The Budget & Resources Scrutiny Committee will be receiving a report on the latest position of the council’s recommendations and actions tracker, a draft copy of the council’s budget for 2025/26 and a draft work programme for 2024/25. The committee also intends to discuss the selection of budget reduction and income proposals for further scrutiny during the committee’s scheduled challenge meetings in January.

Draft Council Budget 2025/26 and Medium Term Financial Plan

The report pack for this meeting contains the draft Milton Keynes City Council budget for 2025/26 and the accompanying Medium Term Financial Strategy (MTFS), which projects the council’s finances until 2028/29. These draft proposals will be subject to public consultation between 4 December 2024 and 15 January 2025. The council’s cabinet noted and endorsed these draft proposals at their meeting on 3 December 2024.

The draft budget forecasts a balanced budget for 2025/26, but this is reliant on several assumptions relating to government funding for social care and the impact of the recent rise in National Insurance. It is possible that further savings will need to be identified before the final budget is published in February 2025.

In the absence of the Local Government Finance Policy Statement and Provisional Local Government Finance Settlement, the council has used data provided by Pixel Consulting to project the level of funding it will receive.

The budget makes provision for a rise in the Milton Keynes element of Council Tax of 4.99%, comprising a 2.99% rise in core council tax and a 2% rise in the Adult Social Care Precept. The draft proposals also anticipate that the council will retain £82.224m of the Business Rates collected in the city, after deductions and payments to central government.

The budget papers also include details of a provisional four year capital programme which includes provision for investment in projects in Children and Families, Transport, Social Care and Housing and Environmental, Protective and Cultural Services. The report pack contains an outline of how the council intends to fund this programme, and makes clear that the council's Section 151 Officer will make the final decision on whether to release funding to each project once the details of funding available to the council have been confirmed.

The papers contain details of £19.882m of new budget pressures that have been identified since the budget for 2024/25 was approved.

The largest of these pressures is a £14.264m rise in demand for Children’s Social Care, driven by “increased complexity, the ongoing challenges in the health service and external markets and the wider economic climate”. The papers say the pressure in Children's services “will need to be managed carefully given the significant volatility and high individual package costs.” The draft budget also notes that

The Councils ability to source more appropriate provision for our most vulnerable young people will be critical to helping the Council remain financially sustainable.

The draft budget contains provision for an additional £7.352m of expenditure on Adult Social Care because of an increase in the National Living Wage, higher inflation, and rising demand for support services. The papers also detail a further £0.2m of budget pressures in Homelessness.

The draft budget papers include proposals for budget reductions and additional income measures, which in total would increase the council’s income by £2.674m and reduce expenditure by £6.342m in 2025/26. The papers also include details of planned one-off expenditure of £1.599m, which would be funded from reserves, and make clear that the council intends to use New Homes Bonus receipts for this purpose, in addition to balances in several other reserves. The council’s cabinet will consider the final budget proposals at their meeting on 4 February 2025.

Draft Council Budget 2025/26 and Medium Term Financial Plan: Housing Revenue Account

The report pack for this meeting contains a draft Housing Revenue Account (HRA) budget for 2025/26. This draft budget will be subject to public consultation between 3 December 2024 and 15 January 2025.

The report accompanying the budget notes that, because of rising inflation and interest rates, changes to government policy, and the impact of the city's rapid growth as a new town,

The financial position of the HRA has declined rapidly in recent years

The draft budget includes a proposed rent increase of 2.7% for council tenants and a 7.7% rise in rents for shared owners, in line with the government’s rent cap policy. These increases would see average rents rise by £2.85 per week for council tenants and £7.35 per week for shared owners. The report accompanying the budget states that:

Setting rents at a lower level than proposed, would require further savings and reductions in expenditure to balance the budget with a reasonable amount of headroom to manage risk. It is likely that this would result in reductions to the Planned Investment Programme, given limited scope for immediate savings elsewhere.

The papers make clear that the council is only planning to fund new council house building where the schemes deliver value for money and can be funded using the receipts the council retains when tenants buy their homes under the Right to Buy scheme. The papers state that building new council houses for social rent is currently unviable and note that

Increases in the cost of materials, coupled with labour shortages and higher borrowing costs currently make house-building unviable which has resulted in a national slowdown of the housebuilding market.

The papers also include proposals for investment in maintaining and enhancing the council’s existing stock, and include plans for further regeneration of the Lakes Estate. The draft budget also sets out how the council plans to fund this work, and includes proposals for demolition of the council’s Reema homes, including Serpentine Court. The final budget for the Housing Revenue Account will be considered by the council’s cabinet at their meeting on 4 February 2025.

Draft Budget & Resources Scrutiny Committee Recommendations/Action Tracker

The papers for the meeting also contain the latest version of the Budget & Resources Scrutiny Committee's recommendations and actions tracker. This document outlines the actions that the council has taken in response to recommendations made by the committee. In particular, the document details the council's approach to selling residential properties, noting that

When the Council has decided that the most appropriate use of a residential asset is disposal, it uses its best endeavours to ensure that as wide a group as possible have the opportunity to purchase the property, whilst maintaining its duty to achieve the maximum economic amount for said property.

The document also includes details of the planned refurbishment of the Milton Keynes Crematorium, how the amount of money the council has available to spend on its council housing stock affects the council’s ability to borrow money to build new council houses, and whether there are any measures that can be taken to improve the council’s capacity to borrow for housebuilding.

The document also notes that the committee has previously requested an update on the council’s in-year savings programme. This was discussed at the meeting held by the Budget & Resources Scrutiny Committee on 4 December 2024, when the committee recommended that the committee's planning group agree the agenda items for the meetings scheduled to be held on 18 December 2024, 2 January 2025 and 9 January 2025.

Draft Budget & Resources Scrutiny Committee 2024/25 Work Programme

The report pack also contains a draft copy of the Budget & Resources Scrutiny Committee's work programme for 2024/25. This document outlines the topics that the committee intends to discuss in future meetings, including a “‘deep-dive’ review of Pressures in Children’s and in-year savings” at the committee’s meeting scheduled to be held on 13 November 2024 and an “HRA update including headroom in the HRA and the ability to borrow to build more social housing” at its meeting scheduled for 4 December 2024. The papers note that:

all scrutiny Work Programmes remain flexible and may be subject to change at short notice depending on circumstances at any one time.

The papers also list several “other identified items” that the committee may wish to discuss in future meetings. These include “costs of processing void council dwellings”, “pressures in Adult Social Care” and “an update on progress of in-year savings.”