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Agenda item

Budget 2025/26 and Medium Term Financial Strategy

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:

  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- 2026 (an increase of £5)
  5. The Capital Programme, set out in Annex D
  6. The Annual Capital Strategy 2025- 2026, as set out in Annex E
  7. The Annual Treasury Management Strategy and Non-Treasury Management Investment Strategy 2025-2026, 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 2025-2026 to 2028-2029 as set out in Section 7 of the report.
  10. 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

  1. 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.

 

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 in time for Full Council.

Financial Sustainability was emphasised and the requirement that the Council address a growing budget gap post-2026 to remain financially sustainable was noted.  It was recognised that Cotswold District Council was in a better position than most District Councils but that the position was still a difficult one.

 

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

 

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

Supporting documents:

 

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