Agenda item

Further to Minute 20 (18 July 2023), the Cabinet Member for Finance, Growth and Core Services presented a report on the updated position regarding the Council’s Medium Term Financial Strategy (MTFS) and the proposed Budget Strategy for 2024/25 and beyond. 

The Cabinet Member advised that the Government had only published the draft Local Government Finance Settlement for 2024/25 the previous evening and, therefore, the assumptions used in the preparation of the report would need to be reviewed to ensure that they reflected the published position. 

Referring to his comments last year that the 2023/24 financial year was likely to be the most challenging that the Council had faced, the Cabinet Member advised that whilst that prediction had proven correct, he was in no doubt that the 2024/25 financial year would prove even more challenging.  He cited the Government’s failure to introduce the Fair Funding reforms that had been promised for several years and its clear acceptance that social care services were underfunded, by forcing local authorities to apply the maximum 2% social care precept to annual Council Tax bills, as two of the main reasons why the next financial year was likely to push the Council’s ability to set a balanced budget to the very limit.

The Council’s projected budget gap for 2024/25 was £23.335m after current savings and growth proposals were taken into account.  The savings proposals of circa £10.618m were set out in Appendix A to the report and the Cabinet Member advised on the planned consultation process for those and the other key aspects of the budget setting process, such as the proposed Council Tax increase of 4.99% (inclusive of the 2% social care precept).  It was also noted that the Strategic Director, Resources, was leading on the identification of additional savings proposals for 2024/25 which would be included in the consultation process.

With regard to reserve balances, the Cabinet Member commented on the impact that the current year’s projected overspend would have on the main General Fund reserve if it remained at the current level.  It was noted that as part of the annual budget setting process, the Council’s S151 Officer was required to issue a statement that he/she was satisfied that the Council also had sufficient reserves to mitigate against key financial risks.  The Cabinet Member referred to the statement in the report that the Council must reduce its expenditure significantly over the short to medium-term to match its funding and income and that difficult decisions would be required on service delivery to ensure that the Council reached a sustainable budget position.  He stressed the importance of the Council taking responsibility for those difficult decisions, as the alternative could result in independent commissioners being appointed by the Government to come into the Borough and make decisions with little or no regard for the local community or the Council’s vision.

Cabinet Members acknowledged the challenges being faced by the Council and expressed their criticism of the Government for its relentless programme of austerity.  Reference was also made to the Government’s failure to deal with the consequences of the Covid-19 pandemic, which had led to significant additional demand for social care, educational support and other health and wellbeing-related services.

Cabinet resolved to:

(i)  Note the revised Budget Gap for 2024/25 of £23.335m and the projection of the future Medium Term Financial Strategy position for years 2025/26 and 2026/27;

(ii)  Note the current savings and growth proposals to help balance the 2024/25 budget as detailed in Appendix A to the report and agree the arrangements for public and stakeholder consultation as set out in Section 7 of the report;

(iii)  Agree to consult Borough residents and taxpayers on the levying of a 2.99% General Council Tax increase and a 2% Adult Social Care Precept to support the Borough’s most vulnerable residents, subject to those thresholds being confirmed by Central Government;

(iv)  Note that from 2024/25, the Council’s policy to support alignment with the London Living Wage in its contracts with third parties shall be reviewed on a contract-by-contract basis; and

(v)  Delegate authority to the Strategic Director, Resources, in consultation with the Cabinet Member for Finance, Growth and Core Services, to agree any additional savings proposals for 2024/25 for public consultation.