The Section 151 Officer introduced the report and highlighted the following:

• The report set out the final 2026/27 revenue budget, developed through a cross‑party working group, with all political groups invited to participate, and based on work undertaken since June.
• The budget updated the draft proposals reported in November to reflect the outcomes of the Fair Funding Review and the Business Rates Reset.
• The funding position for 2026/27 was broadly neutral, with the loss of business rates growth largely offset by an increase in Revenue Support Grant.
• Changes to the Revenue Support Grant incorporated several service‑specific grants and new burdens from 2026/27 onwards, and it was confirmed that 2025/26 was the final year of the New Homes Bonus.
• Transitional protection for the loss of business rates growth would end, resulting in a reduction of over £700,000 in 2027/28 and 2028/29, alongside a reduction in homelessness funding in those years.
• These issues had been raised with MHCLG and the LGA, and while the final settlement was awaited, no material changes were anticipated.
• The updated budget position included a planned use of £459,000 from reserves.
• The Section 25 report confirmed that the budget estimates and reserve balances were considered robust, while noting that longer‑term funding gaps would require permanent solutions.
• The report also covered the capital programme, fees and charges, use of reserves, collection fund balances, council tax base, the MRP statement, and parish council precepts.

The Chair then invited comments from members and these included:

• Concern was raised regarding the reduction in homelessness funding, with Members questioning why funding levels would decrease despite ongoing and increasing homelessness pressures.
• Objection was expressed to the proposed introduction of parking charges at four currently free car parks on the Isle of Sheppey, with Members requesting that these charges be removed or postponed.
• It was argued that the introduction of charges could have a negative impact on town centres, local businesses, charities and service users, potentially discouraging footfall and increasing on‑street parking pressures.
• Members suggested that the estimated income from the charges would be broadly offset by the costs of implementation in the first year, resulting in no net financial benefit.
• Concerns were raised about the potential loss of business rates income, impacts on local employment, and longer‑term damage to community facilities.
• It was proposed that postponing the charges for 12 months would be budget neutral, allow time to assess impacts, and enable further consideration of asset transfers to town and parish councils, particularly in the context of local government reorganisation.
• Members also questioned whether alternative approaches, including the use of reserves, could be explored to address the budget position.

In response, the officer advised that:

• The change to homelessness funding arose from a new funding formula under the Fair Funding Review, which had resulted in anomalies affecting a small number of councils, including Swale.
• This issue had been raised with MHCLG and the LGA, and representations had been made to Government, with the matter under review.
• Officers clarified that the Council was not proposing to give away reserves, and that their use was being managed prudently within the approved financial framework.

The following amendment was proposed by Councillor Palmer and seconded by Councillor Baldock:

That the proposed introduction of parking charges at the four car parks on the Isle of Sheppey which are currently free of charge be removed from the 2026/27 revenue budget and Medium‑Term Financial Strategy.

The Chair invited contributions from Members. These included:

• Introducing charges could negatively impact local businesses, town centres and service users, particularly in areas with fewer transport alternatives.
• The first‑year costs of installing parking machines would broadly offset any income generated, resulting in little or no financial benefit.
• There was insufficient evidence to demonstrate that the charges would be effective or proportionate.
• Postponing or removing the charges would allow time to explore alternative options, including potential asset transfers to town or parish councils, and reduce risks ahead of local government reorganisation.
• The proposal risked disproportionately affecting poorer communities and could reduce footfall, employment and business rate income.

• The decision to introduce charges had already been taken by the appropriate committee following extensive consideration.
• The proposal was necessary to ensure equity and consistency across the borough, as other car parks already charged for parking.
• Continuing to revisit the issue would delay implementation of agreed decisions and was not considered an effective use of Council time.
• The charges aligned with wider Council policies, including climate and transport objectives.
• Capital and revenue funding operated separately, and previous parking initiatives had exceeded initial income forecasts.

Members requested a recorded vote on this amendment.

For: Councillors Mike Baldock, Lee-Anne Moore, Elliot Jayes, Kieran Mishchuk, Richard Palmer, Julien Speed,

Against: Councillors Lloyd Bowen, Charles Gibson, Tim Gibson, Alistair Gould,  Angela Harrison, Mark Last, Ben J Martin, Ashley Wise and Dolley Wooster

The amendment was lost.

On returning to the substantive motion, the Chair invited further feedback from members. Comments included:

• It was emphasised that the Council operated as a hung authority, with budget development undertaken through cross‑party committees and a cross‑party budget working group, and that Members had been given opportunities to participate throughout the process.
• Some Members expressed concern that consultation feedback was being selectively relied upon, noting that decisions must ultimately reflect the wider interests of the borough, not solely consultation outcomes.
• Reference was made to best value legislation, with Members noting that Council assets could not be transferred without first understanding their financial value.
• It was highlighted that many areas of the borough, including Sheerness, already had no free car parks, and that charging had previously been necessary to enable effective enforcement and management of certain sites.
• Members queried a range of specific budget lines, including:
• Capital financing for leisure centre investments.
• Legacy budget adjustments correcting historical inaccuracies.
• Estimated costs for the public toilet contract.
• Chamber meeting security, with concern expressed about proportionality.
• Provision for major planning appeals.
• Proposed additional posts, including communications and coastal erosion roles.
• Concern was raised about the clarity of fees and charges, including:
• The absence of named car parks in the fees and charges schedule.
• Whether certain charges (e.g. use of council land, travelling fairs) were daily fees.
• The presentation of statutorily set gambling and bingo licence fees.
• The description of Members’ pension costs, with a request for clearer wording.
• Members commented on proposed increases to bulky waste charges, linking this to operational performance and fly‑tipping risks.
• Reference was made to public opposition to certain parking proposals, including:
• Evening parking charges and their start time, particularly in Faversham.
• Concerns that parking charges could affect access to community facilities, town centres and local services, especially on the Isle of Sheppey.
• Members queried whether parish and town councils had been approached regarding potential asset transfers or contributions.
• Wider concerns were raised about making decisions that might later prove unnecessary if budget provisions were not ultimately required.
• Some Members expressed overall discomfort with aspects of the budget, while others acknowledged that no budget would satisfy all areas equally, and that difficult compromises were unavoidable.

In response to Members’ comments and questions, officers advised that:

• Capital financing for leisure centres related to previously approved capital investment, covering essential works such as plant, boilers and filtration systems.
• Legacy budget adjustments reflected corrections to historic budget inaccuracies, including income targets and under‑budgeted items.
• The toilet contract provision was based on estimated cost increases, including changes in legislation, to ensure sufficient budget for procurement.
• Security costs were included to reflect risk assessments, recognising that requirements may vary over time.
• Provision for planning appeals was included as a prudent contingency, allowing appeals to be funded without returning to committee.
• Additional posts, including coastal erosion roles, were provisions linked to forthcoming reports, intended to ensure decisions could be implemented if approved.
• Officers stressed that budget setting required prudent forecasting, and that including contingencies did not imply that all funding would be spent.
• Parish precept information was included within the papers, and officers confirmed figures could be located within the documentation.
• Fees and charges, including car park details, were published through agreed policies and on the Council’s website, following decisions by the relevant service committees.
• Clarification was provided that certain charges (e.g. use of council land) could be reviewed for clarity where wording might cause ambiguity.
• Officers confirmed that Members’ pension costs reflected the proposed option for Members to join the scheme.
• Professional services budgets covered a range of costs, including consultants and temporary staff.
• Officers confirmed that Extended Producer Responsibility (EPR) funding:
• Was restricted to waste and recycling purposes.
• Had a guaranteed minimum allocation, with additional funding uncertain.
• Should be budgeted cautiously to avoid reliance on unconfirmed income.
• Officers advised that CCTV services were intended to support businesses and coordination, not to replace police responsibilities.
• It was reiterated that overall the budget had been prepared to be robust, balanced and deliverable, while allowing flexibility for future decisions.

Resolved:

That Policy & Resources Recommends to Council:

(1)  To approve the Administration’s 2026/27 revenue  budget proposals.

(2)  To approve the proposed Council Tax Band D increase for 2026/27 to £212.76.

(3)  To approve the Medium Term Financial Plan.

(4)  To approve the Capital Strategy.

(5)  To approve the capital programme proposals.

(6)  To note the additional amount of Council Tax for Parish Precepts.

(7)  To endorse the Statement (Appendix III) provided by the Director of Resources.

(8)  To approve the minimum revenue provision statement.

(9)  To delegate authority to the Director of Resources to adjust charge out rates within fees and charges as appropriate, where they are based on costs incurred and where legislation changes are made to centrally set charges in year

(10)               To approve the use of reserves statement as detailed in appendix VII as to ensure reserves are valid and support the assumptions in the MTFS