Agenda item

Draft Revenue budget and Capital Programme

Decision:

Cabinet received a report setting out the draft revenue budget for the financial year 2024/25 – 2026/27. The financial position for the Council was extremely challenging with significant pressures identified in relation to both inflation and ongoing increases in demand for key services, in line with those being experienced nationally. The Council discharged more than 1300+ statutory duties and was facing increased demand pressures in key services such as Adult Social Care, Children’s Services, Home to School Transport and Temporary Accommodation. This year had become the most difficult to date in responding to these challenges whilst delivering a balanced budget, and this has been achieved through a significant programme of additional savings and income.

The Council had a strong track record of delivering savings with £45m delivered in the first 3 years, a further £30.4m of income and savings currently budgeted for delivery in 2023-24. A further cumulative programme of £96.1m of new income and savings had been identified as part of the 2024-25 Draft Budget. 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 and was below the average rate of inflation experienced during 2023/24.

The Provisional Local Government Finance Settlement was published on 18th December and provided details of provisional central government funding allocations for 2024/25. Given the timing it had not been possible to fully consider the implications of these figures, and as such this Draft Budget was based on estimates consistent with the Autumn Statement and Funding Policy Statement. The implications of the Provisional Settlement would be fully considered in the Final Budget.

Whilst this budget provided the best available estimates for the 2024/25-2026/27 financial years, there was significant risk around future income, cost and 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 21st February.

The Capital Programme was presented for 4 years as many schemes span multiple financial years. In total the programme included £562.8m 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.

This report did not include special expenses budgets. Discussions were ongoing with the relevant committees to agree special expenses budgets for 2023/24, 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 cannot be finalised until this matter was agreed.

RESOLVED

That the revenue budget for 2024/25 - 2026/27 and capital programme be APPROVED as draft.

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

That the Schedule of Fees and Charges for 2024/25 (Appendix 2) be AGREED.

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

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.

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

Minutes:

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 2023/24, 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 cannot be finalised until this matter was agreed.

The Leader made the following points:-

· Further consultation would be undertaken with Bucks Business Group. Any further feedback from residents and wider stakeholders on this draft budget would also be considered.

· Budget scrutiny would commence week beginning 8^th January and was available to watch on the webcast.

· The Draft Revenue Budget and Capital Programme supported the delivery of all of the Council’s aims and priorities, which were set out in the 2020-25 Corporate Plan.

· A public consultation on priorities and budgets was conducted between 31 August 2023 and 15 October 2023.

· Details of the key risks to the budget were included in the Draft Budget and included: Inflation and national economic conditions, Central Government funding changes, Growth in demand and complexity in Social Care, Temporary Accommodation, SEND and Home to School Transport, Market sustainability and supplier failure and loss of income across a range of services.

· Recognition of the fact that pressures on local authorities were a national problem with six councils having declared bankruptcy. There were additional pressures, such as the national living wage increase and also decisions made by the Government, such as not being able to charge for commercial waste where no additional funding had been given by the Government to compensate for this.

· The Council had a strong track record of delivering savings as referred to earlier with £45m delivered in the first 3 years, a further £30.4m of income and savings currently budgeted for delivery in 2023-24.

· There were concerns regarding risks around income charges such as parking.

· The Council forecasted that by 2027, it would have saved a total of nearly £172 million from both savings and additional income.

The Service Director for Finance reported that there were risks around the budget, particularly the pressures highlighted with increased demand on those four key statutory areas, but this should be managed through savings and income and that the Council had a strong track record of good financial management.

During discussion the following comments were made:-

· Reference was made that despite difficult financial times, the Council had invested an extra £5 million in the County’s road network this year on top of £100 million it had already committed to spending over a four-year period. The Council also hoped that further funding would be provided by Central Government due to the impact of HS2 on Buckinghamshire with funding no longer required for the northern leg.

· The Council discharged more than 1,300 statutory services and these services were assessed regularly by Ofsted and the CQC who made recommendations without recognition that Councils were under financial pressures.

· A Cabinet Member emphasised that non-statutory services were also key and cutting a non-statutory service could significantly impact a statutory service. For example, services provided by the Council for health and wellbeing helped mental health and if cut could put pressure on children and adult services. The Leader commented that funding for non-statutory services inevitably got squeezed but it was those services, such as libraries and leisure centres, which residents expected Councils to provide. Some areas also brought in a good income such as the Film Office at £4.27 million.

· Another Cabinet Member commented on the previous point, that non-statutory and cross portfolio projects played a key part in managing pressures such as preventative work and promoting good mental health which impacted housing, adult and children’s services. It was important to maximise efficiencies through these projects whilst still carrying out statutory duties. 90% of the health and wellbeing budget was spent on statutory duties. It was encouraging to see from the public consultation that protecting the vulnerable was a top priority.

· With regard to the public consultation and respondent comments, it was noted that one of the biggest reduced spends was council running costs with savings and efficiencies from back office services including HR, IT and Finance. In the next four years, the spend was being reduced from £59 million to £52 million, which was a reduction of 12% on top of all the savings previously delivered. There was also a project to look at the council estate and use of council offices, which had led to the closure of the Amersham office in the next six months. The Leader commented that this was a good example of maximising efficiencies from becoming a unitary council. He also mentioned that the back office was a key part of the Council operating, for example the Finance Team collected Council Tax.

· Reference was made to the Homelessness and Regulatory services key data. Homelessness was one area, which was causing pressure on the budget. A weekly meeting was held where every client was discussed and also there were projects to open more accommodation rather than rely on expensive bed and breakfast provision e.g., Bridge Court, High Wycombe. This included council owned accommodation to reduce costs. The Housing Strategy provided a long term vision with information on how some of the gaps in provision could be addressed. There was also a shortage of accommodation for sheltered housing for older people.

The Chief Executive also reported on the savings made by the Council since 2020, which was a 38% reduction in the Council’s budget against rising cost pressures in terms of unit cost for services, including volume of services, which the Council was legally required to provide such as special education need disabilities, homelessness, adult social care, children’s social care and home to school transport. As the Leader had referred to, there was also continued oversight by the inspectorates, including Oflog (Office for Local Government) which would also be monitoring performance without taking account of budget pressures. The Council also worked alongside other statutory bodies who were also facing pressures such as the NHS. This meant that the Council faced difficulties in providing and improving services against such a challenging financial backdrop.

RESOLVED

1. That the revenue budget for 2024/25 - 2026/27 and capital programme be APPROVED as draft.

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

3. That the Schedule of Fees and Charges for 2024/25 (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, will accompany the final budget submitted to Full Council.

Supporting documents: