The Full Council of the Isles of Scilly met on Tuesday, 10 March 2026, to approve the council's budget for the upcoming financial year and set the Council Tax. Decisions were also made regarding fees and charges for various council services.

Council Budget and Council Tax Approved

The council approved its budget for the 2026-27 financial year, setting the Council Tax requirement at £2,429,055. This represents a 4.99% increase in the Council of the Isles of Scilly element of Council Tax, comprising a 2.00% increase for the Adult Care Precept and 2.99% for Other Expenditure, resulting in a Band D charge of £1,744.76. A net General Fund Revenue Budget of £8,306,830 was also approved. The council also agreed to indicative future increases in Council Tax of 4.99% for the 2027-28 and 2028-29 financial years.

The Chief Executive & Section 151 Officer, Russell Ashman, presented the report on the budget, highlighting the necessity of setting a balanced budget to avoid statutory intervention by the government, which would involve issuing a Section 114 notice. He explained that an exceptional financial support (EFS) package had been secured, with in-principle approval from the government, to address a forecast overspend of £1,200,000. Mr. Ashman noted that central government did not fully understand the financial pressures of providing services on a small island, which had not been integrated into the funding settlement. He also pointed to the adult social care budget as a key driver of the previous year's overspend.

Councillor S Nixon, Lead member for Finance, Governance, Risk and Performance and Corporate Services, acknowledged the impact on residents' finances but stated that the council could not subsidise services from reserves. He proposed the budget recommendations, expressing hope for a reconsideration of Scilly's settlement by the government following closer working under the EFS. Councillor J Peacock, Lead Member for Environment, Environmental Services and Climate Change, seconded the proposal, emphasising the need for strong performance management of services to prevent a recurrence of issues seen in adult services and for officers to deliver promised savings. He also noted the potential impact of global market fluctuations due to the Iran-USA/Israel war on the budget. Councillor S Sims, Lead Member for Economy, Tourism & Transport, clarified that the EFS was akin to an overdraft, a point confirmed by Mr. Ashman, who added that the EFS agreement would involve a review of the local authority's finances and governance by the government, which could be a positive outcome.

Councillor Mrs A Mumford, Lead Member for Adults & Public Health and Chairman of the Scrutiny Committee, expressed regret over the reduction in the IOS Healthwatch budget but welcomed additional support for the year ahead. Councillor G White confirmed that the issues were familiar and that stagnant allocations combined with increased government expectations had reached an unsustainable point. He proposed an amendment to delegate authority to the Section 151 Officer to approve a public communication on the budget, in consultation with the Vice-Chair for Council, the Lead Member for Finance, Governance, Risk & Performance and Corporate Services, and Councillor G White in his role as Chair of the Communications Board. This amendment was seconded by Councillor D Marcus, Lead Member for Planning & Regulatory Services and Chairman of Governance Committee, and approved, with Councillors Nixon and Peacock accepting it.

Councillor S Sims suggested that the council might have been too generous in assisting community services in the past, making it difficult to maintain that level of intervention. Councillor D Marcus requested continued checks on second home 'loopholes' and the legitimacy of claims for those not paying council tax on the islands. The Monitoring Officer confirmed that a review of the second homes policy would be presented to the council later in the year. The Chairman, Councillor Robert Francis, stated that councillors would continue to advocate for the islands to receive the settlement they needed to avoid future reliance on EFS.

A roll-call vote was held, with Councillors R Francis, J Williams, S Sims, G White, Mrs A Mumford, D Marcus, S Nixon, E Rodger, H Legg, A Guy, and J Peacock voting in favour of the budget. Councillor Mrs L Blackwell abstained. Councillors R Dorrien-Smith, Mrs F Grottick, T Dean, and A Sandford were absent.

Fees and Charges for 2026-27 Approved

The council approved the proposed fees and charges for the financial year 2026-27, as detailed in Appendices A, B, C, and D of the relevant report. Approval was also given for the proposed fees and charges for registration services for 2027-28 and 2028-29, as outlined in Appendix E. Furthermore, delegated authority was granted to the Strategic Director for Place, Economy and Environment to set prices for bespoke Active Scilly taster and promotional activities.

The Deputy S151 Officer presented the report, explaining that an annual uplift of 5% had been set, which was above the Consumer Price Index (CPI). This increase was deemed necessary to cover service costs, as a lower uplift in the previous year had led to unexpected circumstances that resulted in insufficient funds. Councillor S Nixon acknowledged the impact on residents' finances but reiterated that the council could not subsidise services from reserves. Councillor S Sims commented on the 900 council tax units on Scilly and the airport's recent subsidisation by council tax payers, which he considered a regressive tax. He also anticipated a negative impact on passenger numbers in 2027/28 with the introduction of the Scillonian IV passenger vessel, necessitating a review of fees and charges. Councillor J Peacock stated that a key principle for him was that all council services should be fully funded by users and external grants, with no further council subsidies. The recommendations were proposed by Councillor S Nixon and seconded by Councillor S Sims.