Agenda item

To consider the proposed Council Budget for 2024/25 and the medium-term financial plan (documents to follow). The Council is required to set an annual balanced budget presenting how its financial resources, both income and expenditure, are to be allocated and utilised. Cabinet will consider this and make recommendation to Council at its meeting on 7 February.

The Board is asked to consider the proposals and make comments and/or recommendations to Cabinet as appropriate.

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 'B' to these minutes in the Minute Book. The Board was advised that the report set out for Cabinet consideration and recommendation to Council the proposed 2024/25 budget and council tax based on; increasing council tax by 2.99% in 2024/25 in line with the government’s annual basic threshold, Collecting the full additional 2% Adult Social Care (ASC) precept in 2024/25, implementation of the approved financial strategy, £41m of further savings, efficiencies, and additional income generation required to correct the structural £30m deficit inherited from 2023/24 and other pressures, to set a legally balanced budget, and provide the basis of a more financially sustainable council moving forward. Recognise that the council is projecting to spend £29m more on Special Educational Needs and Disability services in 2024/25 than the funding specifically being made available by government. The consequential deficit this creates in the Dedicated Schools Grant (DSG) will mean the council is technically insolvent on 31 March 2024 (as the deficit on the DSG will be greater than the total reserves held by the council with a negative overall general fund position). Statutory guidance which means the deficit can be ignored by all councils until the 31 March 2026 provides interim protection for the Council. In the subsequent discussion a number of issues were raised by the Board including:

·     Additional Funding - The use and amount of additional funding expected to be received from Central Government was discussed. It was expected that the Council would receive an additional £3.5million in addition to the previously notified finance settlement. A number of suggestions were made throughout the meeting with regards to the use of the additional funding including restoring the complex safeguarding service in Children’s Services, general pressures around children’s social care, day centres, areas identified within the public consultation.

·     Report recommendations - It was confirmed that the report recommend the delegated authority be given to the Chief Executive in consultation with others to agree the proposed use for additional funding. However, it was noted that if the amount was confirmed prior to the Cabinet meeting it may be possible to take an addendum to the recommendations to Cabinet.

·     Financial priorities of the administration – The Portfolio Holder advised that his personal priorities was to ensure a good level of reserves to mitigate any arising risks with some of the funding but in terms of spending it should be used on services which to reduce the most impact on end users.

·     Impact on arts and culture provision – It was noted that a 10 percent reduction in the grant for the BSO had been negotiated. The Arts by the Sea festival was currently funded for next year but it was suggested that more community based events should be considered. The social value of the music service was highlighted.

·     Housing Revenue Account - It was noted that this was a ringfenced account with clear legislation governing what could be included. The changes were about ensuring absolute consistency between the two different area accounts and generally due to using inflation factors.

·     Nature support – It was noted that the level of resources for the three Councils combined was the same as was in place for one predecessor Council.

·     One-off Resources – The Portfolio Holder noted that these had previously been invested in services but these had been taken to be used in various ways to improve the overall financial health of the authority.

·     Medium Term Financial Plan – It was noted that it was very difficult for Councils to plan their budgets when only receiving a one year settlement from central government. A Four-year period to balance the budget was outlined as longer-term decisions were required. Services would be transitioned to be fully self-funded over period of 4 years or to consider alternative provision.

·     Income generation – The Board questioned the decision to close King’s Park Nursery and whether there were any alternative options.  There were proposed increase in fees and Charges. The Portfolio Holder advised that their intent was to do this safely and securely as the Council was not a commercial enterprise upon which risks could be taken.

·     Adult Day Care – Whether consideration had been given to the important social value, for example use of the service had meant full time carers were able to retain their jobs. The Board were advised that the results of the consultation would be considered.

·     Key Financial Risks – The O&S Board considered the S25 report which outlined the various different kinds of risks the Council was facing. Issues were raised concerning whether the contingency would remain unspent. It was noted that risks scores were outlined. If the savings were not realised, then the Council would look to implement an expenditure freeze from 31 March. The Board was advised that the Portfolio Holder would take all opportunities to improve the Council’s financial health. It was noted that the contingency was considered sufficient to cover the possible arising risks, but it was noted that it was dependent upon which risks arose and when.

·     High Needs SEND Budget – it was noted that the Safety Valve Plan had been submitted and that initial feedback indicated that it was credible and realistic, but a response was still awaited from the DfE. It was noted that a realistic solution to the problem was required. Questions were raised around the financing of the £4.9 million DSG deficit and the borrowing charges to finance the deficit.

The meeting adjourned at 8:54pm and resumed at 9.00pm.

(cont.)

·     Community Asset Transfer – Questions were raised regarding the process and impact of community asset transfer. It was noted that the Communities Team alongside the estates and legal teams were looking into the process at present. There were a number of community organisations interested. The Board asked if all areas which had been losing money had been identified.

·     Equalities Impact Needs Assessments – In response to a query it was noted that the whole budget was addressed in that attached to the report but that there were a number of individual assessments for different things. However, it would not be possible to include all of these with the report, Individual EINAs would still need to take place for other items.

·     Freeze of all non-essential expenditure – In a response to a question on what was defined as non-essential it was explained that there were clear processes and procedures in place. There was a level of judgement call outside of statutory requirements. Everything would be challenged by budget holders. If assurance was provided that savings would be achieved by 1 April the recommendation did not need to apply.

·     Budget Consultation – There were a number of issues raised regarding the consultation process and what the public were asked particularly as all areas within the consultation were still earmarked as cuts within the budget.

·     Harmonisation – It was noted that CSAS officers in Christchurch were being funded through the parish precept and there were still differences with issues such as street lighting and food waste collection between the predecessor authority areas.

The Chairman and several members of the Board placed on record their thanks to the finance team in producing the budget. No recommendations were made by the Committee, but the Chairman reminded members that any requests for use of additional funding could be provided directly to the Portfolio Holder and that all members were welcome to attend the Cabinet meeting and make comments directly.