Agenda item

Budget Framework 2024/25 and Medium Term Financial Strategy 2024/25 - 2027/28


The Cabinet Member for Finance, Performance and Core Services presented the Council’s proposed budget framework for 2024/25 which incorporated the following:


·  Proposed General Fund revenue budget for 2024/25;

·  Proposed level of Council Tax for 2024/25;

·  Medium Term Financial Strategy (MTFS) 2024/25 to 2026/27;

·  Draft Capital Budget for 2024/25 and revised Capital Programme 2024/25 to 2026/27;

·  Strategy for the Flexible Use of Capital Receipts 2024/25;

·  Chief Financial Officer’s Statutory Finance Report (Section 25 Statement)


The proposed General Fund net budget for 2024/25 was £221.745m, which incorporated a drawdown from reserves of £8.809m to balance the 2024/25 budget after the inclusion of £15.595m of savings and £54.129m of growth from the 2023/24 revised budget.  In order to achieve that budget, it would be necessary for the Council to increase its element of the Council Tax by 4.99%, made up of 2.99% for general spending and 2% that would be ringfenced as an adult social care precept.  The Greater London Authority element of the Council Tax would increase by 8.6%.


The Cabinet Member outlined the steps taken by the Council to achieve a balanced budget for 2024/25 in the context of high inflation, the cost-of-living crisis, increasing pressures and demand for social care services and the continued uncertainty around local government finances.  The Government’s delay in introducing Fair Funding reforms meant that Barking and Dagenham continued to be significantly disadvantaged due to its population increase and high levels of deprivation which were not being properly funded by the Government.


The Cabinet Member also highlighted a number of other important aspects within the report, which included:


·  The key principles that underpinned the Council’s Medium Term Financial Strategy, as set out under paragraph 4.14 of the report;

·  The key financial risks for both the local government sector as a whole and those specific to Barking and Dagenham, as detailed in section 18 of the report;

·  The key implications of the Local Government Finance Settlement for 2024/25, as set out under paragraph 7.7 of the report, and the continued failure of the Government to provide local authorities with any confidence to plan for the future;

·  The service budgets for 2024/25, which included details of the growth, inflation and savings to be achieved in each area, as set out under paragraph 12.1 of the report;

·  The Council’s reserves position for 2024/25, which meant that the main budget reserve would remain above the £12m minimum level previously set even after the drawdown to achieve a balanced budget for 2023/24; and

·  The outcome of the budget consultation exercise recently undertaken which reflected the local community’s acknowledgement of the need for the Council to increase Council Tax by the maximum amount allowed in order to deliver its aspirations and the priorities that were most important to residents.


In response to questions, the Cabinet Member advised that pressures on the budget were coming from across the borough impacting on all services; however, pressures were fundamentally coming from Government with a third of funding for the Council lost and the fair funding deal not yet being finalised.  Demand for Council services had increased considerably, creating a huge funding gap of £4bn over next two years to keep services where they were now across the country.  Councils were struggling to find resources to cover the gaps and were being encouraged by Government to spend reserves, when most Councils, if not all, had already looked into the use of reserves to balance budgets.


The Cabinet Member advised that the cost of placements for those in social care were skyrocketing in both childrens and adults services, with particular concern regarding private providers.


The Cabinet Member further advised that whilst the Council had undertaken borrowing from the Public Works Loan Board, which were secure and locked in at low rates, the Council also had tangible assets in place to back up any debt.


With regard to savings, the Cabinet Member advised that savings proposals were monitored and went through a rigours process to ensure they were achievable before approved.  Directors were held accountable by the Cabinet, who robustly challenged savings proposals that were put forward for approval.

The Cabinet Member took the opportunity to remind residents that there were discretionary funds in place from the Council for those who were struggling to pay their council tax.


In accordance with paragraph 10.3.2 of Part 2, Chapter 3 of the Council Constitution, the budget was put to a recorded vote and was agreed as follows:


For: Councillors Achilleos, Akwaboah, Ashraf, P Bright, S Bright, Channer, Chowdhury, Cormack, Dulwich, Freeborn, Geddes, Ghani, Haroon, Hornby, Hussain, Jones, Kangethe, Khan, Lumsden, Miah, Mullane, Nalule, Oluwole, Paddle, Perry, Pongo, Quadri, Rahman, Rai, Ramsay, C Rice, I Robinson, P Robinson, Saleem, Sandhu, Shaukat, Sohaib, Spoor, Twomey, P Waker, Worby and Zamee (42)


Against: Councillor L Rice (1)


Abstain: None (0)


(Note: Councillor Gill left the chamber at 19:38 and therefore was not present to vote)


The Assembly resolved to:


(i)  Agree that the basic amount of Council Tax (Band D equivalent) shall increase by 2.99%, and by a further 2% for the Adult Social Care precept, bringing the total increase to 4.99%;

(ii)  Agree that the Council Tax to be set for 2024/25 shall be £1,531.35 for a Band D property, comprising £1,310.70 for core Council Tax and £220.65 for the Adult Social Care precept, an increase of £43.61 and £29.17 per year respectively;

(iii)  Note that the Council shall levy an additional £471.40 on the Band D amount above on behalf of the Greater London Authority which represented an increase of 8.6%;

(iv)  Note the amount of 54,916.54 as the Council Tax Base for Barking and Dagenham for 2024/25, an increase of 1,589.69 on the previous year, in accordance with Regulation 3 of the Local Authorities (Calculation of Council Tax Base) Regulations 1992 made under the Local Government Finance Act 1992 (as amended);

(v)  Agree, in setting the Council’s General Fund revenue budget, to set the Council Tax requirement at £84.096m for 2024/25;

(vi)  Consider and have due regard to budget consultation feedback with residents and businesses as set out in Section 20 to the report and note that no changes were recommended as a result;

(vii)  Agree the Statutory Budget Determination for 2024/25 as set out at Appendix D to the report;

(viii)  Approve the proposed General Fund Revenue Budget for 2024/25 as set out in Appendix A to the report, subject to any changes required from the final Local Government Finance Settlement;

(ix)  Delegate authority to the Strategic Director, Resources, in consultation with the Cabinet Member for Finance, Growth and Core Services, to make further changes to the 2024/25 budget proposals up to a maximum amount of £1.0m;

(x)  Agree the new savings and growth proposals as set out in Appendix B to the report;

(xi)  Agree that the current budget gap of £8.809m shall be funded from use of reserves for 2024/25 and to note that additional permanent savings proposals shall need to be identified;

(xii)  Approve the latest General Fund Medium Term Financial Strategy 2024/25 to 2026/27 as set out in section 4 and Appendix A to the report;

(xiii)  Note that the proposals maintain a General Fund balance of £12m in line with the Council’s approved Reserves Policy (July 2023);

(xiv)  Note the projected reserve balances at 31 March 2025 following the planned use of £8.809m to achieve a balanced budget, as set out in Section 19 of the report;

(xv)  Approve the Council’s provisional Capital Programme, including Investment and Acquisition Strategy (IAS) schemes, for 2024/25 to 2026/27 as detailed in section 8 and Appendix G to the report;

(xvi)  Agree to set a Capital Budget for 2024/25 at £209.462m, as detailed in Appendix G to the report;

(xvii)  Approve the Strategy for the Flexible Use of Capital Receipts 2024/25 at Appendix I to the report, in line with the regulatory requirements to facilitate the delivery of efficiency savings including capitalisation of redundancy costs;

(xviii)  Note the Chief Financial Officer’s Statutory Finance Report (Section 25 Statement) as set out in Appendix H to the report and, in particular, their determination of “the robustness of the estimates made for the purposes of the calculations, and the adequacy of the proposed financial reserves”; and

(xix)  Note the changes to the report since its endorsement by the Cabinet on 19 February, as set out in paragraph 19.13 of the report.


Supporting documents: