The Warwickshire County Council Cabinet met on Tuesday 27 January 2026 to discuss a range of financial and service-related matters. Key decisions included the approval of the Q3 2025-26 Financial Monitoring Report, which detailed a forecast net service overspend of £0.077m, and the adoption of the 2026/27 Budget and 2026-31 Medium Term Financial Strategy, which included a proposed 4.99% council tax increase. The Cabinet also approved the allocation of the 2026/27 Dedicated Schools Grant (DSG), with significant funding directed towards the High Needs Block, and authorised Hatters Space in Nuneaton as the preferred location for Warwickshire's first Best Start Family Hub.

Financial Monitoring Report Q3 2025-26

Cabinet noted the forecast net service overspend of £0.077m for the 2025-26 financial year, which equates to 0.02% of the approved budget. This overspend is to be funded from reserves. The report also highlighted a significant underlying service overspend of £16.126m, which is being managed through spending controls and Treasury Management returns. Savings delivery for 2025-26 is forecast at £15.409m, representing 70.53% of the target, with a shortfall of £6.437m. The controllable capital spend for 2025-26 is forecast at £217.507m, with a total movement in the forecast spend on the capital programme of £16.748m from 2025-26 into future years.

2026/27 Budget and 2026-31 Medium Term Financial Strategy – Updated Information

The Cabinet received an update on the latest resource and spending information impacting the emerging 2026/27 budget and the 2026-31 Medium Term Financial Strategy (MTFS). Key updates included the provisional Local Government Finance Settlement, which provided an additional £3.5m in grant funding for 2026/27, and a revised council tax base growth forecast of 1.00% for 2026/27, significantly lower than the previously estimated 1.68%. This reduction in council tax base growth results in an estimated £2.9m reduction in income for 2026/27. Business rates income for 2026/27 is still awaiting confirmation from District and Borough Councils.

Changes to proposed allocations include a reprofiling of the Children & Family Centres budget reduction, splitting the £2.47m saving across 2027/28 and 2028/29 due to reduced grant funding. The UK Shared Prosperity Fund will end on 31 March 2026, with a recommended two-year time-limited funding allocation of £1.5m to continue economic development activity. A reduction in expected income from the Oxygen Finance rebate of £900,000 annually has also been noted.

The Q3 financial monitoring report indicates an overspend of £770,000 for 2025/26, a significant improvement from Q2. However, a structural overspend of £16.126m remains, primarily driven by adult and children's social care demand pressures. This leads to an anticipated in-year deficit of around £8.2m in 2026/27, which is not currently accounted for in the budget proposals. Despite these movements, the updated MTFS position remains balanced over five years through a 4.99% council tax increase, delivering £95.5m in savings, and utilising £15.7m of MTFS reserves.

The Cabinet noted the Executive Director for Resources' risk assessment on the level of general reserves, which recommends a minimum of £35m for 2026/27. Cabinet resolved to publish their 2026/27 budget resolutions for recommendation to Council on 5 February 2026.

Allocation of the 2026/27 Dedicated Schools Grant (DSG)

Cabinet approved the proposed allocation of the Dedicated Schools Grant (DSG) for 2026/27. This includes the Schools Block allocation, the Early Years Block allocation for all providers, and the High Needs DSG budget. Proposals for allocating the Central School Services DSG budget were also supported.

The provisional 2026/27 DSG allocation is £752.076 million. Warwickshire is noted as being among the lowest funded authorities nationally for gross DSG funding per mainstream pupil. The Schools Block allocation, after deductions, is £518.238m. Adjustments have been made to the National Funding Formula factors, with the Age Weighted Pupil Unit (AWPU) rate set 1.695% lower than the 'hard' NFF. A 0.5% transfer from the Schools Block to the High Needs Block, equating to £2.613m, has received provisional approval from the Secretary of State.

For the Early Years Block, hourly rates have increased, with a 7.20% rise for 3- and 4-year-olds. The minimum pass-through requirement to providers has increased to 97%. Two options for allocating funding between universal and deprivation rates were considered, with the Early Years Working Group recommending Option 1, which keeps the deprivation rate at £0.68p per hour.

The High Needs Block allocation for 2026/27 is £110.351 million, an increase of £6.256 million. However, this block is projected to have a deficit budget of approximately £80 million. The report highlights the national SEND crisis and the significant cumulative deficit, with the Council continuing to use the government's statutory override.

Treasury Management Strategy and Investment Strategy

Cabinet recommended to Council the approval of the Treasury Management Strategy and the Investment Strategy for Non-Treasury Investments for 2026/27. The Treasury Management Strategy outlines how the Council will manage its borrowing and cash balances, with a focus on security, liquidity, and yield. Projections indicate a need for external borrowing from 2026/27 onwards as internal borrowing resources are depleted by the DSG deficit. The strategy proposes a change in liquidity management from a fixed £100m to a target of £100m within a range of £50m-£200m. A new Minimum Revenue Provision (MRP) policy is proposed, adopting the Asset Life (Equal Instalment) Method to ensure borrowing is repaid over a prudent period.

The Investment Strategy covers non-treasury investments, primarily through the Warwickshire Investment Fund (WIF) and the Warwickshire Property Development Group (WPDG). The WIF is entering its final year for new commitments in 2026/27, with a revised investment profile and reduced limits for the Property and Infrastructure Fund (PIF). The strategy also details ethical investment considerations, focusing on environmental, social, and governance (ESG) issues.

Warwickshire Investment Fund Strategy and Business Plan

Cabinet approved the Warwickshire Investment Fund (WIF) Investment Strategy and Business Plan for 2026/27. The WIF continues to support economic resilience and growth in Warwickshire, with two active pillars: the Property & Infrastructure Fund (PIF) and the Local Communities & Enterprise (LCE) Fund. The PIF has seen slower progress than anticipated, with two projects approved totalling £14.3m, while the LCE Fund has supported 116 businesses, safeguarded 515 jobs, and created 60 new jobs. The strategy reflects a shift into the final year of the Fund, with revised investment profiles and reduced limits for the PIF to manage risk. A review will be undertaken in 2026/27 to assess future support mechanisms beyond the current programme.

Best Start Family Hub Options Appraisal

Cabinet authorised Hatters Space in Nuneaton as the preferred location for Warwickshire's first Best Start Family Hub (BSFH). This decision aligns with the Department for Education's strategy to improve outcomes for children from conception to age five by integrating health, education, and family support services. Nuneaton and Bedworth was identified as the most suitable borough due to high levels of deprivation and a significant young population. The Council will develop and submit a 'Best Start in Life' local plan to the DfE in March 2026, outlining local needs and service integration. The report also noted that the provisional grant funding for Best Start Family Hubs is less than initially anticipated, leading to a proposed amendment to the Medium-Term Financial Strategy saving, splitting the £2.47m over two years.

Resident Parking Permit Changes

The report on Resident Parking Permit Charges was withdrawn and will be presented at a future meeting.

Exempt Minutes of the Previous Meeting of Cabinet, Disposal of Land in Alcester, and Warwickshire Property & Development Group (WPDG) - Business Plans for 2026

Cabinet resolved to agree the exempt recommendations for these items, which were presented in a closed session.