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Agenda item

2024/25 Budget Strategy And Medium-Term Financial Strategy (MTFS) Update

Purpose

This report sets out the Budget Strategy to support the preparation of the 2024/25 revenue and capital budgets and presents an updated Medium Term Financial Strategy forecast.

 

Recommendation

That Cabinet resolves to:

1.    Approves the 2024/25 Budget Strategy as outlined in Section 4 of the report.

2.    Notes the forecast surplus on the General Fund revenue budget in 2024/25 and proposed transfer to the Financial Resilience Reserve.

Minutes:

This report set out the Budget Strategy to support the preparation of the 2024/25 revenue and capital budgets and present an updated Medium Term Financial Strategy forecast.

 

The Chair then introduced the report in the absence of the Deputy Leader and Cabinet Member for Finance Councillor Evemy. The following points were outlined.

 

  • It was noted that the financial pressures faced by the Council were faced by councils nationally such as inflation and reductions in central government funding. It was highlighted that the Cabinet should be mindful of these factors for the upcoming budget.
  • It was highlighted that the Cabinet Transformation Working Group was working with partners in Publica and Ubico to reduce the in-year financial pressures of £860,000 identified and further external pressures of around £450,000.
  • It was noted in table ES3 that in 2024 a budget shortfall of £1.3 million was projected.
  • It was noted that in the financial years of 2026/27 and 2027/28 the upcoming fairer funding review was projected to reset the position on business rates and lead to a reduction in income from £5 million to £2.3 million.
  • It was highlighted that in 2024/25 and 2025/26 that the focus would be on building reserves to mitigate the challenges later in the Medium Term Financial Strategy.
  • It was outlined that capital projects would need to be reviewed carefully in line with their business cases due to increases in interest rates.

 

The Deputy Chief Executive then addressed Cabinet and outlined the following points:

 

  • It was outlined at paragraph 2.9 of the report that there was no immediate risk of a Section 114 notice needing to be issued, but there is a budget gap which must be closed.
  • It was noted that the projected surplus for the next two financial years would be used to build the financial reserves for the year 2026/27 and 2027/28.
  • It was noted that the staff pay award for 2023/24 had been agreed with an increase of £1,925 or 3.88% depending on individual salaries.
  • It was highlighted that high interest rates were a risk in terms of any borrowing undertaken but had boosted cash balances that the Council holds.
  • It was noted that the work up to the budget in 2024 was focussed on financial sustainability and delivering upon the priorities for the Council.

 

The Cabinet wished to thank officers for their work in driving down the budget gap and providing support to residents.

 

There were questions about the impact of the Fairer Funding Review and what representations were being made. The Deputy Chief Executive confirmed that the impact would be moving funding from district councils to those local authorities with responsibility for Adult Social Care. The Chair then highlighted on the question of representations that these conversations would be brought up through the Local Government Association.

 

It was highlighted that the consideration of fees and charges would need to take into account the increase in costs of providing non-statutory services.

 

Councillor Coleman as an observer asked about contributions to the Local Government Pension Scheme (LGPS). The Deputy Chief Executive noted at paragraph 4.17, the review and revised employer funding schedule taking place would be taking place resulting in a £531,000 difference between the financial years 2023/24 and 2025/26.

 

The Chair noted that there was an assumption by the Government when formulating the Local Government Settlement that the maximum increase to Council Tax would be applied by councils. It was highlighted that the 1997 sale of homes by the councils has only provided reserves once and was no longer usable.

 

It was also noted that a public consultation was taking place from 3 November 2023 to the 8 December 2023 and would be considered at the Cabinet meeting on 11 January 2024.

 

 

RESOLVED: That Cabinet

1. APPROVED the 2024/25 Budget Strategy as outlined in Section 4 of the report.

2. NOTED the forecast surplus on the General Fund revenue budget in 2024/25 and proposed transfer to the Financial Resilience Reserve.

 

Voting Record - 4 For, 0 Against, 0 Abstention, 4 Absent

 

Supporting documents:

 

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