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The Committee received and considered the report from the Finance Director.
The Finance Director reported that this report presented for consideration for recommendation to Council next week the 2023/24 revenue and capital budgets for the general fund.
The Finance Director reported that there was an amendment to the recommendations on page 135 of the agenda report in regard to Transfers from Reserves; the figure in paragraph 3(b) should read £671,572.
The budget has been informed by the one-year provisional local government finance settlement for the 2023/24 financial year which was announced in December.
The final settlement was announced last Monday, whilst the headline announcements did confirm an additional national grant funding allocation of £27million, the final allocations for the Borough resulted in an additional £6,000 for services grant but a reduction of the same amount of funding guarantee grant, so no change to the figures included in the report as presented.
The detail of the budget along with the assumptions used to inform the position are included within the commentary of the report and also within the appendices.
Members will recall that the Medium-Term Financial Strategy as reported in November highlighted a forecast reliance on reserves in 2023/24 of £1.085. This was after allowing for planned savings of £1.35m and forecasts of assumed levels of grants and income, plus assumptions of spending pressures.
The budget as presented includes savings of £1.1m that are forecast to increase to £1.4m by 2024/25 and is only balanced after a transfer of £1,143,503 from the general reserve, an additional £58,503 compared to the position as reported in November last year.
The budget process for 2023/24 has been challenging, the additional cost pressures that the council is facing from rising inflation has had a significant impact on the financial position, for example:-
• increases in utility costs;
• the impact of the 2022/23 pay award and the cumulative impact on the budget for 2023/24;
• Other pressures on the revenue budget are from higher interest rates and the impact of financing the capital programmes from borrowing, which has partly been mitigated by an increase in interest receivable;
• Contract inflation on contracts that we have for example for provision of software and other services;
• Furthermore the fall in the market for recyclable material has reduced the income from recycling credits by £250,000 in the coming year.
As part of the budget process, management team were asked to put forward proposals for savings and additional income for 2023/24 and future years. Those that have been include in the budget are detailed at Appendix D, most have been allocated to services, although there are some that will be subject to business cases and proposals to be brought forward in the year.
The budget assumes the increase in a band D Council tax for the Boroughs element of the Council tax bull which will increase the annual amount for a band D property to £181.48, this is an increase of 2.83%, £5. The referendum limits for 2023/24 for shire districts is the higher of £5 or 3% so, the proposals are within this.
The Council continues to hold a number of earmarked reserves which along with the general reserve provides some financial stability, however the use of the general reserve for 2023/24 will take the balance below the recommended level and therefore the report is recommending re-allocations from earmarked reserves which have previously been held to mitigate the fluctuations of business rates income to re-establish the general reserve at the minimum level of £3.5m.
The recommended level of the general reserve for the coming year is £3.5m and this has been informed by the policy framework for reserves as included at Appendix E of the report.
The report also includes for approval a number of capital bids as listed at Appendix H, some of which will be subject to more detailed business cases ahead of releasing funds.
Whilst the report presents for approval the budget for 2023/24, the high-level future financial forecasts have been included for information which show a forecast gap of £2million for 2024/25.
The use of reserves is only a one-off source of funding and in order to present a budget for 2023/24 it has been necessary to make a transfer from reserves. However, this is not sustainable in the medium to long term and early action in the 203/24 financial year on a review of the base budget and income levels will be required and proposal brought forward at an early stage to inform the future budget setting process and where possible alleviate pressures on reserves in the coming financial year.
Councillor Myers asked for clarification on the massive reduction in capital spend during 2024/25 & 2025/26 as detailed on page 161 of the agenda report. The Finance Director reported that the Future High street and Town Deal projects would be completed in this timeframe.
The Chairman thanked the Finance Director and her dedicated team for all their sterling work on the budget.
RESOLVED:-
That the Policy & resources Committee recommend to Full Council:-
1) The general fund revenue budget as detailed at Appendix A;
2) The Council Tax for 2023/24 for the Borough Council tax be £181.48 (for an average Band D);
3) That the demand on the Collection Fund for 2023/24 be:-
(a) £5,417,359 for the Borough Council purposes;
(b)£670,326 for Parish Precepts (subject to two parishes finalising their precepts);
4) The new fees and charges as outlined at Appendix D1 and 3.5 be approved;
5) The reserves statement and movement on the reserves as detailed at Appendix E and within section 4 of the report;
6) The Policy framework for reserves as detailed at Appendix F;
7) The updated Capital Programme and financing for 2022/23 to 2023/24 as detailed at Appendix G;
8) An additional £328,314 be added to the capital programme for the asset purchase as outlined at 5.7;
9) The new capital bid proposals at Appendix H; and
10) The Minimum Revenue Provision Statement 2023/24 as included at Appendix I.
11) The amendment to the Transfers from Reserves recommendation on page 135 of the agenda report at paragraph 3(b) to read £671,572.