Agenda item

This report sets out proposals for the 2023/24 General Fund Revenue Budget.  It also provides an overview of key issues arising from the Medium Term Financial Strategy.

Recommended - That consideration be given to the report

The Leader reported that the Council is effectively managing its budget position during 2022/23 and the overall finances of the Council allows it to set a balanced budget for 2023/24 without having to draw upon reserves or make substantial reductions to services or staffing levels. Cost pressures and uncertainty over the future of Government grants which make up over £2million of the £14.38million the Council intend to spend next year contribute to a difficult environment in which the Council must operate.

While the impact from COVID-19 looks to have waned, the economic impact from the war in Ukraine has effected energy costs. We are conscious in setting the budget for next year that the continued impact of the war is unlikely to disappear, so the Council may once again be called upon to undertake necessary actions and deploy extra resources as needed to protect the local population and limit the spread of any new surge.

Cost pressures have added over £2million to the previous year’s budget and we have been able to finance most of the increases from a mixture of extra Government grants, increased business rate growth and some increase in the council tax base. These extra spends will tackle the rising cost and inflationary pressures already being encountered and provide additional funding for the predicted rise in energy costs once the Government’s compensation scheme is removed at the end of March.

The impact of high inflation and the need to ensure the Council’s workforce is maintained and jobs are protected through fair pay awards and pensions has resulted in an almost £900k increase in pay and benefit costs.

The budget also includes growth to continue the Council’s commitment to climate change and reducing emissions through a move towards cleaner fuel across the vehicle fleet. The report also gives details of the anticipated council tax increases of Lancashire County Council, the Police and Crime Commissioner and the Lancashire Combined Fire Authority. Final confirmation of these increases should be known prior to the Council meeting on 23^rd February.

The Leader drew attention to Altham Parish Council freezing its portion of Council tax, maintaining free parking in the borough, surpluses achieved and value for money across key operations.

The Committee were invited to ask questions of the Leader.

Councillor Andrew Clegg asked the following:

Whilst I understand the Council’s decision to freeze Council tax due to the cost of living crisis, is this a wise decision given the numerous risks listed in the medium term financial strategy of reduced future funding through government grants and business rates etc for the Council?

The Leader responded. The administration feel that the impact of increasing Council Tax in 2023/2024 will put additional pressures on the local tax payers in a time of high inflation and significant increases in other household costs. The decision has been made to propose a one-off freeze for 2023/2024. The medium term financial strategy standard model assumes that Council Tax there will increase by 2% for the future years. In order to balance the budget a saving target will be included through management of staff turnover in year. The savings target will have little or no detrimental impact on the delivery of Council services.

Councillor Bernard Dawson asked if the Leader could elaborate on what he meant by the management of staff turnover.

The Executive Director for Resources responded. When a member of staff leaves, it usually takes several weeks to fill that post, meaning there are often vacant posts within the Council, which means salary costs for the times when these posts are vacant are saved

Ken Moss said that the revenue budget is made up of roughly 16% direct Government grants. Ken asked if the Council were budgeting on the principal that 2024/25 would be the last year of receiving a direct grant from the Government.

The Leader responded that there is current uncertainty regarding future local government financing.

Resolved        -           That the report be noted.