This meeting is scheduled to set Southwark Council's budget and council tax for 2025-26. We only have access to the meeting agenda and the documents that will be provided to attendees, so we can't know for sure what will be discussed, whether decisions will be made or what they will be.

Setting the Budget and Council Tax

The meeting will include reports on setting the council's revenue budget for 2025-26 and on setting the council tax for the year.

The Policy and resources strategy 2025-26 Budget report explains that the local government financial settlement increased Southwark's funding slightly to help cover increased costs for things like the employer National Insurance (NI) increases. It also allocated an additional £0.148 million to the Children's Social Care Prevention Grant.

The same report contains a proposal to allocate £2 million from the Southwark 2030 reserve for several initiatives. This includes:

• £0.600 million for Community Safety programmes
• £0.080 million for the Energy Savers programme
• £0.360 million for Investing in cleaner streets
• £0.520 million for Homelessness services
• £0.440 million for a Children’s centre

It also explains how the final local government financial settlement, published on 3 February 2025, means that the council still needs to find another £2 million to meet the full cost of the NI increase.

The Council Tax Setting 25-26 - Final report explains that the council is required to set the council tax for the borough by 11 March 2025.

This report proposes increasing the Southwark element of council tax by 4.99% for 2025-26. 2% of this increase would be ringfenced to finance Adult Social Care services, and the other 2.99% would be for other council services.

This would mean that the council tax for a Band D property would rise by £65.94.

The same report notes that the Greater London Authority (GLA) is due to set the GLA precept on 25 February 2025. The GLA has proposed increasing its precept by £18.98 for a Band D property.

Treasury Management and Capital Strategy

The meeting pack includes a TMS and Capital Strategy Report 2025-26 to describe Southwark Council's Treasury Management and Capital Strategy for 2025-26.

Treasury Management is the management of the authority’s banking, cash flows, borrowing and investments.

The report explains that Southwark Council is a net borrower and that it expects to need to continue borrowing in 2025-26 to meet the costs of its capital programme.

It explains that the council's main objective when borrowing is:

to strike an appropriately low risk balance between securing low interest costs and achieving certainty over the period for which funds are required.

It highlights the council's Community Municipal Investment (CMI) scheme as an example of an alternative borrowing scheme.

The council can raise capital via the issuance of Green Bonds or other similar peer-to-peer (P2P) loan agreements, known as Community Municipal Investments (CMI). Through two schemes £1.5m will have been raised by the end of 2024-25.

The report describes the capital strategy as:

an overarching document which sets the policy framework for the development, management, and monitoring of capital investment.

It says that the council is committed to:

developing a refreshed set of governance proposals to ensure that all future capital bids remain affordable and in alignment with key council objectives.

and explains that the council will consider new capital bids from council departments, which will require business cases to be signed off by the relevant member of the Corporate Management Team (CMT).

A newly established capital board will prioritise the bids and ensure that they can be funded within the pre-defined funding envelope.

The final list of bids will then be considered by CMT and by the Leader and Lead Member for Equalities, Democracy and Finance, before being formally approved by cabinet.

The capital strategy is set within the context of the council's existing asset management plan, which was approved by cabinet in January 2021. The document notes the council's commitment to investing in:

existing stock and future investment decision-making. It was developed from the priorities set out in the council delivery plan and how the decisions that the council take around property can help to achieve these, prioritising climate change and recognising the hugely important role in providing and building stable communities.

The report also describes the Minimum Revenue Provision (MRP) as:

a statutory requirement to make a charge to the council’s General Fund as provision for the repayment of the council’s past capital debt and other credit liabilities.

It goes on to say that:

The broad aim of the guidance is to ensure that capital expenditure is financed over a period that is reasonably commensurate with that over which the capital expenditure provides benefits.

It explains that the council's MRP methodology:

reflects the fact that asset deterioration is slower in the early years of an asset and accelerates towards the latter years). This re-profiling of MRP therefore conforms to the DLUHC “Meaning of Prudent Provision” which provides that “debt [should be] repaid over a period that is reasonably commensurate with that for which the capital expenditure provides benefits”.

The report concludes by explaining Southwark Council's prudential indicators, which are:

indicators and limits, which the council assembly should agree annually.

and by describing their purpose:

The indicators for approval relate to 2025-26 to 2027-28 and are set out at Appendix E. The indicators are of a technical nature and include a self- imposed authorised limit on debt, which the council assembly must determine each year. Approval will ensure that the council meets its obligations under the 2003 Act and that the Strategic Director of Resources can carry out their financial responsibilities in this area. Our plans are within the limits set by the indicators.