Agenda item

To consider the report of the Cabinet Member for Finance and Change detailing the 2024/25 Budget and Medium Term Financial Strategy.

Report of the Cabinet Member for Finance and Change detailing the 2024/25 Budget and Medium-Term Financial Strategy for 2024/25 to 2027/28. The report provided detail to inform Council in setting the council tax charge for 2024/25. A report setting out the Capital Strategy, Flexible Use of Capital Receipts Strategy, and details of the General Fund capital programme for

2023/24 to 2028/29 was considered elsewhere on this agenda. The council’s financial position is such that the budget setting process for 2024/25 had

been considerably more challenging than previous years, including during those under austerity and funding reductions. The council faces significant financial challenges to deliver a balanced budget. This included limited revenue reserves, ongoing financial pressures, especially in children’s services and adult social care, and the continuing impact of inflation and interest rates.

The 2023/24 budget was balanced by a reliance on revenue reserves (£20.6M). In addition, sizable new budget pressures and increases to existing pressures have emerged during 2023/24. A combination of limited remaining reserves and high pressures has led to an underlying structural budget deficit in-year that is projected to continue into future years.  It is against this backdrop that budget proposals for 2024/25 were presented. Despite

considerable progress during 2023/24 in identifying measures to reduce expenditure and identify savings, a shortfall remains between the predicted level of spend and the council’s funding available. A balanced budget for 2024/25 is only achieved with Exceptional Financial Support (EFS) from the government. This support would be in the form of a capitalisation direction, which would allow the council to use capital resources to meet revenue expenditure in 2024/25. Without this support the council would almost certainly have been facing a Section 114 notice.

The recommendations therein, were moved by Councillor Letts and seconded by Councillor Finn.

The Council agreed to suspend Council Procedure Rules 14.2, 14.5, 14.6, 14.7, 14.8, 14.9 and 16.2:-

(i)  to enable any amendments to be proposed, seconded and considered at the same time;

(ii)  to enable any amendment to be re-introduced later into the meeting; and

(iii)  to revise the time allowed for speakers as follows:-

Movers of motions - 20 minutes

Seconders - 10 minutes

Green Party/Independent Members – 5 minutes

Honorary Alderman - 5 minutes

Right of Reply (Executive only) – 10 minutes

RESOLVED:

(i)  That the revised Medium Term Financial Strategy (MTFS) for the period 2024/25 to 2027/28 as set out in Table 1 and Appendix 1 be approved.

(ii)  That the 2024/25 General Fund Revenue Budget as set out in Table 2 and Appendices 1 and 2 be approved.

(iii)  That an increase in the ‘core’ council tax of 2.99% and an increase in the Adult Social Care precept of 2.00%, allowable under general powers to increase council tax without a referendum be approved.

(iv)  That additional General Fund pressures totalling £42.03M in 2024/25, increasing to £51.21M in 2027/28, as detailed in paragraph 33 be approved.

(v)  That the new commitments totalling £0.86M in 2024/25, increasing to £4.89M in 2027/28, as detailed in paragraph 36 be approved.

(vi)  That savings proposals totalling £22.68M that are included in the 2024/25 General Fund Revenue Budget, reducing to £20.94M in 2027/28, as detailed in paragraph 40 be approved.

(vii)  That the Government was minded to provide Exceptional Financial Support (EFS) to the Council be noted. This would be in the form of a capitalisation direction, to ensure the council could agree a balanced budget for 2024/25,had sufficient resources to pay for transformation and other work needed to ensure the council was on a sustainable financial footing in future, and meet other potential liabilities.

(viii)  That the establishment of a comprehensive Transformation Programme as detailed in paragraphs 59 to 63 and associated funding of up to £10.62M from a combination of capital resources and Transformation Reserve be approved. To further recommend to delegate to the Chief Executive (after consultation with the Leader of the Council) the draw-down of funding and the establishment of a resource plan as required for the Transformation Programme.

(ix)  That the adoption of the Business Planning Framework set out at paragraph 64 and Appendix 6 be approved.

(x)  Delegate authority to the Executive Director Corporate Services & Section 151 Officer, following consultation with the Cabinet Member for Finance and Change, to do anything necessary to give effect to the proposals contained in this report.

(xi)  Set the Band D Council Tax for Southampton City Council at £1,812.69 for 2024/25, a Net Budget Requirement of £239.24M and the Council Tax Requirement for 2024/25 at £121.43M as per Appendix 9.

(xii)  That the estimates of precepts on the council tax collection fund for 2024/25 as set out in Appendix 10 be noted.

(xiii)  That the summary of changes to fees and charges set out in paragraph 89 and Appendix 12 be noted and the increase in Careline charges set out in Appendix 12 be approved.

(xiv)  That the Statement of the S151 Officer as set out in paragraphs 118 to 124 on the robustness of the budget and the adequacy of the council’s reserves be noted and endorsed.

(xv)  That the content of the procurement pipeline 2024-29 contained at Appendix 7 be noted.

(xvi)  Delegate authority to the Executive Director Corporate Services & S151Officer and the Executive Director of Place (after consultation with the relevant Cabinet Member) everything that was necessary to prepare a specification, carry out a procurement process or other route to market and to appoint a single provider(s) for the delivery of highways and associated services for a maximum period of 15 years, including approving the utilisation of any contractually permitted extension as set out in Appendix 8.

(xvii)  That the draft corporate debt policy and combined council tax and business rates recovery policy at annexes 6 and 7 to the MTFS (Appendix 1) be noted and adopted.

(xviii)  That the application of Council Tax premiums for properties empty for 12 months or more (from 2024/25) and second homes (from 2025/26) be agreed.

(xix)  That the following amounts be now calculated by the council for the financial year 2024/25 in accordance with Section 31 and Sections 34 to 36 of the Local Government Finance Act 1992 be agreed; and

determine in accordance with Section 52ZB of the Act that the council’s relevant basic amount of council tax for 2024/25 is not excessive in accordance with principles approved by the Secretary of State under Section 52ZC of the Act.

  a) £595,220,372 (being the aggregate of the amounts which the     council estimates for the items set out in Section 31A(2) of    the Act).

  b) £473,790,082 (being the aggregate of the amounts which the    council estimates for the items set out in Section 31A(3) of    the Act).

  c) £121,430,290 (being the amount by which the aggregate at    (a) above exceeds the aggregate at (b) above, calculated in    accordance with Section 31A(4) of the Act as its Council Tax    Requirement for the year). (Item R in the formula in Section    31B(1) of the Act).

£1,812.69 (being the amount at (c) above (Item R), all divided by the tax base of 66,989 (Item T), calculated by the council, in accordance with Section 31B(1) of the Act, as the basic amount of its council Tax for the year).

NOTE: All Members of the Council declared a pecuniary interest in the above matter, as payers and setters of Council Tax, noted the dispensation granted by the Monitoring Officer and remained in the meeting during the consideration of the matter.

NOTE: NOTE: FOR THE RECOMMENDATIONS: Councillors Allen, Barnes-Andrews, Blatchford, Bogle, M Bunday, Cox, Denness, Evemy, Fielker, Finn, A Frampton, Y Frampton, Goodfellow, Greenhalgh, Kataria, Kaur, Kenny, Keogh, Lambert, Leggett, Letts, McCreanor, McEwing, Mintoff, Noon Paffey, Payne, Quadir, Renyard, Savage, Shields, Ugwoeme, Whitbread, Winning and T Bunday.

NOTE: AGAINST THE RECOMMENDATIONS: Councillors P Baille, Beaurain, Fitzhenry, Galton, Houghton, Laurent, Powell-Vaughan, Blackman, Wood and Barbour.