Agenda item

To consider a report by the Director of Finance and Corporate Resources on the Final 2024/25 Budget and Medium-Term Financial Strategy (2025/26 to 2028/29) including the capital programme prior to its consideration by the Council.

Executive Councillor: B Mickelburgh.

The Cabinet has recommended to Council the approval of the overall Final Budget 2024/25 and Medium Term Financial Strategy 2025/26 to 2028/29 as outlined in Appendix 1 of the report now submitted which includes the Revenue Budget at Section 2 and the Capital Programme at Section 3.

With the aid of a report prepared by the Director of Finance and Corporate Resources (a copy of which is appended in the Minute Book) the Cabinet reviewed the Council’s Revenue and Capital budget proposals for the 2024/25 Final Budget and the Medium-Term Financial Strategy – MTFS (2025/26 to 2028/29).

The Executive Leader, Councillor S J Conboy advised the meeting that Councillor B Mickelburgh, Executive Councillor for Finance and Resources, was representing the District Council at a Local Government Association (LGA) Special Interest Group meeting about the funding of Internal Drainage Boards in Westminster. As funding of the drainage boards consumed over £500,000 of annual budget of the Council and it was therefore important to press Central Government over changes to the funding mechanism.

By way of background, the Director of Finance and Corporate Resources then reported that the budget included relevant savings, income and growth proposals, the implications of other budget adjustments and the Commercial Investment Strategy, and the government’s financial settlement, together with a planned Council Tax increase of 3.21% (equating to £5) for 2024/25 and then £5 increase per annum for the duration of the MTFS and have included the implementation of the revised Council Tax Support Scheme.  Whilst in regard to the robustness of the 2024/25 budget and MTFS 2025/26 to 2028/29 it was noted that in respect of risks that both HDC and the wider local government community face at this time of continued public sector austerity the key findings are that HDC should (i) in 2024/25 make a contribution to General Reserves of £1.872m, (ii) utilise only the General Fund and Budget Surplus Reserves and therefore based on those assumptions in the current MTFS, HDC would be able to maintain a minimum level of General Fund (Unallocated) Reserves; and (iii) take a total net contribution from General Reserves of £2.212m over the 5 years of the MTFS.

The Cabinet agreed that the financial climate continued to be unusual with inflation and interest rates having risen to levels not seen for decades, and world conflicts causing disruption to energy and food supplies. This has put considerable pressure on HDCfinances with substantial, necessary cost increases being borne by services (e.g., increases in utility bills, housing benefit, insurance and drainage rates). In addition (i) there is the Material Recycling Facility (MRF) waste management contract being retendered by the County Council that is another cost pressure to take into consideration and HDC has allocated £900k additional expenditure per annum for this, which gives a total pressure of £4.5m in the MTFS.  The Local Government Finance Settlement being only for one year will make financial planning and sustainability challenging although delaying NNDR re-baselining will provide a one-off increase to funding, that will be used to create a new £2.5m workforce strategy implementation reserve together with a further £1m reserve for investments to generate future revenue budget benefits. Expenditure against this reserve will be considered by Overview and Scrutiny.

Members attention was then drawn to the comments of the Overview and Scrutiny panel, in particular questions from Councillor Gleadow regarding the introduction of the garden waste subscription service, the Cabinet noted that this was introduced due to jeopardy in future budgets and that there was a commitment to progress this service as to delay would result in a considerable operational deficit alongside costs incurred by the project implementation and refunds to those who had already paid.  In addition, there would be £2m lost income within the budget and if there was not the £8.9m contribution from the garden waste subscription service in the MTFS then HDC would fully depleted any budget surplus and it would require HDC to use its CIS reserves to fund the remaining deficit. HDC has financial?reserves to enable it to plan for the future, and using these reserves to address a budget deficit is not the solution to the financial?pressures?that HDC is facing, as it would mean taking from future budgets and which would result in budget cuts.  HDC services are already running very, very lean. There is also the uncertainty with a general election due, and many local authorities have had to issue a notice under section 114 of the Local Government Finance Act 1988 that has put spending controls in place and prohibited all new expenditure other than that required to provide statutory services.  Cabinet agreed that good financial management is crucial, a point highlighted by the recent statement from the Department for Levelling Up, Housing & Communities (DHLUC) reminding HDC to ensure that it prudently plans and transform services.  However, it was noted that whilst HDC is operating in a challenging environment it is a long way from having to issue a notice under section 114 because decisions, tough decisions, had been already taken by HDC.

Cabinet went on to express its disappointed that Councillor J A Gray (Conservative and Opposition Group Leader) together with Councillor A Jennings (Opposition Lead for Finance and Resources) had both been invited to attend the meeting to put forward alternative suggestions for the budget but unfortunately, they had both declined to attend tonight’s meeting. 

Referring back to comments from Overview and Scrutiny Cabinet noted that Councillor Pickering had queried why there were lines within the Fees and Charges document which were showing a 0% increase, whereby the Cabinet noted that some of these were outside of the Council’s control as they were statutory fees set by the Government and that some fees, such as One Leisure fees, had increased but that all fees had been discussed with relevant Portfolio Holders and decisions made based on those deliberations. Councillor Jennings remarked on the decrease in the number of Council Tax properties compared to last year’s MTFS. The Cabinet noted that the Council Tax Team had undertaken work to ensure a more accurate figure in this year’s budget rather than an estimation which had been used in previous years, it was noted that consequently the team were fully confident on the figures given within the Council Tax base; and Councillor Cawley had queried about the £2.5m that had been budgeted for the Workforce Strategy and had asked for clarity on what this would cover. Accordingly, the Cabinet were advised that whilst this Strategy was still being developed and the detail was not yet available there had been significant input from District Council staff.

Accordingly, the Cabinet

RESOLVED

that the Council be recommended to approve the overall Final Budget 2024/25 and Medium-Term Financial Strategy 2025/26 to 2028/29 as outlined in Appendix 1 of the report now submitted, which included the Revenue Budget at Section 2 and the Capital Programme at Section 3.