The Cabinet of Merton Council met on Monday 20 October 2025 to discuss the Merton Legacy Fund, the budget for 2026/27 and the Medium Term Financial Strategy (MTFS) for 2026-2030, amendments to revenue budgets and the capital programme, and the school meals catering contract for 2026-2029. Key decisions included the approval of recommendations for the Merton Legacy Fund, the budget and MTFS, and the school meals catering contract.

Merton Legacy Fund

Cabinet approved recommendations for the establishment of a Merton Legacy Fund Board to oversee the development of capital projects that will leave a lasting legacy in Merton. This fund will be financed by an allocation of £15 million from capital receipts generated by the sale of CHAS in 2023. The Board will be supported by an Advisory Board comprising individuals from various sectors and community interests across the borough. Cabinet also recommended to Full Council the approval of this £15 million allocation and delegated the distribution of these funds to chosen capital projects to Cabinet, based on the advice of the Legacy Fund Advisory Board and in consultation with the Chief Executive and the Executive Director of Finance & Digital.

Councillor Stephen Alambritis MBE, Cabinet Member for Finance and Corporate Services, highlighted the significance of this fund, noting that the sale of CHAS in 2023 generated a £186 million capital receipt. He explained that £75 million of this had been earmarked for major new capital projects, and this £15 million allocation is the next step in utilising those funds. The process will involve resident and business consultation to ensure the legacy projects reflect the borough's priorities. Councillor Alambritis emphasised the transparent and consultative approach to be taken, with further public engagement planned throughout the fund's allocation.

Budget 2026/27 and MTFS 2026-30

Cabinet considered and agreed new savings proposals for 2026/27 to 2029/30, amounting to nearly £6.1 million, as part of the progress towards setting a balanced budget for the upcoming year and beyond. These proposals were referred to the Overview and Scrutiny panels and Commission in November 2025 for consideration and comment. Cabinet also considered emerging draft Equalities Impact Assessments for each saving proposal.

Councillor Stephen Alambritis MBE, Cabinet Member for Finance and Corporate Services, presented the report, noting that this was a significant amount of savings put forward at this stage of the year, comparing favourably to previous years. He acknowledged that further savings would be required due to persistent funding and spending pressures, with further updates to follow. He also confirmed that all councillors would have the opportunity to debate and scrutinise these proposals through scrutiny panels in November and January, before final proposals go to Council in February for approval.

Councillor Peter McCabe, Cabinet Member for Health and Social Care, questioned Councillor Stephen Alambritis MBE about the Draft Equalities Impact Assessments for the savings proposals. Councillor Alambritis MBE, drawing on his experience as a former Commissioner for the Equality Human Rights Commission (EHRC), confirmed that equality issues, representing the nine protected characteristics, are taken very seriously. He stated that staff had worked hard to produce these assessments, ensuring that savings were not discriminatory and that any issues identified had been mitigated.

Councillor Sally Kenny, Cabinet Member for Jobs, Skills and Education, inquired about the engagement and scrutiny process for the budget. Councillor Alambritis MBE detailed the process, highlighting that Merton has two full rounds of scrutiny in November and January, contrasting this with Kingston, Richmond-upon-Thames, and Sutton councils. He noted that Merton's approach was more robust than some neighbouring boroughs.

The report indicated a revised MTFS gap for 2026-30 of £5.385 million in 2026/27, £9.492 million in 2027/28, £15.411 million in 2028/29, and £20.422 million in 2029/30. This revised gap accounts for draft savings proposals, an increase in pay inflation from 2% to 3%, and an allocation of £4 million for service pressures, particularly in temporary accommodation and children's social care.

Amendments to Revenue Budgets and the Capital Programme Requiring Cabinet Approval - Period 5

Cabinet approved adjustments to the Capital Programme for Period 5 (August), as detailed in Appendix 1 of the report. They also noted that a new scheme for an artificial pitch at Sir Joseph Hood Recreation Ground, detailed in Appendix 2, will require Council approval.

Councillor Stephen Alambritis MBE, Cabinet Member for Finance and Corporate Services, explained that this was a technical paper outlining necessary capital spending adjustments. Asad Mushtaq, Executive Director of Finance & Digital, clarified that as monthly monitoring reports are not presented to Cabinet, standalone papers are sometimes necessary to gain approval for capital adjustments.

Councillor Caroline Cooper-Marbiah, Cabinet Member for Sport and Heritage, asked which schools would benefit from the capital programme. Councillor Alambritis MBE confirmed that 23 primary schools had already received well-designed additions, providing an extra 4,500 primary school places. He specifically mentioned Popular Primary School, Abbotsbury Primary School, Watley Avenue Special School, and Perseid Upper and Lower Special Schools as beneficiaries of capital projects.

School Meals Catering Contract 2026-29

Cabinet approved the procurement of a central school meals catering contract for primary, secondary, and special schools for an initial term of three years, with an option for a further two-year extension. Authority was delegated to the Executive Director for Children Lifelong Learning and Families to award the contract and exercise any extension options, in consultation with the Lead Member for Jobs, Skills & Education. A key requirement of the new contract is that all catering staff will be paid the London Living Wage.

Councillor Sally Kenny, Cabinet Member for Jobs, Skills and Education, highlighted that the company holding the current contract had come to the end of its tenure, necessitating a new tender process. She emphasised the importance of the London Living Wage commitment, hoping it would encourage local people to apply for jobs and ensure a decent salary.

Councillor Usaama Kaweesa, Cabinet Member for Children's Services, added that significant work had gone into building confidence with the 34 schools committed to the contract, and that local residents would be signposted to vacant posts.

Councillor Edith Macauley MBE, Cabinet Member for Enforcement and Community Safety, inquired about the nutritional outcomes for children. Councillor Kenny explained that while national food standards must be met, the contract would go beyond this, requiring two meat-free days per week, salads, and restrictions on additives. An officer would also monitor catering standards termly.

Councillor Stephen Alambritis MBE reiterated the benefits for Merton residents and catering workers, highlighting the hope of employing local people and the positive impact of the London Living Wage on fair pay. He celebrated this as another contract that insists on the London Living Wage, aligning with the administration's commitment to becoming a London Living Wage accredited employer.

The approved recommendations included: A. Approving the procurement of the contract. B. Delegating authority for contract award to the Executive Director for Children Lifelong Learning and Families. C. Agreeing further delegation for exercising contract extensions. D. Noting the requirement for all catering staff to be paid the London Living Wage.

The meeting concluded with no further indications for comments.