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Agenda item

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:

  1. 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.

 

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 by local authorities was on the rise due to financial pressures, and the Council would need to make difficult decisions to safeguard the financial future.

 

The Deputy Leader in summing up agreed with comments regarding the pressures within the local government sector. It was noted that the Council was planning ahead for the financial challenges, but there was more work to do in advance of the Budget papers being brought back in February 2025.

Supporting documents: