Medium Term Financial Plan (MTFP)
The Council has a long established process of operating a medium term approach to its financial planning and in line with this it reviews the plan at least on an annual basis when it firms up the budget for the forthcoming year, by approving a detailed budget and Council Tax level.
In doing this, the Council also takes due consideration of future year demands on its resources and establishes its firm proposals for the coming year with due regard to prudent financial management in the medium term. The Council has a successful track record of managing its resources in this way.
Financial pressures on the public sector as a whole and more specifically the Council continue to be challenging with demand for services rising and an unstable global economic climate where the country has seen the cost of living increasing, high inflation and poverty rising.
The Council is facing a significant increase in cost and demand for services, particularly in Children’s and Adult Social Care, statutory services, where over two thirds of our budget is spent looking after out most vulnerable residents and children. This consequently impacts on the funding available for all other Council services, in particular discretionary areas which keep our town clean, vibrant and safe.
The Council has met these challenges head on through value for money service delivery, partnership working and shared services, economic growth and strong financial management. We have also utilised built up reserves to continue to provide vital services for the residents of Darlington.
Darlington is not alone in facing these pressures, council across the country are struggling with the same issues with a significant percentage indicating the inability to balance their books. The Government recognised the significant pressure in public services and in response introduced a new local government funding model for 2026/27-2028/29.
Darlington has benefitted from a redistribution of funding with an increase in Core Spending Power (CSP) over the three year period of 14.9%. The CSP also included the expectation that councils would increase council tax by 5% per annum, including the Adult Social Care precept. The Adult Social Care precept is crucial to meet the overall costs and pressures faced in this service area.
The position remains challenging with reserves required over the next two years to meet the sustainability gap and continued demand pressures, thereafter, is a clear route back to an in-year balance position when transformation programmes come into full effect.
The Council Plan vision is for Darlington to be one of the best places to live, learn, work and invest in the UK, with a strong and sustainable economy, health and thriving communities and opportunities for all. The MTFP is shaped to help fulfil this vision, despite the financial challenges faced, by directing the resources available to the areas where most impact can be made.
This ambition is not an overnight fix, inclusive economic growth takes time, particularly in this economic climate, but the Council have been successful in attracting major employers and government departments to the town bringing with them high quality jobs. The Council have also built new Council houses providing good quality affordable housing and significant investment has gone into Darlington railway station paving the way for improved rail services for the town and wider area, as well as significant development occurring across the borough, boosting regeneration, job opportunities and revenue.
The Council operates a core offer which is at a statutory service level with a small provision for discretionary services and this is the base level the new MTFP has been prepared on. Reserves have been maintained for medium term stability, and this is now a crucial component of the budget strategy given the pressures faced in the coming year. General fund reserves are utilised to meet the 2026/27-2027/28 funding gap whilst the full effect of transformation and the financial reforms come into play.
The Council’s MTFP for 2026/27 to 2029/30 reflects the Local Government Finance settlement and includes Council Tax increases of 2.99% plus 2% Adult Social Care Precept (4.99% in total).
The Council’s General Fund balance as at 1st April 2026 is estimated to be £9.787m
Budget breakdown
The Council has set a revenue budget of £148.958m for 2026/27 which is summarised below:
| Group | £m |
|---|---|
| Chief Executives Office | 0.331 |
| People Services | 98.621 |
| Environment, Highways & Community Services Group | 28.077 |
| Resources & Governance Group | 16.493 |
| Economy and Public Protection | 2.108 |
| Financing costs | 4.507 |
| Joint venture - Investment return | (2.188) |
| Council wide | 0.731 |
| Council wide contingencies | 0.278 |
| Total net revenue budget | 148.958 |
Budget funding breakdown
| Item | £m |
|---|---|
| Council tax | 74.338 |
| Business rates | 29.725 |
| Revenue support grant | 28.925 |
| Better care grant fund | 5.537 |
| Recovery grant | 2.325 |
| Extended producer responsibility grant | 2.704 |
| Use of reserves | 5.404 |
| Total | 148.958 |
The draft MTFP was agreed by Cabinet on 2 December 2025 for consultation.
The draft report was reviewed and scrutinised by all Scrutiny Committees and fed back via the Economy & Resources Scrutiny Committee to Cabinet on 3 February 2026.
The results of the consultation and other updates were considered at the meeting and the budget was recommended to and subsequently approved by Council on 19 February 2026.
Capital Programme
The Council has an extensive capital programme with significant resources invested to purchase, improve, protect and maintain our assets, to enable the Council to deliver its priorities, for example purchasing land to enable road improvements or investing in new and modernising council housing. The Council continues to deliver a significant capital investment programme in the main funded from the Housing Revenue Account (HRA) and grant or other external funding which is targeted at specific schemes and programmes such as Transport and Schools. Furthermore, investment from the Tees Valley Combined Authority (TVCA) along with other external funding sources are being used for economic growth initiatives.
The Council can also supplement these funding sources with its own resources such as capital receipts or prudential borrowing where there is a need, however as capital receipts are limited, and prudential borrowing comes with future revenue implications there must be a strong case for doing so.
The MTFP includes planned capital investment of £83.607m between 2026/27 and 2029/30.
Council Tax
In setting the budget the Council has regard to public expectations and demands for services and the impact on Council Tax.
Government support in the form of Revenue Support Grant is determined by national formulae and does not vary with local spending decisions.
£2,056.87 is the amount paid to the Borough Council for band D properties excluding the average Parish Precept. The percentage increase for 2026/27 is 4.99% which is made up of 2.99% for Council Tax and 2% for Adult Social Care Precept.
In addition to the Council’s own requirements, Council Tax bills include
The Office of the Durham Police and Crime Commissioner precept (£300.74 for Band D)
Durham and Darlington Fire and Rescue Service precept (£128.12 for Band D)
Parish areas the Parish Council’s precept (ranging from £18.58 to £73.94 for Band D)
The latest version of the Medium Term Financial Plan was approved by Cabinet on 3 February 2026 and by Council on 19 February 2026.