Decision details

RESOLVED:

That Cabinet recommend to Council;

(a)   That the revised MTFP forecasts, as outlined within the report and appendices be adopted;

(b)   That the options identified to close the budget gap for 2024/25 and through to 2027/28 are developed further;

(c)   That the Fees and Charges Policy set out in section 4f of the report be adopted; and

(d)   That the reporting timeline as set out in section 6 of the Cabinet report be agreed

KEY DECISION:

Report to Cabinet and Council.

PORTFOLIO:

Finance and Corporate / Housing and Homelessness / All

ALTERNATIVE OPTIONS CONSIDERED/REJECTED:

As set out in report.

DECLARATIONS OF INTEREST:

None

DISCUSSION:

The Portfolio Holder for Finance and Corporate presented the report.  He highlighted he was delighted the Medium Term Financial Plan showed that the Council was in a strong financial position to deliver on all front line services for residents in the short term.  However, it was not possible to hide behind the pressures in the plan for the General Fund for the financial years 2025/26 and 2027/28 where the funding with the realignment of the business rates would cause significant financial pressures.  It was necessary to look how these could be addressed at an early stage before they were upon us.

In relation to the Housing Revenue Account, there were challenges in order to deliver additional affordable housing as well as the greener housing agenda which would be at a significant cost to the Council.  Work would continue with officers to deliver on this.

The Strategic Director Corporate Resource & Transformation reported that this was the first update of the Medium Term Financial Plan since the budget had been agreed in February.  He highlighted section 4 (General Fund) of the report and spoke about the funding assumptions which had been made.  This included the business rate reset, Government support and pay.  He drew attention to the fact there were risks associated with those assumptions, such as the rise in inflation, cost of homelessness and pay and price increases.  There was a forecast deficit over the next four years of in excess of £3.5m.  It was therefore necessary to work towards closing the gap between the budget requirement and funding available, by making savings and to consider income growth. 

The Council had an excellent track record at being proactive in its approach to decision making.  Indeed, the following Cabinet report on the agenda was forward thinking about the decision to be taken, in relation to fees and charges.  This would have the potential to create additional headroom to address the budget deficit and create opportunities to reinvest in Council priorities.  This was a strong position for any authority to be in.

There was a different set of challenges for the Housing Revenue Account, as set out in Section 5 of the Cabinet report.  Significant capital expenditure was required to improve Council owned housing to EPC rating of C by 2030.  This was combined with an aspirational priority to increase the number of council owned properties, as well as ensuring properties had ongoing maintenance and that reactive works were carried out.

The recommendations for Council proposed to start the process to identify options to close the budget gap and would be presented to Full Council for consideration in February 2024.

A question was asked by a member regarding whether there would be money set aside now to plan for the future budget deficit.  This could be detrimental to service provision to local residents who needed those services now.  The member also acknowledged it was a balancing act.  The Portfolio Holder for Finance and Corporate responded giving his assurance that this would not be the case and that there was currently a balanced budget.  The Council usually carried £3m in the general fund as a reserve, which was considered to be a prudent level.  He reported there might be a point between the different financial years where a small excess could be carried over in order to smooth out the transition between the different income streams, but this would have negligible impact on the expenditure of the Council.

A member raised concern in relation to the £1m homelessness budget which was set to decrease over the next three years, particularly as fixed term mortgages would come to an end and there could be an increase in homelessness.  The Portfolio Holder for Housing and Homelessness acknowledged this point, but he felt the situation would not get worse and it would be closely monitored.  The relevant scrutiny panel would also receive regular updates on the homelessness.

In response to a question about the target for Council housing to be at EPC level C by 2030 and the financial burden associated with this, it was confirmed that the target of 2030 was being worked towards.  Government support was expected to continue as this was a significant financial pressure on the Council.

Executive Management Team, relevant Portfolio Holder and Resources and Transformation Overview and Scrutiny Panel