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Agenda item

Update on Budget 2025 – 2026

Purpose:

This report provides an update on the budget for 2025/26 following the provisional government funding settlement on 18th December 2024.

 

To consider:

1)    The Draft Base Budget for 2025/26

2)    The Council’s Capital Programme for 2025/26 to 2031/32

3)    The level of Council Tax for 2025/26

4)    The Medium Term Financial Strategy (MTFS)

5)    The Responses from the Statutory Budget Consultation

 

Recommendations:

That the Executive resolves to recommend the following to Council for approval:

1)    The General Fund Revenue Budget as Summarised in Annex A.

2)    The Updated Medium Term Financial Strategy in Annex B.

3)    The Capital Programme for 2025/26 to 2031/32 as set out in Annex D.

4)    The Council’s Pay Policy Statement as set out in Annex L.

5)    The level of District Council Tax for 2025/26 for a Band D property of £129.38 as shown in Annexes E-G.

 And the following for noting:

1)    Fees and charges for 2025/26, as detailed in Annex I and J.

2)    The Parish Precepts and Tax Levels set out in Annex H.

 

Minutes:

Councillor Alaric Smith, Executive Member for Finance, introduced the update on the Budget for 2025 – 2026 which would be considered by the Executive on 12 February 2025 and then full Council on 26 February 2025. The Executive Member highlighted that:

  • The projected budget surplus of £91,280 in 2025/26 was welcome but the picture became more difficult through the duration of the medium term financial strategy.
  • The outcome and impact of the local government funding review remained uncertain but was expected to result in a significant reduction in the Council’s funding.
  • There was also uncertainty around the cost of the next leisure contract.
  • Changes to recycling contracts were benefiting the Council by £420k overall.
  • The Council Tax second homes premium was expected to increase income by £219k.
  • Fees and charges income was expected to increase by £138k compared to the draft budget presented to the Executive in December.
  • Growth items were included in the budget to enable the Council to provide better services going forwards.

 

The Committee asked questions and noted that:

  • Fees and charges, including for green waste, had been agreed by the Executive on 15 January 2025.
  • While there was a small in-year overspend on the cost of services in 2024/25, this was expected to be balanced by Business Rates income and the final outturn for 2024/25 was expected to be a surplus.
  • The Council had a range of robust internal controls in place but there were some factors that could affect the Council’s finances that were beyond the Council’s control.
  • There was a looming financial gap in year 2 which the Council was seeking to mitigate, for example by treating grant funding as one-off income.
  • There would be a rebasing of the budget for Publica to ensure that there would be a more realistic spread of the service costs between the three partner councils.
  • The Council would receive £117k from the government towards the cost of increased Employer National Insurance Contributions. This sum had very recently been confirmed and officers would need to work out the Council’s net position. The final funding settlement was otherwise unchanged.
  • The Council, along with other shire districts, was expecting a significant reduction in Business Rates income. Some form of phasing was likely to be applied but this was still uncertain.
  • £100k was provided over two years for legal services related to the next leisure contract.
  • Extended Producer Responsibility funding of £2.3m would be received in quarter 3 of 2025/26 and had been treated as one-off funding in the budget. More information about the terms of this funding was expected from the Government nearer the time.
  • The target for Development Management fee income had been reduced by £150k to provide a more realistic target. Should there be major planning applications that come through then there may be a positive variance against this target.
  • As part of the budget setting process the finance team had spoken to all services and asked them to submit any growth requests.
  • The budget consultation had recently closed and responses would be considered by officers. Next year officers wouldn’t include a “don’t know” option on the survey.

 

Officers agreed to produce the following in response to comments from the Committee:

  • An updated Annex C with equivalent axes in the graphs showing the Council’s core spending power.
  • An updated Annex G with correct references to precepting authorities.

 

Councillor Alex Wilson proposed that the Committee recommend to the Executive that consider the inclusion of a second Fly Tipping Officer post as an additional growth item within the budget. The proposal was seconded by Councillor Nick Leverton. The recommendation was put to the vote and was agreed by the Committee.

 

The Committee resolved to submit one recommendation to the Executive on 12 February 2025:

  1. That consideration is given to the case for creating a second Fly Tipping Officer (Environment Support Officer) post.

 

Supporting documents:

 

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