Decision details

Proposed decision –

Cabinet is asked to:

a)    AGREE the revised net revenue budget requirement for 2026-27, arising from the final funding announcements, as detailed in the Cabinet report.

b)    AGREE that the increase in net budget requirement is reflected in increased spending where funding is from a consolidated grant, transitional un-ring-fenced grant and any changes in retained business rate income is transferred to reserves

c)    AGREE technical changes to transfer remaining KCC Safety Valve contributions to new earmarked SEND reserve following the announcement that the Safety Valve will be ceased as a result of the new High Needs Sustainability Grant

Reason for the decision

The net revenue budget for 2026-27 is due to be approved by County Council on 12 February 2026. 

The Council has now received the following final funding announcements for 2026-27:

• Final Local Government Finance Settlement from Ministry of Housing, Local Government and Communities (MHCLG)
• Retained Business Rates and Business Rates collection fund balances from the 12 Kent District councils

These final announcements result in an increase in the overall net budget requirement for 2026-27and require some technical changes to the budget following the government’s announcement to cease the current Safety Valve agreement and replace it with the new High Needs Sustainability Grant.

Background

The report on late changes to the 2026-27 budget will be reported to Cabinet on 26^th March 2026 in accordance with the recommendations that will be presented to County Council on 12^th February 2026.

The Cabinet report provides detail of the additional funding arising from these final funding announcements, including technical changes regarding the funding of High Needs / Special Educational Needs and Disabilities, and recommends how this additional funding should be used. 

Options (other options considered but discarded)

N/A

How the proposed decision supports the Council’s Strategic Statement

The Council’s strategic statement, Reforming Kent 2025-28, recognises the significant financial and demand pressures the Council faces, balancing the need to manage spending, deliver savings and generate income, whilst delivering positive outcomes for Kent residents, businesses and local communities.

The Cabinet agree to:

a)    APPROVE the revised net revenue budget for 2026-27 of £1,654.5m [one thousand, six hundred and fifty-four million, five hundred thousand pounds], arising from the final funding announcements.

b)   APPROVE that the increase in the net budget is reflected in increased spending where funding is from a consolidated grant (£115k [one hundred and fifteen thousand pounds] for Domestic Abuse and £0.3k [three hundred pounds]for Crisis and Resilience), with the transitional changes to the Revenue Support Grant of £6,570k [six thousand, five hundred and seventy thousand pounds] transferred to reserves.

c)    APPROVE the reduction in retained business rates income from renewable energy £169.6k [one hundred and sixty-nine thousand, six hundred pounds] and collection fund deficit of £151.7k are balanced with a drawdown of £321.3k [three hundred and twenty-one thousand, three hundred pounds] from the local taxation reserve.

d)   APPROVE the technical changes to transfer the residual balance of the £61.1m [sixty-one million, one hundred thousand pounds] previous years’ contributions and £20.2m [twenty million, two hundred thousand pounds] of future years’ KCC Safety Valve contributions to a new earmarked SEND reserve.  This follows the government’s announcement that the Safety Valve Programme will cease on 1st April 2026 as a result of the introduction of the new High Needs Sustainability Grant.

e)    APPROVE the one-off increase in member community grants for 2026-27 to £4,600 [four thousand six hundred pounds] per member.

f)     NOTE the other late changes to the specific grants and minor technical changes as reflected in the updated High level 2026-27 Budget & 2026-29 Medium Term Financial Plan at appendix A and Key Service analysis at appendix B to the Cabinet report.

g)   NOTE the impact of these late changes on the S25 assurance as shown in section 6 of the Cabinet report