The Budget Development Overview and Scrutiny Committee of Cornwall Council met on Wednesday, 22nd October, 2025, to discuss the council's principles, values and priorities for 2026-2030, and to review the key financial assumptions underpinning the Medium-Term Financial Plan 2026-30 and 2026/27 budget. The meeting was also scheduled to cover questions from the public, and the approval of minutes from previous meetings.

Council Priorities, Values and Priorities 2026-2030

The committee was scheduled to discuss the approach to the new Council Priorities and Financial Strategy 2026-2030. The strategy is intended to replace the existing Council Business Plan 2022-2026, and aims to link the Cabinet's priorities with clear financial objectives.

The six priorities that the Cabinet endorsed in July 2025 are:

• Strong, safe, vibrant communities with more decent and affordable homes
• A clean, green Cornwall with healthy rivers and seas
• A resilient economy creating good growth and jobs
• A caring place for families where children can build a bright future
• Supporting people to live healthy and dignified lives
• Connected, safe reliable roads and transport

The report pack included draft introductory text for each of the six priorities. For example, the description of 'A clean, green Cornwall with healthy rivers and seas' states:

Cornwall's beautiful environment is loved by residents and visitors alike. We need to grow and protect Cornwall's natural environment and support communities adapt and thrive. That means clean air, litter-free communities, and green spaces that are well cared for and accessible to all. We want to see healthy rivers and seas - free from pollution, rich in biodiversity, and safe for people and wildlife alike. We will work with residents, businesses and communities to enable them to take action for climate and nature, supporting a better quality of life, a stronger connection to nature, and a more sustainable future for Cornwall.

The committee was asked to consider the approach to the new strategy, the draft language relating to priorities, and to make recommendations to the Cabinet ahead of their consideration of the draft strategy on 12 November 2025.

Key Financial Assumptions Underpinning Medium-Term Financial Plan 2026-30 and 2026/27 Budget

The committee was scheduled to review information and assumptions relating to pay inflation and interest rate forecasts. This followed a recommendation made at the Budget Development Overview and Scrutiny Committee meeting on 22 September 2025, where it was agreed that the Portfolio Holder for Resources should be invited to provide a report on the concerns raised by the Committee.

The report pack set out financial assumptions that had been made, and key financial risks, noting that these may change as the budget process progresses.

Employee costs represent one of the largest areas of expenditure for the Council, amounting to approximately £320 million, or 38% of the Council's overall net revenue budget. The council directly employs around 5,800 staff across a number of different national public sector agreements on pay and conditions.

The council follows the national pay agreements negotiated by the National Joint Council (NJC) for Local Government Services. The assumption for the 2026/27 to 2029/30 period is a 3% pay award applied from 1 April each year.

The report pack also included details of contract related assumptions. Around £700m, equating to over c40% of the Council's gross revenue expenditure, is delivered through external contracts and commissioning arrangements. Many contracts are driven by the annual increase to the Consumer Price Index (CPI). The contractual inflation work that has been undertaken used data from the report published in May, as a basis for assumptions. The average contract inflation is assumed to be 4.5% per annum, reflecting current CPI forecasts, FLW forecasts and supplier cost pressures.

The Council's financial activity relating to its investments, borrowing and cashflow management is held within the Capital Financing Budget. For 2025/26 this was £51.4m and 6% of the net revenue budget. The main components of this are £59m of interest payable, £30m interest income and £19m on annual Minimum Revenue Provision (MRP) - the repayment of principal.

The Council's net revenue budget is funded through corporate resources consisting of council tax, business rates, and core government grants. The current assumptions include an annual increase to the Council Tax charge of 4.99% for 2026/27 and across all years of the MTFP. This consists of a 2.99% increase for the 'core' charge, as well as a 2% increase for the adult social care precept.

Previous Minutes

The committee was also scheduled to approve the minutes from the meetings held on 17 September 2025 and 22 September 2025.