The Head of Financial Services has submitted a report to present the outcome of the budget consultation and agree the Council’s Medium Term Financial Strategy for 2025-26 to 2027-28 and 2024-25 Budget for recommendation to Council.

Cabinet is recommended to consider the outcome of the public consultation, agree the amendments to the consultation budget and recommend that Council resolves to:

1.        Note the approval by Cabinet on 24 January and subsequently agreed by the Council on 29 January of an increase of 7.7% (£9.27 per week) in social dwelling rents from 1 April 2024 giving a revised weekly average social rent of £129.72 as set out in Appendix 5 based on a HRA budget as set out in Appendix 4, together with the comments in paragraphs 35-40;

2.       Approve the 2024-25 General Fund and Housing Revenue Account budgets for consultation and the General Fund and Housing Revenue Account Medium Term Financial Strategy as set out in Appendices 1-9, noting:

a) the Council’s General Fund Budget Requirement of £27.752 million for   2024/25 and an increase in the Band D Council Tax of 2.99% or £10.06 per annum representing a Band D Council Tax of £346.36 per annum; and

b) the General Fund and Housing Revenue Account Capital Programme as shown in Appendix 6;

3.       Agree the fees and charges shown in Appendix 7;

4.       Delegate to the Section 151 Officer, in consultation with the Deputy Leader (Statutory) – Finance and Asset Management, the decision to determine whether it is financially advantageous for the Council to enter into a Business Rates Distribution Agreement as referred to in paragraphs 16-18 of the report; and

5.       Note the changes to council tax charges in respect of second homes and properties empty for more than one year as referred to in paragraphs 19-22 from 1^st April 2025 and 1^st April 2024 respectively.

The Head of Financial Services had submitted a report to present the outcome of the budget consultation and agree the Council’s Medium Term Financial Strategy for 2025-26 to 2027-28 and 2024-25 Budget for recommendation to Council.

Councillor Ed Turner, Cabinet Member for Finance and Asset Management presented the report and drew attention to the major challenges involved in setting the budget.  He highlighted that whilst significant pressures remained from utility costs; pay costs; capital programme project costs; and demand for homelessness and temporary accommodation, the government had not taken account of calls for the need for increased funding for local authorities.  The additional money (above the finance settlement) which was to be made available to this Council was a one-off payment of just c £243,000 (against a gross general fund budget for the Council of c £80m).  This small gain had effectively been ‘cancelled out’ by a technical change by the government to Council Tax for second homeowners, which meant that the second home premium which the Council had agreed to implement in February 2023 could not now commence until 1 April 2025 (described in paragraphs 19 – 22 of the report).

Councillor Turner reported that a gain had been achieved through the re-procurement of the Leisure Services contract, which was better over a five-year period than had been forecast.

Since the consultation budget had been published, a pay deal had been reached with the Unions: this was welcome given the current difficult financial climate.

Councillor Turner highlighted concerns around the increasing pressure of temporary accommodation costs.  Whilst officers continued to work very hard to find solutions and bring forward options for future consideration, this was likely to remain a significant area of concern in the budget for some time to come.

The Head of Financial Services summarised some of the challenges to the budget setting process, which had included utilities pressures of c £1.2m per year; dividend shortfalls from the Council’s companies, which were experiencing very difficult trading conditions; and pay increases which would generate a cost pressure of an additional c £5m.  These pressures had had to be considered in the context of very limited finance settlement from the government, plus the additional c £243k outlined above. 

Despite these pressures and issues, a balanced budget over the next five years had been achieved in a climate where increasing numbers of councils were unable to accomplish this, and many were in a position of having to issue a S114 notice.  It was therefore moved that it be recommended to Council.

Cabinet resolved to recommend to Council to:

1.        Note the approval by Cabinet on 24 January and subsequently agreed by the Council on 29 January of an increase of 7.7% (£9.27 per week) in social dwelling rents from 1 April 2024 giving a revised weekly average social rent of £129.72 as set out in Appendix 5 based on a HRA budget as set out in Appendix 4, together with the comments in paragraphs 35-40;

2.       Approve the 2024-25 General Fund and Housing Revenue Account budgets for consultation and the General Fund and Housing Revenue Account Medium Term Financial Strategy as set out in Appendices 1-9, noting:

a) the Council’s General Fund Budget Requirement of £27.752 million for   2024/25 and an increase in the Band D Council Tax of 2.99% or £10.06 per annum representing a Band D Council Tax of £346.36 per annum; and

b) the General Fund and Housing Revenue Account Capital Programme as shown in Appendix 6;

3.       Agree the fees and charges shown in Appendix 7;

4.       Delegate to the Section 151 Officer, in consultation with the Deputy Leader (Statutory) – Finance and Asset Management, the decision to determine whether it is financially advantageous for the Council to enter into a Business Rates Distribution Agreement as referred to in paragraphs 16-18 of the report; and

5.       Note the changes to council tax charges in respect of second homes and properties empty for more than one year as referred to in paragraphs 19-22 from 1^st April 2025 and 1^st April 2024 respectively.