Combined Revenue Budget and Council Tax 2026-27
Renfrewshire Council · 26 February 2026
Back to Council — 26 February 2026 and its agenda
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PROCEDURE TO BE FOLLOWED AT THE MEETING OF RENFREWSHIRE COUNCIL TO BE HELD ON 26 FEBRUARY 2026 DURING CONSIDERATION OF ITEM 3 CONCERNING REVENUE ESTIMATES AND COUNCIL TAX FOR THE FINANCIAL YEAR 2026/27 The purpose of this note is to give Members advance notice of the procedure which Provost Cameron has agreed should be followed at the Meeting of the Council on 26 February 2026. 1. The Convener of the Finance, Resources & Customer Services Policy Board (the Convener) will make his budget statement for financial year 2026/27 and move as appropriate. He will then speak to the principal points of his proposals. The motion will require to be seconded. 2. The Leader of the Council will second the motion and may address the meeting then or reserve the right to speak at a later stage of the debate. 3. For the purposes of the subsequent discussion and voting, the Convener's proposals will be taken as one motion. 4. An opportunity will then be given to the Leaders of the opposition groups and any other Members to move, and to have duly seconded, comprehensive amendments to the motion (i.e. taking together proposals for resource allocations, budget proposals, revenue estimates and the level of the council tax for the financial year 2026/27). 5. The motion and any amendments will require to be produced in writing and a copy given to each of the Members present prior to being spoken to at the meeting. Provost Cameron may then adjourn the meeting for 20 minutes to allow Members to consider the terms of the motion by the administration and any amendments by the opposition groups or other Members. Corporate Meeting Rooms have been arranged for the adjournment as follows: Administration – Corporate Meeting Room 2, Labour - Corporate Meeting Room 1, Conservative – Corporate Meeting Room 3, Independents – Communications Room, Reform - Marriage Suite. 6. There shall be no formal restriction upon the length of time given to the Convener and the Leaders of the opposition groups and any other Members to move their respective budget statements and speak in support of the principal points of their proposals. However, Provost Cameron shall have the power to require any person speaking to limit their speech in order to facilitate the conduct of the meeting. 7. Provost Cameron will then invite other Members to take part in the debate including Conveners of the Policy Boards who may wish to take the opportunity to respond concerning the services for which they have responsibility. 8. The debate will conclude with Provost Cameron giving the Convener the opportunity to reply. 9. A vote or votes will then be taken in accordance with the provisions of standing orders.
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PUBLIC To: Council On: 26 February 2026 Report by: Director of Finance & Resources Heading: Revenue Budget and Council Tax 2026/27 1. SUMMARY 1.1. This report provides Members with an overview of the Council’s financial position on the General Services Revenue budget and sets out relevant information to enable the Council to set its budget and Council Tax for 2026/27. Members are required to bring forward proposals to secure a balanced budget and to assist in this, Directors have been providing details of the financial, service and equality implications of any changes to current service levels, as requested by Members. 1.2. Members will be aware that the Council continues to experience a challenging and complex set of financial circumstances. It remains the case that the financial environment that local government in Scotland is facing remains difficult, with substantial risks even in the short term in relation to cost growth and income constraints. 1.3. Members will require to take these circumstances into account when setting the 2026/27 budget, recognising that the Council’s immediate and medium-term challenges remain significant. 1.4. The economic outlook remains volatile. Inflation rates have fallen to target levels, but interest rates have been sustained at a higher level for longer than expected and economic growth forecasts remain subdued. The year ahead is unlikely to see much improved prospects, as the degree of uncertainty remains high due to geo- political concerns.
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PUBLIC 1.5. The Draft Scottish Budget was announced on 13 January, again for one financial year only. Resources were prioritised to social security and health, which naturally places other areas of the public sector under increased financial pressure. 1.6. The local government settlement is presented in the Draft Budget as having increased by £592m in 2026/27; however, much of this increase relates to existing or new burdens, e.g. local government pay and teachers’ pay, i.e. funding that is not available to local government to address core spend pressures. The additional unearmarked sum amounts to c£235m nationally. While this increase is welcome, it is marginal in terms of the scale of cost growth the Council has experienced in recent years. 1.7. The Council’s allocation has increased from £469m (on which the Council’s 2025/26 budget was based) to £493m – a gross £23.6m or 5.0% increase. 1.8. The key elements of the Council’s revenue settlement are set out as follows: - i) Circular 1/2026 confirmed Scottish Government revenue grant funding in 2026/27 for the Council of £487.999m. The Local Government Finance Order laid before Parliament on 17 February updated this allocation to £492.696m. ii) After adjusting for new responsibilities, areas of growing responsibility and other conditional aspects of the settlement, this provides a like-for- like comparison to 2025/26 where the Council’s underlying core grant has increased by £11.9m (2.5%). 1.9. The Scottish Government also published their Public Sector Pay Policy for the medium term period 2026/27 to 2028/29, restating the 9% pay envelope covering three years from 2025/26 to 2027/28, with flexibility for employers to configure three-year proposals within this range. The current agreed pay deal leaves only 2.5% of this envelope for 2027/28. 1.10. The medium-term financial outlook for the Council remains challenging. Among other significant cost pressures, pay and the revenue grant continue to be the two biggest determinants of the Council’s financial outlook. The Scottish Government Spending Review reports a flat cash projection over the next few years. This is a significant shift from the expected position which was outlined in the Scottish Government Medium Term Financial Strategy published in the summer of 2025, which had indicated average 2.7% cash terms growth in the local government settlement over the period of the strategy. The financial outlook provided to Council in September 2025 therefore requires amendment to reflect this more pessimistic forecast. The current and forecast challenging financial position of Renfrewshire HSCP, and consequent potential impact on the Council financial position is also an increasing concern.
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PUBLIC 1.11. The Council has consistently and correctly taken a medium-term view of its financial position, agreeing transformation and savings measures that have ensured the Council positively addresses the forecast medium-term budget deficit, whilst supporting temporary investment in priority areas, and this approach continues into 2026/27. 1.12. Applying a central range of assumptions for the three-year period beyond 2026/27, derives a forecast budget deficit of broadly £40m over this period (before any decisions on the level of Council Tax, but after assumed delivery of known recurring savings). This forecast outlook is based on relatively tight grant and pay assumptions informed by the current financial settlement and information in the UK Government 2025 Budget and Scottish Government Spending Review, as well as likely affordability constraints in relation to future pay awards. 1.13. For 2026/27, budget assumptions have been updated as appropriate, including the confirmed grant available to the Council and associated conditions, the impact of new obligations, the likely impact of increasing demographic and demand pressures and expected Council Tax yield levels for 2026/27. After taking account of the cumulative impact of each of these issues, there is a recurring budget deficit for 2026/27 of £2.121m, subject to any further decisions taken by Members. 1.14. Given the ongoing financial sustainability challenge that lies ahead for the Council, in setting the 2026/27 budget, it is strongly recommended that any commitments by Members that would result in additional recurring expenditure (that would have the effect of increasing the projected medium-term deficit in future years) should be supported by offsetting sustainable savings, or increased resources arising from an increase in Council Tax. 2. RECOMMENDATIONS 2.1. Members are asked to:- 2.2. Submit for approval proposals for any savings, investments, and service changes as part of delivering a balanced budget for 2026/27, and in doing so: • consider the equality impact of any proposed service changes as referred to at paragraph 8.3; and • assess whether adequate provision is being made in the 2026/27 budget to deliver against the specified commitments linked to the Council’s grant settlement for 2026/27, as detailed at section 4. 2.3. Approve the provisions for inflationary pressures, as recommended at section 5.
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PUBLIC 2.4. Approve the revenue estimates for all services for 2026/27 subject to adjustment for the allocation of specific grants, inflationary allowances and any proposals for service changes approved by Council. 2.5. Approve the financial measures outlined in section 5, including the release of additional resources made available in 2026/27 to Renfrewshire Health and Social Care Partnership. 2.6. Approve the proposals in relation to reserve balances as recommended in section 12. 2.7. Submit for approval the Council Tax banding levels A to H inclusive to apply for 2026/27, noting the information outlined in section 9. 3. FINANCIAL OUTLOOK UPDATE 3.1. Successive reports to the Council have highlighted the challenging financial and economic environment the Council continues to face, predominantly linked to the legacy of recent high levels of inflation. 3.2. The year ahead is unlikely to see much improved prospects over that experienced in recent years; however the Council has improved certainty over forecast spend given the two year pay deals agreed in 2025/26. The global political and economic environment remains volatile, with public spending requirements necessarily remaining reactive to global events. 3.3. Beyond 2026/27, the Council’s medium-term financial outlook has been revised to an assumed flat-cash revenue settlement over the medium term, with a slight improvement in share anticipated based on the relative population growth of Renfrewshire. However, and as outlined in previous reports, it is cost increases that are driving the extremely challenging financial outlook. Incorporating an affordable level of pay increase over the 5 year period 2026/27 to 2030/31, and a reducing level of inflation on supplies and services costs suggests that the Council would be facing a c£80m funding gap by 2030/31, before any decisions on council tax. Assuming a 5.0-6.5% council tax increase in over this period, this would reduce the funding gap to c£40m. A significant level of savings will therefore still be required over the medium term in order to maintain financial sustainability. 3.4. Council has previously been advised that since 2010, transformation, efficiency and corporate financing savings in the region of £190m (up to 2025/26), have been achieved, meaning that the Council’s ability to generate further recurring transformation and efficiency savings at this scale without impacting on service delivery or quality will be increasingly challenging. Additionally, over the last decade, nationally set directives as part of grant settlements as well as local priorities, have protected spend in key areas such as Education and Social Care -
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PUBLIC which constitute around two thirds of the Council’s budget. While transformation and the opportunity for increased efficiency will continue to be key priorities, it is likely that material service reductions and spending cuts across all services could be necessary if the Council is to remain financially sustainable and also create the financial circumstances to allow longer term strategic investment in the Council’s property estate and infrastructure. 4. GRANT SETTLEMENT 4.1. On 13 January 2026, the Scottish Government published its draft budget for 2026/27, which is subject to parliamentary approval over the course of February 2026. The draft local government finance settlement was also published on this date, as set out in the Local Government Finance Circular 1/2026, which provided details of the provisional revenue and capital funding allocations for 2026/27 for local government across Scotland. There has since been a release of provisional revised settlement figures, on which this report is based. 4.2. Revised settlement figures indicate that Scottish Government revenue grant funding in 2026/27 for the Council will be £492.936m. Included within the local government settlement, the Government has provided an additional £167m nationally to support health and social care as delegated to Integration Joint Boards broken down as follows: • £160m to fund the real Living Wage uplift for adult social care workers in commissioned services via agreed contract uplifts; and • £7m to uplift free personal nursing care rates. 4.3. The Government confirmed that taken together, the total increase in funding is to be additional to each Council’s 2025/26 recurring spending delegated to Integration Authorities and not be substitutional, i.e. these allocations must be passed to the HSCP for these delegated services. This position is explained further in section 5 below. 4.4. The Cabinet Secretary also outlined a number of other issues: • The Settlement provides full discretion over decisions on council tax, with no freeze and no cap. An additional 2 bands will be added to the current council tax structure affecting properties valued in excess of £1m. This will not take effect until 1 April 2028. • Local Authorities will retain all the funding paid to them by PackUK under the Extended Producer Responsibility scheme with no adjustment to the Settlement. • There is no provision for Reducing Class Contact Time within the Settlement, although £1m has been set aside to explore and support pilot approaches to implementation.
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PUBLIC 4.5. The Council’s settlement figure includes a number of adjustments for new spending burdens, responsibilities, and conditional funding totalling £6.9m, linked primarily to the pass-through of funding to the Integration Joint Board (IJB); and the baselining of funding for the 2025/26 pay awards. 4.6. After adjusting for these areas of new burdens funding, new responsibilities, conditional funding and timing differences in the distribution of funding, the Council’s 2026/27 core grant figure as set out in the provisional local government finance settlement has, on a like-for-like basis, increased by 2.5% from 2025/26, marginally above the assumption which the Council had been working to. The Council’s share of the overall local government revenue funding settlement has increased from 3.27% to 3.30%. 4.7. The total revenue grant funding therefore available to the Council is set out in Table 1 below: Table 1 – Grant Settlement 2026/27 Note: Revenue Support Grant includes an estimated £0.240m for Free Personal Nursing Care not yet confirmed. 4.8. At the time of writing, the Budget Bill remains to be approved by the Scottish Parliament. The final stage in Parliament is scheduled for 25 February 2026, with the Local Government Finance Order anticipated on 26 February 2026. 4.9. As reported to the Council in February 2025, the Council has been notified of an allocation of funding from the UK Government Department for Environment, Food and Rural Affairs (DEFRA) in relation to packaging extended producer responsibilities (PEPR), for 2025/26 and 2026/27, intended to improve sustainability and waste management processes associated with packaging. The notified allocation for Renfrewshire for 2026/27 is £4.383m, which has been baselined into the Council’s 2026/27 Budget. It should be noted that there is some risk to this position, as future funding allocations have not been advised. £000 £000 Estimated Funding Specific Grants 7,490 Non Domestic Rate Income 114,866 Revenue Support Grant 370,580 Total Government Grant 492,936 2026/27Summary of Revenue Estimate 2026/27
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PUBLIC 5. SPENDING AND DEMAND PRESSURES 5.1. An analysis has been enclosed with this report detailing, for each service, the proposed budget changes between 2025/26 and 2026/27. The budget has been adjusted to reflect: i) the continuing costs of the current level of service, including inflationary costs related to current service levels; ii) the financial impact of any decisions already taken by the Council or its Policy Boards, as well as required adjustments to budgets to reflect specific aspects included within the financial settlement. 5.2. Demographic, socio-economic and inflationary factors continue to play a major role in driving core spending pressures for the Council. As has been reported over the course of the year, the legacy of high inflation, along with specific service pressures, has led to overspends across some services in 2025/26, as noted in section 12. 5.3. The CPI measure of inflation stood at 3.4% in December 2025, remaining above the Bank of England’s 2% target, which it expects to achieve over the next 2-3 years. However, given the very significant financial challenges and risks facing the Council over the medium term, and in line with historic practice, general non- pay inflation is not provided for in the 2026/27 budget. Where specific price, service and cost pressures are clear and unavoidable, additional budget provision has been incorporated into the draft position outlined in this report. 5.4. The recommended 2026/27 base budget position detailed in Table 3 includes a provision for pay inflation that reflects what has been agreed nationally (3.5%). In addition, COSLA, following agreement by Council Leaders, has implemented a new pay framework for Scottish local authority chief executives, effective from 1 November 2025. Due to the linkage of chief officer salaries to the chief executive pay scale, the recurring cost impact of this national pay agreement has been provided for in the draft budget. 5.5. The Financial Regulations require charges for services to be reviewed at least annually. The overview of the Council’s spending in Table 3 makes provision of £0.308m for a general inflationary uplift to relevant income charges of 5%. Adult Social Care 5.6. In terms of the core Adults and Older People Services budget, the HSCP most recently reported a 2025/26 forecast year-end overspend position of £3.2m, which will be funded from IJB reserve balances. This position remains subject to change over the remainder of the 2025/26 financial year. The HSCP is also indicating that it faces significant financial pressures moving into 2026/27, however it is currently
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PUBLIC expecting to achieve a balanced budget through the application of reserves and the delivery of any further savings options agreed by the IJB. 5.7. The HSCP is currently forecasting a budget gap in the region of £7m in 2026/27, after the transfer of funding outlined below. It should be noted that this is based on current projections and is subject to change until the IJB budget is approved. It is expected that the HSCP will have sufficient reserve balances to address this in year funding gap. 5.8. This will, however, significantly reduce the available IJB reserve balances leave the HSCP with little financial resilience as it enters 2027/28. The Integration Scheme states that should the IJB be unable to achieve a balanced budget for future years, it would be required to seek additional funding from its Partner Bodies. 5.9. As outlined above, there are specific conditions within the local government settlement which mandate the pass-through of funds related to social care to Integration Authorities. In 2026/27 there is a total of £167m within the settlement nationally which requires to be passed through: Table 2 5.10. The allocation for Free Personal Nursing Care is yet to be distributed in the settlement, so the exact figure is not yet confirmed. It is estimated at £0.240m and will be passed through upon confirmation from the Scottish Government. The Council will also pass through the relevant share of the 2025/26 local government pay settlement funding (£0.370m). 5.11. The Scottish Government has announced a further £20m across Scotland of funding for 2026/27 in relation to Adult and Children’s Services Social Care. There is no further detail at this stage on the distribution of this funding, therefore the Council’s potential share has not been incorporated into this draft budget. Once available, details will be reported to a future report to Council. Children’s Services 5.12. Funding in relation to teacher numbers has been maintained within the grant allocation from the Scottish Government without ring-fencing; and while there is no Funding National £m Renfrewshire £m Free Personal and Nursing Care (estimated, not distributed) 7.0 0.240 Living Wage (commissioned) 2026/27 160.0 5.527 Total 167.0 5.767
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PUBLIC specific grant condition in relation to maintaining teacher numbers, this is the clear expectation. There is no change to specific funding for Attainment. 5.13. In terms of known pressures within Education, the ongoing issue of increasing costs of pupil transport are noted, and provision has been included within the draft budget to address this, both in terms of mainstream and ASN transport. Members should note that the pupil transport budgets will have increased by £2.7m in the 3 years since 2023/24 - a near 70% increase. 5.14. The Scottish Government intends to begin a phased reduction in class contact time starting in the 2026/27 school year. This is an emerging pressure, as reduced class contact time will potentially impact on the number of teachers required. There is no allocated funding within the local government settlement to address this cost, and the issue will continue to require close monitoring; however, the planning assumption is that any costs incurred to implement a reduction in class contact time will be fully funded by the Scottish Government. 5.15. On 1 May 2025, the Council decided to reverse an earlier decision taken at the Education and Children's Services Policy Board in March 2024, which aligned Renfrewshire with national early years eligibility legislation, providing access provided the term after a child's third birthday. As noted at the time of the Council’s decision, the financial impact of reversing this decision is additional recurring annual costs of £0.400m within the Early Years budget. This cost has been funded from the Financial Sustainability Fund in 2025/26, and has been included as a recurring cost pressure from 2026/27. 5.16. Within the wider Children’s Service, additional budget provision has been made in line with increased funding for School Clothing Grants, and to fund the Real Living Wage uplift in commissioned Early Years and Children’s Social Care services, where there is also provision made for cost pressures relating to Residential Respite services, Sefl-Directed Support rates, and Throughcare service changes. 5.17. At its meeting on 26 February 2025, the Council approved long-term funding plan to support the 20-year Learning Estate Strategy. This entailed a commitment to set aside £2.5m of revenue resource in 2025/26 with a similar level of increase in supported borrowing to be prioritised within available resources in subsequent years, leading to capital investment capacity approaching £170m. Therefore, these draft budget proposals for 2026/27 include a recurring £3m revenue contribution towards the cost of delivering the Learning Estate Strategy.
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PUBLIC Table 3 - Summary of Recommended Base Budget Adjustments 2026/27 6. FINANCING COSTS AND LONG-TERM BORROWING 6.1. The provision for financing costs includes both debt charges payable as a result of the Council's capital investment programme and the interest gained on temporary investment of cash. In setting the 2022/23 budget, Members agreed to adjust the base budget by £7.5m, in the knowledge that this position would require to be unwound over the medium to longer term. 6.2. The proposed base budget for 2026/27 incorporates the continued re-building of the loans charges budget, with a provision of £2.280m included. Provision on this scale will require to be made over the medium to longer term in order to rebuild the core loans charges budget; with non-recurring support as required being provided through a draw on the ringfenced Loan Charges Flexibility fund. The actual position will be influenced by the progress of capital investments, with any rephasing of spend on capital projects in effect deferring the requirement to draw from balances. 6.3. Renfrewshire Council has one of the lowest debt to spend ratios in Scotland. At 31 March 2025, the ratio of financing costs to net revenue stream (General Fund) was 2.9% and the Scottish average at the same date was 6.0%. As noted above, the scale of investment need in the whole learning estate over the long-term period will be increase financing costs in the absence of any Scottish Government support. Impact of previous Council and Board Decisions £000 £000 Financial Sustainability Workstreams (1,121) Directorate Targets (1,459) Corporate budget adjustments (250) Total Reductions (2,830) Add Unavoidable Pressures: Financial Settlement adjustments Health and Social Care 5,767 Reversal of one-off settlement adjustments (2,073) Financial Settlement adjustments Other 3,196 Staff related 495 Contract Payment Adjustments 4,809 Requisition Adjustments 897 Other Unavoidable Pressures 3,270 16,361 Long term debt budget 5,280 Net Increase in Provision for inflationary pressures (pay) 15,366 Net Base Budget Increase 34,177 2026/27
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PUBLIC 7. SAVINGS 7.1. Reports to Council over the course of 2025 and previous years have outlined a range of service transformation activity alongside the development of a range of financial sustainability workstreams which aim to achieve savings over the medium term. Due mainly to significant increases in cost pressures over the years, the Council’s development and delivery of savings has fallen behind the level required to support longer term financial sustainability. 7.2. Council agreed in September 2025 a £6.3m savings target for 2026/27 as a route to maintaining recurring financial balance over the medium term. Directors and their management teams have been developing options to deliver savings at this scale; however, the implementation of proposals is now expected to be phased towards future years. Based on work undertaken by services to date, and that for which specific plans are being developed over the next two years, it is estimated that £2.8m of savings can be confidently incorporated into the 2026/27 base budget. Savings targeted from early intervention, the strategic review of culture and leisure services and income growth will not be achieved as targeted. Departmental savings targets are also proving very challenging to achieve after more than a decade of year on year savings being taken. 7.3. The Council will continue to require to generate savings at scale to ensure ongoing financial sustainability over the medium term. A recent report to the Leadership Board outlined progress on the current phase of transformation, building on a long period of successive change programmes that the Council has undertaken since 2009. 8. EXPENDITURE OVERVIEW 8.1. The Council approved spending for 2025/26 of £588.617m. It is estimated that £622.794m (as detailed in Table 4) is needed to fund the costs of maintaining present service levels, new responsibilities and conditional funding commitments provided as part of the financial settlement, new cost burdens, and addressing known pressures and demands in 2026/27.
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PUBLIC Table 4 – Estimated Spending Need 2026/27 8.2. Significant cost pressures are anticipated to persist beyond 2026/27 for the Council. Members will continue to be updated on the medium-term financial position but should be aware that in setting the 2026/27 budget, any commitments to additional recurring expenditure will increase the projected deficit in future years, unless they are offset by recurring savings, or increases in Council Tax or other income. Similarly, any decision taken now to address the future year budget deficits provides greater certainty for service planning and the workforce, and also supports the future financial stability of the Council. 8.3. Where the Council is making decisions in relation to its spending priorities, it is obliged to comply with the public sector equality duty set out in the Equalities Act 2010. This means that the Council must have due regard to the need to: • Eliminate unlawful discrimination, harassment and victimisation and other prohibited conduct; • Advance equality of opportunity between people who share a relevant characteristic and those who do not; and • Foster good relations between people who share a protected characteristic and those who do not. 8.4. To meet this requirement, where necessary the Council must assess the impact of applying a new policy or decision against these three needs and at the point where a decision is made, elected members must have sufficient information available to them to assess that impact. Members, in considering their budget proposals prior to presentation at the Council meeting, are therefore encouraged to seek advice from Directors on the equality implications of each proposal, including any which are covered by the Fairer Scotland duty. Specific service areas may also need to £000 £000 Estimated Funding Estimated Spending need 2025/26 588,617 Adjustments per Table 3 Budget reductions (2,830) Unavoidable budget increases 16,361 Long-term debt budget provision 5,280 18,811 Base Budget 2026/27 607,428 Inflationary cost provision (pay) 15,366 Estimated Spending Need 2026/27 622,794 Summary of Revenue Estimate 2026/27 2026/27
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PUBLIC be impact assessed in relation to Armed Forces Covenant duties or the Environmental Assessment (Scotland) Act 2005. 9. COUNCIL TAX 9.1. The Council’s level of Council Tax (Band D) for 2025/26 is £1,572.61 and is £29.31 (1.9%) above the Scottish average. It is estimated that in 2026/27 each £1 of Council Tax will yield £78,121 gross (£66,071 net of adjustment for Council Tax Reduction), higher than 2025/26. The increase in the yield reflects anticipated growth in the number of dwellings charged (the Council Tax base). 9.2. A maximum net gross yield of £122.8m can be anticipated from the forecast Council Tax base and present Council Tax levels. Within the context of the current service resources, specific collection initiatives continue to be implemented to support the collection of Council Tax, including the recovery of arrears for prior years. It is anticipated that £0.5m will be collected in 2026/27 from prior year levies. 9.3. Members will recall from the financial update report to Council in September that the assumed level of council tax increase for planning purposes was 6.5% over the next two financial years. Increases at this level (assuming all other assumptions hold true) are likely to still leave the Council with a substantial structural deficit over this period, even after planned savings are assumed to have been delivered. 9.4. Members are required to determine the level of Council Tax for Bands A to H inclusive that should apply for 2026/27, considering options for a level of increase that will return the Council to a recurring balanced budget position. 10. RESOURCE ALLOCATIONS 10.1. Appendix 1 attached summarises the provisional resource allocation for each service. The resource allocations will be subject to amendment to reflect the Council's views on budget proposals, inflationary pressures and the allocation of central support costs, specific grants and capital charges. 11. BUDGET OVERVIEW 2026/27 11.1. The overview budget position for the Council for 2026/27, prior to any changes in service levels or Council Tax levels, is outlined in Table 5 below. This overview position confirms a recurring budget deficit position before any council tax decision, which could be temporarily addressed through the application of the ring- fenced Financial Sustainability Fund. As members are aware, the use of ring- fenced reserves can only ever be a temporary solution to the financial position and should only be agreed while substantive measures are taken to move the Council’s finances back to recurring financial balance.
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PUBLIC Table 5 – Budget Overview 2026/27 12. PROBABLE OUTTURN 2025/26, BALANCES AND RESERVES 12.1. Appendix 1 to this report details an overview of the Probable Outturn for 2025/26. The Council’s general fund balances as at 1 April 2025 were £138.769m (see Table 6 below) and the significant majority of this was earmarked for specific purposes. This balance also reflects the previously agreed de minimis in unallocated balances of £10m. As reported to Members over the course of 2025/26, an overspend position in the order of £1.7m is projected for council departments (Period 8, excluding Adult Social Care services). 12.2. It remains important that the Council maintains sufficient unallocated reserves to provide an appropriate degree of financial protection and immediate financial resilience moving forward, and that the level of unallocated reserves held is guided by the risk profile faced by the Council. The Financial Sustainability Fund was established for this primary reason, to support the financial position of the Council in circumstances where, in the short term, savings have not been generated at the scale or pace required to ensure financial balance. In 2025/26, the Financial Sustainability Fund benefited from the second (and final) year of low employer pension contributions. 12.3. It is recognised that the financial risk profile for the Council has increased significantly over the past number of years and in this context the Council previously approved to maintain unallocated balances at a minimum £10m. The actual outturn on unallocated balances in 2024/25 of £10.279m represented 1.9% of the Council’s budgeted net expenditure; a level that remains both prudent and appropriate for the Council’s circumstances. As always, the Accounts Commission will continue to closely monitor the Council’s position in respect to unallocated reserves as part of its wider assessment of the Council’s financial stability and resilience. 12.4. Table 6 below summarises the forecast movement and year-end position of General Fund balances, including those earmarked for agreed purposes and 2026/27 £000 Estimated Funding Total Government Grant advised 492,936 Council Tax Income 122,854 Council Tax / Community Charge Arrears Recovery 500 PEPR Funding baselined (DEFRA) 4,383 Total Income 620,673 Total Estimated Spending Need (622,794) Estimated Deficit (2,121) Summary of Revenue Estimate 2026/27
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PUBLIC estimated future liabilities. It should be noted this forecast is subject to some volatility as the 2025/26 financial position is closed out. Table 6 – General Fund Balances 2025/26 12.5. As previously reported to Council in its consideration of the annual accounts, and as detailed in Table 7 below, other specific reserves continue to be maintained. Summary of Usable Reserves 2025/26 Balance at 01/04/2025 Forecast Movement Forecast Balance at 31/03/2026 General Fund Balances £000 £000 £000 Alcohol and Drugs Commission 628 (628) - Children's Services 4,730 (918) 3,812 City Deal 1,550 (813) 737 Civil Contingencies Shared Service 119 - 119 Clydeplan Unfunded Pension Transfer - 145 145 Connected Communities - 75 75 Culture Bid Legacy 1,826 (541) 1,285 Development Contribution – Paisley Town Centre 254 - 254 Digital Infrastructure 441 - 441 Early Years Change Fund 2,100 (68) 2,032 Employability 10,700 (750) 9,950 Environment & Infrastructure 840 50 890 Fairer Renfrewshire Programme 2,336 (767) 1,569 Financial Sustainability Fund 21,198 13,001 34,199 Fly Tipping Enforcement 50 (50) - Homelessness - 348 348 Learning Estate Support Fund 2,000 (167) 1,833 Leisure: Inclusive Play Facility 7 (7) - Loan Charges Flexibility Fund 63,656 1,000 64,656 Local Authority Economic Recovery Fund 100 (100) - Local Heat and Energy Efficiency Strategy 36 (36) - Local Place Plans - 20 20 Oakshaw Heritage Trail 50 (50) - Planning Enforcement 120 (22) 98 Private Sector Housing Grant 2,167 214 2,381 Pupil Equity Fund 661 - 661 Resettlement and Asylum Fund 1,138 (419) 719 School Music Participation 260 - 260 Service Modernisation and Reform Fund 10,174 (1,544) 8,630 Sustainable Communities Fund 260 16 276 Villages Improvement Fund 136 - 136 Welfare Reform 952 (473) 479 Unallocated General Fund Balance 10,280 - 10,280 Total General Fund Balances 138,769 7,516 146,285
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PUBLIC Table 7 – Specific Reserves 2025/26 12.6. The Insurance Fund covers the main classes of insurance and is earmarked for insurance purposes such as the cost of insurance excesses and premiums. 12.7. The DHN Repair and Renewal Fund is earmarked for future component replacement of the District Heating Network at the Advanced Manufacturing Innovation District Scotland (AMIDS). 12.8. The Reservoir Repairs Fund represents funding received from a developer for repairs in perpetuity in relation to the Thornly Dam. 12.9. The Education Capital Items fund is earmarked for specific schools for the planned purchases of a capital nature such as computers and information communication technology equipment. 12.10. The Investment Capital Fund is used to hold planned contributions to the delivery of the ongoing capital investment programmes, as well as resources that support the long-term debt smoothing strategy. These debt smoothing resources are utilised to manage both the debt levels linked with the capital investment programme and the associated debt servicing costs i.e. principal repayments, chargeable to the revenue account each year. 13. BUDGETARY CONTROL 13.1. Directors are expected to manage their approved budgets on a bottom-line basis in accordance with the Financial Regulations. If an overspend emerges during the year on any approved budget line the Director is expected to take corrective action, seeking Policy Board approval for any policy changes involved in such actions. Members should also be aware that, given the reliance on non-recurring reserves to produce a balanced budget, any further decisions taken by the Council or Policy Boards to increase spend over the course of the year must give consideration to how this spend will be funded. Summary of Usable Reserves 2025/26 Balance at 01/04/2025 Forecast Movement Forecast Balance at 31/03/2026 Specific Reserves £000 £000 £000 Insurance Fund 3,029 100 3,129 DHN Repair and Renewal Fund 186 - 186 Reservoir Repair Fund 358 15 373 Education Capital Items Fund 1,407 (112) 1,295 Investment Programme Capital Fund 79,028 (17,201) 61,827 Total Specific Reserves 84,008 (17,198) 66,810 Total Usable Reserves 222,777 (9,682) 213,095
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PUBLIC 14. FURTHER ACTION 14.1. Members wishing clarification of the details of this report or the enclosed Revenue Estimates pack should contact the Director of Finance & Resources or the Chief Executive or any Director in relation to their specific service responsibilities. 14.2. Members wishing advice on budget proposals should contact the appropriate service Director. ————————————————————————————————————— Implications of the Report 1. Financial - The report and enclosures provide the background information on the 2026/27 revenue budget, identifying a recurring deficit position in year, with a significant budget deficit of up to c£80m forecast over the medium term, before any decisions on council tax. Council is required to set council tax levels for 2026/27. 2. HR & Organisational Development - implications will be subject to any budget proposals agreed. 3. Community/Council Planning – implications will be subject to any budget proposal agreed. Members should however keep in mind that over the medium term the Council is anticipated to have to continue to increasingly make key choices to direct resources to support the delivery of those outcomes of greatest priority as defined in the Council Plan. 4. Legal – the Council is legally required to set a balanced budget by 11 March each year. 5. Property/Assets - implications will be subject to any budget proposals agreed. 6. Information Technology - implications will be subject to any budget proposals agreed. 7. Equality & Human Rights - Where the Council is making decisions in relation to its spending priorities, it is obliged to comply with the public sector equality duty set out in the Equalities Act 2010. Further detail is outlined in Section 8 of this report. 8. Health & Safety – none arising directly from this report. 9. Procurement – none arising directly from this report. 10. Risk - As outlined in the report, the Council continues to be faced with significant financial risk in setting its 2026/27 budget. The financial
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PUBLIC outlook over the medium term remains loaded with downside risks, and the scale of cost reduction necessary to align Council spending with available resources over the medium term brings with it additional risk for the Council. In recognition of this, it is critical that the Council’s financial resilience is maintained and that decisions taken by the Council pay due regard to the medium-term financial outlook. 11. Privacy Impact - implications will be subject to any budget proposals agreed. 12. Cosla Policy Position – implications will be subject to any budget proposals agreed. 13. Children’s Rights - implications will be subject to any budget proposals agreed. 14. Climate Risk – implications will be subject to any budget proposals agreed. Author: Alastair MacArthur, Director of Finance & Resources
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PUBLIC APPENDIX 1 RENFREWSHIRE COUNCIL PROVISIONAL RESOURCE ALLOCATION STATEMENT (subject to amendment by any budget proposals approved by Council) * Includes £4.040m of non-recurring items. The recurring Budget position in 2025/26 is a surplus of £3.195m. Note: The Probable Outturn at Period 8 2025/26 includes a £1.742m forecast overspend for Council General Services, and £5.393m for Adult Social Care (which will require to be drawn from IJB reserves). Net Expenditure Budget before Council Decisions Revised Budget* Probable Outturn Draft Estimates £000 £000 £000 £000 Children's Services 265,513 268,865 269,926 286,852 Adult Services 111,803 111,792 117,185 118,259 Environment, Housing and Infrastructure 64,919 69,568 70,366 79,282 Finance and Resources 45,739 46,189 46,114 52,379 Miscellaneous Services 41,738 41,762 41,762 24,339 Leisure Services 14,096 14,144 14,144 14,907 Chief Executive Services 11,059 12,391 12,349 13,296 Loans Fund 9,251 9,228 9,228 14,258 Strathclyde Passenger Transport 3,379 3,379 3,379 3,479 Renfrewshire Valuation Joint Board 1,650 1,650 1,650 1,743 Corporate Items 14,000 14,000 14,000 14,000 Total Estimated Spending Need 583,147 592,968 600,103 622,794 Funding Income (per Table 5) (581,206) (592,123) (592,123) (620,673) Budget Deficit 1,941 845 7,980 2,121 2025/26 2026/27
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES CHILDREN'S SERVICES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 280,739,729 Adjustment to Current Year Estimates Settlement Adjustments: School Clothing Grants 10,000 Educational Psychologists 4,000 Children’s Social Care Pay Uplift in Commissioned Services 747,000 Teachers' Pay 2025/26 1,549,000 Early Years Provider Rates 396,000 Justice Specific Grant increase 179,000 Gaelic Specific Grant increase 5,000 2,890,000 Unavoidable Pressures: Annual Contractual PPP Indexation Adjustment 470,000 Early Years Eligibility Criteria additional cost 400,000 Early Years Provider Rates 695,000 Children's social care pressures 1,206,000 ASN Transport contractual increase 460,000 School waste collection and disposal 350,000 Mainstream Schools Transport contractual increase 420,000 4,001,000 Transfers (to) / from other Services: Early Years Provider Rates - NIC impact 294,000 Employer Pension increase to 17.5% 345,104 639,104 Proposed Savings: Financial Sustainability Workstreams (663,333) Directorate Workstreams (460,000) (1,123,333) 2026/27 Estimates (before Council decisions) 287,146,500
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES ADULT SERVICES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 111,791,559 Adjustment to Current Year Estimates Settlement Adjustments: Social Care Living Wage 2026/27 5,527,000 Free Personal and Nursing care 240,000 5,767,000 Unavoidable Pressures: LG Pay Funding 370,000 370,000 2026/27 Estimates (before Council decisions) 117,928,559
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES ENVIRONMENT, HOUSING AND INFRASTRUCTURE Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 71,155,406 Adjustment to Current Year Estimates Unavoidable Pressures: Paisley Grammar Community Campus Building Management 97,757 Annual Contractual Indexation Adjustment - Clyde Valley Waste 152,000 Ferguslie Belltrees Grounds Maintenance 25,000 Inflation on Food and Provisions (Soft FM) 349,000 Fleet maintenance inflationary pressure 200,000 HVO Fuel rollout 287,000 Waste collection pressure due to increased households 95,000 Property Lifecycle Maintenance 1,500,000 Inflation on Cleaning Materials (Soft FM) 50,000 Contractual inflation on waste disposal 526,000 3,281,757 Transfers (to) / from other Services: Employer Pension increase to 17.5% 5,240,414 5,240,414 Proposed Savings: Financial Sustainability Workstreams (150,000) Directorate Workstreams (246,000) (396,000) 2026/27 Estimates (before Council decisions) 79,281,577
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES FINANCE AND RESOURCES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 48,188,174 Adjustment to Current Year Estimates Settlement Adjustments: Discretionary Housing Payments initial grant allocation 238,000 238,000 Unavoidable Pressures: ICT software maintenance contractual increases 251,500 ICT contract renewals and migrations 199,000 WiFi in schools and corporate estate 20,000 Other contractual increases (Postage and Occupational Health) 161,500 Elected Member Remuneration 48,000 Removal of Clydeplan SLA income 8,000 Staffing and job evaluation review costs 263,900 External audit fees increase 23,000 974,900 Transfers (to) / from other Services: Election software increases 27,200 Employer Pension increase to 17.5% 3,703,700 3,730,900 Proposed Savings: Service Redesign (various services) (666,900) Non-staffing savings (various services) (61,000) Licensing and registration income (25,000) (752,900) 2026/27 Estimates (before Council decisions) 52,379,074
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES MISCELLANEOUS SERVICES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 22,151,705 Adjustment to Current Year Estimates Settlement Adjustments: Impact of one-off 2025/26 adjustments (2,073,000) (2,073,000) Unavoidable Pressures: Increase in Water charges 102,000 102,000 Transfers (to) / from other Services: Election software increases (27,200) Early Years Provider Rates - NIC impact (294,000) Employer Pension increase to 17.5% to other services (10,173,218) (10,494,418) Inflationary uplift (proposed): Financial Sustainability Workstreams - Fees and Charges Uplift (5%) (308,000) Pay inflation 2026/27 14,996,900 14,688,900 2026/27 Estimates (before Council decisions) 24,375,187
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES LEISURE SERVICES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 14,143,758 Adjustment to Current Year Estimates Unavoidable Pressures: Requisition increase re pay inflation 2026/27 463,300 Provision for PMR increased running costs 300,000 763,300 2026/27 Estimates (before Council decisions) 14,907,058
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES CHIEF EXECUTIVE SERVICES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 12,189,731 Adjustment to Current Year Estimates Unavoidable Pressures: Houstoun Court - rental income loss 48,000 Planning and Building Standards review 75,400 Contractual increases 99,300 222,700 Transfers (to) / from other Services: Employer Pension increase to 17.5% 884,000 884,000 2026/27 Estimates (before Council decisions) 13,296,431
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES LOANS FUND Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 9,228,176 Adjustment to Current Year Estimates Unavoidable Pressures: Learning Estate Strategy 3,000,000 Loan Charges rebuild 2,280,000 5,280,000 Proposed Savings: Service Concession Flexibility (IFRS16) (250,000) (250,000) 2026/27 Estimates (before Council decisions) 14,258,176
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES STRATHCLYDE PASSENGER TRANSPORT Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 3,378,698 Adjustment to Current Year Estimates Transfers (to) / from other Services: Inflationary increase in SPT requisition 100,000 100,000 2026/27 Estimates (before Council decisions) 3,478,698
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES RENFREWSHIRE VALUATION JOINT BOARD Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 1,650,150 Adjustment to Current Year Estimates Settlement Adjustments: Increase in Barclay requisition to RVJB 68,000 Unavoidable Pressures: Increase in core requisition to RVJB 25,300 2026/27 Estimates (before Council decisions) 1,743,450
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES FUNDING INCOME Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates (Gross) (591,811,892) Adjustment to Current Year Estimates Settlement Adjustments GRG + NDRI Increase (23,682,800) DEFRA Funding (4,382,882) Specific Grant adjustment (184,000) Council Tax base growth (611,431) (28,861,113) 2026/27 Estimates (before Council decisions) (620,673,005)