The Cabinet of Worcestershire Council met on Thursday 23 July 2026, deciding to recommission the Best Start Family Hubs service and to proceed with a new procurement process for the Shrub Hill development. The meeting also reviewed the Treasury Management Annual Report for 2025/26.

Recommissioning of Best Start Family Hubs

The Cabinet approved the recommissioning of the Best Start Family Hubs service, which provides crucial support to families across Worcestershire from pregnancy through to young adulthood. The existing three-year contract for these hubs is due to end in March 2027, necessitating a new procurement process. The proposed model will move to a two-provider system, aiming to enhance oversight, improve value for money, and build resilience within the service.

Councillor Alan Bailes, Cabinet Member for Health and Wellbeing, highlighted the significant positive impact of the Family Hubs, noting a 25% increase in footfall since 2023-24, with over 50,500 contacts recorded last year. He also pointed to improvements in breastfeeding rates, a reduction in childhood obesity, and a significant drop in smoking in pregnancy. The service is funded through the Public Health Ring Fence Grant and dedicated national Best Start funding, with a maximum contract value of £2.4 million per year. The new contracts will be for an initial two-year term, with options for two further two-year extensions, providing stability while allowing for reviews and adaptations.

Councillor Natalie McVey, Cabinet Member for Children and Families, seconded the recommendation, emphasising that the hubs help children and families to thrive rather than just survive. She noted the inclusion of quotes from parents and the evidence of how early intervention can lead to better long-term outcomes. The investment in sites and equipment has also improved support for children and families with special educational needs and disabilities.

Concerns were raised about accessibility in rural areas, with Councillor Bailes confirming that an expanded outreach service is in place to bring services to local venues, and that libraries and community buildings are being considered for use. The Worcestershire on-demand bus service was also suggested as a potential solution for transport in rural areas. The Cabinet agreed to the recommendations, which will allow for the procurement process to begin.

Shrub Hill Development

The Cabinet also moved forward with plans for the regeneration of the Shrub Hill development in Worcester. Councillor Adam Kent, Deputy Leader and Cabinet Member for Finance, Corporate Services and Business, presented the recommendations to authorise the Strategic Director for Economy and Infrastructure to undertake a new procurement for a development partner. This follows an earlier procurement process that received an insufficient response from the market.

Councillor Kent described Shrub Hill as one of the most significant regeneration opportunities within the West Midlands, noting its strategic location near the mainline railway station and city centre. He explained that the proposed structure involves a Development Agreement for Lease, allowing the Council to retain control while the partner draws down development leases phase by phase, subject to meeting specific conditions. This approach aims to ensure that the partner takes on the development risk, while the Council maintains control over the standards.

The supplementary planning document for the Shrub Hill Quarter, developed jointly with Worcester City Council and the Worcestershire Local Enterprise Partnership (LEP), provides a flexible framework for development. Consultation on the revised document received positive responses, indicating public support for the regeneration. The new procurement process will use a Competitive Flexible Procedure under the Procurement Act 2023, allowing for dialogue and negotiation with bidders to refine proposals.

Councillor Kent highlighted that the funding for marketing and procurement costs, up to £100,000, is already provided through the Open for Business programme, and no new money is being sought. Any capital or revenue receipts from the disposal of Shrub Hill will be used to fund exceptional financial support or ongoing costs, directly reducing the need to borrow. He stressed the importance of moving forward, particularly in light of local government reorganisation, to present a live, well-structured development partnership to the successor authority.

Councillor Mel Allcott, a Worcester City Councillor, seconded the recommendation, stating that Worcester has been crying out for something here and that the mixed-use development would be perfect. Councillor Dan Boatright-Greene raised a question about contamination on the site, which Councillor Kent addressed by explaining the significant challenges and costs associated with remediating old industrial sites and Victorian infrastructure, reinforcing the need for a flexible approach.

Councillor Jabba Riaz, local member for Rainbow Hill and Fort Royal, shared a statement from the local MP, who emphasised the need for high-quality workspace, genuinely affordable homes, architecturally sophisticated design, and strong community engagement. Councillor Riaz also expressed concerns about previous developments leading to gated communities with a lack of community feel. Councillor Kent assured members that the architectural quality and community aspects would be considered, and that the new procurement process, with its emphasis on dialogue and negotiation, would address the issues that led to the previous procurement's failure.

Councillor Harden raised concerns about the business model, suggesting a partnership approach rather than a traditional sale, and questioned potential underlying liabilities related to Isaac Maddox House. Councillor Kent explained the five-year lease agreement and the phased development approach, and confirmed that Homes England is involved, with a focus on brownfield development. He also stated that the issue of Isaac Maddox House is being discussed with Homes England and that final development figures are awaited. The Cabinet approved the recommendations, with a minor amendment to recommendation G.

Treasury Management Annual Report 2025/26

The Cabinet also reviewed the Treasury Management Annual Report for the year ending 31 March 2026. Councillor Adam Kent presented the report, noting that the period covered predates the current Cabinet's tenure. The report detailed the Council's borrowing and investment activities, highlighting an underlying need to borrow of £752.9 million and external borrowing of £725.2 million, with £22.6 million paid in interest.

Councillor Kent praised the Treasury Management team for managing debt at a relatively low average rate of 3.8%, significantly below current market rates. He explained that much of the debt is linked to productive assets such as the Enviro recovery energy from waste plant, the A440 Southern Link, Worcester Parkway, and broadband infrastructure. However, he also noted that an £118 million increase in borrowing last year was primarily to cover a deficit in the Dedicated Schools Grant (DSG) and exceptional financial support.

The report indicated that the Council's borrowing costs have remained high due to national economic factors, with markets pricing in further rate rises. Despite this, the operational performance was strong, with interest payable being £6.4 million better than budget. The report also noted two compliance exceptions: long-term liabilities exceeding the authorised limit due to a technical reassessment under IFRS 16, and 31.1% of debt maturing within one year against a 25% limit. Councillor Kent explained that the latter decision was a strategic choice to borrow short-term rather than fix long-term debt at elevated rates, a decision vindicated by subsequent events and the anticipated arrival of a High Needs Stability Grant.

Councillor Dan Boatright-Greene asked about the apportionment of debt between the two new unitary authorities following local government reorganisation. Councillor Kent explained that no formula has been set yet, but precedent suggests it will be based on population, tax base, or asset location, with recharge agreements likely for loans serving both areas. He also addressed the increase in the need to borrow, attributing it primarily to the DSG deficit and unfunded high needs spend.

Councillor Harden raised concerns about the maturity structure of the debt, noting that £225 million matures within one year, which will require refinancing at potentially higher interest rates. Councillor Kent acknowledged this concern, stating that the incoming stability grant would offset some of this, but that the overall refinancing challenge remains. He also sought clarification on the technical breach regarding other long-term liabilities, which was explained by Steph Simcox as a paper reassessment under IFRS 16 related to PFI liabilities, not a cash breach. The Cabinet agreed to note the report and refer it to Full Council for approval.

The meeting also included the confirmation of the minutes of the previous meeting and the deferral of the adoption of the Advertising and Sponsorship Policy to the September Cabinet meeting.