Agenda item

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 the £3 million per annum savings target of the TC-25 programme and questioned the genuineness of reported savings. He urged the scrutiny committee to ensure the report accurately reflected both positive and negative financial impacts and addressed the larger financial gap due to decreased planning and building control incomes.

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

The committee proceeded to ask questions and debate the report. In summary, the following matters were raised.

1.             A question was asked about the additional cost per annum for providing the food waste service and why it was not covered by the new burdens funding.

2.             Further clarification was sought regarding the cost-benefit analysis for the early implementation of the food waste service.

3.             Clarification was requested for the additional uptake of service and the increase in fees relating to the garden waste service.

4.             A question was asked about the impact of the council's property assets on the budget and suggested a briefing or further meeting regarding asset management.

5.             Further clarification was sought on the process of releasing reserves, particularly the £1.9 million reserve to mitigate slower than expected recovery. A further question was asked on the review of reserves and the adequacy of the council’s reserves.

6.             A question was raised about the progress of the TC-25 programme in achieving its £3 million savings target and the ongoing review process. Further clarification was requested on the inclusion of certain aspects of the TC-25 process, such as the increase in garden waste service uptake.

7.             A question was asked about the reduction in building control fees and the cyclical nature of planning applications and building control.

These points were responded to by Councillor Neil Cutler, Cabinet Member for Finance and Performance and Liz Keys, Director (Finance) accordingly.

RESOLVED:

1.    The committee scrutinised and commented upon the report.

2.    The committee agreed that 5 committee members (Councillors Brook, Bolton, Batho, Laming, and Wallace) would meet with the relevant officers and cabinet member to be briefed and to discuss relevant matters concerning the council’s asset management strategy.