Agenda item

The Executive Member for Financial Sustainability introduced the report, which set out the savings requirements, the assumptions, risks, and uncertainties facing the council in setting and timetabling the budget.

The Executive Member for Financial Sustainability said that the Mid Term Financial Plan (MTFP) was approved by Council in February 2024, where a savings target of £4.2 million was agreed. He said that the budget monitoring process had identified a number of pressures on the 2024/25 budget, which currently forecast a £1.1 million overspend. He said that a number of these pressures where one offs, with £0.55 million having any ongoing impact.

The Executive Member for Financial Sustainability said that MTFP planning used three scenario models. He said that the Base Case, which was the most likely and therefore used in budget preparations could be found at Appendix A of the report.[PM1] 

The Executive Member for Financial Sustainability said that the 2024/25 savings had been reviewed, and could be seen in Appendix C of the report, with reserves detailed in Appendix D. He said that lots of work was required, and that he was hopeful that the Government would give extra support.

The Chair thanked theExecutive Member for Financial Sustainability for his report.

Councillor Williamson said that the report was the first in a cycle and set the scene. He said that it was helpful to have the scenario modelling included, and asked for clarification regarding the differing savings targets in Appendix A and B.

The Executive Member for Financial Sustainability said that the savings figure of £1.4 million related to a previous target, set earlier in the year. He said that the figure of £1.96 million was the new outcome figure.

Councillor Connolly said that she understood the three scenario cases but asked for clarification of how monthly Council Tax collections were modelled within the pessimistic case. 

The Executive Member for Financial Sustainability said that:

·            The Base Case – assumes that Council Tax increases in line with the current referendum limit of 2.96%

·            The Optimistic Case - assumes that the current referendum limit may be relaxed to allow an increase in Council Tax of more than 2.96%.

·            The Pessimistic Case – assumes that the Council Tax referendum limit of 2.96% remains andthat grants from Government to Local Authorities are also reduced.

Councillor Hart asked if there was a contingency plan should the projected figures for BEAM (formally Hertford Theatre) not be met. She said that these figures had been optimistic, but that the arts were in decline nationally. 

The Executive Member for Financial Sustainability said the 2024/25 figures for BEAM had not been revised, adding that the venue was in its infancy, having been open for only two months. He said that a review by external consultants to identify challenging areas, learn processes to meet forecasts in the business plan would be undertaken.

The Executive Member for Financial Sustainability said that there was no contingency plan for BEAM in isolation, but that it did form part of the budget setting process, with the Council aware that BEAM costs could increase.   

Councillor Willcocks referred to paragraph 2.3.4 of the report, and asked if the uncertainty surrounding the Government’s possible removal of the Council Tax Single Person Discount could create a pressure for the council. 

The Executive Member for Financial Sustainability that this had not been flagged as a big issue, but he would speak with officers and report back to the Committee.

Councillor Nicholls said that it was important that the outgoing Section 151 Officer be replaced.

The Executive Member for Financial Sustainability agreed with Councillor Nicholls and said that such officers were in short supply, with competition  existing within Hertfordshire.

Mr Sharman referred to paragraph 2.6 of the report and asked for an understanding of the deliverability of the ‘at risk’ or ‘delayed’ 2024/25 savings.

The Executive Member for Financial Sustainability said that the largest of the asset disposals was Old River Lane, for which the development agreement was to be signed  imminently. He said that there was no risk to the concept with civil parking enforcement, which should hopefully give savings in the forecasted ballpark. He said that overtime was a budgeting issue due to vacant posts. 

The Chair asked if the figures within the report which pertained to BEAM’s social media revenue were purely profit.

The Executive Member for Financial Sustainability said that the figures shown were before borrowing costs.

RESOLVED – that A) it be noted 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%, as agreed by Executive on 1 October 2024; and

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