Issue - meetings

Budget 2025/26 and Medium Term Financial Strategy

Purpose

To present the Revenue Budget for 2025/26, the Capital Programme and the Medium-Term Financial Strategy for 2025/26 to 2028/29.

Recommendation

Council resolves to approve:

the Medium-Term Financial Strategy set out in Annex B
the Budget Pressures and Savings for inclusion in the budget, set out in Annex C
the Council Tax Requirement of £7,065,418 for this Council
the Council Tax level for Cotswold District Council purposes of £158.93 for a Band D property in 2025/26 (an increase of £5)
the Capital Programme, set out in Annex D
the Annual Capital Strategy 2025/26, as set out in Annex E
the Annual Treasury Management Strategy and Non-Treasury Management Investment Strategy 2025/26, as set out in Annex F
the Strategy for the Flexible use of Capital Receipts, as set out in Annex H
the Balances and Reserves forecast for 2025/26 to 2028/29 as set out in Section 7 of the report
formally note the renewal of the CIVICA OpenRevenues 3-year software contract from 01 June 2025 with an annual fee of £0.106m (an increase of £0.031m over the previous annual contract value).

Additional documents:

Minutes:

Purpose

The purpose of this report was to present the budget for 2025-2026.

The Deputy Leader and Cabinet Member for Finance and Transformation was invited to propose the administration’s budget. Councillor Evemy proposed the Council’s budget for the sixth consecutive time. The budget prioritised maintaining essential services while adapting to financial pressures.

The Council faced significant financial pressures due to government funding cuts, the economic impact of the COVID-19 pandemic, high inflation, and ongoing cost-of-living challenges. Despite these difficulties, the Council remained financially stable and was not at risk of issuing a Section 114 notice or requiring exceptional financial support.

A forecast budget gap of £1.6 million for the next financial year and nearly £5 million for the following year needed to be closed through a combination of savings, income generation, and prudent financial management to maintain financial stability.

The government’s devolution white paper suggested potential restructuring, including the creation of unitary councils, which could have led to the abolition of the current Council by April 2028. Financial planning incorporated this uncertainty to ensure sustainability.

Cost Savings & Income Generation:

£625,000 in savings was projected for 2025-26 through operational efficiencies in customer service and waste management.
An additional £800,000 was expected to be raised through a combination of increased fees, service efficiencies, and revenue-generating initiatives.
Rising costs included an additional £450,000 in general expenditure and £1 million in increased contract pay and energy inflation costs.
A planned budget surplus of over £600,000 was allocated to replenish reserves and strengthen financial resilience.

The funding settlement from the government for the upcoming year was the lowest since 2019, reflecting a £256,000 reduction. Additionally, the £1.5 million grant from the Extended Producer Scheme remained uncertain for future years, making financial planning more challenging.

The Council’s capital fund (Capital Reserves), originally £56 million from the 1997 housing stock sale, had been gradually used for key infrastructure and community projects. With reserves nearly depleted, the Council carefully managed remaining funds to reduce pressure on revenue budgets.

Revenue & Investment Initiatives:

Over £1.5 million was raised through fee and service charge reviews.
The Council secured £4.4 million in external funding to support local community and infrastructure projects.
Investments were directed toward waste and recycling improvements, leisure centre decarbonisation, and the expansion of EV charging points.
The Council explored income-generating opportunities such as leasing surplus Council building space to external organisations.

Despite financial pressures, the Council’s service delivery and support remained a priority. The Council committed to supporting vulnerable residents, maintaining high-quality public services, and investing in community development initiatives. Efforts to date included housing support programmes, social care investments, and enhancements to local amenities.

Council Tax & Charges:

A £5 increase per Band D property was expected to generate an additional £469,000 in revenue.
A second-home premium was introduced to encourage better use of local housing stock.
Increased fees and charges across various Council services were projected to generate an estimated £280,000.
Adjustments to parking charges were expected to contribute an additional £90,000.
The garden waste collection fee was ... view the full minutes text for item 82

Meeting: 06/02/2025 - Cabinet (Item 67)

Webcast for 06/02/2025 - Cabinet

67 Budget 2025/26 and Medium Term Financial Strategy PDF 1 MB

Purpose

To present the Revenue Budget for 2025-2026, Capital Programme and Medium-Term Financial Strategy for 2025-2026 to 2028-2029.

Recommendation

Cabinet is requested to consider and approve for recommendation to Council:

The Medium-Term Financial Strategy set out in Annex B
The Budget Pressures and Savings for inclusion in the budget, set out in Annex C
The Council Tax Requirement of £7,065,418 for this Council
The Council Tax level for Cotswold District Council purposes of £158.93 for a Band D property in 2025- 2026 (an increase of £5)
The Capital Programme, set out in Annex D
The Annual Capital Strategy 2025- 2026, as set out in Annex E
The Annual Treasury Management Strategy and Non-Treasury Management Investment Strategy 2025-2026, as set out in Annex F
The Strategy for the Flexible use of Capital Receipts, as set out in Annex H
The balances and reserves forecast for 2025-2026 to 2028-2029 as set out in Section 7 of the report.
Formally note the renewal of the CIVICA OpenRevenues 3-year software contract from 01 June 2025 with an annual fee of £0.106m (an increase of £0.031m over the previous annual contract value)

Cabinet is recommended to approve delegation to the Council’s Deputy Chief Executive, in consultation with the Deputy Leader and Cabinet Member for Finance

To agree changes to the General Fund Summary arising from the Local Government Finance Settlement and the Business Rates Retention Scheme estimates prior to submission to Council.

Additional documents:

Decision:

The purpose of the report was to present the Revenue Budget for 2025/26, the Capital Programme and the Medium-Term Financial Strategy for 2025/26 to 2028/29.

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

The recommendations were proposed by Councillor Evemy, Deputy Leader and Cabinet Member for Finance and Transformation and seconded by Councillor Harris, Leader. This proposal was put to the vote and agreed by Cabinet.

RESOLVED Cabinet approved for recommendation to Council:

1. the Medium-Term Financial Strategy set out in Annex B

2. the Budget Pressures and Savings for inclusion in the budget, set out in Annex C

3. the Council Tax Requirement of £7,065,418 for this Council

4. the Council Tax level for Cotswold District Council purposes of £158.93 for a Band D property in 2025/26 (an increase of £5)

5. the Capital Programme, set out in Annex D

6. the Annual Capital Strategy 2025/26, as set out in Annex E

7. the Annual Treasury Management Strategy and Non-Treasury Management Investment Strategy 2025/26, as set out in Annex F

8. the Strategy for the Flexible use of Capital Receipts, as set out in Annex H

9. the balances and reserves forecast for 2025/26 to 2028/29 as set out in Section 7 of the report.

10. Formally noted the renewal of the CIVICA OpenRevenues 3-year software contract from 01 June 2025 with an annual fee of £0.106m (an increase of £0.031m over the previous annual contract value)

RESOLVED: Cabinet approved delegation to the Council’s Deputy Chief Executive, in consultation with the Deputy Leader and Cabinet Member for Finance to:

11. Agree changes to the General Fund Summary arising from the Local Government Finance Settlement and the Business Rates Retention Scheme estimates prior to submission to Council.

Voting Record: 5 For, 0 Against, 0 Abstention.

Minutes:

The purpose of the report was to present the Revenue Budget for 2025/26, the Capital Programme and the Medium-Term Financial Strategy for 2025/26 to 2028/29.

The Deputy Leader and Cabinet Member for Finance and Transformation, Councillor Evemy introduced the report and emphasised that the Budget 2025/26, the Capital Programme and the Medium -Term Financial Strategy were crucial documents for consideration. Following the decision of Cabinet the final determination of the Council's budget and the setting of Council Tax would happen on Monday 24 February at Full Council.

· A draft Budget and Medium-Term Financial Strategy (MTFS) had been presented before Christmas after a provisional government funding settlement had been announced.

· It was noted that a reduced budget consultation had taken place in January 2025 due to staffing changes and a by-election, this had led to only 46 responses instead of the usual 400 plus.

· The final government settlement had been received in the first week of February 2025 and was the worst funding settlement in nearly six years, with no increase in core government support or provision for inflation. The settlement was cash-neutral after accounting for the maximum allowable Council Tax increases.

· The Rural Services Delivery Grant, £800,000 funding was removed but later replaced through an alternative government mechanism.

· The Deputy Chief Executive and Deputy Leader had presented the financial position and answered questions at the recent Overview and Scrutiny Committee.

· It was noted that the increase to employer National Insurance contributions would cost the Council £400,000 annually, with government funding covering only £133,000, leaving a significant shortfall.

· A £4 million funding gap was initially projected before Christmas, but revised assumptions and plans including service transformation, efficiency improvements, and revenue reserve utilization had reduced that figure.

· A £2 million loss of government funding was expected from 2026/27 onward.

· There had been recent positive news around Pooled Funds suggesting the Council would not need to set aside reserves for potential investment losses.

· Significant future costs were included in the Capital Program, including £5m for waste vehicle replacements in 2026/27, which would require potential borrowing of £2.87m.

· A projected surplus of £662,000 for the next year would align with the Council’s motion from November 2023 to set aside surpluses in preparation for future financial challenges.

· However it was noted that future funding would remain unclear due to continued consultation on proposed changes to local authority funding, and uncertainty around potential mitigation measures.

· It was noted that the Council received £1.5 million this year from Extended Producer Responsibility (EPR) Funding, this was to support waste and recycling services, shifting costs onto producers.

· Risks around EPR funding were seen as:

§ Uncertainty about whether the Council could retain the full amount.

§ Lack of clarity around future funding levels.

§ Uncertainty as to whether producers might alter packaging to reduce their costs, which could positively impact the environment but reduce Council funding.

The Deputy Chief Executive confirmed that an updated version of the report with clarifications, but no major financial changes would be prepared ... view the full minutes text for item 67

Meeting: 03/02/2025 - Overview and Scrutiny Committee (Item 149)

Webcast for 03/02/2025 - Overview and Scrutiny Committee

149 Budget 2025/26 and Medium Term Financial Strategy PDF 1 MB

Purpose

To present the Revenue Budget for 2025-26, Capital Programme and Medium-Term Financial Strategy for 2025-2026 to 2028-2029

Recommendation

That the Committee agrees any recommendations it wishes to submit to Cabinet on 6 February 2025.

Additional documents:

Minutes:

This report set out the Revenue Budget for 2025/26, Capital Programme and Medium-Term Financial Strategy for 2025/26 to 2028/29

Deputy Leader of the Council and Cabinet Member for Finance and Transformation, Councillor Mike Evemy, introduced the item. They raised the following points:

There was a £3m reduction in funding from Government in 2026/27.
The Council was not being fully reimbursed for the impact of changes to Employers National Insurance contributions in April 2025 - £267,000 shortfall.
The Local Government Finance Settlement (LGFS) provided district councils with a cash flat settlement only after Council Tax increases were included.
New Homes Bonus would continue for a further year £0.820m of one-off funding.
Extended Producer Responsibility – funding of £1.5m had been provided.
The Rural Services Delivery Grant had been abolished with a loss of £0.820m per annum.
There would be a £0.662m surplus in 2025/26, followed in 2026/27 by a £1.539m deficit/budget gap and in 2027/28 a £4.829m deficit/budget gap
The Council would be utilising its Financial Resilience Reserve and Business Rates Risk reserve to support the Medium-Term Financial Strategy.
The needed to be a focus on savings and cost reductions to address the budget gap in 2026/27 in order to provide services to residents.
The Budget included a £5 Council Tax increase, a Second Home charge, a freeze on car parking charges for stays up to one hour and inflationary rises for stays of two hours or more.
Garden waste fees would be increased to maintain a cost recovery position.

The Deputy Chief Executive added information on the risks and uncertainties around Transitional Protection estimates assuming a ‘quick’ transfer of funding along with potential global economy/trade wars.

Members discussed the report, raising the following points:

Members asked about the Capital Waste Project in light of the future of the Council and the costs involved. The Deputy Chief Executive explained that it would not be unreasonable to review the vehicle replacement programme and see how the life of the vehicles could be extended. Ideas were suggested around increasing the life of the fleet beyond the planned seven-year lifespan of the vehicles, hiring fleet vehicles, opportunities with UBICO providing services across the whole of Gloucestershire or the purchase ‘nearly new’ vehicles from other local authorities. There was a responsibility to maintain services to residents bearing in mind the impact ofdevolution changes in the future.
A Member asked whether circumstances created by the Devolution White Paper would allow for discretionary options with respect to the strategic use of reserves to fund off one-off costs for service improvements e.g. upgrades to critical infrastructure, visible community projects, clearing backlogs of planning enforcement cases. The view of the Chief Financial Officer was that the Section 25 statement would assess the robustness of budget estimates and adequacy of reserves, highlighting that without significant cost reductions in the next few years, continued reliance on reserves would threaten the Council’s financial sustainability and the ability to provide the quality of statutory services for residents. Unless there are significant ... view the full minutes text for item 149

Issue - meetings

Budget 2025/26 and Medium Term Financial Strategy

Meeting: 24/02/2025 - Council (Item 82)

Meeting: 06/02/2025 - Cabinet (Item 67)

Meeting: 03/02/2025 - Overview and Scrutiny Committee (Item 149)

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