Agenda item

Business Planning - General Fund Budget 2024-25


A report regarding the General Fund Revenue Budget 2024-25 and Medium Term Financial Plan (MTFP) 2024-25 to 2026-27 was before the Joint Executive Advisory Board (JEAB) for consideration.  The report was introduced by the Lead Councillor for Finance and Property and presented by the Joint Executive Head of Finance and S151 officer, who sought councillors’ views thereon.


The JEAB was advised that in July 2023 the Council considered a report which detailed a MTFP with a funding gap of £18.3 million and highlighted that the Council was at significant risk of potentially having to serve a Section 114 Notice.  Much work was undertaken during the following six months to reduce this gap.  The initial focus had been on short term measures such as ceasing discretionary spend, introducing a vacancy freeze and reviewing all budgets to achieve a balanced in year position.  A mixture of permanent changes and one-off reductions had been introduced.  Some of the latter would need to be addressed on an ongoing basis for the new financial year.


The next factor to address the funding gap was the preparation of a Financial Recovery Plan.  The first iteration of the Plan was submitted to Council in September 2023 and the second edition in October confirmed that the Council would not need to issue a Section 114 Notice as sufficient financial recovery had been achieved to avoid it at that stage.  A further update in December focused on changes to the Capital Programme and the Asset Disposal Programme.  All these measures had culminated in the MTFP gap being reduced by £15.9 million and the Council being able to achieve a balanced budget for 2024/25, which was before the JEAB for consideration.


The key budget headlines were:


·           An assumed Council Tax increase of 2.99% leading to growth in the tax base over the year of 1%.

·           The Finance Settlement showed a reduction in the New Homes Bonus of £600,000 and a cut in the Services Grant of approximately £100,000 which were off set by a rise in the Funding Guarantee Grant giving an overall position of an increase in grant year on year of approximately £147,000.

·           Cost pressures were resulting from the impact of inflation.  Although there was an assumption of a 4% pay award increase, this had not yet been agreed with the Union.

·           The Capital Review had resulted in a Capital Programme reduction of £96 million.

·           The Asset Disposal Programme was aiming to deliver £50 million of capital receipts targeted at years two and three of the MTFP.  This Programme together with the Capital Review would assist with reducing the Council’s future borrowing and the debt previously expected to reach £600 million by the end of the decade would be more likely to peak at £450 million.

·           A number of policy changes were being made including treatment of interest payable in respect of large capital projects involving capitalising costs and paying them at the completion of the project.

·           Adjustments were being made to reduce interest payments relating to the HRA and treatment of SANG.

·           Although growth bids were not encouraged, some were unavoidable as they were of a statutory nature such as new Government requirements  in relation to dealing with damp and mould.

·           A number of potential growth items that had been identified were likely to be unavoidable.

·           There were opportunities to achieve contract savings such as with the energy supply contract which would be retendered in September and it was hoped that savings of around £1 million per year could be achieved.  There was also contract work being pursued in relation to G Live, the Spectrum and telephony.

·           Income was another area being targeted and would include increased parking charges and seeking to recover the full costs of other services such as garden waste collection.

·           In terms of fees and charges, a minimum increase of 5% would be levied.

·           Project underspend in the current year of approximately £1 million had been realised and the related savings would be directed towards funding a number of items which had been identified.

·           Although a balanced budget would be set for 2024/25, a deficit of £740,000 in year two and a further £1.6 million in year 3 were in need of addressing.

·           The Section 25 report appended to the report identified a number of assumptions and key risks.


The following points arose from related discussion, comments and questions for forwarding to the Executive:


1.            In terms of the long-term empty dwelling levy, the current number of long-term empty dwellings in the Borough was unknown and the officers would obtain that information from the Revenues and Benefits Lead and circulate it to the JEAB.

2.            The JEAB was advised that the Asset Register was publicly available and a link to it would be circulated to councillors to enable them to contact the project lead, the Joint Executive Head of Assets and Property, with any comments, queries or issues.

3.            The Asset Disposal Programme was not yet finalised and a valuation expert and another property expert were revaluing the assets on the short list with a view to arriving at a final list.  The Programme would be subject to approval through the formal processes in due course.

4.            The freezing of councillors’ allowances for 2024/25 was supported.

5.            Climate Change was a consideration when letting any contract, in particular the Council’s energy supply contract, which would fall due for renewal in the next financial year.  This exercise would include looking at whether, as part of the Council’s Climate Change commitments, green energy could be utilised.  This would depend upon price differentials quoted in contract tenders received.

6.            With regard to parking charges, although the package in terms of the overall amount of income the Council was seeking to raise had been agreed, further details were to be added to the report prior to its submission to the Executive and Council.

7.            It was assumed that the fly tipping fine of £400 was set nationally.  However, enquiries would be made to ascertain whether there was any local discretion to increase the amount to deter culprits.

8.            In response to a request, the JEAB was advised that the capital cash flow could be added to the report to aid understanding.

9.            With regard to the submission of Monitoring Reports to the Corporate Governance and Standards Committee, the Period 8 report would be received next week whilst the Period 6 and 7 reports would be published on the Council’s website, together with the Period 8 report following its submission to the Committee.  The Period 9 report was almost ready for publishing.  It was hoped that the availability of this information to councillors and the public would assist with answering some of the budget queries raised.

10.        The addition of greater context to the report to assist the public to understand it was welcomed.


The JEAB was invited to comment on seven recommendations which would be considered by the Executive at its meeting on 25 January 2024.  The JEAB indicated its support for all seven recommendations and agreed that its above comments be forwarded to the Executive.


Supporting documents: