Issue - meetings

The Leader’s Portfolio

To consider report FIN/636 of the Head of Corporate Finance, which was referred to the meeting of the Overview and Scrutiny Commission of 27 November 2023.

RESOLVED

That Full Council be asked to:

a)         approve the process for of balancing the budget over the next 12 to 18 months, including the use of reserves to balance the budget as outlined in Section 8 of the report FIN/636.

b)         approve the minimum recommended General Fund Balance remains at £3m.

c)         approve the growth items for the General Fund as outlined in sections 6.3 of the report FIN/636.

d)         approve the  inclusion of new capital schemes in future budgets with the value of £652,000 as identified in section 9.2 of the report FIN/636..

e)         note the following highlights of the Budget Strategy:

i.        that the Budget is aligned to the Council’s Corporate Priorities.

ii.      the outline 3 year forecast as shown in table 6 paragraph 6.5 of the report FIN/636.

iii.     that the current budget deficit of £1.012m for 2024/25 (section 6.5 of the report FIN/636) is based on a Council tax increase of 2.99% which is £6.74. However, table 10 highlights that the gap could be higher when looking at sensitivity analysis.

iv.     that there are uncertainties around Government funding prior to the settlement in December and the delay in Local Government Funding reforms such as business rates retention and the future of New Homes Bonus.

Reasons for the Recommendations

1)         To agree the Council’s Budget Strategy for 2024/25 to 2026/27 including the assumptions made.

2)         To agree growth items and capital schemes outlined in the report.

3)         The 2024/25 General Fund and Housing Revenue Account Budgets and the revised capital programme will be set by the Full Council in February 2024. The Treasury Management Strategy and Capital Strategy will be considered at the same meeting.

4)         To note that until the Local Government Finance Settlement is published in December 2023 these projections are highly likely to change.

The Leader presented report FIN/636of the Head of Corporate on the Budget Strategy 2024/25-2026/27. The report set out financial projections with particular reference to the period 2024/25-2026/27 as well as the policy framework for improving financial efficiency and meeting the long-term investment needs of the town, as well as proposals for the annual budget process. It was noted that the strategy assumed several factors including that:

·       Government grants would rise in line with inflation and rolled forward into 2024-25

·       That Council Tax be increased at 2.99%

·       That fees and charges be increased by 7% where feasible.

It was emphasised that the increasing cost of temporary accommodation was a having a real impact on the Council’s finance and the strategy as such proposes shorter term focus of 12-15 months to enable better control and monitoring of the budget gap.

Councillor Ayling presented the Overview and Scrutiny Commission’s comments on the report OSC/315 to the Cabinet following consideration of the matter at its meeting on 27 November 2023, which included:

·       Recognition that Ashdown House may remain vacant for a period from 2024 and this would allow the building to be refurbished and a new tenant to be sought.

·       Explanation provided of the Minimum Revenue Provision (MRP) review having identified a saving of £778k in 2023/24 being due to technical adjustments.

·       Recognition that additional cost pressures were predicted to impact the budget, some of these related to homelessness, pay award, town hall rates and inflation.

·       It was commented that whilst there had recently been changes to the Local Housing Allowance (LHA), the overall impact was yet unknown.

Councillor S Mullins spoke as part of the discussion on the report. 

RESOLVED

That Full Council be asked to:

a)          approve the process for of balancing the budget over the next 12 to 18 months, including the use of reserves to balance the budget as outlined in Section 8 of the report FIN/636.

b)          approve the minimum recommended General Fund Balance remains at £3m.

c)          approve the growth items for the General Fund as outlined in sections 6.3 of the report FIN/636.

d)          approve the  inclusion of new capital schemes in future budgets with the value of £652,000 as identified in section 9.2 of the report FIN/636.

e)          note the following highlights of the Budget Strategy:

i.        that the Budget is aligned to the Council’s Corporate Priorities.

ii.       the outline 3 year forecast as shown in table 6 paragraph 6.5 of the report FIN/636.

iii.      that the current budget deficit of £1.012m for 2024/25 (section 6.5 of the report FIN/636) is based on a Council tax increase of 2.99% which is £6.74. However, table 10 highlights that the gap could be higher when looking at sensitivity analysis.

iv.     that there are uncertainties around Government funding prior to the settlement in December and the delay in Local Government Funding reforms such as business rates retention and the future of New Homes Bonus.

Reasons for the Recommendations

1)          To agree the Council’s  ...  view the full minutes text for item 7

To consider report FIN/636 of the Head of Corporate Finance.

The Commission considered report FIN/636 of the Head of Corporate Finance.  The report set out financial projections with particular reference to the period 2024/25 – 2026/27. The report set out the policy framework for improving financial efficiency and meeting the long-term investment needs of the Town, as well as proposals for the annual budget process.

During the discussion with the Leader of the Council, Head of Corporate Finance and Chief Accountant, the following comments were made:

·         Recognition that Ashdown House may remain vacant for a period from 2024 and this would allow the building to be refurbished and a new tenant to be sought. Similarly, it would be important for the Ask building to be renovated and re-let as soon as practicable.

·         Explanation provided of the Minimum Revenue Provision (MRP) review having identified a saving of £778k in 2023/24 being due to technical adjustments also identified future year savings by taking a payment holiday and switching the calculation to an annuity basis.  The methodology being prudent due to the debt relating to the appropriation of garages from the HRA to the General fund.

·         It was questioned whether the average increase in the fees and charges forecast of 3.5% was too lenient, in comparison with fees and charges having to be increased by a minimum of 7% (where feasible). It was queried whether fees and charges could potentially be increased higher than 7%, however, it then was noted that there was a balance to be made between covering the cost of the service whilst also remaining competitive. Further explanation was provided, that the forecasting model was a tool that did not distinguish between fees that could be increased and for example fees that were set by statute or rents.

·         Recognition that additional cost pressure were predicted to impact the budget, resulting in a net overspend of £2.516m in the current year, some of these related to homelessness, pay award, town hall rates and inflation.

·         It was commented that whilst there had recently been changes to the Local Housing Allowance (LHA), the overall impact was yet unknown, and whilst it would help private tenants to stay in their tented accommodation, it was confirmed that the LHA related to the recovery of Housing Benefit remained frozen and would not improve the budget position going forward, which remained unsustainable.  However temporary accommodation was identified on the corporate risk register and would be constantly monitored and continued to be reported in future monitoring reports.

RESOLVED

That the Commission noted the report and requested that the views expressed during the debate, were fed back to the Cabinet through the Commission’s Comment sheet.