Agenda item

To set out for Cabinet’s consideration and recommendation to Council the proposed 2025/26 budget and council tax based on.

·     Increasing council tax by 4.99% in 2025/26 in line with the government’s annual referendum threshold which can be broken down into a 2.99% basic increase and a 2% uplift by way of the Adult Social Care (ASC) precept.

·     Implementation of the approved financial strategy.

·     Implementation of £7.8m of further savings, efficiencies, and additional income generation required to set a legally balanced budget and support the basis of a more financially sustainable council moving forward.

·     Borrowing to fund the Special Educational Needs and Disability services revenue expenditure above the level of the Dedicated Schools Grant (DSG) High Needs grant. It will also be considered with government if it would be prudent to obtain a capitalisation direction associated with the  2024/25 and 2025/26 interest costs on the accumulated DSG deficit.

·     Recognise that the government must come up with a permanent solution to return the SEND system both locally and nationally to financial sustainability.

·     Recognition that the council is technically insolvent from the 1 April 2025 onwards as the accumulated deficit on the DSG will be greater than the total reserves held by the council, with a negative overall general fund position and is only protected by the statutory override.

This report also provides the latest Medium Term Financial Plan (MTFP) covering the 3-year period to 31 March 2028.

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 set out for Cabinet’s consideration and recommendation to Council the proposed 2025/26 budget and council tax based on.

·     Increasing council tax by 4.99% in 2025/26 in line with the government’s annual referendum threshold which can be broken down into a 2.99% basic increase and a 2% uplift by way of the Adult Social Care (ASC) precept.

·     Implementation of the approved financial strategy.

·     Implementation of £7.8m of further savings, efficiencies, and additional income generation required to set a legally balanced budget and support the basis of a more financially sustainable council moving forward.

·     Borrowing to fund the Special Educational Needs and Disability services revenue expenditure above the level of the Dedicated Schools Grant (DSG) High Needs grant. It will also be considered with government if it would be prudent to obtain a capitalisation direction associated with the 2024/25 and 2025/26 interest costs on the accumulated DSG deficit.

·     Recognise that the government must come up with a permanent solution to return the SEND system both locally and nationally to financial sustainability.

·     Recognition that the council is technically insolvent from the 1 April 2025 onwards as the accumulated deficit on the DSG will be greater than the total reserves held by the council, with a negative overall general fund position and is only protected by the statutory override.

Further to this Cabinet was informed that this report also provides the latest Medium Term Financial Plan (MTFP) covering the 3-year period to 31 March 2028.

Thanks were expressed to officers for all the work which had gone into the proposed budget 2025/26.

In presenting the report the Portfolio Holder for Finance detailed the pressures of SEND and highlighted some of the Councils achievements over the last year whilst also acknowledging the continued investment in areas.

Councillor Farquhar addressed the Cabinet commending the administration on the budget and raising a question in relation to the cessation of the camera car with a proposed saving of £11,000 and the £25,000 set aside for another car.

In relation to this the Portfolio Holder for Destination, Leisure and Commercial Operations advised that the car was at its end of life, and that civil enforcement officers were more effective than the car itself. In relation to this the Portfolio Holder advised that the long-term solution should be fixed cameras, particularly around schools. Further to this the Portfolio Holder advised that the additional £25,000 set aside was for the vehicles in which the civil enforcement officers travel in.

Cabinet members spoke in support of the budget and acknowledged the significant work which taken place across the council.

The Leader thanked the Overview and Scrutiny Committees for their budget scrutiny on chosen areas and emphasised the importance of a collaborative approach for budget setting.

RECOMMENDED that Council: -

(a)           Undertakes a recorded vote in relation to the following items as required by the Local Authorities (Standing Orders) (England) (Amendments) Regulations 2014;

(i)         Agrees that a net budget of £356m, resulting in a total council tax requirement of £281.2m, is set for 2025/26 based on the draft local government financial settlement figures published by government in December 2024.

(ii)       Agrees an increase in council tax of 2.99% for 2025/26 in respect of the basic annual threshold and the collection of the additional social care precept of 2%.

(iii)      Confirms the key assumptions and provisions made in the budget as proposed and as set out in Appendix 3.

(iv)      Agrees the allocations to service areas in the budget as set out in Appendix 5.

(v)       Agrees the implementation of £7.8m of savings as set out in Appendix 5a.

(vi)      Approves the flexible use of capital receipts efficiency strategy as the mechanism for funding the council’s transformation related expenditure as set out in Appendix 6.

(vii)    Approves the capital investment programme (CIP) as set out in paragraphs 84to 97 and Appendix 7.

(viii)  Approves the asset management plan as set out in Appendix 8.

(ix)      Agrees the treasury management strategy (TMS) and prudential indicators as set out in paragraphs 100to 103 and Appendix 9.

(x)       Accepts and supports the formal advice of the chief finance officer on the robustness of the budget and the adequacy of the reserves as set out in paragraphs 118 to 124and Appendix 10.

(b)          Accepts the government revenue and capital grant announcements linked to the 2025/26 local government finance settlement. This includes a £1.373m UK Shared Prosperity Fund (UKSPF) grant for 2025/26 split between revenue and capital as set out in paragraphs 37 to 40;

(c)           Agree to borrow to fund the 2025/26 excess Special Educational Needs and Disability (SEND) High Needs DSG revenue expenditure above the government grant being made available. This is subject to clarification and negotiation with government, including whether or not a capitalisation direction will be required. A capitalisation direction may also be considered in respect of the associated interest costs;

(d)          Approves an increase in the permanent pay bill of the authority due to the implementation of the pay and reward project from the £1.641m pa agreed in December 2024 to £2.793m pa (1.5%) after the end of the pay protection period;

(e)           Delegate to the Chief Executive, in consultation with the Director of Finance, Leader, and Portfolio Holder for Finance, the allocation of any additional resources that become available through the final 2025/26 local government finance settlement or any other means; and

(f)          Approves the chief officers’ pay policy statement 2025/2026 for consideration and approval by the council in accordance with the provisions of the Localism Act 2011 as set out in paragraphs 126to 128 and Appendix 12.

Voting: Unanimous

Portfolio Holder: Finance

Reason

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.