Agenda item

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:

 The 2023/24 Base Budget has been adjusted for permanent virements (budget transfers from other budget lines)

The Cabinet noted that the proposed Capital Programme was currently under development and would be presented to Cabinet and Council in February for consideration.

On 18^th December 2023, the Rt Hon Michael Gove, Secretary of State for Levelling Up, Housing and Communities, released a Written Ministerial Statement to Parliament setting out the provisional local government finance settlement for 2024/25 financial year. The Final Settlement was likely to follow in early February 2024.

Key information provided in the Settlement included

a)    Core Spending Power –the Authority’s overall Core Spending Power had increased by 6.5%.

b)    Council Tax – Authorities may increase Council Tax for 2024/25 by up to the referendum limit of 2.99% and social care authorities may also increase the precept by up to a further 2% specifically to fund adult social care costs (4.99% in total without a referendum being required).

c)    Revenue Support Grant – The provisional allocation for 2024/25 was £713,381, an increase of £44,316 (6.6%) compared to 2023/24.

d)    Business Rates – total funding received through business rates will be determined using information provided by the district/borough/city councils in Devon, which was due to be received by 31 January 2024.

e)    New Homes Bonus – the provisional allocation of NHB grant in 2024/25 was £1.14 million, an increase of £176,859 (18%) compared to 2023/24.

f)      Rural Services Delivery Grant – the provisional allocation was £8.744 million – the same as was received in 2023/24.

g)    Services Grant – the provisional allocation of this general funding grant towards the cost of local services was £653,263 in 2024/25, a decrease of £3.499 million (84%) compared to 2023/24.

h)    Social Care Grant –the provisional allocation of this general grant funding in 2024/25, which aimed to support local authorities in meeting the costs of adults’ and children’s social care needs, was £63.28 million, an increase of £9.265 million (17%) compared to 2023/24.

i)      Improved Better Care Fund – this funding was pooled into the local Better Care Fund and the provisional allocation for 2024/25 was £29.127 million – the same as 2023/24.

j)      Adult Social Care Market Sustainability and Improvement Fund – the Authority’s allocation of funding for 2023/24 came in two tranches: £8.373 million in the settlement in February 2023, plus £5.438 million additional in-year allocation confirmed in August 2023.  The Authority’s 2024/25 provisional allocation was £15.643 million next year, an increase of £1.832 million (13%) from 2023/24.

k)    Adult Social Care Discharge Fund – the funding nationally had increased from £300 million in 2023/24 to £500 million in 2024/25, distributed to local authorities and ICBs. The provisional allocation for Devon County Council was £6.806 million, an increase of £2.722 million (67%) when compared to 2023/24.

A breakdown of the key funding streams published within the provisional settlement was set out in the table below:

*The actual amount we receive will be derived from returns completed by our Devon Districts in January 2024.

*The ASC Market Sustainability and Improvement Fund 2023/24 settlement figure includes £8.373 million allocated in the Settlement in February 2023, plus £5.438 million additional in-year allocation confirmed in August 2023.

The Cabinet noted that Impact assessments would be published in January to support consideration of the detailed budget proposals.

The matter having been debated and the options and alternatives and other relevant factors (e.g. financial, sustainability and carbon impact, risk management, equality and legal considerations and alignment with the Council’s Strategic Plan) set out in the Director’s Report having been considered:

it was MOVED by Councillor Twiss, SECONDED by Councillor Hart, and

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.