Agenda item

Report attached.

The Cabinet considered a report of Councillor Noordad Aziz, Deputy Leader and Portfolio Holder for Transformation, Education and Skills, and Councillor Vanessa Alexander, Portfolio Holder for Resources and Council Operations, introducing the proposals contained in the Revenue Budget Report 2025-2026 provided at Appendix A of that report.  The report also provided an overview of key issues arising from the Medium-Term Financial Strategy.

The decision to set the Budget was a core decision of the Council.  The role of the Cabinet was to recommend a proposed Budget to Council.

Councillor Alexander provided a brief introduction to the report.

Councillors Fisher, Aziz and Whitehead thanked Councillor Alexander for her work on the Revenue Budget and again thanked to the Finance Team for their efforts.  Councillor Aziz also highlighted the steps taken by the controlling group to address significant pressures, including community leisure costs and waste disposal/transfer issues.

Approval of the report was not deemed a key decision.

Reasons for Decision

The report set out the Council’s Revenue Budget for 2025/26.  This would require net expenditure of £17,313,300.

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 would increase from £268.43 in 2024/2025 to £276.46.

A number of national and global issues had undoubtedly had an impact on the Council’s budgets and this along with the impact of higher inflation and forecast pay settlements had contributed to the Council raising its element of the Council Tax by the maximum 2.99%, an increase of £8.03 annually 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 2025/26.  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 £82.50 (4.99%) increase overall.  The Police Commissioner had confirmed that they would increase a Band D Property by £14.00 (5.31%) and the Lancashire Combined Fire Authority had proposed a £4.00 (5.90%) increase.

Altham Parish Council had set a separate precept for its activities.  This year the Parish Council had decided to increase its precept by 2.66% and the Band D charge for Altham Parish Council would therefore increase from £43.18 for 2024/25 to £44.33 for 2025/26.  The Parish Council would precept the Collection Fund for £14,185.60 for 2025/26.  Details of the proposed position on other Bandings for properties in Altham were shown in Appendix 6.

In setting the Budget for 2025/26 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.  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 2025/26 would continue to deliver key investment in council and public facilities adding another £2.48m to £44.87m 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 continued delivery of £24m investment in Accrington Town Centre, with £20m coming from the Government’s Levelling Up Fund, and continuing the £12m investment into the 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 2025/2026 of £2.48m included:

a)      £317,000 of investment into Parks and Play areas of which the Council expected to be able to attract £52,500 of external grant funding to contribute to the improvements.

b)      £1,359,906 to provide Disabled Facility Grants this year which was fully funded from the Better Care Fund.

c)      £115,000 to maintain and invest in its operational assets and vehicle fleet.

d)      £419,500 to improve and develop new ICT and technical equipment to deliver services in a more efficient way.

e)      £177,800 on UK Shared Prosperity projects.  Decisions on which schemes this would involve had not yet been made, and this would be reported once a proposal was available.

f)       £87,000 on Community projects that involved War Memorial restoration, Christmas decoration replacement and Maiden Street Clock Tower lighting in Church.

• Despite costs of over £87,000 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.  It was believed that this action would help bolster Hyndburn’s 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 Council accommodation costs, building on the success over the last 15 years including further rationalising its accommodation and looking at more ways of using its accommodation more effectively.  The council would also continue its actions to reduce its carbon emissions and its energy costs and continue contributing to the improvements of its environmental footprint by positive action.

The Council intended to continue to deliver all 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 Council’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.  The authority 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 remain clearly evident. The Council has built itself back from experiencing major difficulties in controlling expenditure and a position of negative reserves in 2003/04 to a situation by March 2025, in which general reserve balances are expected to be just under £2.5m. We have years, through good financial management and will continue to deliver strong financial performance in the years to come.

Within the Budget for 2025/26 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.

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 those 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 recent national and global issues had had on the Business Community.

The detailed Revenue Budget Report 2025-2026, set out at Appendix A of the report, included the following information:

• Background;
• Medium Term Financial Strategy;
• Continuation Budget;
• Growth and Inflation Pressures;
• Available Resources;
• Resources Summary;
• Budget Proposal;
• Budget Saving Proposals;
• Reserves;
• Risks and Management;
• Consultation;
• Conclusion; and
• Appendices Nos. 1 - 6

Alternative Options considered and 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.  Further options might be presented at the Council meeting.

Resolved                                 (1)   That Cabinet recommends the proposal to increase Council Tax for 2025/26 by 2.99%, increasing the charge for a Band D property to £276.46.

(2)   The Budget for 2025/26 will therefore be £17,313,300 as detailed in Appendices 1 to 3 of the Revenue Budget 2025-2026 report attached at Appendix A of the covering report.

(3)   That Cabinet recommend approval of the changes in budget requirement through including inflation, growth and savings identified in Appendix 3 of the Revenue Budget 2025-2026 report, to ensure the Council can set and approve a balanced budget.

(4)   That Cabinet note 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 2025/26, 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 2025/26, 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 2025/26 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 the Extended Producer Responsibility Grant is set aside in reserves to be drawn down as required, so the Council can meet its obligations under the legislation.

(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.