To consider approval and referral to Council on 4 March 2026: The General Fund Budget for 2026/27, including the use of reserves, Medium Term Financial Strategy, Capital Programme and Strategy, Treasury Management Policy/Strategy and the Annual Delivery Plan including the approval of Council Tax levels.

That Executive Board approve the Draft Budget 2026/27 including all appendices and it be forwarded to Council on 4 March 2026 for consideration and approval with the following specific recommendations:

1. The Medium-Term Financial Strategy (at Appendix 1 to the report referred) be approved.

2. That the Council Tax Base for East Lindsey District Council of 49,379 (Band D equivalent) set for 2026/27 on the 23 December 2025 by the Director of Finance & Section 151 Officer under officer delegation in line with the Constitution be noted.

3. That the Revenue Estimates for the General Fund for 2026/27 (Appendices 1, 1a, and 1b to the report referred) be approved.

4. The additions to and use of reserves (as detailed at Appendix 1 to the report referred) be approved.

5. The Capital Programme and Capital Strategy (Appendices 2 and 3 to the report referred) be approved.

6. That the Treasury Management Policy Statement Treasury Management Strategy Statement MRP Policy and Annual Investment Strategy and Treasury Management Practices (Appendix 4a, 4b and 4c to the report referred) be approved.

7. The Fees and Charges Schedule 2026/27 (Appendix 5 to the report referred) be approved.

8. That the report of the Section 151 Officer, under Section 25 of the Local Government Act 2003 on the robustness of the estimates made for the purposes of the budget calculations and adequacy of proposed financial reserves be noted (Paragraph 10).

9. That the Council Tax for a Band D property in 2026/27 be set at £176.67 (£5.13 per annum increase on 2025/26 levels) for East Lindsey District Council.

10. That £10 million to be set aside from the Corporate Priorities Reserve to fund ‘ELIF 2’ as outlined in Section 7 of Appendix 1 be noted.

11. That the recommendations detailed in paragraph 7.3 of Appendix 1 with regards to the management and delivery of ‘ELIF 2’ be agreed.

12. The Annual Delivery Plan for 2026/27 (Appendix 6 to the report referred) be approved.

13. That Executive Board grant delegated authority to the Director of Finance & Section 151 Officer in consultation with the Portfolio Holder for Finance for the further amendment of this document (where needed to ensure financial integrity and reconciliation) in preparation for Council on 4^th March 2026.

A report was presented to consider approval and referral to Council on 4 March 2026 of the General Fund Budget for 2026/27, including the use of reserves, Medium Term Financial Strategy, Capital Programme and Strategy, Treasury Management Policy/Strategy and the Annual Delivery Plan including the approval of Council Tax levels, pages 11 to 22 of the Agenda refer.

During his introduction of the report, the Portfolio Holder for Finance highlighted that the creation of the budget for the forthcoming year had been challenging, which had been due in large part to the uncertainty surrounding the outcome of the government’s ‘Fairer Funding Review’, the conclusions of which had not become clear until mid?December 2025.  In addition, errors had been identified in the methodology used by the government to calculate the figures and as a result, further adjustments had been required within the final Local Government Settlement, which had only been released late on the previous Wednesday.

Key points were highlighted as follows:

·       With regard to the General Fund budget, the Portfolio Holder explained that while the move to multi?year settlements improved medium?term financial visibility, the immediate impact for district councils had included a reduction of £1.6m in central funding, followed by a further £1.4m reduction in 2027/28.

·       The reset of business rates and the revaluation exercise being undertaken had materially reduced locally retained income, placing greater reliance on Revenue Support Grant and transitional protections provided directly by the government.  This had come at a time when the Council was seeking to support the most vulnerable in the community, create a vibrant district for residents and foster an environment in which businesses could grow.

·       The budget included expenditure for the introduction of the food waste collection service, for which no additional government funding had been received, however the Council had managed to accommodate the service within existing resources.

·       Internal Drainage Boards continued to present significant financial pressures, with their overall levy having increased by more than 43% since 2021/22.  The total cost for 2026/27 would amount to £5.45m,  representing 61% of the Council Tax retained by the authority.

·       Against this backdrop, the proposed budget delivered a balanced and sustainable financial position for 2026/27, supported statutory service delivery, protected financial resilience and maintained capacity for transformation and investment.  Despite the challenges, the Council continued to explore new opportunities, develop innovative approaches to service delivery, and identify efficiencies and new income streams to support the revenue budget.

·       Following the success of the East Lindsey Investment Fund (ELIF) 1, under which the outcomes for all four priority themes had been achieved, the Council proposed the establishment of a new scheme (ELIF 2) with a further £10m allocation and the four priority themes would remain unchanged.

Members were referred to the treasury management documents which set out the Council’s Treasury Management Strategy for the forthcoming year, including the management of borrowing, investments and cash flows and demonstrated that robust arrangements were in place.  Treasury activities had delivered significantly increased in?year returns, contributing to the balanced budget.

The Portfolio Holder also highlighted the proposed capital programme of £21.2m for 2026/27.  This included major investments in waste transformation, warm homes initiatives, local grants and the completion of works at Alford Manor House and Spilsby Sessions House. 

The proposals also included an increase in Council Tax in line with government guidance, equating to an increase of just over 10 pence per week for a Band D property.  Members were reminded that 81% of properties in East Lindsey fell within Council Tax bands A to C (A: 38%, B: 21%, C: 22%) and would therefore experience increases lower than the Band D figure.

In conclusion, the Portfolio Holder for Finance stated that the budget responded to one of the most complex settlements faced by local government.  It reflected the Council’s strong planning capability, strategic foresight and commitment to local services.  The Council continued to invest where it mattered most, maintained firm financial discipline, and positioned itself for a stable and sustainable future.

The full background and details were included at Sections 1 to 11 of the report, pages 13 to 19 of the Agenda refer.  The full suite of budget papers was attached at Appendices 1, 1A, 1B, 2, 3, 4A, 4B, 4C, 5, and 7 to the report referred.

Members were invited to put their comments forward. 

The Portfolio Holder for Operational Services reported that concerns had been raised at the meeting of the Lincolnshire Waste Partnership earlier that day regarding potential future burdens relating to the implementation of food waste collections and forthcoming requirements around the recycling of soft plastics, tins, and aluminium.

He advised Members that a letter on these matters had been sent to the government, however responsibility appeared to be being passed between DEFRA and the Treasury, with neither department committing to provide future support for the anticipated new obligations.  The Portfolio Holder advised that the Council should therefore be mindful of the potential additional burdens that might arise as these requirements were introduced.

In response, the Deputy Leader of the Council stated that the Executive accepted that further burdens were likely to arise and that there remained a degree of opacity in the approach taken by central government, regardless of political administration.  The Deputy Leader added that the report presented was highly impressive and emphasised that the Executive recognised and appreciated the considerable amount of work undertaken by officers and by the Portfolio Holder for Finance in producing the report and in ensuring that the Council remained on track.

The Portfolio Holder for Coastal Economy commented that the Portfolio Holder for Finance and his team had produced an excellent piece of work.  It was further noted that this built upon the strong foundations established by Councillor Fry during his previous tenure as Portfolio Holder for Finance which emphasised that the progress reflected a long?term programme which had enabled the Council to reach its current position, including the ability to establish ELIF 2 and allocate £10m to the scheme.

In conclusion, the Portfolio Holder for Finance agreed that it was entirely appropriate to commend the work of successive administrations of the Council, and in particular the contributions of Councillor Fry.  He added that he was supported by highly capable officers, including the Section 151 Officer and Head of Finance Delivery (ELDC) and emphasised that these officers ensured the effectiveness of the Council’s financial planning and performance.  He further stated that the successes enjoyed by the authority had been built on the dedication and professionalism of individuals who had contributed over many years.

The recommendations were duly proposed and seconded.

RESOLVED

That Executive Board approve the Draft Budget 2026/27 including all appendices and it be forwarded to Council on 4 March 2026 for consideration and approval with the following specific recommendations:

1. The Medium-Term Financial Strategy (at Appendix 1 to the report referred) be approved.

2. That the Council Tax Base for East Lindsey District Council of 49,379 (Band D equivalent) set for 2026/27 on the 23 December 2025 by the Director of Finance & Section 151 Officer under officer delegation in line with the Constitution be noted.

3. That the Revenue Estimates for the General Fund for 2026/27 (Appendices 1, 1a, and 1b to the report referred) be approved.

4. The additions to and use of reserves (as detailed at Appendix 1 to the report referred) be approved.

5. The Capital Programme and Capital Strategy (Appendices 2 and 3 to the report referred) be approved.

6. That the Treasury Management Policy Statement Treasury Management Strategy Statement MRP Policy and Annual Investment Strategy and Treasury Management Practices (Appendix 4a, 4b and 4c to the report referred) be approved.

7. The Fees and Charges Schedule 2026/27 (Appendix 5 to the report referred) be approved.

8. That the report of the Section 151 Officer, under Section 25 of the Local Government Act 2003 on the robustness of the estimates made for the purposes of the budget calculations and adequacy of proposed financial reserves be noted (Paragraph 10).

9. That the Council Tax for a Band D property in 2026/27 be set at £176.67 (£5.13 per annum increase on 2025/26 levels) for East Lindsey District Council.

10. That £10m to be set aside from the Corporate Priorities Reserve to fund ‘ELIF 2’ as outlined in Section 7 of Appendix 1 be noted.

11. That the recommendations detailed in paragraph 7.3 of Appendix 1 with regards to the management and delivery of ‘ELIF 2’ be agreed.

12. The Annual Delivery Plan for 2026/27 (Appendix 6 to the report referred) be approved.

13. That Executive Board grant delegated authority to the Director of Finance & Section 151 Officer in consultation with the Portfolio Holder for Finance for the further amendment of this document (where needed to ensure financial integrity and reconciliation) in preparation for Council on 4^th March 2026.

Reason

To comply with the budgetary and policy framework and legislative requirement.

Other Options

No other options were considered.