Purpose

The report presents the updated Budget 2025-26
and Medium Term Financial Plan 2025-2029 to Cabinet (for
recommendation to County Council) following the receipt of the
provisional local government settlement which is due to be
announced in December 2024. The report will also include an update
on the deliverability of savings

Content

RESOLVED that the following recommendations be made to the
County Council:

1.            
Note that the figures contained within the Budget 2025-26 within
Appendix 1 are based on the provisional Local Government Finance
Settlement of 18 December 2024.

2.            
Approve the Revenue Budget for 2025-26 including the efficiencies
totalling £16.299 million for 2025-26 contained within
Appendix 1 (detailed in Appendix 11).

3.            
Note the Revenue MTFP covering the period 2025-29 detailed within
Appendix 1 and the requirement to deliver budget balancing measures
of £27.764 million in 2026-27, £13.841 million in
2027-28 and £12.080 million in 2028-29.

4.            
Note the estimated receipt of Revenue Support Grant of
£14.829 million for 2025-26 contained within Appendix 1.

5.            
Note the estimated retained Business Rates and the Top-Up Grant
funding to be received by the Council for 2025-26 of £106.894
million and £332.095 million over the remaining period of the
MTFP contained within Appendix 1.

6.            
Note the estimated surplus from prior years on Collection Fund
Business Rates balance of £3.979 million in 2025-26 contained
within Appendix 1.

7.            
Note the estimated receipt of the New Homes Bonus of £3.261
million (excluding service element of £0.028 million) for
2025-26 contained within Appendix 1.

8.            
Note the estimated receipt of Local Authority Better Care Grant of
£15.416 million for 2025-26 contained within Appendix 1.

9.            
Note the estimated receipt of Social Care Grant funding of
£33.910 million for 2025-26 contained within Appendix 1.

10.         
Note the estimated receipt of Adult Social Care Market
Sustainability and Improvement Fund Grant of £6.656 million
in 2025-26 contained within Appendix 1.

11.         
Note the estimated receipt of the Extended Producer Responsibility
Grant of £6.573 million in 2025-26 and £12.162 million
over the remaining period of the MTFP contained within Appendix
1.

12.         
Note the estimated receipt of National Insurance Funding Grant of
£2.799 million in 2025-26 contained within Appendix 1.

13.         
Note the estimated receipt of the Domestic Abuse Safe Accommodation
Grant of £0.833 million in 2025-26 contained within Appendix
1.

14.         
Note the estimated receipt of the Children’s Social Care
Prevention Grant of £0.982 million in 2025-26 contained
within Appendix 1.

15.         
Approve a 2.99% increase in general Council Tax for 2025-26, noting
that this is in line with the Government’s assumptions
regarding the Council’s Core Spending Power and, within the
Government’s referendum limit of 3.00%.

16.         
Note the MTFP 2025-29 includes a 2.99% annual increase in Council
Tax for all years of the MTFP and that an estimate of annual tax
base growth has also been included.

17.         
Note the non-collection rate for Council Tax purposes remains at
1.00% for 2025-26 (1.00% in 2024-25).

18.         
Note the estimated surplus of £2.305 million from prior years
on the Collection Fund Council Tax balance for 2025-26 contained
within Appendix 1.

19.         
Approve a 2.00% increase in Council Tax for 2025-26 for use on
Adult Social Care services; raising an additional £6.322
million to support the Budget 2025-26 and note that the assumed
increase included in the MTFP is 1.00% for financial years 2026-27
to 2028-29.

20.         
Approve the Reserves Policy 2025-26 detailed in Appendix 2.

21.         
Note the Schedule of Reserves and Provisions contained within
Appendix 3.

22.         
Approve:

The net contributions from the Strategic Management Reserve of
£0.311 million in 2025-26, and note the proposed net
contributions from the Strategic Management Reserve of
£15.818 million in 2026-27, £4.255 million in 2027-28
and £2.570 million in 2028-29, contained within Appendix 1,
comprising:

a)     
non-recurrent pressures of £3.141 million for 2025-26, and
note the non-recurrent pressures totalling £3.476 million in
2026-27, £2.065 million in 2027-28, and £1.664 million
in 2028-29 (as detailed within Appendix 10 excluding: the costs of
the Council Modernisation programme [£7.103 million in
2025-26 and £1.231 million of the cost in 2026-27], Hirst
Welfare Centre transitional support, additional Fire Control Staff
to enable succession planning, Leisure Facilities transitional
support costs including car parking costs at Concordia, and
Extended Producer Responsibility costs);

b)     
delayed investment interest due from Newcastle International
Airport as a result of Covid-19 will be repaid to the Strategic
Management Reserve. It is anticipated that £0.104 million of
the remaining outstanding interest due will be received in 2027-28,
and the remainder of £1.084 million in 2028-29.

c)     
revenue contributions to capital (RCCO) for capital investments as
follows:

2025-26 

2026-27 

2027-28 

£m 

£m 

£m 

Schools Development Programme 

3.766 

7.334 

- 

Blyth Relief Road 

0.944 

3.508 

0.554 

4.710 

10.842 

0.554 

d)     
estimated net costs relating to the restructure of Advance
Northumberland of £1.270 million in 2025-26, £1.500
million in 2026-27, £1.740 million in 2027-28, and
£1.990 million in 2028-29; and,

e)     
contribution to the Strategic Management Reserve of £8.810
million in 2025-26 in order to balance the Budget. This includes
£10.000 million reversal of voluntary Minimum Revenue
Provision (MRP) less £1.190 million needed to balance the
2025-26 Budget.

23.         
Approve the use of the Public Health Revenue Grant Reserve of
£0.180 million in 2025-26 and note the proposed contribution
from this reserve of £0.100 million in 2026-27 contained
within Appendix 1, with regard to transitional support for Hirst
Welfare Centre.

24.         
Approve the use of the Council Transformation Fund Reserve of
£7.103 million to fund the Council's Modernisation Programme
delivery costs in 2025-26 and note the proposed contribution from
this reserve of £1.231 million for 2026-27 contained within
Appendix 1.

25.         
Approve the use of the Leisure Reserve (once funds have been
returned to the Council following the financial closedown of Active
Northumberland) to fund £0.250 million in 2025-26 and note
the proposed use of this reserve for the following three years
totalling £0.334 million to fund leisure facilities
transitional costs.

26.         
Approve the use of the Recruitment and Retention Reserve of
£0.108 million in 2025-26 and note the proposed contribution
from this reserve of £0.108 million in 2026-27 to fund
temporary resources to enable succession planning within Fire
Control.

27.         
Approve the use of the Extended Producer Responsibility Grant of
£4.542 million in 2025-26 to fund the costs associated with
the scheme and note the proposed costs for the following three
years totalling £10.356 million.

28.         
Note the Schedule of Service Specific Grants of £276.991
million contained within Appendix 4 and note that some are still
indicative pending final confirmation.

29.         
Note the Schedule of Fees and Charges 2025-26 contained within
Appendix 5.

30.         
Approve the Fees and Charges Policy 2025-26 detailed in Appendix
6.

31.         
Approve the Inflation Schedule for 2025-26 totalling £18.512
million detailed in Appendix 7.

32.         
Approve:

a)     
the Recurrent Growth and Pressures Schedules of £28.382
million for 2025-26 and note the Recurrent Growth and Pressures of
£8.073 million in 2026-27, £7.042 million in 2027-28
and £5.291 million in 2028-29 included within Appendices 1, 8
and 9; and,

b)     
the additional net revenue costs associated with the Capital
Programme of £1.114 million, including £10.000 million
reversal of Voluntary MRP and the estimated net revenue costs
associated with the Advance Northumberland restructure of
£1.270 million for 2025-26 and note the revenue costs
associated with the Capital Programme of £29.623 million in
2026-27, £6.554 million in 2027-28 and £6.000 million
in 2028-29 included within Appendix 1.

33.         
Approve the Non-Recurrent Pressures of £15.324 million for
2025-26 and note the Non-Recurrent Pressures of £8.617
million for 2026-27, £5.559 million for 2027-28, and
£5.158 million in 2028-29 included within Appendix 10.

34.         
Approve the Non-Recurrent Income of £0.816 million for
2025-26 and note the Non-Recurrent Income of £0.283 million
for 2026-27, £0.269 million for 2027-28 and £0.221
million for 2028-29 included within Appendix 10.

35.         
Approve the identified budget balancing measures contained within
Appendix 11 of £16.299 million for 2025-26 (the majority of
which, £13.985 million, were approved by full Council in
February 2024) and note those budget balancing measures totalling
£15.647 million already identified for 2026-27 to
2028-29.

36.         
Note the Integrated Impact Assessment at Appendix 12.

37.         
Note the Budget by Service Area 2025-26 detailed in Appendix
13.

38.         
Note the receipt of Dedicated Schools Grant of £189.037
million in 2025-26 and note the revised allocation of
£167.572 million for 2024-25. This is following the
conversion of two schools to academy status during 2024-25.

39.         
Approve the Capital Strategy 2025-26 to 2028-29 contained within
Appendix 14.

40.         
Approve the revised Capital Programme detailed within Appendix 15
and note the increase in the Capital Programme 2025-29 of
£370.140 million detailed in Appendix 16.

41.         
Approve the delegation of the detail of the final Local Transport
Programme and any subsequent in-year amendments to the Executive
Director Place and Regeneration in consultation with the Cabinet
Member responsible for improving our roads and highways.

42.         
Approve the delegation of the detail of the capital allocation for
the Highway Maintenance and Pothole Repair Fund to the Executive
Director Place and Regeneration in consultation with the Cabinet
Member responsible for improving our roads and highways.

43.         
Approve the Capital Prudential Indicators 2025-26 to 2028-29 based
on the proposed Capital Programme detailed within Appendix 17.

44.         
Approve the Annual Minimum Revenue Provision (MRP) Policy detailed
in Appendix 18.

45.         
Approve the Treasury Management Strategy Statement 2025-26 detailed
in Appendix 19.

46.         
Approve a delegation to amend the Budget 2025-26 and MTFP in light
of any changes as a result of the final Local Government Finance
Settlement to the Executive Director of Transformation and
Resources (the Council’s Section 151 Officer) in consultation
with the Cabinet Member for Corporate Services if the final
Settlement is received after the 19 February 2025 Cabinet meeting.
If the final Local Government Finance Settlement is received prior
to the Cabinet or 19 February 2025 Council meeting, then a
supplementary report will be provided to Members advising of any
changes necessary.