Agenda item
General Fund Revenue Budget 2024/2025
Report attached.
Minutes:
The Cabinet considered a report of Councillor Peter Britcliffe, Deputy Leader of the Council and Portfolio Holder for Resources, setting out the Budget proposals contained in the main Revenue Budget Report 2024-2025, provided as Appendix A. The report also provided an overview of key issues arising from the Medium Term Financial Strategy.
Councillor Britcliffe highlighted that the Council intended to set a balanced budget for 2024/25 without drawing on its reserves, reducing services or staffing levels. This represented a very stable position, notwithstanding cost pressures caused by uncertainty around the award of Government grant (approximately £2m), the war in Ukraine, rising energy costs, inflation and the possible resurgence of pandemic issues. On-going conflict in the Ukraine and Middle East was unlikely to dissipate soon. The Budget included provision for the staff pay award (£1.2m). The total net expenditure increase was £1.72m.
The Budget would be financed mainly by Government grant, Business Rates growth, Council Tax increases and Council Tax Base growth. The Council Tax increase for Hyndburn would be 2.99%, which would give rise to an increase in a Band D property of £7.79 per year. The majority of Hyndburn properties were in Band A, for which the increase would be £5.20 per year. Members were reminded that there had been no Council Tax increase for Hyndburn in 2023/24. This year’s increase would cover inflation and some growth as well as protecting staff pay, pensions and jobs.
The final precept requirements of Lancashire County Council, the Police and Crime Commissioner, Lancashire Combined Fire Authority and Altham Parish Council would be available before the Council meeting on 27th February 2024.
Following successful lobbying by the local MP, the Government had now announced the award of a further £123k grant per year, in addition to the amount indicated in the provisional finance settlement. Accordingly, it was the intention of the controlling group to propose an amendment to the published Budget proposal to provide additional investment to support the reopening of Oswaldtwistle Civic Theatre, repurposing of Mercer Hall and the introduction of a food waste collection service in 2026.
In response to a question by Councillor Loraine Cox, the Chair listed a number of projects in Great Harwood, which had recently received funding.
Councillors Steven Smithson, Mohammed Younis and Loraine Cox welcomed the report and highlighted the financial support made available for the Persistent Organic Pollutants (POPs) waste service, Civic Theatre, various projects in the townships and Leisure Transformation. The Chair added that close to £100k of Community Chest funding had recently been earmarked for local community and voluntary groups, although this had been delayed due to the operation of the call-in procedure.
Approval of the report was not considered to be a key decision.
Reasons for Decision
The recommendations in the report provided an appropriate platform on which the Cabinet could recommend a Budget to the Council which would meet the objectives and key priorities of the people of Hyndburn.
This report set out the Council’s Revenue Budget for 2024/25. This would require net expenditure of £15,998,500.
Under these proposals, Council Tax for Hyndburn residents would incur a rise in charge for Hyndburn Council provided services and the charge for a Band D property will increase from £260.64 in 2022/2023 to £268.43.
The impact of the war in the Ukraine had undoubtedly had an impact on the Council’s budgets and this along with the impact of higher inflation and higher than forecast pay settlements had contributed to the Council raising its element of the Council Tax by the maximum 2.99%, an increase of £7.79 on a Band D property.
Lancashire County Council, the Police & Crime Commissioner and the Lancashire Combined Fire Authority had not yet formally taken their decisions on Council Tax Levels for 2024/25. It was expected that the County Council would raise its Council Tax for each household by a general increase of 2.99% and a 2.0% increase to assist with meeting the cost of Adult Social Care which equated to a £78.58 (4.99%) increase overall. It was expected that the Police Commissioner would increase a Band D Property by £13.00 (5.17%)and that the Lancashire Combined Fire Authority had proposed a £2.46 (2.99%) increase.
Altham Parish Council had set a separate precept for its activities. This year the Parish Council had decided to increase its precept by 5.14% and the Band D charge for Altham Parish Council would therefore increase from £41.07 for 2023/2024 to £43.18 for 2024/2025. The Parish Council would precept the Collection Fund for £13,668 for 2024/2025. Details of the proposed position on other Bandings for properties in Altham were shown in Appendix 6 of the report.
In setting the Budget for 2024/25 the Council faced continued volatility around some of the most significant items within its Budget. Major reforms of local government finance had transferred the risk of business rate revenues and Council Tax benefits to the Council. The certainty on which the Council could budget and manage its finances had therefore decreased since 2013 and it would be important going forward to plot any deviations away from the expected figures and take appropriate action if these should start to emerge. The ongoing impact from the War in Ukraine was also difficult to predict at this time. This might result in the need to reduce spending during the year, if revenue monitoring started to indicate the amounts of funds received would fall short of the target or if the Council faced an upsurge in spending.
The Cabinet intended to continue the good financial stewardship of the Council’s affairs by continuing its successful policies to manage costs effectively and promote appropriate service investment. This Budget would therefore deliver:
· A continuation of the Council’s established approach of limiting enhancements on early retirement, continuing its rigorous approach to absence management and committing to minimising borrowing costs. These actions had already stemmed the build-up of unproductive costs within the organisation. In each of these cases the Council had put a stop to the costly and financially damaging policies of the past and created a healthier and more financially stable culture within the Council.
· The Capital Programme for 2024/25 would continue to deliver key investment in council and public facilities adding another £4.40m to £46.29m that the Council currently had approved.
· A large proportion of the Capital Programme would be phased over the next few financial years and this included the delivery of £24m investment in Accrington Town Centre with £20m coming from the Government’s Levelling Up Fund and a £12m investment into the authority’s Leisure Estate to modernise it and significantly boost the number of people making use of the facilities to keep fit and healthy.
· The additions to the Programme in 2024/2025 of £4.40m included:
a) £495,000 of investment into Parks and Play areas of which the Council had been able to attract £40,000 of external grant funding to contribute to the improvements.
b) £1,095,958 to provide Disabled Facility Grants this year which was fully funded from the Better Care Fund.
c) £490,000 to maintain and invest in its operational assets and vehicle fleet.
d) £300,000 further investment in the Leisure Estate, which was a condition of the Council being awarded £2.4m from Sport England for the new facility at Wilsons Playing Fields.
e) £85,000 to improve and develop new ICT and technical equipment to deliver services in a more efficient way.
f) £764,000 of works required as part of the Levelling Up programme / Town Centre Regeneration.
g) £241,447 on Energy efficiency / Decarbonisation works, of which all was fully funded from external grant funding.
h) £267,000 on Community projects that involved bringing the Oswaldtwistle Theatre back into use.
i) £665,600 from a new Capital grant from the government to provide vehicles and equipment required for the introduction of the new Food Waste service to be introduced in 2026.
· Despite costs of over £85,000 to provide car parking in Hyndburn for residents and visitors and particularly for shoppers, the Council would continue to provide this facility free of charge and not introduce charges for parking in Hyndburn. The Council believed this action would help bolster its town centres through these difficult economic times and provide an incentive for people to shop locally rather than drive and pay to shop elsewhere across the North-West.
· Further reductions in the Council’s accommodation costs, building on the success over the last 15 years including further rationalising its accommodation and looking at more ways of using the accommodation more effectively. The authority would also continue its actions to reduce its carbon emissions and energy costs and continue contributing to the improvements of its environmental footprint by positive action.
The Council intended to continue to deliver all of the above and remain committed to a radical agenda of improvement while managing within its available resources. This would be more difficult in the years to come, given the authority’s reduced resources from the Government. However, there remained a firm commitment and absolute determination amongst Members and Officers of the Council to control the finances of the Council, drive forward on the efficiency agenda and continue to improve service delivery. Everyone wished to continue to push forward on the drive for delivering value for money as a key priority for the Council.
The rewards of strong financial control remained clearly evident. The Council had built itself back from experiencing major difficulties in controlling expenditure and a position of negative reserves in 2003/04 to a situation by March 2023, in which general reserve balances were over £1.8m. The authority had been able to operate within its existing financial resources over the last three years during the pandemic, through good financial management and would continue to deliver strong financial performance in the years to come.
Within the Budget for 2024/25 there were a number of areas which were subject to a best estimation. There were therefore a number of risks around the Budget, should these estimated costs or revenue amounts vary during the year. The Council had assumed that extra costs from another pandemic were containable within the funds previously provided by Government or that additional funds would be made available if required.
After the introduction of the Government reforms to Business Rates Funding of Local Government, the Council now carried a significant risk around the level of monies available, fluctuating substantially from this source. In addition, as the calculation of how much funds would be available was dependent on a number of factors, including debt collection rates, the size of appeals against business rates assessment and the success of these appeals, new rules around levies, safety nets and pooling, the introduction of new rules on rates relief on retail premises and small businesses, as well as predicted levels of growth or decline in business activities and the estimation of a number of figures which would only truly emerge after the end of the financial year, the imprecision in these estimates was regarded as high and could be subject to variations of hundreds of thousands of pounds. The volatility around these forecasts had increased due to the impact that the War in Ukraine had had on the Business Community. There had been growth in the calculation of business valuations within Hyndburn that showed positive signs, although this could remain uncertain for a number of years.
The main Budget Report was provided as Appendix A to the covering report and included the following detailed information:
- Background;
- Medium Term Financial Strategy;
- Continuation Budget;
- Growth and inflation Pressures;
- Available Resources and Summary;
- Budget Proposal;
- Budget Savings Proposals;
- Reserves;
- Risks and Management;
- Consultation; and
- Conclusion.
The overall Revenue Budget 2024/25 was set out at Appendix 2 of the main Budget Report. In summary, the Budget for 2024/25 would be £15,998,500 and would be supported by a Council Tax levy of £268.43 for a Band D property - translating into a revenue source of £5.931m to meet services to the local community. The Budget had been determined in light of continuing upward pressure on costs, the additional costs associated with the War in Ukraine, previous financial difficulties that continued to overhang the Council, the available funding from Government and the Council’s strong desire to provide high levels of service to the community in line with its priorities.
Alternative options considered and the reasons for rejection
There had been a wide number of individual proposals put forward to produce a Balanced Budget. Options had been rejected on a variety of grounds including policy objectives, practicalities and the potential for additional costs to be incurred. However, further options might be presented at the Council meeting.
Resolved (1) That Cabinet recommends to Council the proposal to increase Council Tax for 2024/25 by 2.99%, increasing the charge for a Band D property to £268.43.
(2) The Budget for 2024/25 will therefore be £15,998,500 as detailed in Appendices 1 to 3 of the Revenue Budget 2024-2025 report, attached at Appendix A to the covering report.
(3) That Cabinet recommends approval of the changes in budget requirement through including inflation, growth and savings identified in Appendix 3 of the Revenue Budget 2024-2025 report, to ensure the Council can set and approve a balanced budget.
(4) That Cabinet notes the significant improvement made in relation to budget monitoring and cost reduction within the Authority over the past 20 years and confirms its commitment to continuing this approach in the year ahead.
(5) That Cabinet recommends during the financial year 2024/25, the Executive Director (Resources) be delegated responsibility to amend the Budget (following consultation with the Leader of the Council) for technical reasons, such as the restructuring of cost centres, the re-apportionment and re-allocation of overheads etc., provided such amendments have an overall neutral impact on the Budget.
(6) That Cabinet recommends during the financial year 2024/25, the Executive Director (Resources) be delegated responsibility to amend the Budget (following consultation with the Leader of the Council) should the estimate of Business Rates not be sufficiently accurate, by drawing on reserves if needed or paying over additional contributions to reserves.
(7) That to aid future financial management planning any surpluses generated during 2024/25 are set aside to help the Council reduce its cost base over the next three years, to support its long term capital programme or to strengthen its overall reserve position.
(8) That Cabinet recommends that the Services, Funding Guarantee and New Homes Bonus Grants awarded for 2024/25 are used to help balance the Council’s Budget.
(9) That Cabinet recommends that any additional funds from Government that are not ring-fenced funding as well as any other surplus funds can be used if required to support Capital expenditure as determined by the Executive Director (Resources) in the overall financing of capital expenditure or be transferred to Reserves.
Supporting documents: