The Cabinet of County Durham Council met on Wednesday 1 July 2026. The meeting discussed the Local Council Tax Reduction Scheme, the 2025/26 final outturn for budgets, and the adoption of an interim policy on Houses in Multiple Occupation (HMOs). Key decisions included supporting the continuation of the current Local Council Tax Reduction Scheme for 2027/28, noting the council's financial outturn for the previous year, and recommending the adoption of the interim HMO policy to Full Council.

Local Council Tax Reduction Scheme Proposal for 2027/28

The Cabinet supported the recommendation to continue the current Local Council Tax Reduction Scheme (LCTRS) into 2027/28, retaining the same level of support for all working-age council taxpayers on low incomes. This decision follows recent changes implemented in April 2026, which introduced an income-banded model and capped maximum support at 90% of council tax liability. The scheme will remain under continuous monitoring to assess the impact of these changes on residents and the council. A report will be presented to County Council later this year to formally adopt this approach. The pension-age scheme remains unaffected by these changes and continues to be fully protected.

2025/26 Final Outturn for the Revenue Budget, Capital Budgets, Collection Fund and Treasury Management

The Cabinet noted the council's financial outturn for the year ending 31 March 2026. The council achieved an overall General Fund Revenue Budget underspend of £8.532 million, representing 1.37% of the net expenditure budget. This underspend has contributed to a closing General Reserve balance of £39.688 million, which meets the council's reserves policy of retaining a balance between 5% and 7.5% of the net budget requirement. The Cabinet also noted and agreed transfers to and from earmarked reserves, including the creation of the High Needs Stability Grant (unfunded) Reserve. Amendments to the MTFP(16) capital programme were also agreed, resulting in a revised capital programme of £363.482 million in 2026/27 and £701.510 million across the MTFP(16) planning period. The Cabinet also noted the outturn position for the Collection Funds in respect of Council Tax and Business Rates, and the updated position on the delivery of budget savings for 2025/26.

County Durham Plan Interim Houses in Multiple Occupation Policy - Adoption

The Cabinet recommended that Full Council agree to the adoption of the interim policy on Houses in Multiple Occupation (HMOs). This policy aims to manage the increasing number of HMOs outside of the existing Durham City Article 4 areas, which has led to concerns about overconcentration and impact on residential amenity. The interim policy, which will take effect on 17 August 2026, has been strengthened following public consultation to more effectively prevent overconcentration, with proposals now not being permitted where any of the ten nearest properties are HMOs, and a further requirement that HMOs will not exceed 10% of residential properties within a 100-metre radius. The policy will be used as a material consideration in the assessment of planning applications for HMOs outside the Durham City Article 4 areas.

Maintain Schools Budget Plans and Permission to Set Deficit Budgets 2026/27

The Cabinet noted the report on maintained schools' budget plans for 2026/27. The report highlighted that while the majority of the council's 123 maintained schools remain financially stable, with a cumulative net surplus reserves of £29.5 million at 31 March 2026, some schools face significant financial pressures. Five maintained schools had deficit balances as at 31 March 2026. Of these, four have set budgets for 2026/27 that are expected to recover their deficit position. However, one school, Benfieldside Primary, has required a licensed deficit budget for 2026/27 due to a significant decline in pupil numbers. The Corporate Director of Resources has approved this licensed deficit, which is within the scheme parameters, and the school has agreed to work on a sustainable recovery plan.

Corporate Peer Challenge Progress Review and Action Plan Update

The Cabinet noted the progress made in delivering the Corporate Peer Challenge (CPC) Action Plan, with 95% of actions either complete or in progress as of June 2026. This demonstrates positive momentum in responding to the findings of the peer review conducted in October 2025. The Cabinet acknowledged areas where progress is not on track and supported actions to strengthen delivery, oversight, and accountability. The proposed approach to preparing for the CPC Progress Review in September 2026 was agreed, including the use of a live action plan progress update to monitor delivery. Delegated authority was approved for the Corporate Director of Resources to approve the final CPC Action Plan Position Statement.

Horden Masterplan Residents Charter Public Consultation

The Cabinet approved the draft Residents Charter for public consultation. This charter supports the delivery of the Horden Masterplan, which aims to regenerate one of the most deprived areas in the UK. The charter will set out the council's policy for engaging with residents and property owners affected by the masterplan, providing information on support, compensation, and processes. A key element is the proposed establishment of a Horden Masterplan Residents Steering Group to facilitate ongoing dialogue. Authority was delegated to the Corporate Director of Regeneration, Economy and Growth, in consultation with the Cabinet Portfolio Holder for Planning, Investments and Assets, to adopt the charter following consultation, with the provision that significant changes would require return to Cabinet for adoption.

Annual Poverty Progress Report 2025/26

The Cabinet noted the annual progress report on tackling poverty and financial insecurity in County Durham during 2025/26. The report highlighted the sustained demand for support, particularly for food, fuel, and housing, despite some economic pressures easing. Key achievements included significant income gains for residents through advice services and the expansion of the Financial Inclusion Support Officer programme in schools. The report also outlined the transition from the Household Support Fund to the new Crisis and Resilience Fund from April 2026, with a stronger emphasis on early intervention and prevention, aligning with the proposed Financially Resilient Communities Strategy for 2026–2030.

Delegated Decision: 19 June 2026 SEND Local Area Reform Plan

The Cabinet noted the delegated decision taken on 19 June 2026 to approve and submit Durham's Special Educational Needs and Disabilities (SEND) Local Area Reform Plan (LARP) to the Department for Education. This plan, developed through partnership self-assessment and co-production, is crucial for accessing the High Needs Stability Grant, which will cover 90% of the council's current SEND deficit. The Cabinet endorsed SEND reform as a corporate transformation priority and supported the establishment of regular assurance reporting to oversee delivery, risk, and impact. The plan represents a significant system reset, aiming for earlier intervention, stronger inclusion in mainstream settings, and clearer shared accountability across partners.