Issue - meetings

Draft Budget 2025/26 and Medium Term Financial Strategy

Purpose

This report sets out the Budget Strategy to support the preparation of the 2025/26 revenue and capital budgets and presents an updated Medium Term Financial Strategy forecast.

Recommendations

That Cabinet resolves to:

Approves the 2025/26 Budget Strategy as outlined in the report.

2. Approves the revised Capital Programme including the additional expenditure on Disabled Facilities funded by Disabled Facilities Grant, as set out in Annex B.

Additional documents:

Decision:

This report sets out the Budget Strategy to support the preparation of the

2025/26 revenue and capital budgets and presents an updated Medium

Term Financial Strategy forecast.

The Deputy Leader and Cabinet Member for Finance introduced the item.

The recommendations were proposed by the Deputy Leader and seconded by the Cabinet Member for Health, Leisure and Parking.

RESOLVED: That Cabinet:

1. APPROVED the 2025/26 Budget Strategy as outlined in the report.

2. APPROVED the revised Capital Programme including the additional expenditure on Disabled Facilities funded by Disabled Facilities Grant, as set out in Annex B.

Minutes:

The purpose of the item was to set out the Budget Strategy to support the preparation of the 2025/26 revenue and capital budgets and present an updated Medium Term Financial Strategy (MTFS) forecast.

The Deputy Leader and Cabinet Member for Finance, Councillor Mike Evemy, introduced the report and made the following points:

This was the first report to be received on the budget, with the final budget being received in the New Year before February’s Full Council
The Chief Finance Officer’s work with the Deputy Leader had been ongoing ahead of the final budget document.
The budget had not fundamentally changed and there was still a projected budget gap due to the reduction in government funding.
Table ES1 showed the pressures on the budget which included the cost of auditors, Crowdfund Cotswold fees and Rental income loss from the Bourton VIC.
A revised budget gap of £6.5 million for 2027/28 was still present but inflation was falling and interest rates were still remaining higher than normal. The benefit from the cash balances would therefore continue.
The Pay Award Settlement would have an impact which would be reported in 2025, but there was likely to be a positive variance on the MTFS within the Financial Resilience Reserve.
Costs of the Phase 1 Publica Review were noted within the report but there were currently no cost estimates provided for Phase 2 due to it being early in the process. However, it was highlighted that transformation of services would be required to provide additional savings.
It was highlighted that a change to the Business Rates Pool to remove Cheltenham would generate additional revenue.
Council tax was predicted to see an increase of £5 for Band D properties and the council tax base would increase by 1%. The Second Homes Premium agreed in March 2024 would not be factored into this and the newly published guidance was being examined for how this would impact the decision.
Core Grant funding was predicted to remain unchanged but the local government settlement would be confirmed before Christmas.
The significant increase in the capital costs in 2026/27 to replace waste vehicles was highlighted as older vehicles would be decommissioned for lower emission vehicles.
The increased cost of National Insurance contributions would be supported by the Government.
There would be a lower business rates relief rate of 40%.

There was a question around the future plans of the Fairer Funding Review from the previous Government. The Deputy Leader noted that a one year settlement would be received but the 2025 Spending Review would then provide a three year settlement. The Deputy Chief Executive confirmed this and added that a White Paper on devolution in England would be forthcoming soon.

Cabinet thanked the Deputy Leader and the Deputy Chief Executive for their work in managing the Council’s finances.

It was highlighted the Local Government sector was seeing real terms reductions in funding which was harmful for all authorities.

It was noted that the number of S.114 notices being issued ... view the full minutes text for item 25

Meeting: 04/11/2024 - Overview and Scrutiny Committee (Item 119)

Webcast for 04/11/2024 - Overview and Scrutiny Committee

119 Draft Budget 2025/26 and Medium Term Financial Strategy PDF 499 KB

To follow

Invited

Councillor Mike Evemy, Deputy Leader and Cabinet Member for Finance

David Stanley, Deputy Chief Executive

Additional documents:

Minutes:

This report sets out the Budget Strategy to support the preparation of the 2025/26 revenue and capital budgets and presents an updated Medium Term Financial Strategy forecast.

The Deputy Leader and Cabinet Member for Finance introduced the item. They raised the following points;

The Business rate reset had been delayed, with a three-year settlement expected in 2026/27, and a one-year settlement expected in the interim.
Inflationary pressures were expected to ease.
The Local Government Pay Award was at a lower cost than the one budgeted for.
The minimum wage increase announced by the Government in the autumn budget was expected to have an impact on future pay settlements.
The numbers within the report showed that further savings and transformation of services were needed.
There was a change to the business rates pool which was expected to generate income for the Council.
The draft budget assumed a £5 increase in Council tax for a Band D property.
The assumption was that the core grant funding to the Council was not going to change.

The Deputy Chief Executive added that the increase in Employers National Insurance Contributions was expected to increase the cost of employing people for the Council. He also stated that there was a new funding stream of £1.1bn across Local Government.

Members discussed the report, raising the following points:

Members asked about the estimated cost associated with phase two of the Publica transition. The Deputy Chief Executive explained that the second phase was more challenging to estimate due to the roles being fragmented across the different councils.
Members asked about the prospect of the Council serving a Section 114 insolvency notice, in the context of other councils which had done so across the country. Specifically, Members asked which projects or non-statutory services the Council would get rid of if it meant avoiding being in this position. The Deputy Chief Executive explained that, some investment was necessary to balance the revenue budget, and that in the case of replacing waste vehicles, it was necessary to borrow.
The Committee asked if it was possible to generate revenue from collecting business waste e.g. from holiday lets. The Cabinet Members stated that while Ubico were working to ensure that no waste from holiday lets was accidentally collected, due to logistical issues it was not a viable income stream.
Members asked why it had not been possible to set money aside to save for the replacement of refuse trucks instead of borrowing the money and also wished to know whether the length of the contract was the same as the loan period. The Deputy Chief Executive stated that due to the cost of the replacement and the financial pressures that the Council was facing, it was not possible to have set the money aside. The length of the loan would not exceed the vehicle’s lifespan and it was important that the vehicles be managed in order to maintain their life.
The Cabinet Member stated that the key risk to the Council’s budget was reduction ... view the full minutes text for item 119

Issue - meetings

Draft Budget 2025/26 and Medium Term Financial Strategy

Meeting: 07/11/2024 - Cabinet (Item 25)

Meeting: 04/11/2024 - Overview and Scrutiny Committee (Item 119)

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