Agenda item

Post-Financial Settlement Budget Update

Decision:

RESOLVED

KEY DECISION

That the Executive:

a) Noted the funding changes to the draft budget as set out in Table 2.

b) Approved the reduction in the waste management inflationary increase from £756k, as presented in the draft budget report to the Executive at the meeting on 19th December 2024 by £241k to £505k.

Reason for Recommendations; To ensure that the Council complies with its Constitution and legislative requirements in setting the budget for North Northamptonshire Council from 2025-26.

Alternative Options Considered – The formal budget consultation commenced on 19^th December 2024 when the draft budget report was presented to the Executive. This report provides an update following the announcement of the provisional financial settlement and any comments from this report and the report presented to the Executive at the meeting on the 19^th December 2024 will be considered as part of the consultation process.

Minutes:

The Chair invited Cllr Jim Hakewill to address the meeting. Cllr Hakewill queried what provision had been made for Executive Members to explain the impact of the local government financial settlement on Council Tax levels for 2025/26 in face-to-face meetings with the public. Cllr Hakewill also queried how the Council justified raising Council Tax levels by the maximum of 4.99% in light of the loss of winter fuel payments for many vulnerable pensioners. In relation to scrutiny of the budget, Cllr Hakewill questioned why budget scrutiny sessions had been poorly attended by members, with a recent meeting postponed at short notice.

The Chair then invited the Executive Member for Finance and Transformation, Cllr Lloyd Bunday to introduce a report that updated the Executive following the publication of the provisional Local Government Finance Settlement on 18^th December 2024.

In response to Cllr Hakewill, Cllr Bunday noted that the budget scrutiny process was public facing, with meetings recorded and papers publicly available and that it was not possible to meet with all residents in face to face meetings. Regarding the proposed increased in Council Tax levels for 2025/26, central government expected local authorities to raise Council Tax levels by the maximum allowable (4.99%) and based its local government financial settlement figures on this assumption.

It was noted that the draft General Fund Budget proposals for 2025/26 had been presented to the Executive at its meeting on 19^th December 2024, with the provisional local government financial settlement having been received only the day prior to that meeting.

It was noted that the Council’s draft budget proposals had assumed funding of £400.927m. Following the announcement of the provisional local government finance settlement, funding has been reduced by £1.197m, offset by an improved funding position of £956,000 based on the latest modelling for Business Rates Growth resulting in a net adverse movement of £241,000.

The key changes in funding were detailed as follows:-

· New Homes Bonus – The grant had increased by £136,000 from the original draft budget proposals of £3.087m to £3.223m.

· Business Rates Funding Baseline - The draft budget had modelled funding from Business Rates at £114.924m. Following the provisional finance settlement, funding for Business Rates has moved favourably by £956,000 to £115.880m.

· Revenue Support Grant – The grant had increased by £365,000 from the original draft budget proposals of £6.223m to £6.588m.

· Recovery Fund – The draft budget was based on the grant being allocated using the Index of Multiple Deprivation (IMD) and had assumed funding of £3.384m. However, the provisional settlement announced a cap on the grant whereby those authorities who had an increase greater than 3% of core spending power did not receive any funding, resulting in the Council not receiving any funding via the Recovery Fund.

· Social Care Grant - The grant has increased by £1.048m against the draft budget proposals, from £26.719m to £27.767m

· Children’s Services Prevention Grant - The draft budget proposals had assumed funding of £1.380m. The provisional settlement announced a grant of £2.018m, meaning an increase in funding of £638,000 with potential further increases in the final settlement.

Cllr Bunday reported that the reduction in funding of £241,000 would be funded following a review of the original inflationary assumptions for the Waste Management Contract. It was noted that while these adjustments presented challenges, the overall budget remained balanced without the requirement to cut any frontline services or using the Council’s reserves.

Cllr Bunday noted that the Public Health Grant sat outside the Core Spending Power calculation for councils, with indicative allocations still to be announced, although this was expected shortly. The ringfenced grant in 2024-25 was £18.906m, with any changes in funding reflected in how the grant had been spent. The ringfenced Dedicated Schools Grant (DSG) had seen a £12.720m increase from indicative initial allocations.

The consultation period for the draft budget proposals had commenced on 19^th December 2024 and would close on 24^th January 2025. The publication of the final local government finance settlement was anticipated in early February 2025, alongside confirmation of the Council’s Employer National Insurance Contributions.

The Chair offered his thanks to the Council’s Section 151 officer and her team, noting the balanced budget position without resort to reducing service provision or utilising reserves.

Cllr Gill Mercer noted that details of the Public Health Grant had yet to be provided by government and it was hoped that this figure would be as expected. Cllr Mercer also referenced the potential impact on external service providers in regard to Employer National Insurance Contributions.

Cllr David Brackenbury spoke to note the unintended impacts of changes to National Insurance and offered his thanks to the Finance Team for their work on the budget and their response in providing updated figures in light of the provisional settlement. Cllr Brackenbury spoke to welcome the budget scrutiny process and suggested that all councillors had a duty to explain the budget to their constituents and to put this into context when considering the financial settlement.

Cllr Helen Howell spoke to note engagement in regard to budget scrutiny, with specific reference to engagement with Town and Parish councils.