URL: https://rother.moderngov.co.uk/ieDecisionDetails.aspx?ID=1720

Decision Maker: Cabinet

Outcome: Recommendations Approved

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: To review the financial issues affecting the Council in the years up to 2028/29 and to provide draft budget scenarios for 2025/26.

Content: Cabinet considered the report of the Deputy Chief Executive on the Draft Budget and Medium-Term Financial Plan 2025/26-2028/29, which reviewed the financial issues affecting the Council in the years up to 2028/29 and provided draft budget scenarios for 2025/26 for Members to consider as part of the budget setting process.  The report also included the proposed fees and charges.  The Draft Budget had been scrutinised by the Overview and Scrutiny Committee (OSC) on 18 November 2024 and a copy of the Minutes arising from the OSC meeting had been appended (Appendix F) to the report for Cabinet’s consideration.   The Council was required to set its 2025/26 Budget in the context of increasing uncertainty and the unsustainability of its previous Capital Programme (CP). The Local Government Finance Settlement was expected on 19 December 2024.  It was anticipated that focus would be on socio economic factors, e.g. funding would be distributed according to the level of deprivation in the district, therefore urban local authorities could receive more funding.  Concern was aired that deprivation was scattered across the whole of the district and it was important that Rother received funding to support these areas / communities. The funding formula needed to reflect that granularity rather than high level averages.   The following salient points were noted:   ·         the Council had reduced its reserves by £3.394m in 2023/24.  As at 1 April 2024, £5m remained in the General Fund reserve and any overspend would need to be funded predominantly from this reserve; ·         of the savings target of £2.575m, £1.523m had been achieved, therefore the overall budget position was still that of an overspend; ·         the Month 5 Budget Monitoring report on 4 November 2024 showed an increased need to draw down £954,000 from reserves, compared with an initial budget position of £185,000 draw down. If this overspend was maintained, the General Fund reserves would be reduced to around £4.35m. The main overspends were detailed within the report; ·         savings / income generation and growth proposals were detailed in Appendices A and B to the report, which totalled £1,176,424 and £540,639 for 2025/26, respectively. Focus would continue on generating income, to protect and maximise the Council’s reserves, where possible; ·         Government Devolution White Paper expected in January 2025; proposal to reorganise local government (simpler structures to deliver efficiency savings); ·         an extra £1.3b funding nationally had been announced, but £600m of that was for social care, so would not be paid to district councils. Rother’s share of the remaining £700m would depend on the distribution method used; ·         uncertain whether the Council’s increased Employers National Insurance costs (approximately £250,000) would be funded from the £700m (above); ·         increased Government funding of £233m for homelessness, which could assist with offsetting the Council’s additional costs and £50m for Planning; ·         councils’ Core Spending Power would increase by 3.2% in real terms. This could mean the end of New Homes Bonus and other grants, as the extra £700m grant announced would be sufficient to meet this figure; ·         the total income generated from council tax for the year 2024/25 was £8.02m, which represented 55% of the Council’s net Revenue Budget; and ·         Council Tax (CT) threshold would remain at 2.99% for 2025/26; this would raise Band D to £210.65, an increase of £6.11.  The CT would be agreed and set at full Council in February 2025.   Appendices C, D and E detailed two indicative budget gap scenarios, a revised CP of £126m and the fees and charges proposed for 2025/26 (based on 2.2% inflation rate, plus 6% increase for car parking charges), respectively.   Cabinet was keen to see the results of the budget consultation which had commenced and was scheduled to close on 11 January 2025.  The results would be reported to the Overview and Scrutiny Committee at their meeting on the 20 January 2025 and Cabinet on 3 February 2025.   RESOLVED: That the financial forecast and proposed way forward be noted.   (Councillor Field declared an Other Registerable Interest as the Council’s appointed Trustee on the Board of the De La Warr Pavilion and as a Member of East Sussex County Council, and in accordance with the Members’ Code of Conduct remained in the meeting for the consideration thereof).   (Councillor Maynard declared an Other Registerable Interest as an Executive Member of East Sussex County Council, and in accordance with the Members’ Code of Conduct remained in the meeting for the consideration thereof).   (Councillor Timpe declared an Other Registerable Interest as the Council’s appointed Trustee on the Board of the De La Warr Pavilion and as a Member of Bexhill-on-Sea Town Council, and in accordance with the Members’ Code of Conduct remained in the meeting for the consideration thereof).

Date of Decision: December 9, 2024