Purpose

To provide an update on the Draft Budget for
2025-2026 and the Medium Term Financial Strategy and agree the next
steps that will be taken in order to address the financial
pressures faced by the Council over the medium term.

Content

That Cabinet approve:
1.   
The ‘Our Future Council’ Programme and its continued
direction of travel, including its approach, guiding principles and
service vision statements, as detailed in section 3 of the
report.
 
2.   
Subject to the outcome of Budget Consultation and Scrutiny, the
specific Our Future Council savings proposals, amounting to
£10.4 million (£700,000 of which is one-off and
£9.7 million recurrent), outlined in section 4 and Appendix 1
to the report.
 
3.   
The savings targets, amounting to a further £19.9 million (of
which £300,000 is one-off and £19.6 million recurrent),
as outlined in Section 5 and Appendix 2 to the report, noting that
further work would be undertaken to understand the impact and
implications of delivering against these targets, in advance of
setting the 2025-2026 Budget and Medium-Term Financial Strategy in
February 2025.
 
4.   
The updated draft Medium-Term Financial Strategy, including changes
to inflation, demand and development as set out in Sections 7 to 9
of the report, noting that at this stage significant risk exists in
relation to these assumptions and that proposed savings still need
to be delivered to achieve these financial forecasts.
 
5.   
The approach to public consultation as set out in Section 13 of the
report.
 
6.   
That authority be delegated to the Cabinet Member for Resources, in
consultation with the Director of Finance, to finalise the specific
questions with regards to the public consultation exercise in line
with the approach outlined in Section 13 of the report.
 
7.   
That authority be delegated to the Director of Finance to action
the necessary virements in order to capture the estimated savings
outlined in this report, including those where further work is
required to quantify the level of saving.
 
That Cabinet note:
1.   
That there is a significant financial challenge over the medium
term, and that as at February 2024, the projected revenue budget
deficit was £27.1 million in 2025-2026, rising to £32.6
million in 2026-2027.
 
2.   
The actions taken to reduce costs, as set
out in the report, which subject to approval and consultation, (and
subsequent delivery) would reduce the draft forecast deficit
position to £11.2 million in 2025-2026, and to £8.0
million in 2026-2027. Furthermore that at this stage significant
risk exists in relation to these assumptions, and that proposed
savings (if approved) still need to be delivered in order to
achieve this reduced (but still significant) deficit forecast
position. Work would therefore continue to be undertaken to bring
forward proposals to set a balanced budget for 2025-2026 and
deliver a sustainable Medium Term Financial Strategy.
 
3.   
That, in line with Government referendum
limits and in line with what was reported in the February Budget
and MTFS report, our working assumptions are that Council Tax
would  increase by 4.99% for 2025-2026
which incorporates 2% in relation to Adult Social Care, as set out
in Section 8 of the report.
 
4.   
The proposals to revise the Council’s senior management
structures as referenced in Section 4 of the report. This would be
subject to a separate report to Councillors.
 
5.   
That there continues to be considerable amount of risk with regard
to the Council’s finances, particularly in relation to
increased costs and demand, and uncertainty regarding future
funding streams for local authorities, over the medium term.
Savings (as outlined in the report) should they be approved, also
need to be delivered.
 
6.   
That there is a risk that Government does not extend the current
capital receipts flexibilities beyond the end of the current
financial year and the actions in place to mitigate this risk as
set out in Section 12 of the report.
 
7.   
That as set out in Section 9 of the
report, the updated draft Medium Term Forecast Position is that
£11.2 million of one off resources (reserves) would be needed
to balance the 2025-2026 Budget and that further work is therefore
being done to reduce the Council’s reliance on one-off
resources.
 
8.   
That the Council would continue to lobby Government
with regards to the need for fairer funding (and multi-year
settlements), particularly in relation to increased demand and
costs prevalent in such areas as children’s and adult’s
social care and temporary accommodation. That the 2025-2026 draft
budget and Medium-Term Financial Strategy would continue to be
updated in line with any announced changes in funding.
 
9.   
That, due to external factors, budget
assumptions remain subject to change which could, therefore, result
in alterations to the financial position of the
Council.  This includes assumptions with
regards to the level of resources that would be available to the
Council.   Any reduction in
Government’s allocation of funding to the Council would have
a significant detrimental impact and further increase the budget
deficit over the medium term. 
 
10.That
the Our Future Council Strategy and approach outlined in the report
would be subject to the Council’s Scrutiny processes as set
out in Section 13 of the report.
 
11.That
as part of the Our Future Council Programme of work and in
recognition of the Council’s commitment to the wellbeing of
its staff, an exercise is being undertaken to review and assess
staff workload in order to ensure it remains manageable. And that
as part of this, operational mitigations (such as deprioritising
certain tasks or reallocating additional resources) would be
considered.
 
12.The
Council has a good track record of strong financial management, and
significant progress has been made in responding to the
Council’s financial challenge. However, more work is required
to ensure that the Council is able to set a balanced budget for
2025-2026 and has a sustainable Medium-Term Financial Strategy.
Work would therefore need to continue to identify further savings
proposals which would be reported back in future reports. As a
consequence of the size of the financial challenge, the need to
deliver planned savings and the level of uncertainty across both
demand for services and funding levels, the overall level of risk
associated with the Draft Budget and Medium-Term Financial Strategy
therefore continues to be assessed as Red.