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Agenda item

Draft Budget 2025/26 and Medium Term Financial Strategy

To follow

 

Invited

Councillor Mike Evemy, Deputy Leader and Cabinet Member for Finance

David Stanley, Deputy Chief Executive

 

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 of income from the business rates reset.
  • Members discussed how the changes to the minimum wage and employer’s national insurance contributions would impact Ubico. The Deputy Chief Executive explained that the expectation was that the Government was likely to compensate Local Authorities for this increase in national insurance contributions but that this wouldn’t be known until late December. They were engaging with Ubico on the topic of minimum wage.
  • The budget consultation was going to be presented to the Committee, but the timescales and approach had not been finalised.
  • The Deputy Chief Executive stated that if the issues as presented in the report were not addressed there would be a £10m shortfall by the end of 2027-28.

 

RESOLVED: The Committee NOTED the report.

 

Supporting documents:

 

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