Agenda item

The Deputy Leader and Executive Member for Finance, Governance and Organisation.

The Deputy Leader and Executive Member for Finance, Governance and Organisation, Councillor Lewanski, introduced the report and annexes ­- Service & Financial Planning 2024/25 which was published as part of the Executive agenda pack on the Council’s website. The report and annexes set out the draft Revenue Budget proposals for 2024/25 and Capital Programme proposals for 2024/25 to 2028/29.

Councillor Lewanski said that local government as a whole was facing continued financial challenges. However, Reigate and Banstead Borough Council was confident of balancing its budget for 2024/25 as it had avoided high levels of external debt and reserves remained buoyant. It had nevertheless been challenging over the summer to produce a set of draft budget proposals for 2024/25.

The Financial Sustainability Programme had helped Executive Members and Officers continue in-depth reviews of spending plans and sources of income. This was supported by service plans that set out how each service will operate and what they plan to achieve over the coming year. This work had led to a full and robust assessment of what the Council does and how it is funded. Service budget growth requirements were relatively modest, mainly reflecting unavoidable cost increases.  Wherever possible savings proposals had been identified that have few direct impacts on service delivery. However, that continued to be a challenge in the current economic climate.

There had been an in-depth review of fees & charges for all services. This had identified opportunities to adjust existing budgets to reflect forecast income levels and increase fees in line with the recommended Policy.

The Deputy Leader said that the Council was very mindful of the potential impacts when making budget decisions and they will, as they do every year, consult widely on the proposals in this report before making final decisions in February.The final budget position will depend on the outcome of the Chancellor of the Exchequer’s Autumn Statement on 22 November 2023 and the Local Government Settlement announcement in December. The Budget report to Council in February will reflect any further changes that are identified as a result.

In addition the Budget report highlights potential risks and issues that may cause the Council to draw on the Reserves that have been earmarked to address them. These include the continued risk of reducing housing benefit subsidy and grants.

Medium Term Financial Plan

This report also included the updated five year Medium Term forecasts, reflecting the work that had been completed over recent months to map the potential impacts of increasing costs and reductions in Government funding over the next five years. While the forecast gap remains potentially significant if action is not taken to address it, the MTFP and supporting strategies provide a solid framework for future financial planning.

Reserves

As set out in the report, the Revenue Reserves are more than sufficient to support the Budget and mitigate potential risks. Focus remains on developing new income streams and reducing costs through the Financial Sustainability Programme and an approved Reserves Policy.

Council Tax Increase

The Council Tax proposals set out in the report are to increase the Reigate & Banstead element of the average Band D charge by less than 15 pence per week, being a £7.47 increase overall at the 2.99% level. This is subject to confirmation of the Government’s referendum limit in the Provisional Local Government Settlement in December and approval by full Council in February.

The report also confirmed new recommendations to increase the  Local Council Tax Support scheme for residents next year. This follows the planned review of the scheme during 2023/24. There were also recommendations to change council tax premiums on empty properties which arise from the Levelling-Up and Regeneration Bill which received Royal Assent  on 26 October 2023.

Capital Programme

The Capital Programme included several new capital schemes to support delivery of the Council’s Environmental Strategy, many of which have been enabled through the allocation of Strategic CIL funding.

Next steps

The Revenue Budget and Capital Programme proposals in this report will go forward for consideration by the O&S Budget Scrutiny Panel on 29 November 2023  and the Overview & Scrutiny Committee on 7 December 2023 before the final budget is brought back to the Executive on 1 February 2024.

The Leader of the Council, Richard Biggs, thanked the Portfolio Holder for Finance, Governance and Organisation and all Executive Members as well as the Chief Finance Officer, Finance team and Heads of Service for their work on the draft Budget which had taken place since the summer.

There were no further observations from Executive Members who had been closely involved in Budget discussions in each of their portfolios.

Visiting Member and Overview & Scrutiny Committee Chairman, Councillor Harrison, confirmed that there was an O&S Budget Scrutiny Panel meeting at the end of November, followed by a meeting of Overview & Scrutiny Committee to examine the draft Budget on 7 December 2023. Councillor Harrison noted that this Council was in a strong position compared to many others. He said that to have a report that shows a balanced position was commendable. The Budget Scrutiny Panel and O&S Committee would be looking at the increases and savings proposed as well as use of balances and reserves to test the potential risks.  Committee Members would also review how the previous year finished and what it means for services in the coming year.

The Leader, Councillor Biggs, acknowledged the scrutiny work that would take place to review the draft Budget by O&S Members.

Additionally, Visiting Members made observations and asked questions on the following points:

·        Council Tax – they noted the proposed increases to Council Tax and to fees & charges to residents. They welcomed the review of the Local Council Tax support scheme to help the most vulnerable residents and increases in Council Tax on second homes and empty homes.

·        Proposed savings – Members noted that some savings were being made by delaying Capital projects and making savings through staff vacancies and asked whether this was serving residents well enough.

·        Environment and Sustainability schemes – Members welcomed the additional investment proposals and focus on environmental sustainability as set out in the Capital Programme growth 2024/25 onwards. Members asked if the Council was maximising all it could do as set out in the energy audit and whether it was taking forward sufficient opportunities in that report?

·        Energy savings investment – noted proposals for introducing energy saving measures after high energy costs to make future savings.

·        Waste and recycling – noted the likely allocation of additional resources to support delivery of the Government’s strategy.

·        Electric Vehicle (EV) charging points – asked whether income from EV charging points was included in the report and reported that local  businesses such as taxi drivers were reporting that there were not enough high power charging points in the borough. 

Officers confirmed that an update on EV charging points had been included in the Environmental Sustainability Strategy annual report to Executive in September. It was agreed that a further written answer would be provided in response to the questions raised.

Deputy Leader and Executive Member for Finance, Governance and Organisation, Councillor Lewanski, concluded by stating that residents were being served well as they are seeking value for money which was demonstrated in the draft Budget with core services not being cut. Staffing remains adequate with growth in some key services, for example, the proposal to employ an additional person working on sustainability projects.

The Recommendations were then put to the Executive and it was:

RESOLVED – that the Executive agreed:

(i)               That the national and local policy context (Annex 1) and significant financial uncertainties at this stage in the budget-setting process be noted.

(ii)             That the service proposals set out in this report which seek to respond to this context and deliver our corporate priorities, be endorsed.

(iii)           That the draft service business plans for 2024/25 to 2026/27 be approved, and that Heads of Service be authorised to finalise the plans for their service areas in consultation with the relevant Portfolio Holders.

(iv)           That the following be approved for consultation under the Council’s budget and policy framework:

a.     Medium Term Financial Plan Forecasts and proposed actions to address the forecast Revenue Budget gap    (Annex 2);

b.     Service Revenue Budget growth proposals totalling £0.943 million, savings of (£1.719) million and additional income of (£0.540) million (Annex 3);

c.     Continued funding support for Banstead Commons Conservators for a further three years (2024/25 to 2026/27);

d.     Central Revenue Budget savings and growth proposals totalling (£0.376) million, and £1.75m provision for the 2024/25 pay award (Annex 3);

e.     Agreement of a new 10 year Section 136 agreement with Horley Town Council;

f.       Revenue Issues, Risks and Opportunities totalling £0.964 million, to be funded from earmarked Reserves as necessary;

g.     Revenue Reserve Balances at 1 April 2023 of £35.474 million (Annex 6.1); and

h.     A forecast balanced Revenue budget for 2024/25, subject to final confirmation of the outstanding items.

(v)             That the Capital Programme Growth proposals totalling £3.976 million (Annex 4) be approved.

(vi)           That the Fees & Charges Policy (Annex 5) be approved.

(vii)         That the Reserves Policy (Annex 6.2) be approved.

(viii)       That the following changes to the Local Council Tax Support Scheme be approved and adopted from 2024/25:

a. Removal of the maximum award of 90% Council Tax liability for 1,800 households and increasing the award to 100%;
b.Removal of the minimum requirement for a household to   qualify for £5 per week before support is provided;
c. Expansion of support awards to cover full Council Tax liability for residents in Bands F to H;

(ix)           That the following changes Council Tax premiums on empty properties be approved and adopted from 2024/25:

a. Removal of the empty homes discount of 28-days where a property becomes empty and unfurnished;
b. For empty and furnished second homes – charge 200% council tax after the first 12 months; and
c. For long-term empty properties – commence charging the 100% premium after 12 months.