Decision Maker: Cabinet

Outcome: Recommendations Approved

Is Key Decision?: Yes

Is Callable In?: No

Date of Decision: January 29, 2025

Purpose: This report sets out the issues and actions which inform the development of the Council’s Medium Term Financial Strategy (MTFS) 2025-28.

Content: DECISION   1.      Note the Overview and Scrutiny Committee’s Review of Budget Proposals 2025-26 as included at Item 5.1.   2.      Propose a draft General Fund Revenue Funding Requirement of £484.136m for 2025-26 subject to any remaining changes arising from the final Local Government Finance Settlement and any other necessary adjustments.   3.      Propose to levy a 2% Adult Social Care precept and an increase of 2.99% on the general Council Tax element for 2025-26. The council continues to shield those most in need from the burden of increased council tax by continuing the Council Tax Support Relief Fund and increasing the qualifying household income ceiling to £50,350.   4.      Note that the Local Council Tax Reduction Scheme will remain unchanged for 2025-26.   5.      Note the Council Taxbase calculations in Appendix 4.   6.      Approve that the Corporate Director Resources, in consultation with the mayor and Cabinet Member for Resources & Cost of living, be authorised to make any changes required to the draft budget following receipt of the Final Local Government Finance Settlement (LGFS) for further consideration at Cabinet on 29 January 2025.   7.      Note the General Fund Reserve increase to £25m to meet the Chartered Institute of Finance and Accountancy (CIPFA) best practice guidance.   8.      Note the latest draft position of the Council’s reserves in Appendix 6.   9.      Approve the HRA housing rent and service charge increases as outlined in section 3.12. This includes increasing housing rents for properties by 2.7% for 2024-25 (CPI +1%), service charges by 1.7% (CPI) and new build properties at CPI+5% in the first year only.   10.   Propose the Housing Revenue Account (HRA) budget as set out in Appendix 8A.   11.   Approve the HRA Rent Setting Policy at Appendix 8B.   12.   Approve the appropriation of the Temporary Accommodation buy back properties from the General Fund to the HRA at the end of 2024-25 to provide greater flexibility.   13.   Agree that the National Schools Funding Formula (NSFF) adopted by Tower Hamlets originally in 2019-20 continues for 2025-26. The only changes included are increases to the factor values in line with the NSFF.   14.   Agree that the Minimum Funding Guarantee (the mechanism that guarantees schools a minimum uplift in per-pupil funding) is set as close to 0.5% as affordable, the maximum allowed after consideration for growth and factor changes in School allocations.   15.   Note the School funding position set out at Section 3.11, in particular the overall Dedicated Schools Grant (DSG) deficit.   16.   Note the Equalities Implications as set out in Section 5.   17.   Approve the proposed discretionary fees and charges as detailed in Appendix 7A.   18.   Approve the proposed statutory fees and charges as detailed in Appendix 7B.   19.   Approve the charges relating to the Housing Revenue Account in Appendix 8C.   20.   Approve the continued delegation for amendments to fees and charges, including those to take account of the result of any Equality Impact Assessment that may be identified, to the relevant Corporate Director following consultation with the Lead Member and the Mayor, and that they will be reviewed throughout the year as part of the budget monitoring process.   21.   Agree that all increases and new fees are implemented from 1st April 2025 where possible or as soon as practical thereafter.   22.   Propose the Flexible Use of Capital Receipts Strategy 2025- 26 as set out in Appendix 10.   23.   Propose the General Fund (GF) Capital Programme budget from 2024-25 to 2027-28 as set out in Appendix 9B, totalling £241.963m. This includes revising the 2024-25 budget to £66.215m.   24.   Propose the budget allocation growth and reductions to schemes in the General Fund capital programme as detailed in Appendix 9C, subject to sign off through the council’s capital governance process.   25.   Propose the Housing Revenue Account (HRA) Capital Programme budget from 2024-25 to 2027-28 as set out in Appendix 9D, totalling £784.696m. This includes revising the 2024-25 budget to £86.337m.   26.   Approve delegated authority to the Corporate Director of Housing and Regeneration in consultation with the Corporate Director of Resources to take any steps required to deliver the capital programme including but not limited to going out to tender, appointing consultants and contractors in accordance with the Procurement Procedures, acquiring land interests and appropriating land and assets from the General Fund to the Housing Revenue Account (HRA), subject to approved budgets and in consultation with the Mayor and the Cabinet Member.   27.   Approve that all capital projects within the capital programme will only proceed once all due diligence relating to the council’s capital governance process has been completed.   Action by Corporate Director Resources (J. Lorraine) Director of Finance, Procurement and Audit (A. Kassim)