Agenda item

To consider a report by the Director for Sustainability and Resources, copy attached as item 7

Before the Committee was a report by the Director for Digital, Sustainability & Resources, copies of which had been circulated to all Members and a copy of which is attached to the signed copy of these minutes as Item 8

The purpose of the report before members was to propose a budget strategy for the development of the 2024/25 budgets. When the 2023/24 budget was set, there was a clear expectation that inflation rates would begin to fall throughout 2023 with an associated reduction in interest rates. However inflation had remained stubbornly high and had only just started to reduce with impacts on our pay, contracts and our treasury management costs.

It had been a long time since the Councils have had any certainty during budget setting. Having come through a pandemic and one very difficult year, the Councils now had to address the challenge of extended inflationary pressures which continued to impact on its budgets.

The local government funding review was now looking likely to be deferred until after the parliamentary election in 2024, consequently there was unlikely to be any change until 2026/27. The difficult economic climate continued to influence a number of budget lines, from pay to income for services such as car parks which will need to be reassessed as we balance our budget. 

The Councils had a clear strategy for facing the challenges of rapidly changing local government finance. It was now important to build on this strategy to meet the new and emerging challenges but within the context of supporting local communities and economies.

Now more than ever, careful financial management was required to ensure that the Councils manage both the emerging in-year pressures and the implications for the future, whilst driving forward with plans for the future. The financial strategy would need to include managed and prudent increases in council tax, and a clear focus on driving efficiency and productivity.

The report aimed to set out how the Councils would address the challenges of the next few years, outlining the revenue forecast and setting out the Councils’ strategic response to the challenges ahead. With the detailed budget proposals for 2024/25 coming forward to the Joint Strategic Committee in December, the report sets out the broader context for the detailed work that will be undertaken over the intervening months.

As set out in the report, the Councils would be increasingly reliant on council tax income, business rate income, and its own income generating services. The Councils had a good track record in innovation, working creatively in partnership, and transforming digital capabilities, so that there was capacity to continue to deliver our aspirations for our Councils

Work had been underway for some time to address the financial challenges for 2024/25 and beyond. This would continue over the summer and autumn, and the Organisational Leadership Team would be working to produce new financial plans designed to deliver a balanced budget over 3 years. The outcome of the service planning process would be presented to the Joint Strategic Committee for approval in December 2023 as part of the development of the 2024/25 budget.

In line with the recommendations outlined, the budget strategy was written with the assumption that the councils would continue to maximise the benefits from the shared service with a joint revenue budget while continuing to create separate capital programmes for each Council. Attention had been paid to where priorities differ and where relevant attention will be drawn to differences of approach.

The Chief Financial Officer responded to a question asked about car parking income

Members approved the recommendations within the report

Decision 

That the Joint Strategic Committee

i) Note the report and the outline 5-year forecasts in Appendix 3;

ii) Approve the proposed budget process as set out in section 6 of the report;

iii) Recommend to the Councils to approve the Budget Strategy for 2023/24 outlined in Section 9 of the report.

Call In:

There is no call in for recommendation iii) as it is a recommendation to Council

The call-in deadline for the decision will be 5.00pm on 21 July 2023.