Purpose

Budget and Council Tax setting

Content

196.   
It is recommended that the Cabinet endorse the following:
 
(a)      The recommendations to the
Council set out below.
 
197.   
It is recommended that the Council approve the following:
 
(a)           
The revised Revenue Budget for the financial year 2023/24 and the
Revenue Budget for the financial year 2024/25 as set out in the
General Fund Summary (Appendix 1) which includes:

 
(i)             
Additional spending in Adult Social Care of £6.3m and
Children's Services of £5.0m
(ii)            
A Covid Contingency of £5m
(iii)          
No Revenue Contribution to Capital in 2023/24 or 2024/25
 
(b)           
Any variation arising from the Local Government Finance Settlement
2024/25 or any further savings made in
2023/24 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 threshold5or 2024/25 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 £1,977,705 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 2024/25 in 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
£2.75m for 2024/25 and continuing into future years as set
out on the next page:

 

 

Portfolio

Controllable Budget

Savings Proposal

 

£

£

%

 

Adult Social Care
& Public Health*

57,782,000

919,900

1.6%

 

Children's Services,
Education & Corporate Functions*

41,238,000

207,000

0.5%

 

Climate Change,
Biosphere & Waste

6,777,000

68,000

1.0%

 

Deputy Leader -
Housing & Finance

8,292,000

107,100

1.3%

 

Economy,
Regeneration, Culture & Leisure

3,052,000

24,000

0.8%

 

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

13,658,000

1,167,000

8.5%

 

Planning, Coastal
Protection & Flooding

2,361,000

0

0.0%

 

Regulatory Services,
Community Protection & ICT

11,340,000

257,000

2.3%

 

Grand Total

144,500,000

2,750,000

1.9%

 

* Excludes the additional
funding passported through to Adult Social Care of £6.3m
(which if included would result in an overall increase of 9.4%) and
the additional funding for Children's Services, Education &
Lifelong Skills of £5.0m (which if included would result in
an overall increase of 15.3%)

 

** Excludes
£19.4m of PFI grant funding, on a gross expenditure basis the
saving amounts to 3.5%

 

(h)           
Directors be instructed to start planning
how the Council will achieve the savings requirements of
£3.0m for the 3 year period
2025/26 to 2027/28 and that this be incorporated into Service
Business Plans.

 

(i)             
The minimum level of Revenue Balances as
at 31 March 2025, predicated on the
approval of £2.75m savings in 2024/25be 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 2023/24 to 2028/29
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") - 2024/25set out in
Appendix 4 be reflected within the recommended Capital Programme
2023/24 to 2028/29 and be funded from the available Capital
Resources.
5 Council Tax
increases beyond the referendum threshold can only be implemented
following a "Yes" vote in a local referendum.
 
(m)         
The allocation of Disabled Facilities Grants be made to the Better
Care Fund, and reflected within the recommended Capital Programme
2023/24 to 2028/29

 
(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 in
order to secure additional external capital funding (e.g. bids for funding from Government or any other
external source).
 
198.   
It is recommended that the Council note the following in respect of
the          
Council's Budget: 
 
(a)   
The Revenue Budget 2024/25 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
£988,900 for each 1% reduction in order for the Budget
2024/25 to be approved.

 
(b)   
The Revenue Forecasts for 2025/26 onwards as set out in the section
entitled "Revenue Forecasts 2025/26 to 2027/28" and Appendix 1
 
(c)   
The estimated Savings Requirement of £3.0m for the
three year period 2025/26 to 2027/28,
for financial and service planning purposes, be phased as
follows:
 

 

Financial Year

In
Year Savings Requirement

£m

Cumulative Saving

 

£m

2025/26

1.0

1.0

2026/27

1.0

2.0

2027/28

1.0

3.0

 
(d)   
The Transformation Reserve held to fund the upfront costs
associated with Spend to Save Schemes and Invest to Save Schemes
holds a very modest uncommitted balance of £3.2m 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
£2.75m in 2024/25 (and £1.0m p.a. thereafter), the
Council's financial risk will increase and therefore the minimum
level of General Reserves held will also need to increase
in order to maintain the Council's
financial resilience.
 
(f)     
The Council Tax base for the financial year 2024/25 will be
54,407.3 [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 2023/24 is
estimated to be in surplus by £1,483,500 which is shared
between the Isle of Wight Council (85.3%) and the Police &
Crime Commissioner (11.1%) and the Hampshire & Isle of Wight
Fire & Rescue Authority (3.6%)
 
(h)   
The Business Rate element of the Collection Fund for 2023/24 is
estimated to be in deficit by £3,354,365 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 income6 for 2024/25 based on the
estimated Business Rate element of the Collection Fund deficit as
at March 2024, the Non Domestic Rates
poundage for 2024/25 and estimated rateable values for 2024/25 has
been set at £43,763,020.
 
 
6 Includes
Retained Business Rates of £17,546,907, "Top Up" of
£12,834,713, S.31 Grants of £15,025,039 a Collection
Fund deficit of £1,643,639