The Strategy and Resources Committee met on 16 February 2026 to discuss the council's financial performance, the medium-term financial plan, and the proposed budget for 2026/27. Key decisions included the approval of the 2026/27 budget, which incorporates a 4.99% increase in Council Tax, and the agreement to changes to the land boundary for the London Cancer Hub development.

Finance and Performance Update - Quarter 3 2025/26

The committee received an update on the council's financial performance for the third quarter of the 2025/26 financial year. Victoria Goddard, Director of Finance, presented the report, highlighting an improved financial position compared to earlier forecasts. The general fund revenue budget showed an underspend of £519,000, largely due to the release of budgeted contingency funds, which will be transferred to the council's reserves. However, pressures remain in adult social care, children's services, special educational needs and disabilities (SEND), and homelessness. The Dedicated Schools Grant (DSG) position showed a forecast deficit of £11.710 million, and the Housing Revenue Account (HRA) reported an underspend of £376,000.

Councillor Sunita Gordon, Lead Member for Resources, noted the positive news regarding the revenue budget underspend and thanked officers for their hard work. Councillor Marian James raised concerns about the volatility of social care costs and questioned the modelling used to forecast growth assumptions. Officers explained the complex methodologies employed, including demographic analysis, trend analysis, and benchmarking against other local authorities, acknowledging that forecasting in this area is not an exact science.

The report also detailed slippages in the capital programme, including delays on the restoration of the Beddington Park wall project due to planning permission requirements, and delays in the flooding prevention programme. A significant slippage of £1.6 million was noted in the Housing Revenue Account for building safety works, including alarms, smoke detectors, and lift replacements, attributed to contractor award delays.

The committee approved recommendations 2.1 to 2.7, which included noting the forecast outturns for the general fund, DSG, and HRA, approving capital programme budget adjustments, and approving the updated complaints policy.

2026/29 Medium Term Financial Plan and 2026/27 Budget

Councillor Barry Lewis, Leader of the Council, introduced the report on the Medium Term Financial Plan (MTFP) and the 2026/27 budget, highlighting the ongoing financial pressures, particularly in social care, housing, and education. He noted that while the Fair Funding Review provided more clarity, it resulted in a reduction in the council's funding by approximately 9%. The council's approach remains to plan responsibly, act early, and protect its long-term resilience while prioritising residents.

Richard Simpson, Strategic Director of Resources, presented the detailed budget proposals, which aimed to achieve a balanced budget for 2026/27. The budget includes allowances for inflation, service growth, and the loss of grant funding, which are to be offset by savings and a proposed increase in Council Tax. The report detailed significant pressures in adult social care (£3.7 million forecast overspend), children's social care (£0.7 million), and temporary accommodation (£0.7 million).

A key change highlighted was the new local government funding formula, which has resulted in a lower increase in core spending power for Sutton compared to other outer London boroughs. The report indicated that without council tax increases, core spending power would decrease in real terms. The proposed Council Tax increase for 2026/27 is 4.99%, comprising a 2.99% general increase and a 2% Adult Social Care Precept. This would result in a total Band D Council Tax charge of £2,378.64 for 2026/27.

The report detailed £13.3 million in proposed savings for 2026/27, largely driven by existing transformation programmes. However, a significant budget gap of £34.5 million is projected over the following two years, necessitating further fundamental organisational change.

Councillor Ryan, speaking on behalf of the opposition, raised concerns about the implications for residents facing increased financial pressure and questioned the council's ability to meet its sufficiency duties. He also inquired about structured lobbying and legal routes to challenge perceived unfairness in funding. Officers responded that while legal challenges are difficult in this context, lobbying efforts through the Local Government Association and London Councils are ongoing.

Councillor Dave Tchil raised concerns about the UK Emissions Trading Scheme (ETS) extension and its potential costs, questioning if this contradicted the council's commitment to extending its heat network. Officers clarified there was no direct contradiction, as the ETS extension relates to carbon emissions and not specifically the incinerator's operation.

Councillor James McDermott-Hill inquired about the drivers behind the shift towards increasing fees and charges year-on-year, asking if this was a temporal or structural issue. Officers explained that pressures in adult social care, temporary accommodation, and SEND were the primary drivers, and that fees and charges were a small part of the overall savings programme. Spencer, from officers, elaborated that parking charges, for example, were a mixture of cost recovery, policy considerations for behavioural change, and income generation, with benchmarking against neighbouring authorities also a factor.

Councillor Tom Drummond questioned the cumulative gap of £34.5 million and whether it included the 10% the council would cover for the DSG deficit. Officers confirmed it did not and that this would need to be added. He also sought clarification on the SEND reform plan required for the high needs stability grant. Officers explained that the details of this plan were still emerging and would be informed by a forthcoming white paper.

Councillor Jake Short thanked staff for their work on the Housing Revenue Account (HRA) and inquired about the impact of rent convergence on the business plan. Officers confirmed that rent convergence, starting from April 2027, would have a significant positive financial impact.

Councillor Sam Martin asked about ensuring the new transformation programme was positive for the borough and owned by members and the public. Officers outlined a multi-stage process involving partner input, best practice, internal ideas, and member consultation.

Councillor Richard Clifton reflected on the significant expenditure on social care and SEND, acknowledging the positive impact these services have on society, despite the budgetary challenges.

The committee agreed to recommendations 2.1 to 2.7, which covered the revenue budget, Council Tax, and capital programme.

London Cancer Hub Update

Councillor Sunita Gordon introduced the update on the London Cancer Hub, a £1 billion partnership to create a major centre for cancer research. The report recommended changes to the south boundary of the land being leased to Aviva Capital Partners (ACP) to safeguard future development and potential highway network improvements.

Richard Clifton, Vice Chair of the Planning Committee, explained that the proposed changes to the leased land area were to safeguard future development, specifically in relation to potential highway network improvements. ACP had offered to release an area of land from the development site that could be used for the future provision and relocation of allotments if necessary.

Councillor Tom Drummond raised concerns about the reduced capital receipt from the sale of a smaller plot of land and questioned the valuation process. Officers explained that the terms reflected a proportionate reduction based on the percentage of land being taken out. Councillor James McDermott-Hill expressed concern about the council retaining ownership of a small, potentially derelict piece of land, proposing it be used as public green space or a small park. Following discussion, an additional recommendation was agreed for officers to consider options for the meanwhile use of this land, including consideration as a park or open space.

The committee noted the positive development for Sutton and approved the recommendations, including the amendment for officers to consider meanwhile uses for the retained land.

Proposed Lease of Quarry Cottage, Seears Park

Councillor Sunita Gordon introduced the proposal to lease Quarry Cottage in Seears Park to Yourspace.Sutton for restoration and community use as a well-being hub. This initiative would bring a derelict property back into use without requiring capital investment from the council.

Joseph, representing Yourspace.Sutton, highlighted the potential for a multi-functional well-being hub, including health integration, preventative care, and community heritage projects. The proposal involves an agreement for lease with a four-year conditionality period for securing funding and planning permission, followed by a 21-year lease at a peppercorn rent.

Councillor Christopher Woolmer, whose ward includes Seears Park, expressed pride in the proposed solution and confirmed there would be no council capital expenditure involved. Councillor Tom Drummond raised concerns about the long period of inactivity on previous proposals for the cottage and sought assurances about safeguards and a plan B if the current proposal did not progress. Officers explained the phased approach of the agreement for lease and the mechanisms in place to manage the process.

Councillor James McDermott-Hill inquired about engagement with the Charity Commission regarding the trustees of the park. It was clarified that the council acts as the sole trustee for the John Seear's Park Trust, and there were no outstanding issues with the trustees of Yourspace.Sutton.

The committee agreed to the recommendation to delegate authority to the Director for Assets and Capital Delivery to approve the lease terms. An amendment was also agreed for officers to consider options for the meanwhile use of the retained land at the London Cancer Hub site, including consideration as a park or open space.

The meeting concluded with thanks to members, officers, and the public.