Agenda item

To receive a report from the Deputy Chief Executive (S151) on 2024/2025-2028/2029 Medium Term Financial Plan.

Cabinet had before it a report * from the Deputy Chief Executive (S151) Officer on the Medium Term Financial Plan (MTFP) covering the period of 2024/2025 to 2028/2029.

The Cabinet Member for Finance outlined the contents of the report with particular reference to the following:

·         This reports covers the fourth update of the Medium Term Financial Plan covering the five years 2024/25 to 2028/29. This report encompasses all elements including the General Fund, Housing Revenue Account and the Capital Programme.

·         The initial results of the budget element within the resident’s survey has been included within Section 3 of the report. The results are similar to previous years and the allocation of the Council’s resources reflect the public’s priorities as far as possible within the Council’s financial constraints and statutory requirements.

·         Since the December Cabinet, further work had been undertaken to reduce the shortfall further. £103k of further savings has been identified, the majority of which (£78k) results from changes to the Building Control Partnership where the council pick up a lower percentage of the costs. Crucially, the staff savings has reduced by more than half and no resulting redundancies.

·         In December the local government finance settlement was announced. Although very much a like for like settlement compared to 2023/24, this did announce £85k of additional grant funding above the forecast and additional Council Tax income following the announcement of 3% cap not 2%.

·         Due to the scale of the services that report into the Economy and Homes PDG, and the Council will not look at those PDG’s to identify any further savings for 2024/25 – although of course any ideas are always welcomed. 

·         Given the scale of the budgets the following PDGs are responsible for, the Council will still seek further savings from the Community and Environment PDG’s,  and I will be proposing that any remaining shortfall to the general fund after this round is met from reserves.

·         Appendix 2 details the Housing Revenue Account and proposes a balanced budget for the HRA. Since the December update, clarification has been given by government on the Social Rent Cap which allows the Council to increase by September CPI +1% (7.7%). Therefore the proposed Rent Charges now reflect this as per Appendix 3. The additional income generated enables increased investment in both the maintenance and further carbon reduction of our existing stock. It also enables greater investment in new stock through the housing development programme. There are also financial adjustments to update the bad debt provision and the recharges to the General Fund.

The proposed capital programme was presented for review. It remained largely the same as that presented to Cabinet in December, with the General Fund showing a small £1.5m reduction and the HRA showing no change in the 2024/25 deliverable budget. Changes in the assumed funding of the programme see forecast borrowing increase by just over £0.5m. Within the General Fund, the significant investment is the Cullompton Relief Road with a sufficient funding source still being sought. The HRA has significant investment included to deliver the Housing Development Programme that will increase the Council’s existing stock by c.500 units.

Discussions took place regarding:

·         A full report to Cabinet in March 2024 not 2023.

·         Savings from reserves and would this leave the reserves vulnerable? 

RESOLVED that:

·         The initial results from the 2023 Residents Survey in relation to the Budget (section 3) be noted;

·         Cabinet agree revisions as detailed in section 4 and recommend the use of reserves to mitigate the remaining budget deficit, delegate precise makeup of the recommendation to S151 in consultation with Cabinet member for finance.

·         The update on the Local Government Finance Settlement included within Section 5 be noted;

·         To consider and agree the revisions to the 2024/25 Housing Revenue Account Budget as outlined within Section 6;

·         To consider and agree the proposed increase in HRA Rents and Fees as outlined in Appendix 3;

·         To consider and agree the updated 2024/25 to 2028/29 Capital Programme explained in Section 7 and Appendix 4.

·         The updated MTFP’s for the General Fund, Housing Revenue Account and Capital Programme covering the years 2025/26 to 2028/29 and agree that work on strategic planning for delivering a balanced budget for 2025/26 and beyond is commenced immediately.

(Proposed by Cllr J Buczkowski and seconded by Cllr J Lock)

Reason for Decision:

In order to comply with the requirement to set a balanced budget, management must ensure that the proposed savings are robust and achievable. The Council must also ensure that the assumptions it has used are realistic and prudent. Failure to set a robust deliverable budget puts the Council at risk of not being able to meet its commitments and casts doubt on its “going concern” and “Value for Money” status.

Note * Report previously circulated.