To consider for approval the onward referral to Council the General Fund Budget for 2024/25 including the use of reserves, Medium Term Financial Strategy, Capital Programme and Strategy, Treasury Management Policy/Strategy, MRP Policy and Annual Investment Strategy and the Annual Delivery Plan.

 

That the following recommendations be approved for onward referral to Full Council on 28th February 2024:

 

1.       That the Revenue Estimates for the General Fund and Medium Term Financial Strategy for the period 2024/25 – 2028/29 (Appendices 1, 1a and 1b) be approved.

 

2.       That the Council Tax for a band D property in 2024/25 be set at £166.59 (a £4.95 per annum increase on 2023/24 levels) and be approved.

 

3.       That the additions to and use of reserves (as detailed at Appendix 1) be approved.

 

4.       The Medium Term Financial Strategy (at Appendix 1) be approved.

 

5.       That the Capital Programme and Capital Strategy (Appendices 1 and 2) be approved including the addition of £400,000 into the capital programme funded by the Corporate Priorities reserve for the Sutton on Sea Paddling Pool.

 

6.       That the Treasury Management Policy 2024/25 (Appendix 3a) and Treasury Management Strategy, including the Minimum Revenue Provision Policy and Annual Investment Strategy 2024/25 (Appendix 3b) be approved.

 

7.       That the proposed Fees and charges as set out in Appendix 4 be approved.

 

8.       That the Annual Delivery Plan for 2024/25 (Appendix 5) be approved.

 

9.       That the results of the Budget Consultation process at Appendix 6 be noted.

 

10.     That the alignment of constitutional financial limits across the partnership (Appendix 7) be approved.

 

11.     That Council be recommended to reaffirm its previous decision in respect of long term empty properties determined in Appendix 1, and determine the introduction of the premium for substantially furnished with no residents (second homes), to be introduced at the earliest point 1st April 2025.

 

A report was presented to enable consideration of the Annual Budget Report 2024/25, Medium Term Financial Strategy, Capital Programme and Capital Strategy, Treasury Management Policy and Annual Delivery Plan.

 

Attached to the report was the final detail of the 2024/25 budget, the 5-year Medium Term Financial Strategy (MTFS) from 2024/25 to 2028/29, Capital Programme, Capital Strategy, Treasury Management Policy, Treasury Management Strategy, MRP Policy and Annual Investment Strategy for 2024/25.  The report also included the recommended level of Council Tax for 2024/25, considering the pressures including that of the IDB levy.  This detailed the efficiencies required to support the MTFS.  Executive Board was asked to consider the budget and associated appendices for referral onwards to Full Council.  It was noted that the Pay Policy Statement would be dealt with separately. 

 

Preparation for the budget had been a detailed process involving officers and the attached appendices reflected the latest known position and the report set out the basis for the final budget and MTFS for the next 5 years and assumptions used in its development.  The Portfolio Holder added that the budget had been through a consultation process, shown at Appendix 6 to the report presented with positive acceptance ratings for projects the Council aspired to deliver. 

 

The major changes and key pressures included within the proposed budget were as follows:

 

·                 A pay award for 2023/24 was agreed in November of 2023, being an uplift of up to 9.42% for the lowest paid through to 3.88%. for those on the highest bands.

 

·                 For 2024/25 a 3.5% increase had been assumed with this moving to 3% for 2025/26 and 2.5% for 2027 onwards.

 

·                 The pension contributions would be 23.8% in 2024/25, and the pension contribution rate was assumed to stay at 23.8% throughout the life of the medium term financial strategy.

 

·                 The return on cash investment reflected recent increases to the Bank of England base rates, which had increased significantly from the recent historic low levels. A further meeting of the Monetary Policy Committee on the 1st of February 2024 had held the rate at 5.25%.

 

·                 Electricity and gas costs had been based on actuals for 2024/25, vehicle fuel costs had been based on 2023/24 actuals and current fuel prices.

 

·                 An increase in the internal drainage board levy.

 

·                 Increased contract and service costs were similarly a feature of the budget, albeit officers and members were working closely to seek to manage these implications and impacts, and which included increased demand for homelessness support, external audit fees and PSPS administrative contract increase.

 

With regards to council tax and business rates, the previous MTFS committed to a Council tax increase in line with the maximum allowed under the recent local government settlement.  For East Lindsley District Council in 2024/25 this was £4.95 being a 3.06% per increase, and for band D properties generated an additional income of £370,000.  The increase was reflected throughout the life of the MTFS. 

 

Further information relating to Council Tax and Business Rates was provided at Paragraph 3 of the report presented. 

 

The Local Government Settlement was provided at Paragraph 4 of the report presented and the main points were highlighted as:

 

• The Funding Guarantee had replaced the Lower Tier Services Grant;
• The Revenue Support Grant had been increased;
• Local Government Funding Reform;

 

With regard to the IDBs, paragraph 5 detailed substantial increases on previous years due to the extensive use of power and fuel for the activities these organisations undertook very necessarily along with other pressures. The 2024/25 IDB costs had been estimated at £5.3 million. The Council was liaising with the Boards to limit future increases where possible, however, with the pressures from power costs being experienced, particularly standing charges, in addition to pay pension, worsening weather events and contract inflation, this was proving impossible.  Representations had been and continued to be made to government due to the substantial loss of income to this Council and others and a special interest group had been set up to lobby in respect of this matter.

 

Turning to the capital programme for 2024/25 to 2028/29, the Capital Programme included in Appendix One was subject to final editions and other announcements that may be received by the time of publication.  A final version of the programme would be presented to Council on the 28th of February 2024 for approval if required.

 

As regards to reserves, the General Fund specific reserves were budgeted to increase by £468,000 in 2024/25. This was predominantly linked to financing the capital programme offset by the NNDR surplus, this figure will be adjusted once the outturn for 2023/24 was known.

 

With regards to balancing the budget, the following areas had been considered as part of the budget setting process in the short term:

• The use of reserves for invest to save initiatives;
• Continued work to engage on the internal drainage board finance challenge;
• Review of all new pressures and reserve and service budgets to consider efficiency opportunities and alternative options;
• Commercialisation opportunities;
• Alternative service delivery. 

 

In the medium term, the Council would work with PSPS in terms of its transformation plans for the future to help finance contract cost pressures, driving transformational change using the Southeast Lincolnshire Council's Partnership Sub Regional partnership as a driver for innovation and efficiency, reviewing all assets to maximise income and efficiency of use, delivering and supporting economic growth and the review of fees and charges in light of inflationary cost increases where appropriate.

 

Detailed efficiency and transformation plans were being put together for consideration in order to facilitate delivery and to align constitutions across the South and East Lincolnshire Council's partnership and in addition to providing a written list of ease for the implementation of funding streams, it was proposed that some changes were made as part of the budget setting, decision making process and these were set out in Appendix 7.

 

In respect of additional considerations, it was proposed that Executive Board recommended that full Council reaffirmed its previous decision in respect to the long term empty homes, empty properties detailed in Appendix 1 and approved the introduction of the premium for substantially furnished with no resident, (second homes) to be introduced at the earliest time, 1st April 2025.

 

With regard to Fees and Charges, it was proposed that due to continued significant inflationary pressures to include an annual RPI uplift in all fees and charges where applicable.

 

As regards the Annual Delivery Plan, the South and East Lincolnshire Council's partnership annual delivery plan shown in Appendix 5 identified the planned programme of work for the partnership and sovereign Councils for 2024/25,  drawing on the previously approved partnership work programme, as well as wider opportunities identified.

 

Finally, areas for priority investment and consultation. Some particular areas of investment and which were for consultation had been identified by Members including:

 

• Market towns and rural areas
• Driving and supporting economic growth
• Supporting the delivery of affordable housing
• Supporting the vulnerable
• Supporting healthy living
• Decarbonisation and continued investment in green initiatives
• Invest to save projects.

 

A new corporate priorities reserve had been established to facilitate the delivery of these areas of focus.

 

The Portfolio Holder highlighted support for the creation of a new updated and modernised car parking area in Sutton on Sea to compliment the new Colonnade development.  This would form an additional report to Executive Board once details were confirmed. Finally, the Portfolio Holder extended his thanks to officers involved in the budget preparation.

 

The recommendations were duly proposed and seconded.

 

During discussion Members fully supported the recommendations

 

RESOLVED

 

That the following recommendations be approved for onward referral to Full Council on 28th February 2024:

 

1.       That the Revenue Estimates for the General Fund and Medium Term Financial Strategy for the period 2024/25 – 2028/29 (Appendices 1, 1a and 1b) be approved.

 

2.       That the Council Tax for a band D property in 2024/25 be set at £166.59 (a £4.95 per annum increase on 2023/24 levels) and be approved.

 

3.       That the additions to and use of reserves (as detailed at Appendix 1) be approved.

 

4.       The Medium Term Financial Strategy (at Appendix 1) be approved.

 

5.       That the Capital Programme and Capital Strategy (Appendices 1 and 2) be approved, including the addition of £400,000 into the capital programme funded by the Corporate Priorities reserve for the Sutton on Sea Paddling Pool.

 

6.       That the Treasury Management Policy 2024/25 (Appendix 3a) and Treasury Management Strategy, including the Minimum Revenue Provision Policy and Annual Investment Strategy 2024/25 (Appendix 3b) be approved.

 

7.       That the proposed Fees and charges as set out in Appendix 4 be approved.

 

8.       That the Annual Delivery Plan for 2024/25 (Appendix 5) be approved.

 

9.       That the results of the Budget Consultation process at Appendix 6 be noted.

 

10.     That the alignment of constitutional financial limits across the partnership           (Appendix 7) be approved.

 

11.     That Council be recommended to reaffirm its previous decision in respect of long term empty properties determined in Appendix 1, and determines the introduction of the premium for substantially furnished with no residents (second homes), to be introduced at the earliest point 1st April 2025.

 

Reasons:

To comply with the budgetary and policy framework and legislative requirement.

 

Other options:

No other options were considered.