Issue - meetings

AGREED that Executive:

1.    Note the update on the key budget assumptions upon which the 2025/26 budget and MTFP to 2028/29 was calculated and were detailed in paragraphs 4.62 to 4.67 in the report.

2.    Note the proposed draft budgets for 2025/26 and 2026/27 were balanced, with a gap of £2.686m in 2027/28 and rising to £5.150m in 2028/29 and were detailed in paragraphs 4.124 and 4.125 in the report.

3.    Note that further work was required to fully assess the Council’s financial position once the detail of the Provisional Local Government Finance Settlement was published.

4.    Note that Transformation Programme business cases must be robust, and adequately assured to enable their inclusion in the proposed 2025/26 budget and MTFP. Work was continuing to develop detailed business cases within the Recover, Reset, Deliver Transformation Programme in relation to the cross-cutting Programmes: Target Operating Model including Customer Services, Neighbourhoods, IT and Digital. These programmes would fundamentally modernise and redesign the Council’s service delivery models to achieve improved outcomes for the community from a lower cost base. It was intended that these would be brought forward to the 5 February 2025 Executive for incorporation into the overall budget to be considered by Council on 19 February 2025.

AGREED that Executive:

1.    Endorse total proposals for savings and income growth of £7.036m in 2025/26 rising to £8.686m in 2028/29, of which £0.249m were deemed to involve policy change and/or impact service delivery levels and would be subject to public consultation and were detailed in Appendices one and two in the report.

2.    Endorse total budget growth for re-investment in services aligned to the Recover, Reset, Deliver plan of £2.361m in 2025/26 rising to £2.558m in 2028/29 detailed in Appendix three of the report.

3.    Endorse the proposed total Council Tax increase of 4.99% for 2025/26 comprising:

·         2.99% increase in general Council Tax and

·         2% Adult Social Care Precept.

4.    Endorse the proposed arrangements to make financial provision against the risk of delivering the 2025/26 budget and MTFP which would enable the Council to set a robust budget without an application for reliance upon Exceptional Financial Support (EFS) from Government as detailed in paragraph 4.65 of the report.

5.    Endorse that, where applicable, budget consultation would commence, on 5 December 2024 conclude on 8 January 2025 prior to finalising the proposed budget by Executive on 5 February 2025 for consideration and approval by Council on 19 February 2025

The Mayor and the Executive Member for Finance submitted a report for Executive’s consideration. The report was a key stage in the budget development process for 2025/26 and the Medium-Term Financial Plan (MTFP) for the four-year period to 2028/29. It presented budget and council tax proposals that would achieve a legally balanced budget for 2025/26; a balanced position for 2026/27 with a remaining budget gap in 2027/28 and 2028/29.

Subject to endorsement by the Executive, the draft budget would progress to the consultation phase of the budget development process during the period 5 December 2024 to 8 January 2025.

Further work would be required to assess the Council’s financial position more fully once the detail of significant Government Budget announcement was made in the Provisional Local Government Finance Settlement on 19 December 2024.

The delivery of a balanced budget and rebuilding reserves during 2024/25 was a critical stage in the Council’s financial recovery and was necessary to establish the foundations required to achieve financial sustainability over the medium term.

In setting the 2024/25 budget, the Council provided for £20.764m of growth to meet demand pressures in key statutory service areas. After approving £13.910m of savings, it needed to rely upon one off Exceptional Financial Support of £4.7m in the form of a capitalisation direction in order set a legally balanced budget. However, unanticipated additional pressures primarily in Children’s Social Care have resulted in a forecast overspend early in the financial year.

The Quarter Two position now forecasted an overspend of £1.382m which was an improvement of £2.360m compared to the Quarter One position. This was being driven, primarily, by savings slippage and increased number and complexity of children in external residential care resulting in a forecast overspend of £3.687m in Children’s Social Care, offset by underspending in other directorates and central budgets. It was essential that transformation measures to improve social care practice and cost efficiency within the directorate are successfully delivered at pace to stabilise the Council’s financial position.

Financial recovery plans continued to be developed and implemented in order to mitigate this further, with current plans totalling £0.498m, bringing the overspend down to £0.884m if delivered. Corporate contingencies that were held for unforeseen events outside the Council’s control, would be reviewed and revised in light of financial performance at Period nine (end of December 2024) to update the forecast outturn and preparation for final budget setting. Indications were that it was possible for the Council to deliver its financial outturn within the approved 2024/25 budget by 31 March 2025, providing that no material adverse events occur during the second half of the year.

The MTFP was based on a number of assumptions that were subject to change prior to final budget setting by the Council in February 2025. The report reflected some of the announcements made in the Chancellors Budget of 30 October 2024. However, as referenced in Table 5 of the report, there were a number of high-level announcements which, whilst they appeared favourable, were not possible  ...  view the full minutes text for item 59