Agenda item

That (A) the Executive agreed, as guidance to officers, that the budget proposals should be based on the base case presented in paragraph 1.4; with a Council Tax increase of 2.98%, contract inflation of 2.5%, no inflation in any other goods and services budgets and that the provision for the national pay award will be 3%; and

(B)    the revised savings requirements of £2m in 2025/26, rising to £2.5m in 2027/28, be noted.

The Executive Member for Financial Sustainability presented the report. He said that the report set out the savings requirements for the Medium-Term Financial Plan (MTFP) for 2025 to 2035, the assumptions included in the 2025 to 2026 budget and the risks and uncertainties facing the council in setting the budget and the timetable for the budget setting process.

The Executive Member said that the 2024 to 2034 MTFP approved at council on 28 February 2024, had included a savings target of £5.6m for 2025/26 and £4.2m of savings had been agreed, with a further £1.4m to be identified.

The Executive Member for Financial Sustainability said that subsequently, the quarter 1 forecast had identified further ongoing budget pressures of £0.55m, taking the additional savings requirement for 2025 to 2026 to almost £2m. He said that a number of assumptions had been made regarding council tax increases, government support and inflation.

The Executive Member for Financial Sustainability said that 3 models had been created, the base case, the optimistic case, and the pessimistic case. He said that the proposal was that the base case was the model to be used for the budget setting process, as this reflected the outcomes that were most likely at the moment.

The Executive Member for Financial Sustainability said that the details of these assumptions were set out in the report, and the Executive was referred to Appendix A for the base case MTFP, and to Appendix B for the outcome for the optimistic case.

The Executive Member for Financial Sustainability referred to many uncertainties ahead and these were outlined in the report. He expected clarity on a number of these to emerge in the course of the next 3 months, and he said that there was much work to do to bring the council finances back to a sustainable level. He said that realistic assumptions had been made about finding internal solutions due to no firm indications of support from the new government.

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

Councillor McAndrew referred to a number of high-profile projects that had greatly benefited residents. He said that with much of the groundwork already established, the time had come to consider a shared chief executive officer (CEO) rather than filling the position with a full-time appointment. He said that there were opportunities for significant savings, especially given the current financial constraints.

Councillor McAndrew mentioned aged debtors and referred to the £2m that needed to be found in respect of the 2025/26 budget. He said that 40 to 50% of £1.8m was a substantial amount of money and would this be realised and ensure that the budget deficit was reduced accordingly.

The Executive Member for Financial Sustainability said that there were plans to reduce aged debtors. He said that this would be a one-off saving which would be incorporated into the savings proposals for 2025/26.

Councillor Estop asked about the £50k regarding the reduced grounds maintenance specification. She said that she had also been advised by parks officers that the £50k budget for the renewal of playground equipment would not be continuing for the 60 playgrounds. She asked if these two amounts were separate or just the one amount.

The Executive Member for Financial Sustainability confirmed that these 2 figures were separate and the £50k for grounds maintenance was for the contract to maintain the grounds and was not for new equipment.

Councillor Deering said that the figure for debt write off was a big figure. He asked what were the debts that might comprise the approximate 50% write off and who would make that decision. He asked about the criteria for determining whether any debt should be written off.

The Executive Member for Financial Sustainability said that the Head of Strategic Finance and Property would make the decisions in respect of the debt which was to be written off. The Head of Legal and Democratic Services confirmed the constitution rules in part 9 allowed the Head of Strategic Finance and Property to write off irrecoverable debts up to a limit £50k in any one case. Any irrecoverable debts in excess of this amount would have to be referred to the Executive.

There was a general discussion about debt timelines as well as the last change to the constitution around the level of debt that could be written off by Officers.

The Executive Member for Communities said that it would be interesting to know the debt level as an amount at the point when the Executive came into administration in May 2023. The Executive Member for Environmental Sustainability agreed that publishing a time profile of the debt and how this debt was being handled subsequently would be helpful in terms of clarity.

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 agreed, as guidance to officers, that the budget proposals should be based on the base case presented in paragraph 1.4; with a Council Tax increase of 2.98%, contract inflation of 2.5%, no inflation in any other goods and services budgets and that the provision for the national pay award will be 3%; and

(B)   the revised savings requirements of £2m in 2025/26, rising to £2.5m in 2027/28, be noted.