Draft budget and three-year financial strategy set to go before Cabinet

The 26/27 budget and Medium-Term Financial Strategy sets out the positive impact that the government’s Fairer Funding review will have on the council in future years.

Fairer Funding is a government funding initiative which aims to direct more financial support to areas, like Peterborough, with higher levels of deprivation and demand for services.

Following an announcement by central government in December 2025, Peterborough City Council can expect to see its funding for services increase by £76m by 2028/29, in comparison to 2025/26 – an increase of 31 per cent.

Councillor Shabina Qayyum (Labour), Leader of Peterborough City Council, said that years of underfunding have had a “significant impact on the financial standing of the authority.”

She added: “The announcement made in December confirmed that we will receive one of the largest increases in our core funding across English councils and will allow us to move forward on a more stable footing.”

The Cabinet meeting, which is scheduled for Tuesday, February 10, comes on the back of a Joint Meeting of Scrutiny held on January 29 which showed a balanced budget position up to 2029.

Members noted it was refreshing to see a balanced budget after more than a decade of needing to make significant savings.

Cllr Qayyum observed: “As our Scrutiny members pointed out last week, this is the first budget in more than a decade that we have been able to present a balanced budget without swingeing cuts to services whilst also proposing investment in key areas such as the replacement swimming pool for the city, children and adult social care, and support for those who are struggling financially.”

The budget includes investment in a number of areas including: social workers; AI and digital; additional educational psychologists; communities (through the new Crisis and Resilience Fund), and the Families First programme.

As changes to funding allocations are being phased in over a three-year period, however, councillors are being advised that risks and challenges look set to remain in 2026/27. For example, demand for services in areas such as children and adult social care and housing needs look set to keep rising.

As a result, the council has factored in an additional £6m in 2026/27 to meet service demand. The authority’s reserves balances also remain considerably lower than required, with the forecast £6m overspend in the current financial year needing to be met by reserves.

To improve its reserves position, Peterborough City Council has made a request to central government for Exceptional Financial Support (EFS), a form of financial flexibility for local authorities that are facing financial difficulties.

Councillor Mohammed Jamil (Labour), Cabinet Member for Finance and Corporate Governance, said: “Fairer Funding allows us to now move ahead with our plans to reset by strengthening the foundations of our budget, rebuild by increasing reserves and investing in services, and redesign by developing new opportunities to deliver long term sustainable service solutions.

“With this approach we can move at pace towards our goal of achieving financial sustainability, investing in services that matter the most to our residents and supporting the most vulnerable.

“These priorities are all set out in our updated corporate strategy, which will also go before members for approval, and includes investment in a new swimming pool and leisure centre, a focus on supporting people in crisis and to reduce poverty, and delivering a plan to enhance our city centre so it is safe and vibrant, day and night.”

The Cabinet meeting will take place at 4pm on Tuesday, February 10. Members will be asked to recommend the budget reports for approval to Full Council, which will then be tasked with rubber-stamping the budget and Medium Term Financial Strategy at its meeting on Wednesday 25 February.