Agenda item

Reasons for recommendations	It is a statutory requirement to set the budget each year. To enable the Council to set a balanced budget.
Background papers	Budget reports and briefings, precepts (NCC, Police and Parishes)   Draft Revenue Budget Report for 2026/27 presented to Cabinet on 2 February 2026

 

 

Wards affected	All
Cabinet member(s)	Cllr Lucy Shires
Contact Officer	Don McCallum Director of Resources and s151 Officer Don.McCallum@north-norfolk.gov.uk

 

                                              

Executive Summary	This report presents for approval the budget for 2026/27 and to make statutory calculations in accordance with the Local Government Finance Act 1992 to set the Council Tax for 2026/27. The report also includes the Chief Finance Officer’s report on the robustness of the estimates and adequacy of reserves.   It is worth noting that this budget has been prepared based on the draft Local Government Finance Settlement. Due to report publishing timing constraints, it was not possible to update all underlying financial reports in time for the Full Council on 18 February 2026. However, extensive analysis has been undertaken comparing the draft Local Government Finance Settlement funding to the final Local Government Finance Settlement with the only difference being an additional £1,225 being received through the settlement for the 2026/2027 budget compared to the draft position.
Options considered.	It is a statutory requirement to set the budget each year, whilst there are options around the content of the budget presented for approval, the budget now recommended reflects the recommendations made by Cabinet at its meeting on 2 February 2026.
Consultation(s)	The Overview and Scrutiny Committee have reviewed items within the draft budget papers on 28 January 2026 and will have the opportunity to review this report at its meeting on 11 February 2026.   Public and business consultations have also taken place on the Council’s website and on all the Council’s other social media platforms.
Recommendations	That having considered the Chief Finance Officer’s report on the robustness of the estimates and the adequacy of the proposed financial reserves, the following be approved:   1.     The 2026/27 revenue budget as outlined at Appendix A;   2.     The service budgets detailed in Appendix B;   3.     The statement of the movement in reserves as detailed at Appendix C, including;   3.1.  To approve the use of the Communities reserve to fund a revenue budget of £4,000 per Member to allow the award of small local grants.   3.2.  To approve the creation of an £0.75m Ear Marked Reserve to mitigate the Revenue costs of Local Government Reorganisation.   4.     The updated Capital Programme and financing for 2026/27 to 2028/29 as shown in Appendix D;   5.     The new capital bids recommended for approval as detailed at Appendix E;   6.     That Members note the current financial projections for the period 2026/27 to 2029/30 that form the Medium Term Financial Strategy as presented as a Cabinet recommendation from its meeting on 2 February 2026;   7.     That the minimum Level of the General Fund Reserve of £2.1m for 2026/27 to 2027/28;   8.     The Local Council Tax Support Scheme (LCTS) for 2026/27 as set out in paragraphs 3.18 to 3.19;   9.     That Members undertake the Council Tax and statutory calculations set out at Appendix F, and set the Council Tax for 2026/27;   10.  The demand on the Collection Fund for 2026/27 is as follows: ·       £8,285,376 for District purposes which reflects the recommended Council Tax increase of 2.96% (£5.13) for the district element for a Band D equivalent property ·       £4,318,242 for Parish/Town Precepts,

 

The Chair advised members that there would be a series of recorded votes. He then invited the S151 Officer and Chief Financial Officer (CFO) to speak on the robustness of the estimates.

 

The CFO said that when considering the robustness of the estimates and adequacy of reserves a holistic approach was taken, which considered the general reserve, earmarked reserves and the identified risks in relation to the revenue and capital budgets presented for approval.

 

The CFO confirmed that he was satisfied that the estimates, as presented in the budget were sufficiently robust and that the reserve balances proposed for 2026/27 were adequate.

 

The Chair then invited Cllr L Shires, Portfolio Holder for Finance, Estates & Property Services to introduce the Budget for 2026/2027.

 

Cllr Shires began by saying that despite a deeply disappointing funding review, the Council had been able to produce a balanced budget. Funding for the Council was reduced in real terms and included a government funding floor of 95% of Core Spending Power. Additionally, new burdens had been placed on the Council with insufficient funding for Local Government Reorganisation (LGR) and a domestic food waste collection service. She said this approach reinforced a long-held concern that central government did not understand rural communities. The funding formula may be national but the consequences were intensely local. This was not a new phenomenon. Since 2010, shire districts had experienced some of the deepest cuts in funding whilst facing additional pressures such as the need for temporary accommodation and the implementation of food waste collection. National economic volatility, inflationary pressures, pay award uncertainty and fluctuating interest rates all continued to increase the cost of delivering services. Through prudent financial management, disciplined use of reserves, careful forecasting and a clear medium term financial strategy (MTFS), the Council had been able to maintain essential services. Whilst other councils faced instability, NNDC continued to plan responsibly.

 

Cllr Shires said that the shortfall in funding for temporary accommodation remained one of the most significant challenges. By the end of the financial year a temporary accommodation funding gap of £400k was anticipated, a position that was likely to continue into the next year. It was due to such pressures that the Council introduced the 100% second homes premium and she confirmed that North Norfolk’s 7.3% share of this premium which resulted in £663K, would be used to mitigate government funding shortfalls and to maintain the second homes premium reserve. That reserve would continue to provide stability in managing temporary accommodation costs. In addition, NNDC had successfully negotiated a share of the County Council’s second homes premium, estimated at £1.7m. This agreement ensured that the capital investment that was committed for temporary accommodation could now be funded without borrowing.

 

She then spoke about the proposed mandatory introduction of food waste collections, saying that whilst the Council supported the environmental ambitions of the policy, the funding provided by central government underestimated the establishment and ongoing costs of such a scheme. The initial capital allocations have underestimated the real expense of vehicles, containers and operational set up and the ongoing revenue did not reflect the cost of collection in a large rural district.

 

Cllr Shires said that she had been clear about working with all members of the Council throughout the budget monitoring and budget setting process and always in the best interests of North Norfolk residents. She thanked the Overview & Scrutiny Committee for their time and diligence in helping to reach this stage. Scrutiny strengthened decision-making and she asked for the committee’s support in the year ahead. She also thanked opposition members for their constructive support throughout the budget setting process.

 

Cllr Shires said that the budget setting process for the year began with the Council facing a projected £1.8m deficit. The scale of work required to close the gap had been significant and she thanked officers for their diligence, professionalism and creativity shown in bringing forward a balanced budget. She said it was important to note that changes in government funding and expectations had added a further £2.4m to projected future deficits. This context made the achievements outlined all the more significant. She thanked all officers for their professionalism, resilience and dedication to North Norfolk. She extended her thanks to her Cabinet colleagues for the way they had engaged constructively with this process and commended them for responding so positively to the scrutiny of their portfolio budgets and worked collaboratively to identify solutions.

 

The Local Government Financial Settlement (LGFS) guaranteed only 95% of core spending power on the assumption that District councils would apply the maximum increase before a referendum was required, of 3.00% or £5 in Council Tax. The recommendation was to increase Council Tax in 2026/27 by 2.96%, £5.13 for a ‘Band D’ property. This amounted to less than 10 pence per week. She reminded members that NNDC retained a very small proportion of the council tax it collected – just 7.3 pence of every £1.00 paid.

 

Cllr Shires reminded members that in 2024/2025, it had been agreed that the Sustainable Communities Fund would be paused and she made a commitment that it was not a withdrawal. She was delighted to announce that it would be reinstated in a new form, a dedicated members’ fund investing £160k back into local communities. Each councillor would have an allocation of £4k to support projects withing their ward, empowering them to respond directly to local need. The fund would operate within a clear and robust governance framework, and she welcomed cross-party engagement in shaping how it was administered.

 

Cllr Shires said that since 2019, the Administration had committed over £147m towards capital investments across North Norfolk. She then outlined the projects that had been completed in the last year and said that the capital proposals for 2026/2027 built on that strong track record, ensuring continued investment in the environment, amenities and infrastructure that mattered most to North Norfolk. The budget committed over £10.6m in further capital investment across the district, with over £820k allocated towards ‘our greener future’, including further decarbonisation of the Council offices. £3.9m was allocated towards ‘Developing our Communities’ including £120k for play area improvements, £40k to improve the public conveniences on Newgate lane in Wells and £3.6m in the log-term investment in the substructure of Cromer Pier. £4m was allocated towards ‘Meeting our Housing Needs’ through the purchase of additional temporary accommodation and £1.8m towards ‘Investing in our local economy and infrastructure’, including £740k to renovate the Cornish Way industrial units and Cedar House in North Walsham. She said that the budget showed the unwavering commitment to North Norfolk and its residents.

 

Cllr Shires said that members would be aware that the Government’s programme for local government reorganisation proposed the creation of new unitary authorities by April 2028. At present, no additional grant funding had been provided to support this transition process. Until legislation was passed and any new authorities were established, the Council was legally required to set a balanced budget and maintain a robust MTFS on the basis that NNDC continued to operate whilst simultaneously planning for imminent structural changed. Consequently, £750k was set aside in an earmarked reserve for LGR. The Government expected councils to meet the cost of reorganisation from existing resources. Whether or not members supported the direction of travel, it would be financially irresponsible not to prepare. She added that the pathway to devolution and reorganisation did not begin in the Chamber. The Conservative Administration at County Hall had ‘opened that door’ and had now withdrawn, leaving NNDC to navigate the consequences. The Council had a responsibility to ensure that North Norfolk remained financially secure whatever the outcome and on that basis, she assured members that if the Government’s expected announcement regarding the future structure of Norfolk’s councils did not result in LGR for which NNDC was required to meet the costs, then the earmarked reserve for LGR would be brought back to Full Council for members to determine an alternative use for those funds.

 

In conclusion, Cllr Shires said that last year the Council had proposed a shrinking deficit. Recent Government decision had increased the financial burdens that the Council faced but despite the challenges, she assured members that work continued to address the forecast deficit and ensure the sustainability of the Council and its assets for the future. Whilst there was certainty that there would be 95% of core funding for the next few years, she said that she no longer had confidence that fairness extended to rural communities such as North Norfolk. Through this budget and future budgets, the Council would be there to support residents where the Government was failing to do so. Finally, she said that she would like to update members on the latest Budget Monitoring position at period 10. For period 6, a £300k surplus had been forecast and the period 10 report would be presented to cabinet on 9^th March.  She thanked the S151 officer, the Deputy S151 officer and the Finance Team for their hard work and support in bringing forward a balanced budget.

 

Cllr Shires proposed the Budget for 2026/2027. Cllr T Adams seconded the proposal and reserved his right to speak.

 

The Chair thanked Cllr Shires and invited the Leader of the main Opposition Group, Cllr C Cushing to respond.

 

Cllr Cushing began by thanking the Finance team for their support during the last three months and Cllr Shires for the ongoing dialogue in the lead up to the Budget presentation, particularly for her input and support in shaping the amendment which would be coming forward later in the meeting.

 

Starting with the Revenue Budget, Cllr Cushing said that he welcomed a balanced budget and he agreed with Cllr Shires about the Government’s disregard for rural areas and that District Councils were being penalised via the LGFS, by receiving funding at only 95% of core spending power. This approach was in line with the imposition of the family farm tax and the increasing of business rates by approximately 30%. In addition, consultations were planned on the closure of more rural post offices and they had also removed VAT relief on places of worship which meant repairs to churches would now cost 20% more.

 

He then spoke about the ending of the Shared Prosperity Fund (SPF) and the Rural England Prosperity Fund (REPF). This funding had provided huge support to local businesses and was meant to be replaced by new Mayoral funding. This had now been delayed by two years and no alternative had been proposed. He queried the Government’s approach of ‘baking in’ council tax increases into the LGFS as he felt it could disincentivise councils from making savings.

 

Looking forward, he said that he had concerns about the significant deficit forecast from 2027. He added that there was an assumption that NNDC would not exist from 2028 due to unitarization, however, as the Leader had outlined earlier in the meeting, the County Council had announced that they were ceasing to cooperate with the Government regarding implementation of LGR. This could potentially mean that LGR and Devolution would not happen and serious consideration should therefore be given as to how the Council would balance the budget in future years. In light if this, he added that overall, the MTFS was very good but that section 8 which focused on mitigating budget gaps should be strengthened.

 

Cllr Cushing said that the Conservative Group supported the introduction of local community grants. They had opposed the removal of the Sustainable Communities Fund two years and had proposed that it was reinstated last year.

 

Moving on to the capital strategy, he said it was disingenuous to claim that the Administration had spent £147m since 2019 as a substantial amount of this had come from central government. He was concerned about the Council’s ability to deliver it all. There were 59 projects in the current programme and a further 19 proposed as part of the budget, resulting in 79 projects in total. Some sort of prioritisation of projects would be good. An initial assessment indicated that little or no work had begun on 20 of them and with officer capacity potentially stretched due to LGR, a review would be a good idea. As in previous years, he highlighted the large number of projects in Cromer. Out of the 78 on the programme, 23 were Cromer initiatives. He accepted the argument that NNDC owned several assets in the town, including the pier, which the Council had a duty to maintain but he felt that the remaining allocation of resources should be reviewed to ensure fairness across the district. He queried why Cromer Town Council was not being asked to take on responsibility for some of the projects in the town.

 

Cllr Cushing agreed with Cllr Shires’ comments about food waste collection. He had never supported the proposals and said they simply did not make sense in a rural area. It wouldn’t be carbon neutral or have any impact on climate change. He felt that the Council should not proceed any further with the proposals until the position regarding LGR was clear.

 

In conclusion, Cllr Cushing said that although he believed LGR was not beneficial for Norfolk, he supported setting aside £750k for this work. He felt the capital programme should be reviewed and prioritised and allocated across the district. The Conservative Group would work with the Administration where possible to try and navigate the challenging times ahead.

 

The Chair then invited Cllr J Punchard, Leader of the Independent Group to respond to the budget proposals.

 

Cllr Punchard began by thanking Cllr Shires for her willingness to engage fully with him on a ‘blank book’ budgeting exercise and for responding so willingly to his many challenges. He welcomed the local community grants fund. He was frustrated by the cuts that were being imposed by central government, whilst the burdens on the Council increased. He said that it always pained him to vote for an increase in council tax but on this occasion, there was no other option if key services were to be maintained.

 

The Chair invited Cllr Shires, as proposer of the budget, to respond.

 

Cllr Shires said that she welcomed the strong dialogue between herself and Cllr Cushing in the run up to the budget and she understood his concerns. She thanked Cllr Punchard for his engagement and challenges in recent months. She said that careful and honest engagement across the political spectrum was key to reaching a balanced budget.

 

Cllr Cushing and Cllr Punchard confirmed that they did not wish to respond further.

 

The Chair then advised members that the following amendment had been submitted in advance of the meeting:

 

Stalham Public Toilet Feasibility Study

 

Proposed by Cllr K Bayes, seconded by Cllr L Shires:

 

A feasibility study will be commissioned to explore the construction of a new public toilet and Changing Places facility in Stalham, with the aim of securing long-term provision for the town.

 

The study will assess indicative project costs, identify potential barriers and risks, and outline realistic timescales for delivery should funding become available.

 

Funding for the study will be drawn from unspent allocations from other public toilet regeneration projects across the district, to the amount of £25,000.00. Breakdown as follows: 

• £5k Design of facility
• £2k Legal Counsel for special conditions
• £2k Planning application and advice
• £6k Surveys (general £1k, £1.5k trees, £1.5k bats etc, £2k drainage)
• £2k quantity surveyor to cost development
• £1k Consultations
• £7k Contingency including

 

This project will support both local and district-wide priorities to maintain accessible public toilet provision in Stalham. The current facility is in a poor state of repair and is arguably not well located when considering the town’s future growth and development proposals.

 

The Chair invited Cllr K Bayes as proposer of the amendment to introduce it. He confirmed that the S151 Officer had seen it and accepted it as valid.

 

Cllr Bayes said that it had cross-party support and he thanked the other Stalham member, Cllr M Taylor for the huge amount of work that he had done. Cllr Bayes explained that over a year ago there were plans to close the public toilets in Stalham and over half the town signed a petition to keep them open. This ensured that they remained open on a temporary basis. Since then, local members had regularly engaged with Cllr Shires on the future of public toilet provision in Stalham. It was hoped that the toilets could be relocated to another site and that a modern facility would cater for the needs of residents and visitors to the town. The amendment was the first step in this process. It was hoped that undertaking a feasibility study would help the Council understand the potential barriers and opportunities. In particular, he wanted to thank Cllrs Adams, Shires, Cushing and Dixon and the S151 Officer for their help and support in bringing it forward.

Cllr L Shires said that she welcomed the way in which opposition members had worked with her on this proposal. She was pleased to second the amendment to the budget. Whilst not a commitment to do the work, it was a commitment to do the groundwork properly. Whilst Stalham’s current public toilet provision did not meet the standard the public expected from the Council’s public conveniences, it was also arguably not ideally located. It was important to understand why the current facilities were not well used and to explore whether a better located, accessible facility would be better used. The feasibility study would provide a clear, evidence-based foundation. Without this work, it was just a case of speculating, with it, it was a case of planning effectively. The amendment aligned with the Council’s local priorities for Stalham and the Council’s wider district commitment to maintain accessible public conveniences where they were needed most. It was modest in cost and strategic in intent. She wanted to make a slight alteration and confirmed that she had already spoken to Conservative colleagues about this. Instead of funding being drawn from ‘unspent allocations from other public toilet regeneration projects across the district’ she proposed that funding would be drawn from the Asset Management Reserve,

 

The Monitoring Officer (MO) asked the proposer of the amendment if they agreed to the proposed alteration. Cllr Bayes confirmed that he did.

 

Cllr T FitzPatrick commented that if the proposer of the Budget accepted the amendment then there was no need for a debate, it would just form part of the substantive motion. The MO advised that a recorded vote was required as there had been an alteration to the amendment.

 

The Chair advised members that a recorded vote would be taken.

 

It was RESOLVED unanimously to accept the amendment.

 

The Chair then advised members that he would open the debate on the substantive budget proposals:

 

Cllr C Rouse thanked the Finance team for their hard work on the Budget. He welcomed the announcement for Ward member grants.

 

Cllr N Dixon began by congratulating the S151 Officer for delivering a balanced budget. He then said that he welcomed capital spending east of North Walsham but reiterated the need to be mindful of the impact of LGR on the MTFS and forward planning.

 

Cllr S Butikofer said that she welcomed cross-party engagement on the budget and the amendment that had come forward. She referred to the Police & Crime Commissioner’s (PCC) budget and said that as the Council’s representative on the Police & Crime Panel, the PCC was given a lot less money from central Government. Questions had been asked regarding the spending of second homes money by the PCC and it was confirmed that it would be spent on policing in Norfolk rather than the services that it had previously been spent on. She concluded by saying that she was delighted to see the consensus on looking into public toilet provision in Stalham.

 

The Chair then asked the Cllr V Holliday, Chair of the Overview & Scrutiny Committee to speak about recommendations on the Budget made by the Committee. Cllr Holliday confirmed that the budget had been reviewed in depth and the recommendations were all supported.

 

The Chair then invited Cllr T Adams to speak as seconder of the Budget 2026/2027.

Cllr Adams began by saying that rural councils were being punished in favour of Northern Metropolitan councils which were mainly Labour controlled. Yet again, the rural economy was being neglected.

 

One of the biggest challenges was the undertaking of food waste collection across the district. Again, this came from a lack of understanding of the cost of providing services in rural areas. A lot more travel time was needed to accommodate collection across a wide area. He said that the proportion of council tax collected by NNDC had reduced further year on year, despite the fact that service provision was maintained and, in some cases, even increased. There was no doubt that district councils provided good value for money.

 

Responding to Cllr Cushing’s comments regarding external funding received from Government reflected NNDC’s ambition, capability and needs and the Council had often bid for that funding. He referred to the Leisure scheme at Fakenham which made up a large part of this external funding.

 

He then spoke about the number of Cromer based projects in the capital programme. He said that it reflected which assets needed the most work and he said that previous administrations had also provided a huge amount of support for Cromer projects and schemes and these had been handed down to NNDC over time. Many of the assets in the town provided revenue and to ensure this continued they needed to be maintained.

 

In conclusion, Cllr Adams said that he welcomed the amendment and he hoped that further investment in Stalham would be coming forward. He reiterated Cllr Shires comments about the positive engagement and dialogue across the political spectrum during the budget setting process.

 

The Chair then invited Cllr Shires to speak as the proposer of the Budget.

 

Cllr Shires said that the Budget represented responsibility but also belief. Belief in North Norfolk, belief in local communities and belief in the ability to navigate difficult times with confidence and purpose. She said that it had been a very difficult financial year. The pressures were real and the funding constraints were undeniable and the landscape of local government continued to shift. However, despite this, the Budget presented to members was not about cuts but about stability, investment and resilience and members should be proud of that. It was a budget for a rural district that refused to be overlooked and that understood that behind every line of expenditure there was a resident, a family, a business or a community. The commitments were not abstract but were tangible improvements to the places people called home. In a time when public discourse could feel divided and uncertain, the Council Chamber had shown something different – seriousness, collaboration and a shared commitment to residents. She thanked the Finance team, Cabinet colleagues and all members for engaging in the process. North Norfolk was strong, the Council was stable and the direction was clear.

 

The Chair informed members that there would be a recorded vote.

 

It was proposed by Cllr l Shires, seconded by Cllr T Adams and

 

RESOLVED unanimously to

 

That having considered the Chief Finance Officer’s report on the robustness of the estimates and the adequacy of the proposed financial reserves, the following be approved:

 

1.     The 2026/27 revenue budget as outlined at Appendix A;

 

2.     The service budgets detailed in Appendix B;

 

3.     The statement of the movement in reserves as detailed at Appendix C, including;

 

3.1.  To approve the use of the Communities reserve to fund a revenue budget of £4,000 per Member to allow the award of small local grants.

 

3.2.  To approve the creation of an £0.75m Ear Marked Reserve to mitigate the Revenue costs of Local Government Reorganisation.

 

4.     The updated Capital Programme and financing for 2026/27 to 2028/29 as shown in Appendix D;

 

5.     The new capital bids recommended for approval as detailed at Appendix E;

 

6.     That Members note the current financial projections for the period 2026/27 to 2029/30 that form the Medium Term Financial Strategy as presented as a Cabinet recommendation from its meeting on 2 February 2026;

 

7.     That the minimum Level of the General Fund Reserve of £2.1m for 2026/27 to 2027/28;

 

8.     The Local Council Tax Support Scheme (LCTS) for 2026/27 as set out in paragraphs 3.18 to 3.19;

 

9.     A feasibility study will be commissioned to explore the construction of a new public toilet and Changing Places facility in Stalham, with the aim of securing long-term provision for the town. The study will assess indicative project costs, identify potential barriers and risks, and outline realistic timescales for delivery should funding become available. Funding for the study will be drawn from unspent allocations from the Asset Management Reserve to the amount of £25,000.00

 

The Chair advised members that they were now required to undertake the setting of Council Tax for 2026/2027. He invited the Section 151 Officer (Chief Financial Officer) to outline the different elements of the Council tax recommendations. He explained that Appendix F to the report set out the statutory calculations for the council tax bases.

 

It was proposed by Cllr L Shires, seconded by Cllr T Adams and

 

Following a recorded vote, RESOLVED unanimously to

 

10.  Undertake the Council Tax and statutory calculations set out at Appendix F, and set the Council Tax for 2026/27;

 

11.  The demand on the Collection Fund for 2026/27 is as follows:

·       £8,285,376 for District purposes which reflects the recommended Council Tax increase of 2.96% (£5.13) for the district element for a Band D equivalent property

·       £4,318,242 for Parish/Town Precepts,