Purpose

Budget and Council Tax Setting

Content

1.         
THAT the Cabinet endorse the following:

 

(a)  
The recommendations to the Council set out
below.

 

2.         
It is recommended that the Council approve the
following:

 

(a)   
The revised Revenue Budget for the
financial year 2024/25 and the Revenue Budget for the
financial year 2025/26 as set out in the
General Fund Summary (Appendix 1) which includes:

(i)     
Additional spending in Adult Social Care of
£11.1m and Children's Services of £4.7m

(ii)    
No Revenue Contribution to Capital in
2024/25

(b)   
Any variation arising from the Local Government
Finance Settlement 2025/26or any further
savings made in 2024/25 arising at the year-end (after allowing for
specific carry forward requests) be transferred to the Revenue
Reserve for Capital, Transformation Reserve, and General Reserves
with the level of each transfer to be determined by the S.151
Officer.

(c)    
That the level of Council Tax be increased by 2.99%
for general purposes in accordance with the referendum
threshold[1] for
2025/26 announced by Government (as
calculated in Appendix 2)

(d)   
That the level of Council
Tax be increased by a further 2.0% beyond the
referendum threshold (as calculated in Appendix 2) to take
advantage of the flexibility offered by Government to implement a
"Social Care Precept"; and that in accordance with the conditions
of that flexibility, the full amount of the associated sum
generated of £2,201,721 is passported direct to Adult Social
Care

(e)   
That the
amounts set out in Appendix 2 be now calculated by the Council for
the financial year 2025/26in
accordance with Section 31 and Sections 34 to 36 of the Local
Government Finance Act 1992

(f)     
The S.151 Officer be given delegated
authority to implement any variation to the overall level of
Council Tax arising from the final notification of the Hampshire
Police & Crime Commissioner, Hampshire & Isle of Wight Fire
& Rescue Authority and Parish and Town Council precepts, and
amend the calculations set out in Appendix 2 accordingly

(g)   
The savings proposals for each Portfolio amounting,
in total, to £1.5m for 2025/26and
continuing into future years as set out on the next
page:

 

 

 

 

 

Portfolio

Controllable Budget

Savings Proposal

 

£

£

%

 

Adult Social Care
& Public Health*

62,020,191

0

0.0%

 

Children's Services,
Education & Corporate Functions*

47,243,346

721,100

1.5%

 

Climate Change,
Biosphere & Waste

7,412,195

37,000

0.5%

 

Deputy Leader -
Housing & Finance

8,501,964

601,000

7.1%

 

Economy,
Regeneration, Culture & Leisure

10,794,751

1,900

0.0%

 

Leader - Transport
Infrastructure, Highways PFI and Transport Strategy, Strategic
Oversight and External Partnerships

16,520,833

0

0.0%

 

Planning, Coastal
Protection & Flooding

2,538,260

0

0.0%

 

Regulatory Services,
Community Protection & ICT

13,427,815

139,000

1.0%

 

Grand Total

168,459,355

1,500,000

0.9%

 

 

* Excludes the additional
funding passported through to Adult Social Care of £11.1m
(which if included would result in an overall increase of 17.9%)
and the additional funding for Children's Services & Education
of £4.7m (which if included would result in an overall
increase of 10.8%)

 

 

(h)   
Directors be instructed to start planning how the
Council will achieve the savings requirements of £6.5m for
the 3-year period 2026/27 to 2028/29 and that this be incorporated
into Service Business Plans

(i)     
The minimum level of Revenue Balances as at 31 March
2026, predicated on the approval of £1.5m savings in
2025/26be
set at £8.0m to reflect the known and expected budget and
financial risks to the Council

(j)     
Members have regard for the "Statement of the
Section 151 Officer in accordance with the Local Government Act
2003"

(k)    
The Capital Programme 2024/25 to 2029/30 set out in
Appendix 5 which includes all additions, deletions and amendments
for slippage and re-phasing

(l)     
The new Capital Investment Proposals ("New Starts")
- 2025/26 set out in
Appendix 4 be reflected within the recommended Capital Programme
2024/25 to 2029/30 and be funded from the available Capital
Resources

(m) 
The allocation of Disabled Facilities Grants be made
to the Better Care Fund, and reflected within the recommended
Capital Programme 2024/25 to 2029/30

(n)   
The S.151 Officer be given delegated authority to
determine how each source of finance is used to fund the overall
Capital Programme and to alter the overall mix of financing, as
necessary, to maximise the flexibility of capital resources used
and minimise the ongoing costs of borrowing to the
Council

(o)   
That the S.151 Officer in consultation with the
Leader of the Council be given delegated authority to release
capital resources held back for any contingent items that might
arise, and for any match funding requirements that may be required
of the Council to secure additional external capital funding (e.g.
bids for funding from Government or any other external
source).

3.           
It is recommended that the Council note the
following in respect of the Council's
Budget: 

 

(a)   
The Revenue Budget 2025/26 as
set out in Appendix 1 has been prepared on the basis of a 4.99%
increase in Council Tax, any reduction from the overall 4.99%
Council Tax increase proposed will require additional savings of
£1,101,000 for each 1% reduction in order for the Budget
2025/26 to be approved

(b)   
The Revenue Forecasts for 2026/27 onwards as set out
in the section entitled "Revenue Forecasts 2026/27 to 2028/29" and
Appendix 1

(c)    
The estimated Savings Requirement of £6.5m for
the three-year period 2026/27 to 2028/29, for financial and service
planning purposes, be phased as follows:

Financial Year

In
Year Savings Requirement

£m

Cumulative Saving

 

£m

2026/27

2.5

2.5

2027/28

2.0

4.5

2028/29

2.0

6.5

 

(d)   
The Transformation Reserve held to fund the upfront
costs associated with Spend to Save Schemes and Invest to Save
Schemes is now fully committed and will only be replenished from
contributions from the Revenue Budget and an approval to the
transfer of any further savings at year end

(e)   
Should the Council elect to reduce the level of
savings below £1.5m in 2025/26 (and £6.5m over the next
three-year period), the Council's financial risk will increase and
therefore the minimum level of General Reserves held will also need
to increase to maintain the Council's financial
resilience

(f)     
The Council Tax base for the financial year 2025/26
will be 57,697.1 [item T in the formula in Section 31 B(1) of the
Local Government Finance Act 1992, as amended (the
“Act”)].

(g)   
The Council Tax element of the Collection Fund for
2024/25 is estimated to be in surplus by £2,163,470 which is
shared between the Isle of Wight Council (85.5%) and the Police
& Crime Commissioner (11.0%) and the Hampshire & Isle of
Wight Fire & Rescue Authority (3.5%)

(h)   
The Business Rate element of the Collection Fund for
2024/25 is estimated to be in surplus by £6,918,907 of which
is shared between the Isle of Wight Council (49%), the Hampshire
& Isle of Wight Fire & Rescue Authority (1%) and the
Government (50%)

(i)     
The Retained Business Rate income[2]for
2025/26 based on the estimated Business Rate element of the
Collection Fund surplus as at March 2025, the Non Domestic Rates
poundage for 2025/26 and estimated rateable values for 2025/26 has
been set at £49,339,548.
 
 

[1] Council
Tax increases beyond the referendum threshold can only be
implemented following a "Yes" vote in a local
referendum.

[2]Includes Retained Business Rates of
£19,757,296, "Top Up" of £12,743,652, S.31 Grants of
£13,448,335 and a Collection Fund surplus of
£3,390,265