Decision details

AGREED that Executive note the contents of the report and submit the following to Council for approval:

1.    Budget proposals for savings and income generation of £7.036m in 2025/26 rising to £8.686m in 2028/29, as set out in Appendix two (Annex one and two) of the report.

2.    Budget growth of £2.521m in 2025/26 rising to £2.918m in 2026/27 for re-investment in services aligned to the Recover, Reset, and Deliver plan as set in Appendix two (Annex four) of the report.

3.    Budget provision of £0.311m in 2025/26 and a further £0.100m in 2026/27 to address the removal of previously approved savings in line with the priorities outlined in the Council Plan and after listening to residents’ views as set out in Appendix two (Annex three) of the report.

4.    An increase in Council Tax of 4.99% resulting in a Council Tax level (Band D) of £2,074.35 excluding parish, Fire, and Police precepts in line with both the Government’s referendum limits and the s151 Officer’s advice (paragraphs 4.29 to 4.32 and detailed in Appendix seven of the report).

5.    The proposed General Fund revenue budget for 2025/26 with a net budget requirement of £143.362m

6.    The Financial Reserves Policy for 2025/26 (Appendix four of the report) including the proposed contributions to reserves to strengthen the Council’s financial resilience, and which proposes:

·         a minimum General Fund Balance of least 7% of the Net Revenue budget over the MTFP period to 2028/29. In the 2025/26 proposed budget the level is 7.75% equivalent to £11.1m.

·         the building up of the Financial Resilience Reserve to at least £10m in 2025/26 and £20m by the end of 2028/29 to strengthen the Council’s financial resilience

7.    The proposed Fees & Charges Policy for 2025/26, and the schedule of fees and charges arising from the application of the approved policy for 2025/26 (Appendix five of the report).

8.    The Capital Strategy 2025/26 and the proposed 2025/26 to 2028/29 Capital Programme totalling £170.290m which included the addition of new Council funded schemes, and the associated financing statement (Appendix six of the report).

AGREED that Executive note:

1.    The statutory s25 report of the Council’s Section 151 Officer in respect of the robustness of the estimates within the budget and the adequacy of reserves (Appendix one).

2.    The updated financial planning assumptions in the Council’s Medium Term Financial Plan following the publication of the Provisional Local Government Finance Settlement (Appendix two), and that these will be updated further following publication of the Final Local Government Finance Settlement in early February 2025, with any changes being reported to the Council on 19 February 2025 as part of the budget setting report.

3.    The creation of a Delivery Risk Budget of £2m on a one-off basis in 2025/26 only to protect against unplanned use of reserves (Appendix two).

4.    The transfer of the estimated surplus on the Collection Fund for 2024/25 of £3.135m to a new Savings Delivery Risk Reserve to help provide against the risk of non-delivery or delay of savings and to rebuild reserves (Appendix two).

5.    The creation of a Middlesbrough Priorities Fund totalling £4.367m for 2025/26 only, along with the process for use and governance of the Fund (Appendix two).

6.    Whilst the budget was balanced for 2025/26 and 2026/27 there would still be a budget gap of £2.726m in 2027/28 rising to £5.170m by 2028/29. Further savings proposals arising from the Transformation Programme would be required as a minimum to meet those budget gaps (Appendix two).

7.    The feedback of the budget consultation exercise (paragraphs 4.8 to 4.16 and Appendix three).

8.    The estimated balances on unrestricted usable revenue reserves as at 1 April 2025 of:

·         General Fund balance - £11.100m

·         Usable Earmarked reserves – unrestricted £10.269m

9.    The inclusion of transformation and redundancy expenditure which could be capitalised under the Flexible Use of Capital Receipts strategy (FUoCR) of £7.500m in 2025/26 (as part of planned £26.700m Transformation Programme from 2024/25 to 2028/29), and that the annual Flexible Use of Capital Receipts (FUoCR) Strategy would be presented to Council for consideration and approval in April 2025.

10.  The Council’s estimated revenue cost of borrowing for 2025/26 was £12.060m which was equivalent to 8.4% of the Net Revenue Budget and was approaching the maximum affordable level (currently set at 10% over the MTFP period), therefore future capital investment would need to rely more heavily on external funding and capital receipts in order to maintain borrowing at affordable levels.

11.  Details of the Dedicated Schools Grant (DSG) Grant for 2025/26 and the allocation to schools (detailed in Appendix eight)

12.  The forecast total cumulative DSG deficit of £20.693m on 31 March 2025, including £21.281m relating to the High Needs Block (Appendix eight).

13.  That a statutory override was in place which prevented the DSG deficit from being met from General Fund resources and the Government’s plan to deliver a funding solution was awaited. This presented a potential significant medium term financial risk to the Council in the event that the statutory override was removed without a suitable funding solution (Appendix eight).