Purpose

To agree the draft budget

Content

The Draft Revenue Budget
proposed was for the financial years 2025/26 – 2027/28. The
financial position for the Council was extremely challenging with
significant pressures, in line with those being experienced
nationally. The Council discharged more than 1,300 statutory duties
and was facing increasing demand pressures in key services such as
Adult Social Care, Children’s Services, Home to School
Transport and Temporary Accommodation. Responding to these
pressures whilst delivering a balanced budget remained challenging
and once again this had only been achieved through a significant
programme of additional savings and income.
 
The Council had a strong track
record of delivering savings with £116.8m of income and
savings currently delivered since 2020-21. Further savings and
additional income of £115.6m have been required as part of
the 2025-26 Draft Budget. This took the total value of savings
required by 2027/28 to £232.4m, or 52.8% of the
Council’s first budget in 2020/21.
 
The draft budget proposed was
built on the proposed Council Tax base and assumed a 2.99% increase
in basic Council Tax and a 2% increase for the Adult Social Care
Precept, giving a total increase of 4.99%. This was the maximum
allowable without triggering a local referendum.
 
The draft budget was based on
estimates consistent with the Autumn Budget and Local Government
Funding Policy Statement. This set out a new deprivation-based
approach to the allocation of additional funding in 2025/26 which
the draft budget reflected. The government had also reconfirmed
their intention to implement a full reform of local government
funding from 2026/27 though multi-year settlements.
 
The Provisional Local
Government Finance Settlement was published on 18 December 2024 and
provided details of provisional central government funding
allocations for 2025/26. Given the timing of this announcement it had not been possible to fully
consider the implications of these figures for the draft budget,
however they would be fully reflected in the Final
Budget.
 
Whilst this budget provided the
best available estimates for the 2025/26 - 2027/28 financial years,
there was significant risk around future income, cost and
especially future Local Government funding projections. The
external environment was continuously monitored, and significant
and material changes would be reported and included within the
final budget presented to full Council on 26th February.
 
The Capital Programme was
presented for 4 years as many schemes span multiple financial
years. In total the programme includes £612.5m of projects.
As with previous years it was proposed that a recommendation was
made to Council in February for delegation to be given to Cabinet
to add up to £100m worth of schemes to the capital programme,
to be funded through prudential borrowing, subject to a robust
business case being approved. This would enable additional
priorities, such as regeneration and housing projects, to come
forward and be added to the capital programme once positive
business cases were fully developed.
 
The Council Tax Resolution
report would be presented as a separate report as part of the final
budget in February and would contain the final information from the
other precepting authorities leading to the total Council Tax for
the area, which full council was required to approve.
 
This report did not include
special expenses budgets. Discussions were ongoing with the
relevant committees to agree special expenses budgets for 2025/26,
and these would also be presented alongside the final budget. The
level of precept charged in Special Expenses areas formed part of
the Council tax referendum threshold calculation, so final Council
Tax levels could be finalised until this matter was
agreed.
 
A review of Fees & Charges
had been undertaken as part of the development of the budget
proposals included in the report. The starting assumption was that
Fees & Charges should be uplifted by 5%. Portfolios had
reviewed the options to achieve a balance to increases in fees
& charges, and the results were reflected in the Revenue budget
proposals presented.
 
Charges for Traded Services to
other organisations (including Schools) were not included in this
schedule, however it was proposed these should also be increased by
5%.
 
Whilst every effort was made to
ensure the budget proposals were robust, deliverable and support
financial sustainability there were significant risks identified in
the proposed draft budget, both in terms of delivery of proposed
savings and also in managing future
demand pressures.
 
The Council had changed its
approach to managing risk and no longer held budget risk
contingencies. The revised financial risk management approach
focused on ensuring budget estimates were robust, enhancing the
Council’s approach to in-year action plans and ensuring that
immediate risks could be covered by risk reserves and
provisions.
 
Balanced against risks were the
level of reserves including the General Fund (non-allocated)
balances which was held at a level of approximately 10% of Net
Operating budget. These balances were held against the risk of
unforeseen events and provided a strong buffer against unexpected
events. Close management of these risks was required to ensure the
sustainability of the Council.
 
RESOLVED
 
1.              
That the draft revenue budget and capital
programme for 2025/26 be APPROVED. 
2.              
That the outcome of the budget consultation
(Appendix 1) be NOTED. 
3.              
That the Schedule of Fees and Charges for 2025/26
(Appendix 2) be AGREED. 
4.              
That the current risks associated with the draft
budget proposals be NOTED. 
5.              
That the proposal to seek delegation from Council
to Cabinet for up to £100m of new capital schemes to be added
to the capital programme, through Prudential Borrowing, and where
robust financial business cases have been made, be
supported. 
6.               
That it be noted that a supplementary report, the
formal Council Tax Resolution, would accompany the final budget
submitted to Full Council.