Issue - meetings

1.         That the assumptions set out in respect of Government funding, council tax, inflation rates and fees and charges (set out in full in section 13 of report CAB3483) and the projections set out in Appendix 1 be noted.

2.         That the Medium-Term Financial Strategy be approved as set out in sections 13 to 17 of report CAB3483. 

3.         That a detailed budget be prepared for consideration by Council in February 2025 based on the assumptions set out in this MTFS; final spending review announcements; and including the following options shown in Appendix 2 and Section 14 of the report:

a.    That, in relation to Greener Faster and carbon reduction priorities:

                                      i.     An additional £135,000 per annum be included for the ongoing costs of providing the food waste collection service.

                                     ii.     An additional one-off budget of £460,000 be included to fund the phased roll out of the food waste service from October 2025, without government funding.

b.    That, in relation to the Homes for All priority:

                                      i.     Additional estimates, shown in Appendix 2, of c£300,000 per annum be included to fund increased demand for temporary accommodation to prevent homelessness.

c.     That, in relation to services:

                                      i.     A reduction of £300,000 per annum to the energy benchmarking budget in relation to the operation of the leisure centres.

                                     ii.     An additional £50,000 per annum be included to fund additional pressures on council contracts.

d.    That, in relation to service income annual budgets, amendments be made as follows, in response to revised estimates:

                                      i.     An increase of £30,000 per annum to Garden Waste income to reflect increased subscriptions (although partly off-set by increased contract costs of delivering the service to more households, already assumed in the MTFS).

                                     ii.     A reduction of £200,000 per annum of planning fee income to reflect the current reduced levels of applications received.

e.    In relation to management of the council’s property assets:

                                      i.     An additional £250,000 per annum be set aside into the Property Reserve for the maintenance of and investment in operational assets.

                                     ii.     A reduction of £500,000 per annum to reflect estimates of future rental income on investment properties.

4.         That a risk reserve of £1m for homelessness prevention be established by transferring existing risk reserve funds from the Exceptional Inflation Risk Reserve.

5.         That maintaining the concessionary price of the Garden Waste collection service at £29 and increasing the prices for small and large bin collections by the waste collection contract inflationary increase with effect from March 2025 be approved, resulting in charges of £46 for small bins and £70 for large bins.

6.         That a capital budget of up to £190,000 be approved to enable a grant of developer contributions, under ‘Section 106’ agreements monies to be made to Wickham Parish Council for a replacement pavilion at Wickham Recreation Ground.

7.         That the council’s application to participate in the Hampshire Business Rates Pool for 2025/26 be noted.

Councillor Cutler introduced the report which set out the financial challenges facing the council, including those relating to the national situation regarding local government financing and the assumptions being made regarding future funding and pressures.

At the invitation of the Leader, Councillors Lee and Godfrey addressed Cabinet as summarised briefly below.

Councillor Lee

He acknowledged the significant financial pressures being faced.  He queried whether the medium term financial strategy (MTFS) had full regard to the draft Council Plan and requested that recommendation 1 of the report be amended to address this.  He believed that specific references to the nature emergency declaration were missing at a number of points within the report.  Proactive investment in nature recovery should be included in addition to investment in carbon reduction measures to generate future savings.  He expressed concerns regarding the increasing costs involved in collecting food waste.

Councillor Godfrey

He also acknowledged concerns regarding the uncertainty of future local government finances and that the main challenge would be faced in two years’ time when savings of £3 million per annum must be achieved.  The council’s TC25 initiative was vital but he expressed concern that at the current time this appeared to lack any real plans about how this level of savings could be achieved and instead extra annual expenditure was being proposed.  He also queried the council’s future intentions if the government removed the Council Tax referendum limit.

Councillors Cutler and Tod responded to the comments made including emphasising that it was a government requirement to introduce food waste collection. 

Councillor Cutler referred to the discussion of the report at Scrutiny Committee on 12 November and the draft minutes had been circulated to Cabinet and other members present prior to the Cabinet meeting.

The Director (Legal) drew members’ attention to a correction required to recommendation 5 of the report to change the date referred to from March 2024 to March 2025.  This was agreed.

Cabinet agreed to the following for the reasons set out in the report and outlined above.

RESOLVED:

1.             That the assumptions set out in respect of Government funding, council tax, inflation rates and fees and charges (set out in full in section 13 of report CAB3483) and the projections set out in Appendix 1 be noted.

2.             That the Medium-Term Financial Strategy be approved as set out in sections 13 to 17 of the report. 

3.             That a detailed budget be prepared for consideration by Council in February 2025 based on the assumptions set out in this MTFS; final spending review announcements; and including the following options shown in Appendix 2 and Section 14 of the report:

a.             That, in relation to Greener Faster and carbon reduction priorities:

                             i.     An additional £135,000 per annum be included for the ongoing costs of providing the food waste collection service.

                            ii.     An additional one-off budget of £460,000 be included to fund the phased roll out of the food waste service from October 2025, without government funding.

b.             That, in relation to the Homes  ...  view the full minutes text for item 7

RECOMMENDATION:

It is recommended that the committee scrutinise and comment on the proposals within the attached draft cabinet report, ref CAB3483 which is to be considered by cabinet at its meeting on the 20 November 2024.

Councillor Neil Cutler, Cabinet Member for Finance and Performance introduced the report, ref CAB3483 which set out proposals for the General Fund Budget Options & Medium Term Financial Strategy, (available here).  The introduction included the following points.

1.             Local government continued to face a funding crisis. Since 2020, the government had indicated a fair funding review, including resetting business rates, ending new homes bonus, and remaining revenue support, but had only provided a one-year settlement each year. This year was no different, with another one-year settlement, expected before the end of the year, and assurances of a longer-term settlement next year.

2.             The government had committed to better funding for local government but indicated that increased funding would be based on need.

3.             It was prudent to assume that any longer-term settlement would result in reduced core funding for the council, with a reset in business rates, negative revenue support grant, and the end of the new homes bonus in 2026/27, mitigated by forecasts of damping these reductions over four years.

4.             Core assumptions for council tax and inflation showed a reduction in revenue resources from £23.36 million in 2025/26 to £19.62 million in 2029/30.

5.             The report outlined the council’s approach to this financial challenge through the TC 25 project (Section 11), current financial year forecast (Section 12), government funding, council tax, inflation assumptions, fees and charges (Section 13), and budget pressures (Section 14).

6.             Detailed descriptions of reserves and the General Fund Capital programme were provided, feeding into the Medium Term Financial Strategy table in Appendix One.

7.             Recommendations within the report included adjustments to the base budget for ongoing work on the food waste collection service, additional support for homelessness, contract inflationary increases for the garden waste service, and creating a capital budget to transfer Section 106 funds to Wickham Parish Council.

Liz Keys, Director (Finance) provided the committee with an update which included the following:

1.             That the council continued to face pressures due to increased service usage and the cost of delivering services.

2.             That uncertainty around long-term funding made forward planning difficult and that the council awaited the December funding settlement information.

3.             The paper sought approval to develop the detailed budget to be presented in February 2025, marking a step in the ongoing budget preparation journey.

Councillor Danny Lee addressed the committee and highlighted the following points. Councillor Lee questioned the correlation of the MTFS with the 2025 Council Plan and expressed concerns about the balance between climate mitigation and adaptation resilience. He inquired about the risk and confidence in delivering efficiency savings and sought clarification on the business rates pool and additional funds for homelessness. He also raised concerns about the costs of waste food collection, council contract renewals, and the digital transformation programme.

Councillor Stephen Godfrey addressed the committee and highlighted the following points. Councillor Godfrey emphasised the importance of the MTFS and highlighted the continued uncertainty in government announcements affecting future financial planning. He stressed the need to achieve  ...  view the full minutes text for item 6