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Agenda item

Budget 2025/26 and Medium Term Financial Strategy

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.

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 cost reductions in the next two years then the Council would need to apply for Exceptional Financial Support from the Government and so the advice was to retain reserves to support future budgets.
  • Members questioned some of the spending included in the budget and whether these costs were necessary – spending on roles that may not have longer term value and Phase 2 of the Publica transition. The Cabinet Member for Finance and Transformation explained that if services were not transformed and run differently, they would cost more money and so felt that the Phase 2 transition of Publica should continue for the lifespan of this Council. The new roles would be funded using reserves to allow for the smooth transformation of staff to Cotswold District Council (CDC) from Publica.
  • Members asked for clarification on the CDC pay inflation. The Chief Financial Officer agreed to provide an explanation following the meeting but assured the Committee that the figures were correct.
  • Members asked for clarification into the funding provided to Cirencester Town Council for the Cirencester Master Plan. The Chief Financial Officer explained that these were costs associated with the CDC activities.
  • Members expressed the difficulties of managing finances with reduced Government funding and asked about the relevance of applying for Exceptional Financial Support. The Cabinet Member for Finance and Transformation reassured the Committee that representations were being made to Government and to the Local Government Association that the financial settlement for District Councils was completely inadequate. Applying for EFS would mean massively raising council tax or having to sell off assets to support revenue spending and would take choice away from members. It would provide the Council with a financial lifeline for only a very defined period.
  • The Chair wanted to know if there were costs associated with the unoccupied space not let in the Trinity Road offices. The Chief Financial Officer agreed that there would be costs and there was a discussion about the difficulties with renting various parts of the building.  Watermoor Point had reported more interest recently and it was hoped that more tenants would be confirmed shortly.

 

RESOLVED: The Committee NOTED the report.

 

Supporting documents:

 

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