Agenda item

Budget 2025/26 and Medium Term Financial Strategy

Purpose

To present the Revenue Budget for 2025/26, the Capital Programme and the Medium-Term Financial Strategy for 2025/26 to 2028/29.

Recommendation

Council resolves to approve:

the Medium-Term Financial Strategy set out in Annex B
the Budget Pressures and Savings for inclusion in the budget, set out in Annex C
the Council Tax Requirement of £7,065,418 for this Council
the Council Tax level for Cotswold District Council purposes of £158.93 for a Band D property in 2025/26 (an increase of £5)
the Capital Programme, set out in Annex D
the Annual Capital Strategy 2025/26, as set out in Annex E
the Annual Treasury Management Strategy and Non-Treasury Management Investment Strategy 2025/26, as set out in Annex F
the Strategy for the Flexible use of Capital Receipts, as set out in Annex H
the Balances and Reserves forecast for 2025/26 to 2028/29 as set out in Section 7 of the report
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).

Minutes:

Purpose

The purpose of this report was to present the budget for 2025-2026.

The Deputy Leader and Cabinet Member for Finance and Transformation was invited to propose the administration’s budget. Councillor Evemy proposed the Council’s budget for the sixth consecutive time. The budget prioritised maintaining essential services while adapting to financial pressures.

The Council faced significant financial pressures due to government funding cuts, the economic impact of the COVID-19 pandemic, high inflation, and ongoing cost-of-living challenges. Despite these difficulties, the Council remained financially stable and was not at risk of issuing a Section 114 notice or requiring exceptional financial support.

A forecast budget gap of £1.6 million for the next financial year and nearly £5 million for the following year needed to be closed through a combination of savings, income generation, and prudent financial management to maintain financial stability.

The government’s devolution white paper suggested potential restructuring, including the creation of unitary councils, which could have led to the abolition of the current Council by April 2028. Financial planning incorporated this uncertainty to ensure sustainability.

Cost Savings & Income Generation:

£625,000 in savings was projected for 2025-26 through operational efficiencies in customer service and waste management.
An additional £800,000 was expected to be raised through a combination of increased fees, service efficiencies, and revenue-generating initiatives.
Rising costs included an additional £450,000 in general expenditure and £1 million in increased contract pay and energy inflation costs.
A planned budget surplus of over £600,000 was allocated to replenish reserves and strengthen financial resilience.

The funding settlement from the government for the upcoming year was the lowest since 2019, reflecting a £256,000 reduction. Additionally, the £1.5 million grant from the Extended Producer Scheme remained uncertain for future years, making financial planning more challenging.

The Council’s capital fund (Capital Reserves), originally £56 million from the 1997 housing stock sale, had been gradually used for key infrastructure and community projects. With reserves nearly depleted, the Council carefully managed remaining funds to reduce pressure on revenue budgets.

Revenue & Investment Initiatives:

Over £1.5 million was raised through fee and service charge reviews.
The Council secured £4.4 million in external funding to support local community and infrastructure projects.
Investments were directed toward waste and recycling improvements, leisure centre decarbonisation, and the expansion of EV charging points.
The Council explored income-generating opportunities such as leasing surplus Council building space to external organisations.

Despite financial pressures, the Council’s service delivery and support remained a priority. The Council committed to supporting vulnerable residents, maintaining high-quality public services, and investing in community development initiatives. Efforts to date included housing support programmes, social care investments, and enhancements to local amenities.

Council Tax & Charges:

A £5 increase per Band D property was expected to generate an additional £469,000 in revenue.
A second-home premium was introduced to encourage better use of local housing stock.
Increased fees and charges across various Council services were projected to generate an estimated £280,000.
Adjustments to parking charges were expected to contribute an additional £90,000.
The garden waste collection fee was raised to £69 per bin per annum to ensure cost recovery for the service.

Enhancements to the Council Tax Support Scheme provided increased assistance to nearly 4,000 low-income households. Efforts to promote awareness and accessibility of this support continued.

The financial resilience reserve was projected to increase by over £600,000, ensuring financial stability and enabling strategic service transformations in response to evolving demands.

The budget included provisions for the ongoing transition of services back from Publica. Financial allocations were made for future phases of the project to ensure a smooth transition with minimal disruption to services.

Attention was drawn to the Chief Finance Officer’s report in Annex A, emphasising the importance of understanding the Council’s financial position and associated risks. The recommendations from pages 33 and 34 were moved for approval, with appreciation extended to the Deputy Chief Executive, the finance team, and all assistant directors and business managers for their contributions.

Despite challenging financial circumstances, the Budget was considered both deliverable and prudent. It aimed to safeguard the Council’s finances, enhance services, and uphold Liberal Democrat values. The Budget focused on providing affordable housing, addressing the climate emergency, and supporting communities and the local economy while ensuring financial resilience. The Deputy Leader and Cabinet Member for Finance and Transformation commended the Budget 2025-2026 for approval to all members.

The Chair then invited the seconder of the budget, Councillor Harris, the Leader, to speak. Councillor Harris reserved his right to speak.

Councillor Stowe, Leader of the Conservative group reserved his right to respond until later in the debate.

Councillor Maclean was invited to respond to the budget on behalf of the Green Party. Councillor Maclean reserved his right to respond until later in the debate.

The Chair then invited Councillor Stowe, as Leader of the Conservative group, to propose their amendment which was then circulated in the room.

Once it had been circulated Councillor Stowe then spoke to the amendment proposal which read as follows:

Restructure the CDC communications team so that the staffing costs within the communications budget are reduced from £340,000 to £200,000 to give a £140,000 annual saving, reducing the overall Press & PR/Communications budget from £404,764 to £264,764.

£40,000 of this annual saving to be used towards a new permanent Level 1 Case and Field Work Officer post in the Environmental Protection Team.

The following points were made by Councillor Stowe:

The Deputy Chief Executive had confirmed that the amendment was viable.

Attention was drawn to the 41% increase in the press, PR and communications budget.
The amendment was proposed with the aim of delivering best value and services to residents. Allocating additional resources to the Environmental Protection Team.
The cost would be £40k per annum to fund a new permanent Level 1 Case and Field Work Officer post in the Environmental Protection Team.
The proposal would create an additional annual saving of £100k.
£140k reduction in the “Press & PR Communications budget” would fund the £40k Environmental Protection Role and deliver £100k of additional savings.

Councillor Daryl Corps, of the Conservative Group then seconded the amendment and made the following point:

· The cost of a supplementary Environmental Protection Officer would bring more benefits and provide better value for council tax-payers in the district than the extra proposed budget for PR and communications.

There were no proposed amendments from the Green group

There were no proposed amendments from the Independent group.

The Chair then invited Members to ask any questions for clarification.

There were no questions for clarification

The Chair moved to the adjournment for groups to discuss proposals.

The meeting was adjourned for twenty minutes.

The meeting resumed and the Chair asked the Deputy Leader for Finance and Transformation as proposer of the Budget, if the administration had accepted the amendment, and it was confirmed that the amendment was not accepted.

The Chair then moved to the debate on the amendment.

Councillor Joe Harris acknowledged the rationale behind the amendment but emphasised the importance of effective communications for local authorities.

Communications were highlighted as crucial for engaging and reaching all residents, especially harder-to-reach groups.

Claims that communications served as a political tool for the Liberal Democrats were rejected.

The importance of communications in:

· Providing help with the cost-of-living crisis.

· Raising awareness of local plans and developments.

· Keeping residents informed about services and opportunities.

· Encouraging engagement in the democratic process.

was emphasised and a warning that accepting the amendment would lead to redundancies was given without specifying which officers would be affected.

Members emphasised the importance of effective communication, ensuring residents were well-informed about Council services and decisions was considered crucial, especially during times of misinformation and engagement challenges.

The positive impact of outreach efforts, like the Cost-of-Living leaflet, was noted.

The Drive and Thrive event was mentioned as a successful example of communication influencing residents.

The Chair invited Councillor Tom Stowe, Conservative Leader to sum up the debate on the amendment.

In summing up the debate on the amendment Councillor Stowe made the following points:

that the proposed amendment was not to completely remove the communications team, rather to restructure it into a more reasonable size with a sensible budget and was seen as a clear opportunity for savings.
past communications successes were acknowledged, but the previous year’s budget of £285,000 was noted and the proposed 41% increase to £404,000 was seen as excessive.
the decision to reject the amendment was seen as reflecting priorities in allocating limited resources and prioritising PR and self-promotion over frontline services.

The Chair invited the Deputy Leader to respond to the Conservative amendment.

Councillor Evemy acknowledged his fellow Members’ contributions and made the following points:

that he viewed the amendment as tactical.
the increased spend had been framed the issue as self-promotion, but Councillor Evemy refuted this.
the increased cost resulted from Publica transitioning to a sovereign service, not just inflated spending.
cutting £140,000 from the budget would eliminate at least two to three jobs, which were seen as essential to effective communication seen as crucial, especially with upcoming local government reorganisation.
that thoughtful planning had gone into forming the new communications team, with new hires ready to start.
passing the amendment would send a false message that the roles are unnecessary.
more and better communication to support residents across the district was deemed necessary.

The Deputy Leader urged colleagues to reject the amendment.

The Chair moved to the vote on the amendment, proposed by Councillor Stowe and seconded by Councillor Corps.

Voting Record.

8 For 16 Against 2 Abstentions

The amendment was lost.

The Chair then returned Council to the substantive budget and sought questions of clarification.

Councillor Cunningham questioned why the 2025-2026 transformation budget matched the entire flooding budget for the same period and challenged whether this aligned with the Council’s "Green to the Core" commitment.

Councillor Joe Harris rejected this criticism, highlighting government cuts to the Environment Agency and Gloucestershire County Council, the lead flood authority. Councillor Harris defended the Council’s flooding officers and their efforts while questioning what the County Council and Environment Agency were doing to address the issue.

A question was raised about whether the Council had received any delivery funding from MHCLG for the Local Plan.

The Deputy Chief Executive confirmed that it had not.

There were no further questions on the substantive budget, and the Chair invited Councillor Stowe to speak, as Conservative Group Leader who had reserved his right to respond to the budget.

Councillor Stowe thanked officers for producing the budget and made the following points:

The budget meeting had revealed that the Council continued to face the threat of future bankruptcy and sought exceptional financial support from the government.
External economic factors like inflation, interest rates, and national government policies had also impacted the Council's finances.
The budget for PR and communications had increased by 41% to £405,000, funding a six-strong team.
The Council had spent £60,000 on a rebrand.
The administration had scrapped the popular ‘free after three’ scheme and increased parking fees by 15%.
The Council faced challenges with its Medium-Term Financial Strategy (MTFS) and needed to focus on scrutinising and challenging financial decisions.
The Publica transition process had had a significant impact on the Council's finances, with costs escalating from £200,000 to £1.1 million by the end of Phase 2.
The ongoing costs of delivering services in-house had increased by £780,000 per year.
It was felt that the Council missed the opportunity to streamline operations and instead added layers of management, costing £363,000 per year.

The process had created uncertainty and forced the administration to reduce the quantity and quality of services.
The transition had severely impacted the Council's finances putting it in a more precarious financial situation.

The Chair invited Councillor Maclean to speak, as Green Group Leader who had reserved his right to respond to the budget.

Councillor Maclean had nothing to add.

Councillor Ind, as an Independent Member, responded to the budget and expressed frustration at the constant one-year funding of local government since the 2019 election and noted that things had not improved under the new government. The following points were made:

challenges for district councils due to changes in local government and devolution were highlighted.
the importance of ensuring that residents understood the government's expectation to increase council tax was emphasised in light of the fact that 30% of residents had disagreed with the increase during consultation.
insufficient government support for national insurance increases and its impact on businesses were also pointed out.
Phase 2 of the Publica transition was identified as a significant challenge, its financial implications and the impact on staff were both highlighted.
the exploration of alternatives to the replacement of the Ubico fleet of vehicles just ahead of devolution was encouraged.
the detailed asset strategy review was welcomed and the importance of ensuring all assets worked effectively for the district council emphasised.

The Chair then retuned Council to the general debate on the Substantive budget.

Councillor Hodgkinson defended freezing half-hour and one-hour parking charges after consulting businesses and residents. Despite financial pressures, he stressed the benefit to many users. He noted a shift toward shorter stays, with most usage now in 30-minute to 2-hour slots, and dismissed criticism of past increases.

The Chair invited Councillor Joe Harris to speak, as seconder who had reserved his right to respond to the budget:

Thanks was given to Councillor Mike Evemy for delivering a balanced budget in difficult times and keeping Council tax among the lowest in the Southwest while also supporting those struggling to pay. Thanks was also given to David Stanley for his work in ensuring financial accuracy and compliance.
It was noted that local government funding had worsened under the current Labour government, leading to uncertainty across the sector.
The difficulty of providing an accurate MTFS was acknowledged given the possibility of structural changes beyond 2028.
Investments through the Shared Prosperity Fund were highlighted, including £70,000 allocated to redevelop a derelict building in Cirencester.
The administration reaffirmed its commitment to investing in the Cotswolds, protecting frontline services, and supporting vulnerable residents.

The budget was formally seconded by Councillor Joe Harris.

The Deputy Leader as proposer of the budget then summed up the budget and thanked members for the debate and discussion on the budget:

Councillor Stowe’s concerns around the Publica Transition were noted and it was confirmed that a full debate on the Publica transition would take place in a months time.
The benefits of bringing staff back in-house, including better pensions and improved recruitment, particularly in planning roles were emphasised.
Councillor Evemy dismissed criticism of communications, stating it had already been debated.
Councillor Ind’s points about financial challenges, including the £5 million waste fleet replacement, were noted as key upcoming decisions.
Claims that the Council was near bankruptcy, were rejected but acknowledged significant financial pressures, including a potential £3 million funding reduction next year were acknowledged.
It was stressed that financial difficulties were due to government funding changes, not Council decisions, and assured that transformational savings were being planned.
All members were urged to support the prudent and robust budget.

The Chair then moved to the vote on the substantial budget proposed by the Deputy Leader and Cabinet Member for Finance and Transformation, Councillor Mike Evemy, seconded by Councillor Joe Harris.

Voting Record:

18 For, 7 Against, 1 Abstention

RESOLVED

Supporting documents:

Agenda item

Budget 2025/26 and Medium Term Financial Strategy

Related Pages