Agenda item

The Executive Member for Financial Sustainability presented the Draft Budget 2025/26 and Medium-Term Financial Plan (MTFP) 2025-2035 report. He said that there was uncertainty over the future of East Herts Council following the government’s Devolution White Paper, but it still had a requirement to produce a balanced budget.

The Executive Member for Financial Sustainability said that there was now a greater understanding around the government settlement to the council but the grant to cover the increase in National Insurance contributions was unknown but expected to fall short of what was required. He said the council had a balanced budget for 2025/26 but beyond this there were significant savings to be made.

The Executive Member for Financial Sustainability said there was a £2 million budget gap in October 2024 and savings had been identified through £1.46 million of officer delegated savings and £492,000 of Member recommended savings. Savings proposals that had been accepted and rejected by the Executive were shown in the appendices.

The Executive Member for Financial Sustainability said that there had been some changes to the MTFP as described under paragraph 1.6 – 1.9 of the report. He said that further work would be undertaken on the MTFP to generate more savings and there was a proposal to increase council tax by 2.98%, the maximum allowed without a referendum. He said that ongoing pressures of high interest rates and a lack of government funding left the council with little choice. The budget required all planned savings to be realised and £164k had been drawn down from reserves with no plan to add to it.

Councillor Brittain proposed that the recommendations in the report be supported. Councillor Hoskin seconded the proposal.

Councillor Crystall thanked officers for their work in helping to prepare the budget in a challenging financial year.

Councillor Deering echoed the Leader’s appreciation to those involved in the budget. He referred to Table 3 in the report which related to the increase in the garden waste charge. He said this was under the savings section but would be an increase for residents. He asked how this linked with the proposed North Herts charge in the shared service.

Councillor Brittain said that although it was an increase to residents, it reflected a saving to the council as there was a net income. North Herts were consulted when deciding on a charge but due to East Herts’ challenging financial position, there was no choice but to increase by £10. He said that this also brought the council into line with neighbouring authorities, and it had not increased since 2021.

Councillor Deering felt that explaining the increased charge as a saving was disingenuous and wanted to see more accurate terminology when the budget was presented to Full Council. He said that North Herts were proposing an increase that was less and asked why East Herts were proposing a greater increase.

Councillor Brittain said that there was not a requirement for both councils to have the same charge and they had tried to align the cost, but circumstances had meant that East Herts had to increase by £10.

Councillor Deering said that North Herts were increasing the charge by £6. He said that residents might find it difficult to understand why the charges were different when it was a shared service across the two councils.

Councillor Brittain said that he understood Councillor Deering’s point but both councils had different financial positions.

Councillor Hoskin said that the garden waste charge was a commercial offering, and residents could choose whether they paid for the service or not and this charge was not being imposed on residents.

The motion to support the recommendations having been proposed and seconded was put to the meeting and upon a vote being taken, was declared CARRIED.

RESOLVED – that (A) The Executive requests the Audit and Governance Committee to consider the savings proposals and advise Executive of any significant issues they believe may arise;

(B)      the Executive delegate to the Interim Head of Strategic Finance, in consultation with the Executive Member for Financial Sustainability, the authority to amend the proposed budget and medium-term financial plan to be put to Audit and Governance Committee on 29 January 2025 in order to reflect the Local Government Finance Settlement and other emerging information, so that the committee can consider the most complete and up to date information.