Issue - meetings

This report presents the positive progress that has been made towards delivering a sustainable and balanced budget for 2024/25 and developing the latest medium-term financial plan (MTFP) position of the council.

It is important that the context to the development of the 2024/25 budget is fully appreciated. This can be summarised as.

·      The February 2023 approved general fund budget for 2023/24 was balanced on the assumption of a £30m drawdown in reserves and the delivery of £34m in savings, efficiencies, and additional resources including £9m in respect of transformation which were un-itemised.

·      A funding gap of £44m for 2024/25 as set out in the July MTFP Update report to Cabinet and a 3-year funding gap to 2026/27 of £67m.

·      An environment of ongoing uncertainty and volatility associated with the cost-of-living crisis.

Although significant progress has clearly been made it is clear that there is still much work to be done and that the savings, which will be considered as part of a November and December public engagement process, will have an inevitable impact on the level of services provided to our community.

RESOLVED that Cabinet: -

(a)    acknowledged the progress in delivering a sustainable balanced budget for 2024/25;

(b)   endorsed the updated MTFP position; and

(c)    approved the implementation of a voluntary redundancy process to support the delivery of a balanced budget for 2024/25 with delegation to the Chief Executive, in consultation with the Leader of the Council, to develop an appropriate policy.

Voting: Unanimous

Reasons

To comply with accounting codes of practice and best practice which requires councils to have a rolling multi-year medium term financial plan. To present progress on delivering a balanced budget for 2024/25 and a high-level overview of the current medium term financial plan position. To ensure a prudent approach to financial management based on traditional local government financial management processes. To present ongoing progress against the Best Value Notice requirement to establish a sound budget setting process and begin preparation for the 2024/25 budget as soon as possible and draft a sustainable MTFP and three-year budget by the end of September 2023.

The Portfolio Holder for Finance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book.

Cabinet was advised that the report presented the positive progress that had been made towards delivering a sustainable and balanced budget for 2024/25 and developing the latest medium-term financial plan (MTFP) position of the council.

Cabinet was informed of the context to the development of the 2024/25 budget which is summarised as: -

·      The February 2023 approved general fund budget for 2023/24 was balanced on the assumption of a £30m drawdown in reserves and the delivery of £34m in savings, efficiencies, and additional resources including £9m in respect of transformation which were un-itemised.

·      A funding gap of £44m for 2024/25 as set out in the July MTFP Update report to Cabinet and a 3-year funding gap to 2026/27 of £67m.

·      A funding gap of £44m for 2024/25 as set out in the July MTFP Update report to Cabinet and a 3-year funding gap to 2026/27 of £67m.

The Portfolio Holder for Finance explained the importance of delivering a sustainable and balanced budget and what a section 114 notice would mean.

In relation to this Cabinet discussed the pressures relating to the social care system and the impact the significant reduction in central governments has had on the BCP Council and on other local authorities experiencing similar financial challenges.

RESOLVED that Cabinet: -

(a)    acknowledged the progress in delivering a sustainable balanced budget for 2024/25;

(b)   endorsed the updated MTFP position; and

(c)    approved the implementation of a voluntary redundancy process to support the delivery of a balanced budget for 2024/25 with delegation to the Chief Executive, in consultation with the Leader of the Council, to develop an appropriate policy.

Voting: Unanimous

Portfolio Holder: Finance

Reasons

To comply with accounting codes of practice and best practice which requires councils to have a rolling multi-year medium term financial plan. To present progress on delivering a balanced budget for 2024/25 and a high-level overview of the current medium term financial plan position. To ensure a prudent approach to financial management based on traditional local government financial management processes. To present ongoing progress against the Best Value Notice requirement to establish a sound budget setting process and begin preparation for the 2024/25 budget as soon as possible and draft a sustainable MTFP and three-year budget by the end of September 2023.

This report presents the positive progress that has been made towards delivering a sustainable and balanced budget for 2024/25 and developing the latest medium-term financial plan (MTFP) position of the council.

It is important that the context to the development of the 2024/25 budget is fully appreciated. This can be summarised as.

·      The February 2023 approved general fund budget for 2023/24 was balanced on the assumption of a £30m drawdown in reserves and the delivery of £34m in savings, efficiencies, and additional resources including £9m in respect of transformation which were un-itemised.

·      A funding gap of £44m for 2024/25 as set out in the July MTFP Update report to Cabinet and a 3-year funding gap to 2026/27 of £67m.

·      An environment of ongoing uncertainty and volatility associated with the cost-of-living crisis.

Although significant progress has clearly been made it is clear that there is still much work to be done and that the savings, which will be considered as part of a November and December public engagement process, will have an inevitable impact on the level of services provided to our community.

The Cabinet Portfolio Holder for Finance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'B' to these Minutes in the Minute Book.

The Portfolio Holder outlined the context for the development of the 2024/25 budget, as detailed in the report. Work continued to focus on closing the £44million funding gap for 2024/25 and on delivering £34 million in savings for 2023/24, £9million of which had been unidentified. He highlighted that the savings and efficiencies being considered would include some reduction in services, painful in some cases. He also referred to additional pressures which included corporate costs, such as the pay award and unidentified transformation costs, and 12.6million funding pressure in the current year.

The Portfolio Holder responded to questions and observation on the report, including:

• A member questioned the realism of the 2019 Transformation business case and it was noted that while savings had been made, whether this was as much as originally presented was debatable.
• A member asked why the Council’s pension fund contribution rate was in excess of 22% and why the projections were not falling. It was explained that funding levels had improved to 96% and that it was better to maintain at a consistent level and only reduce when clearly overfunded.
• A member summarised the current position, referred to the positive feedback at the Transformation Working Group and wondered whether more savings and less cuts could be factored into 2025/26. The Portfolio Holder did not agree with the suggestion that the unidentified savings had been identifiable and while good work was being done, it was too early to make assumptions and there was still up to £7million to be identified in the current financial year. A major issue was that third party savings had not delivered as anticipated.
• It was confirmed that the budget monitoring report would detail which services came under which directorate, so as to be clear and transparent for councillors and residents.
• Latest information was that the Local Government Settlement would be provided before Christmas.
• It was confirmed that the assumed £1.4million cost to establish the regeneration team was an ongoing revenue cost until such time as any future profit could be capitalised.
• With regard to the inflation figures in the projection the Portfolio Holder advised that these were provided by the treasury management team. It was noted that while some councils had been criticised for the figures they had used, BCP had a prudent approach.
• It was clarified the £3.2million itemised as salary costs charged to Transformation would come out of the budget in 2025/26.

There were no recommendations from the Board arising from this report.