Agenda item

REPORT OF: SERVICE DIRECTOR – RESOURCES

Cabinet is asked to consider the latest information in relation to funding, income and expenditure in relation to the revenue budget for 2024/25.

RESOLVED: That Cabinet:

(1)   Noted the latest funding forecasts for 2024/25 onwards and the significant uncertainty that still remains.

(2)   Confirmed that it will be necessary to increase Council Tax by the maximum amount allowed without a local referendum, as this is what will be assumed by Government in determining the Business Rates that the Council can retain and calculating the Council’s Core Spending Power.

(3)   Noted the comments made at the budget workshops, and comment on the inclusion of the revenue savings and investments in the budget to be brought back for consideration in February, for referral on to Council at the end of February.

(4)   Considered the additional revenue investment proposals that are detailed in paragraph 8.8 and confirm that they should be included in the February budget report.

(5)   Noted the comments made at the budget workshops, and comment on the inclusion of the capital investments in the Investment Strategy to be brought back for consideration in February, for referral on to Council at the end of February.

REASON FOR DECISIONS: To ensure that all relevant factors are considered in arriving at a proposed budget, Investment Strategy and Council Tax level for 2024/25, to be considered by Full Council on 29 February 2024.

Audio recording – 1 hour 33 minutes 26 seconds

The Chair invited Councillor Sean Nolan, as Chair of Finance, Audit and Risk Committee, to present the referral on this item. Councillor Nolan advised that:

·       There had been questions and discussions about the pressures faced by the Council and to try to look at what choices there might be in the future.

·       They had studied trading between spending and investment and the retaining of reserves for investment purposes.

·       They had looked at which revenue streams were successful and which were a risk to the financial position of the Council.

Councillor Ian Albert, Executive Member for Finance and IT, presented the report entitled ‘Draft Budget 2024/25’ and advised that:

·       This was the first budget report following agreement of the Medium Term Financial Strategy (MTFS).

·       An update to forecast funding was provided at the beginning of the report.

·       The draft local government settlement provided inadequate funding which combined with the delay to the funding formula, put pressure on the Council.

·       Council Tax would need to be raised by the maximum amount allowed to try to protect and, where the Council could, improve services to residents of North Herts.

·       General fund reserves were in a good state which allowed time for a longer-term view of how to balance the budget by the end of the MTFS period.

·       Additional proposals with short term impacts on the budget were highlighted in paragraph 8.10.

·       Some updates, mainly affecting capital, that Officers would update in the next version of the budget report.

·       Reflect the additional income from the award of the new leisure contract.

·       The capital allocation for waste vehicles aligned to the start of the new waste contract to be increased to £8.5 million.

·       Funding for the new graduate post for a 2 year period to support delivery capacity.

·       Capital allocation for the new learner pool at Royston, would be subject to a viable business case.

·       Capital funding for the new leisure provider to invest in the leisure centres, which would generate returns through improved contract payments.

·       The outcome of the bid for a public sector decarbonisation bid for the leisure centres was not yet known.

·       The Council was required to provide match funding which was estimated at about £3 million. Some of this match funding was already in the capital programme, and the proposal was for the remaining allocation to be added. An off-setting revenue saving would also be added.

·       The proposal would not only cover its costs but would provide environmental benefits.

·       The next version of the budget would include a review of budget forecasts and would include the treasury income forecast.

·       This was a prudent, pragmatic and sensible budget to ensure the Council could continue to deliver the services that the residents of North Herts value.

In a response to a question from Councillor Elizabeth Dennis, the Service Director – Resources advised that only about 12% of Council Tax income was retained by the Council.

In a response to a question from Councillor Alistair Willoughby, Councillor Ian Albert advised that as residents value the services the Council supplies, the correct way forward was to increase Council Tax otherwise significant cuts would have to be made.

Councillor Ian Albert proposed and Councillor Sean Prendergast seconded and, following a vote, it was:

RESOLVED: That Cabinet:

(1)   Noted the latest funding forecasts for 2024/25 onwards and the significant uncertainty that still remains.

(2)   Confirmed that it will be necessary to increase Council Tax by the maximum amount allowed without a local referendum, as this is what will be assumed by Government in determining the Business Rates that the Council can retain and calculating the Council’s Core Spending Power.

(3)   Noted the comments made at the budget workshops, and comment on the inclusion of the revenue savings and investments in the budget to be brought back for consideration in February, for referral on to Council at the end of February.

(4)   Considered the additional revenue investment proposals that are detailed in paragraph 8.8 and confirm that they should be included in the February budget report.

(5)   Noted the comments made at the budget workshops, and comment on the inclusion of the capital investments in the Investment Strategy to be brought back for consideration in February, for referral on to Council at the end of February.

REASON FOR DECISIONS: To ensure that all relevant factors are considered in arriving at a proposed budget, Investment Strategy and Council Tax level for 2024/25, to be considered by Full Council on 29 February 2024.