Issue - meetings

Report of the Director of Finance and Public Value (DFP/24/2) on the Budget Targets for 2024/2025, attached

RESOLVED

(a) that the revenue budget targets as set out in Table 1 to be incorporated in the Draft Budget for 2024/25 be approved;

(b) that the capital programme be determined by Cabinet on 9th February 2024; and

(c) that the information related to the Provisional Local Government Finance Settlement for 2024/25 be noted.

(Councillors Biederman, Leaver and Whitton attended in accordance with Standing Order 25(2) and spoke to this item).

The Cabinet considered the Report of the Director of Finance and Public Value (DFP/24/2) seeking Cabinet support for the proposed revenue Budget Targets for services for financial year 2024/25 so they could be incorporated in the Draft Budgets to be considered in January and February. The Report had been circulated prior to the meeting in accordance with regulation 7(4) of the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012.

Senior Leadership Team had worked extensively to develop plans to manage net service costs within affordable financial targets in light of local authorities across the country continuing to face financial challenges due to high inflation and interest rates as well as demands on local service provision.

The Report provided a brief update on progress in this regard and presented the proposed service budget targets for 2024/25 totalling £743.4 million, a net increase of £43.8 million or 6.3% compared to the 2023/24 adjusted budget.

The Report highlighted that at Month 8 (November) the budget forecast was a net overspend for this year of £4.5 million which incorporated the £10 million contribution to the SEND Deficit Safety Valve reserve agreed by Cabinet in September 2023.

In terms of the Budget for 2024/25, inflationary pressures continued to be felt across the economy, local government and partners and social care was particularly impacted by increases to the national living wage. Within the proposed Service Targets, it was proposed to allow for £22.8 million in total inflationary pressures.

The National Living Wage increase also drove an inflationary impact on costs. In the Autumn Statement, the Government confirmed the National Living Wage would increase by 9.8% to £11.44 per hour, therefore the Target Budgets included £25.7 million for this.

To enable the authority to set a balanced budget, savings, alternative funding and additional income of £49.6 million had been identified. Overall, there was additional funding of £43.8 million or 6.3% for services next year.

It was not currently planned to support the proposed budget targets by using general reserve balances. In recognition of the SEND Deficit and Safety Valve considerations, it was anticipated the Council would need to set aside funds in 2024/25 – and in subsequent years in the Medium-Term Financial Plan – to increase the SEND Safety Valve Reserve. An update on the SEND position would be reflected in the proposed budget presented to Members in February 2024.

The proposed service revenue budget targets for the 2024/25 financial year were set out in the table below: