social Care of £14.8m and Children's Services of £3.9m (iii)           Additional Waste Services costs of £6.5m   Appendix 1 (Amended) includes the following changes listed in the tables below:   i)                Additional Savings/Reduction to Reserves - Reductions to Budget Estimates   Committee/ Item Description 2026/27 £ 2027/28 £ 2028/29 £ 2029/30 £ Environment & Community Protection New Introduce new charges for DIY & Rubble Disposal Scheme (100,000) (100,000) (100,000) (100,000)   Sub-Total (100,000) (100,000) (100,000) (100,000) Policy, Finance and Resources New Reduce Transformation Reserve (413,725) 0 0 0 New Reduced Revenue Contribution to Capital (257,275) 0 0 0     (671,000) 0 0 0   Total (771,000) (100,000) (100,000) (100,000)     ii)              Additional Costs - Additions to Budget Estimates   Ref No Increases to Committee Budgets 2026/27 £     2027/28 £ 2028/29 £ 2029/30 £     Economy, Regen, Transport & Infrastructure 25 Withdraw - On Street Parking - Increase in on street parking charges by 25p per hour 122,000     152,000 152,000 152,000 26 Withdraw - Off Street Parking - Increase off street parking charges by 25p per hour 119,000     149,000 149,000 149,000 27 Withdraw - Introduction of Parking charges for Union Street Ryde 56,000     112,000 112,000 112,000 28 Withdraw - Introduction of Parking charges at Crocker Street Newport  11,000     21,000 21,000 21,000 29 Withdraw - Introduction of Parking charges at Sandown High Street 15,000     30,000 30,000 30,000 30 Withdraw - Introduction of Parking charges at Shanklin Regents Street 26,000     51,000 51,000 51,000 31 Withdraw - St. James Street - implement on street charges (order) 19,000     39,000 39,000 39,000 32 Withdraw - Egypt Esplanade Cowes and Princes Esplanade Gurnard - implement on street charges (order) 16,000     66,000 66,000 66,000 33 Withdraw - Fort Victoria Pay and Display 19,000     19,000 19,000 19,000 34 Withdraw - Floating Bridge - Increase foot passenger prices by 50p/£1/£1 for saver card/casual single/casual return.  149,000     149,000 149,000 149,000 35 Withdraw - Introduce new charge for under 19s on the Floating Bridge. 5,000     11,000 11,000 11,000 38 Withdraw - Close Roman Villa to the public but continue to maintain the asset 6,000     6,000 6,000 6,000 39 Withdraw - Duke of Edinburgh Service - Cease provision of the support service. 15,000     15,000 15,000 15,000   Sub-Total 578,000     820,000 820,000 820,000                     Environment & Community Protection 22 Withdraw - Open each HWRC 4 days/week (Lynnbottom ? from 7 ? 4; Afton Marsh ? from 3 ? 4) OR equivalent hour change 93,000     93,000 93,000 93,000   Sub-Total 93,000     93,000 93,000 93,000                 Policy, Finances & Resources             47 Amend - Staff Reduction Programme (from £641,000 to £541,000) 100,000     100,000 100,000 100,000   Additional EFS Debt 0     101,444 214,160 339,400   Sub-Total 100,000     201,444 314,160 439,400   TOTAL 771,000     1,114,444 1,227,160 1,352,400   (b)  Any variation arising from the Local Government Finance Settlement 2026/27 or any further savings made in 2025/26 or 2026/27 arising at the year-end be used to reduce the draw down of Exceptional Financial Support (thus minimising debt costs) or alternatively, transferred to the Revenue Reserve for Capital, Transformation Reserve, and General Reserves with the level of each transfer to be determined by the S.151 Officer.   (c)   That the level of Council Tax be increased by 2.99% for general purposes in accordance with the referendum threshold[1] for 2026/27 announced by Government (as calculated in Appendix 2)   (d)  That the level of Council Tax be increased by a further 2.0% beyond the referendum threshold (as calculated in Appendix 2) to take advantage of the flexibility offered by Government to implement a "Social Care Precept"; and that in accordance with the conditions of that flexibility, the full amount of the associated sum generated of £2,326,800 is passported direct to Adult Social Care   (e)  That the amounts set out in Appendix 2 be now calculated by the Council for the financial year 2026/27 in accordance with Section 31 and Sections 34 to 36 of the Local Government Finance Act 1992   (f)    The S.151 Officer be given delegated authority to implement any variation to the overall level of Council Tax arising from the final notification of the Hampshire Police & Crime Commissioner, Hampshire & Isle of Wight Fire & Rescue Authority and Parish and Town Council precepts, and amend the calculations set out in Appendix 2 accordingly   (g)  (amended recommendation) The savings proposals for each Committee amounting, in total, to £3.500m for 2026/27 and continuing into future years as set out on the next page:     Committee Savings Proposal £ % Budget Adult Social Care & Public Health & Housing* 878,000 1.1% Children's Services, Education & Skills* 940,000 2.4% Economy, Regeneration, Transport & Infrastructure** 252,000 0.9% Environment & Community Protection 566,000 3.3% Policy, Finance & Resources 223,000 1.0% Cross Council - Staff Reduction Programme 641,000 0.3% Grand Total 3,500,000 1.9% * Excludes the additional funding passported through to Adult Social Care of £14.8m (which if included would result in an overall increase of 18.1%) and the additional funding for Children's Services ,Education and Skills of £3.9m (which if included would result in an overall increase of 7.5%) ** Excludes £19.4m of PFI grant funding, on a gross expenditure basis the saving amounts to 0.5%     (h)  (amended recommendation) Directors be instructed to start planning how the Council will identify savings opportunities to contribute towards a Transformation Plan to address the forecast "Structural" Deficit of £40m for 2027/28 and rising to £66m by 2029/30 and that this be incorporated into Service Business Plans   (i)    The immediate establishment of an appropriately constituted Improvement Board to support the development and implementation of a Transformation Plan   (j)    The minimum level of Revenue Balances as at 31 March 2027, be maintained at £12.0m to reflect the known and expected budget and financial risks to the Council   (k)   Members have regard for the "Statement of the Section 151 Officer in accordance with the Local Government Act 2003"   (l)    (amended recommendation)The Capital Programme 2025/26 to 2030/31 set out in Appendix 5 (Amended) which includes all additions (set out in Appendix 4), deletions (set out in Appendix 4a) and amendments for slippage and re-phasing to be amended to reflect the following changes:           Scheme Description - Reductions & Additions   Increase / (Decrease)  in Corporate Resources Total Corporate Resources Allocated   £ £ Reductions / Deletions to Proposed Capital Schemes:       62 Delete - Parking Machines & Tariff Boards   (197,275) 0 105 Delete -Chamber Microphone System   (60,000) 0           Total Overall Change   (257,275)     (m)The allocation of Disabled Facilities Grants be made to the Better Care Fund, and reflected within the recommended Capital Programme 2025/26 to 2030/31   (n)  The S.151 Officer be given delegated authority to determine how each source of finance is used to fund the overall Capital Programme and to alter the overall mix of financing, as necessary, to maximise the flexibility of capital resources used and minimise the ongoing costs of borrowing to the Council   (o)  That the S.151 Officer in consultation with the Leader of the Council be given delegated authority to release capital resources held back for any contingent items that might arise, and for any match funding requirements that may be required of the Council to secure additional external capital funding (e.g. bids for funding from Government or any other external source).   (p)  The Capital Strategy 2026/27 including the Minimum Revenue Provision Policy Statement contained therein (Appendix 6)   (q)  The Investment Strategy (Non-Treasury Investments) 2026/27 (Appendix 7)   (r)    (additional recommendation) That delegated authority be given to the S.151 Officer to make any necessary changes to either the investment Strategy or the Capital Strategy in accordance with the proposed changes to the capital programme set out in this amendment   (s)   (additional recommendation) With regard to the savings proposal 47 Staff Reduction Programme; the Council is committed to transforming services to deliver improvements in services to residents and delivering productivity gains through harnessing the benefits of technology and modern ways of working.  Transformation will involve re-organising Services and staff roles and responsibilities.  It is proposed that the Council uses every opportunity to redeploy the Council's talent to deliver the necessary transformation or where that is not possible, enter into voluntary arrangements. There will be no compulsory redundancies.   (t)    (additional recommendation)   The removal of "Fort Victoria Closure winter closure (Oct-Mar)" from saving number 23 set out in Appendix 3   (u)  (additional recommendation) In recognition that the proposals within this Amendment lead to an overall increase in the Council's forecast Structural Deficit by £1.2m over the whole 3 Year period from £65.1m to £66.3m, and that long term sustainability for the Isle of Wight Council services will require transformational approaches which will require substantial investment; the following suggestions are prioritised for consideration by a Transformation Board (acting as an Improvement Board) with a view to eliminating this Structural Deficit:`   i)                 Review the price structure of Tourist Parking Permits as a mechanism to maximise the volume of sales income that can be achieved - balancing both the economic impact of any such change against the financial benefit to the Council   ii)               Review night time Long Stay parking charges taking into consideration the revenues raised versus the cost of enforcement and balancing the economic impact to the night time economy of any such change against the financial benefits to the Council     iii)              Continuing the following initiatives already earmarked against the reserve:   ·       Support for the continuation of the implementation of the Children’s Social Care Multi Agency Safeguarding Hub £0.2m ·       Accommodation for care leavers £0.5m ·       Contribution to the Regional Care Co-operative £0.25m ·       Children’s Services project staff £0.3m ·       ICT Licences – Copilot £0.1m ·       Purchase of a property for temporary accommodation £0.3m   iv)             Reduction of poverty and increase in community resilience, and improving mental health and wellbeing, leading to reduced need for support and intervention from statutory services with joint working alongside public health wherever possible.   v)               Partnerships with voluntary sector and other not-for-profit organisations (e.g. IW Community Action).     vi)             Collaborations with health and social care partners towards reducing delayed discharge and providing improved care at home.   vii)            Working with town, parish and community councils on stewardship of public assets and programmes where joint approaches produce greater benefits alongside other not-for profit organisations where possible.   viii)          Using technology to reduce staff workload pressure, support staff welfare and increase organisational efficiency.   ix)             Investment in economic development, particularly for small business, that increase the number, quality and security of employment opportunities   x)               Maximising benefits of the Island’s environment and particularly, its Biosphere status.   Success of the transformation programme will be enhanced through the input of external assurance and expertise. A Transformation Board (acting as an improvement board) be established with the costs of the board to be monitored carefully to provide assurance that value for money is achieved.   That reports to Service Committees and Audit and Governance Committee are presented at each meeting to advise upon and monitor the delivery of indicative savings and the implementation of any transformation project; this to provide further assurance, ensure accountability and demonstrate democratic oversight.   It is recommended that the Council note the following in respect of the Council's Budget:    (a)  The Revenue Budget 2026/27 as set out in Appendix 1 has been prepared on the basis of a 4.99% increase in Council Tax, any reduction from the overall 4.99% Council Tax increase proposed will require additional savings of £1,163,500 for each 1% reduction in order for the Budget 2026/27 to be approved   (b)  The Revenue Forecasts for 2027/28 onwards as set out in the section entitled "Revenue Forecasts 2027/28 to 2029/30" and Appendix 1   (c)   (amended)The forecast "Structural" Deficits amounting to £65.1m in total by 2029/30 as follows: BUDGET 2026/27 to 2029/30 2026/27 2027/28 2028/29 2029/30     £m £m £m £m             Structural Deficit 20.4 39.7 56.4 66.3 Note: As savings are made, debt costs will reduce (estimated at £18m by 2029/30) and therefore the overall sums that need to be saved will be reduced   (d)  The Transformation Reserve held to fund the upfront costs associated with Spend to Save Schemes and Invest to Save Schemes has been set at £12m for 2026/27 with modest replenishments planned at £1m p.a over the period to 2029/30 plus any approval to the transfer of any further savings at year end (e)  Should the Council elect to reduce the level of savings below £6.3m in 2026/27, the Council's requirement for Exceptional Financial Support will increase which in turn will increase the Council's "Structural" Deficits for future years beyond the estimated £65.1m and putting Council Services at further risk. (f)    The Council Tax base for the financial year 2026/27 will be 58,067.2 [item T in the formula in Section 31 B(1) of the Local Government Finance Act 1992, as amended (the “Act”)]. (g)  The Council Tax element of the Collection Fund for 2025/26 is estimated to be in surplus by £632,402 which is shared between the Isle of Wight Council (85.4%) and the Police & Crime Commissioner (11.1%) and the Hampshire & Isle of Wight Fire & Rescue Authority (3.5%) (h)  The Business Rate element of the Collection Fund for 2025/26 is estimated to be in surplus by £639,172 of which is shared between the Isle of Wight Council (49%), the Hampshire & Isle of Wight Fire & Rescue Authority (1%) and the Government (50%) (i)    The Retained Business Rate income[2]for 2026/27 based on the estimated Business Rate element of the Collection Fund surplus as at March 2026, the Non Domestic Rates poundage for 2026/27 and estimated rateable values for 2026/27 has been set at £33,320,232. (j)    That the Dedicated Schools Grant deficit[3] is forecast to be £27.1m by March 2026 and the overall liability that is estimated to fall to the Council once the statutory override comes to an end in March 2028 is £4.6m   (k)   The Equality Impact Assessment (attached at   [1] Council Tax increases beyond the referendum threshold can only be implemented following a "Yes" vote in a local referendum. [2]Includes Retained Business Rates of £28,457,639, "Top Up" of £3,722,135, S.31 Grants of £827,263 and a Collection Fund surplus of £313,195   [3]  Excluding Safety Valve Payments of £9.6m