Decision details

The Draft Revenue Budget proposed was for the financial years 2025/26 – 2027/28. The financial position for the Council was extremely challenging with significant pressures, in line with those being experienced nationally. The Council discharged more than 1,300 statutory duties and was facing increasing demand pressures in key services such as Adult Social Care, Children’s Services, Home to School Transport and Temporary Accommodation. Responding to these pressures whilst delivering a balanced budget remained challenging and once again this had only been achieved through a significant programme of additional savings and income.

The Council had a strong track record of delivering savings with £116.8m of income and savings currently delivered since 2020-21. Further savings and additional income of £115.6m have been required as part of the 2025-26 Draft Budget. This took the total value of savings required by 2027/28 to £232.4m, or 52.8% of the Council’s first budget in 2020/21.

The draft budget proposed was built on the proposed Council Tax base and assumed a 2.99% increase in basic Council Tax and a 2% increase for the Adult Social Care Precept, giving a total increase of 4.99%. This was the maximum allowable without triggering a local referendum.

The draft budget was based on estimates consistent with the Autumn Budget and Local Government Funding Policy Statement. This set out a new deprivation-based approach to the allocation of additional funding in 2025/26 which the draft budget reflected. The government had also reconfirmed their intention to implement a full reform of local government funding from 2026/27 though multi-year settlements.

The Provisional Local Government Finance Settlement was published on 18 December 2024 and provided details of provisional central government funding allocations for 2025/26. Given the timing of this announcement it had not been possible to fully consider the implications of these figures for the draft budget, however they would be fully reflected in the Final Budget.

Whilst this budget provided the best available estimates for the 2025/26 - 2027/28 financial years, there was significant risk around future income, cost and especially future Local Government funding projections. The external environment was continuously monitored, and significant and material changes would be reported and included within the final budget presented to full Council on 26th February.

The Capital Programme was presented for 4 years as many schemes span multiple financial years. In total the programme includes £612.5m of projects. As with previous years it was proposed that a recommendation was made to Council in February for delegation to be given to Cabinet to add up to £100m worth of schemes to the capital programme, to be funded through prudential borrowing, subject to a robust business case being approved. This would enable additional priorities, such as regeneration and housing projects, to come forward and be added to the capital programme once positive business cases were fully developed.

The Council Tax Resolution report would be presented as a separate report as part of the final budget in February and would contain the final information from the other precepting authorities leading to the total Council Tax for the area, which full council was required to approve.

This report did not include special expenses budgets. Discussions were ongoing with the relevant committees to agree special expenses budgets for 2025/26, and these would also be presented alongside the final budget. The level of precept charged in Special Expenses areas formed part of the Council tax referendum threshold calculation, so final Council Tax levels could be finalised until this matter was agreed.

A review of Fees & Charges had been undertaken as part of the development of the budget proposals included in the report. The starting assumption was that Fees & Charges should be uplifted by 5%. Portfolios had reviewed the options to achieve a balance to increases in fees & charges, and the results were reflected in the Revenue budget proposals presented.

Charges for Traded Services to other organisations (including Schools) were not included in this schedule, however it was proposed these should also be increased by 5%.

Whilst every effort was made to ensure the budget proposals were robust, deliverable and support financial sustainability there were significant risks identified in the proposed draft budget, both in terms of delivery of proposed savings and also in managing future demand pressures.

The Council had changed its approach to managing risk and no longer held budget risk contingencies. The revised financial risk management approach focused on ensuring budget estimates were robust, enhancing the Council’s approach to in-year action plans and ensuring that immediate risks could be covered by risk reserves and provisions.

Balanced against risks were the level of reserves including the General Fund (non-allocated) balances which was held at a level of approximately 10% of Net Operating budget. These balances were held against the risk of unforeseen events and provided a strong buffer against unexpected events. Close management of these risks was required to ensure the sustainability of the Council.

RESOLVED

1.               That the draft revenue budget and capital programme for 2025/26 be APPROVED. 

2.               That the outcome of the budget consultation (Appendix 1) be NOTED. 

3.               That the Schedule of Fees and Charges for 2025/26 (Appendix 2) be AGREED. 

4.               That the current risks associated with the draft budget proposals be NOTED. 

5.               That the proposal to seek delegation from Council to Cabinet for up to £100m of new capital schemes to be added to the capital programme, through Prudential Borrowing, and where robust financial business cases have been made, be supported. 

6.                That it be noted that a supplementary report, the formal Council Tax Resolution, would accompany the final budget submitted to Full Council.