Agenda item

Proposed Capital and Revenue Budget 2024/25

Minutes:

Background:

This report presented proposals for the capital and revenue budgets for 2024/25. It was noted that the Cabinet had considered initial budget proposals on 21 November 2023, which had identified a potential revenue shortfall of £35.798million in 2024/25.

It was noted that setting a balanced budget was particularly challenging in the context of national level funding reductions which had included a 91% reduction in the Council’s revenue support grant since 2010. Inflationary pressures were making the situation more difficult.

It was also noted that the Council had engaged CIPFA to undertake a resilience review. CIPFA had concluded that it would not be possible for the Council to set a balanced budget for 2024/25 without some form of Government intervention. Following this, Exceptional Financial Support had been requested in January 2024. The Council had been advised that its request to increase council tax above referendum limits had been rejected. It was waiting for confirmation of whether the second part of its request had been successful. This would enable the council to borrow for revenue purposes and the flexibility to use existing grants to support Medway’s Improvement Programme.

An addendum report had been provided which set out the impact of the Final Local Government Finance Settlement 2024/25, which had been announced on 5 February.

The budget proposals had been referred to all the Overview and Scrutiny Committees for consideration. The Overview and Scrutiny Committees’ views together with the recommendations of the Business Support Overview and Scrutiny Committee (1 February 2024) were set out for Cabinet at Appendix 1 to the report.

The report set out the requirements under equality legislation and it was noted that an overarching Diversity Impact Assessment would be included in the budget report to Full Council on 29 February 2024.

Decision number:	Decision:
	The Cabinet noted the comments from the overview and scrutiny committees as summarised in Appendix 1 to the report.
34/2024	The Cabinet recommended to Full Council that the net revenue budget summarised at Table 1 should be set at £438.569million, funded from a 4.994% increase in Council Tax for 2024/25 with the equivalent Band D figure at £1,754.69.
	The Cabinet noted that on 30 January 2024, Employment Matters Committee recommended to Full Council: a) a Cost of Living Adjustment (COLA) of 5% is allocated for the 2024/25 pay award for all on MedPay Terms and conditions. b) the Range 3 pay band is lifted by £1,052 (excluding the 5% COLA increase). c) the Range 2 pay band is lifted by £547 (excluding the 5% COLA increase). d) a gap of £525 is introduced between the Range 1 and 2 pay bands. e) sleep in payments are increased by 3.88%. f) the Annual Leave entitlement is increased to 30 days per annum pro rota for R1-R3, after 5 years’ continuous service. g) the current PDR levels and the associated performance related award attributed to them (i.e. levels 1A and 1B) be removed and instead an additional day’s annual leave awarded to everyone in 2024/25 and 2025/26 on MedPay terms and conditions who is not subject to formal performance management measures. h) a long service award of an additional day’s leave at 10 and 15 years of service at all grades be introduced.
35/2024	The Cabinet recommended to Full Council the capital budget proposals, as set out in Table 12 of the report.
36/2024	The Cabinet recommended to Full Council the fees and charges as set out at Appendix 5 to the report.
37/2024	The Cabinet recommended to Full Council the Flexible Use of Capital Receipts Strategy set out at Appendix 6 to this report.
38/2024	The Cabinet requested the Chief Operating Officer to calculate the formal requirements under Sections 30 to 36 of the Local Government Finance Act 1992 for resolution by the budget Council meeting on 29 February 2024.
39/2024	The Cabinet recommended that Full Council approves the Retail, Hospitality and Leisure Relief scheme policy in respect of Business Rates for 2024/25 at Appendix 8 to the report.
	The Cabinet noted its earlier recommendation to Full Council (decision 178/2023 refers) that when setting the Council Tax, the following changes are applied to Council Tax premia in line with the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018: · the 100% premium for long-term empty properties may be brought forward so that it can commence after being empty for one year rather than two with effect from 1 April 2024; and · a 100% premium may be charged for properties that are unoccupied but furnished (known as second homes) with effect from 1 April 2025.
	The Cabinet noted its earlier recommendation to Full Council (decision 179/2023 refers) that when setting the Council Tax, the following changes are applied to the Council Tax discretionary discounts: · reduce the discount in respect of class C to 0% from the day on which a property becomes vacant, and · reduce the discount in respect of class D to 0%.

Reasons:

The Constitution requires that the Cabinet’s budget proposals must be referred to Full Council for consideration and approval.

The Council is required by statute to set a balanced budget and set the Council Tax levels by 11 March each year.

Supporting documents: