Issue - meetings

To consider the enclosed Medium-Term Financial Strategy update which had been due for consideration by OSMB on 14 January 2025.

Consideration was given to the introduction by the Cabinet Member for Finance and Clean and Safe Communities and supported by the Assistant Director of Corporate Finance which set the local context by way of a presentation for the Medium-Term Financial Strategy Update.

The presentation drew attention to: -

Main Pressures

·            Placement pressures within Children and Young People’s Services and Adult Social Care.

·            Home to School Transport pressures within Regeneration and Environment and Children and Young People’s Services.

·            Pressures on income generation within Regeneration and Environment, relating to the longer-term recovery from Covid-19 and the cost-of-living crisis.

·            Inflationary costs impacting the cost of food in Schools Catering and contractual and provider inflation impacting Children and Young People’s Services.

·            Increased costs of homelessness due to increased demand.

·            Increased property costs

·            Impact of the Local Government Pay Award.

How the Council was funded.

Where the money was spent.

Net Revenue Budget Comparison.

Budget 2024/25 and Medium-Term Financial Strategy and in order to set a balanced Budget for 2024/25 the Council approved: -

·            Further increases in fees and charges to 6% (up from MTFS plan of 2%)

·            Council Tax increased by 3.5% out of a possible 5% (0.5% above what had been assumed in MTFS)

·            £4.6m use of reserves across 2024/25 and 2025/26 (£9m less than planned at 2023/24 Budget)

·            No new savings for 2024/25

·            New revenue investments of £1.8m

·            Funding gap of £6.6m in 2025/26, not a concern at that point given uncertainty and time.

2024/25 Current Financial Challenges.

·            Placement pressures within Children and Young People’s Services (£4.8m) and Adults Social Care (£6.6m).

·            Home to School Transport pressures within Regeneration and Environment (£2.5m) and Children and Young People’s Services (£1.1m).

·            Inflation has rebased our costs, over 20% increase in base costs over last 2 years.

·            Increased costs of homelessness due to increased demand.

·            Pressure in waste management on staffing, vehicle costs, disposal costs and related income.

·            Impact of the Local Government Association (LGA) Pay Award.

November Monitoring Position 2024/25

December Medium Term Financial Strategy Update (Technical Update to Cabinet)

•             Picking up on what we know, rather than trying to pre-empt Governments plans.

•             Deal with inflation, energy, pay award position.

•             Refresh future pay assumptions

•             Refresh Council Tax / Business Rate assumptions

•             Refresh Fees and Charges assumptions

•             Expected Budget Gap of £5m-£10m per annum (pending Autumn Policy Statement clarity)

Autumn Statement and Provisonal Settlement Impacts

•             September’s CPI was confirmed at 1.7%, £350k resources reduction

•             Autumn Statement & Provisional Settlement really positive

•             £1.3bn extra – inc £0.68bn for Social Care (£3.8m for RMBC)

•             Bulk of £0.7bn is new recovery grant, to be provided on deprivation basis (£8.7m for RMBC – Services Grant cut £0.4m)

•             £1bn more for SEND – expected to flow into Dedicated Schools Grant to support High Needs Block.

•             Extended Producer Responsibility (EPR) grant- £6.1m

•             £233m for Homelessness grant continues £86m for further Disabled Facilities Grants

•             Household Support Fund to continue for a further year

•             New Homes Bonus announced for  ...  view the full minutes text for item 86

To consider the Medium-Term Financial Strategy update.

At the Chair’s discretion and the Boards agreement, this item was deferred to the next meeting.