Agenda item

Medium Term Financial Plan 2024/25 to 2026/27 and Capital Programme 2024/25 to 2027/28

Decision:

Cabinet received a report on the Medium Term Financial Plan (MTFP) 2024/25 to 2026/27 and Capital Programme 2024/25 to 2027/28 for Buckinghamshire Council. These proposals were based on the latest known funding position, service budget pressures and the key financial risks facing the Council both now and in the future. They also took account of the findings from the recent budget scrutiny inquiry.

The Council Tax Resolution report would be presented as a separate report as part of the budget to Council in February 2024 and would contain the final information from the other precepting authorities leading to the total Council Tax for the area, which Full Council would be required to approve.

The Revenue Budget was for the financial years 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 had 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 following the inception of the new unitary Council, a further £30.4m of income and savings currently on-track for delivery in 2023-24. A further programme of £95.3m of new income and savings had been identified as part of the 2024-25 to 2026-27 Revenue Budget.

Since the Draft Budget report to Cabinet on 4 January 2024, the Government had announced additional one-off funding for Social Care on 24 January. This had been confirmed by the Final Local Government Settlement on 5 February and details were set out in the Cabinet report.

Overall, the key elements of the final revenue budget portfolio proposals include unavoidable growth of £47.2m, Inflation of £14.2m, and net savings and income changes of £28.3m in 2024/25. The budget proposed had been built on the agreed Council Tax base and assumes 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.

Whilst the 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 financial risks were managed through revenue contingency budgets contained within these budget proposals.

RECOMMENDED to Full Council to –

(1) Approve the Medium Term Financial Plan 2024/25 to 2026/27 and Capital Programme 2024/25 to 2027/28.

(2) Approve the ‘Special Expenses’ budgets, precepts and associated services for Aylesbury Town, High Wycombe Town and West Wycombe Church Yard (Appendices 2 & 3).

(3) Support the proposal to delegate to Cabinet, decisions to add up to £100m to the Capital Programme, to be funded by Prudential Borrowing, subject to a robust business case being approved.

(4) Approve the Business Rates Discretionary Rate Relief Policy (Appendix 5).

(5) Note that a supplementary report, the formal Council Tax Resolution, will accompany the final budget to full Council.

(6) Note the Bucks Business Group response to the budget (Appendix 6).

(7) Note that a supplementary report, the formal Council Tax Resolution, will accompany the final budget to full Council.

(8) Note the Equality Impact Assessment for the proposed budget (Appendix 7).

Minutes:

The Final Local Government Settlement was announced on 5 February 2024 and included an increase in funding for Social Care through the Social Care grant, and an increase in the Minimum Funding Guarantee from 3% to 4%. Whilst these funding announcements were welcome the expected increases in funding were not likely to be sufficient to address either the recently experienced high levels of inflation (circa 10%) or the broadly recognised structural issues of underfunding and increasing demand which currently exist across both the sector as a whole and within Buckinghamshire. The budget proposals were based on the figures published within the Final Settlement. The one-off additional funding was allocated to the contingency budget for Social Care (approx. £5 million). The Council had played a key part in lobbying the Government for further funding.

Overall, the key elements of the final revenue budget portfolio proposals include unavoidable growth of £47.2m, Inflation of £14.2m, and net savings and income changes of £28.3m in 2024/25. The budget proposed had been built on the agreed 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 Capital Programme covered 4 years as many schemes spanned multiple financial years. In total the programme included £666.3m of projects. As with previous years it was proposed that a recommendation be 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. Key areas of investment within the programme were: a) £179.8m on Strategic Infrastructure (including HIF). b) £168.3m on schools’ capital programme. c) £107.9m on roads including pothole repairs. d) £37.1m to support regeneration projects. With the additional funding from Government some savings could be reinstated which included litter clearing, gully emptying, the number of days Household Waste Recycling Centres were open and to re-introduce one cycle of weed spraying.

The Leader reported that some of the savings/increases in income made within the budget would be unwelcome to some residents and community groups for example increases in car park charges but the Council had to balance the budget alongside dealing with difficult financial challenges.

The Cabinet Member for Health and Wellbeing commented that whilst the additional funding was welcomed it should be highlighted that this was for one year only and this allocation could not be built into the base budget which was what was needed to address future demand and complexity.