Agenda item

This report sets out the Draft Capital and Revenue Budgets for 2025/26. In accordance with the Constitution, Cabinet is required to develop ‘initial budget proposals’ approximately three months before finalising the budget and setting Council Tax levels at the end of February 2025. The Draft Budget is based on the principles set out in the Medium Term Financial Outlook 2024-2029 (MTFO) considered by the Cabinet on 27 August 2024. This report also provides the comments of the other Overview and Scrutiny Committees on the Draft Budget proposals, for this committee to consider.

Discussion:

The Chief Finance Officer introduced the report which had previously been considered by the committee in November and included comments of the other Overview and Scrutiny Committees at Appendix A. Since the last meeting the provisional Local Government Finance Settlement had been announced which proposed an estimated additional £11m in resources for the Council compared to 2024-25, the final settlement for Medway would be announced shortly and included in the final budget reported to Cabinet and Council.

The following issues were discussed:

Council Tax income – further detail was requested regarding proposed council tax revenues, the Chief Finance Officer explained that the budget assumed a baseline of 92,100 homes in Medway, then added how many new homes were expected to be built, factored in the proposed band d council tax increase of just under 5% and the impact of collection rates to determine an expected total income.

Interest and Financing -  in response to a question why the costs associated with interest and financing had gone from a projected £4m rise in the Medium Term Financial Outlook (MTFO) to a small decrease in the budget, the Chief Finance Officer explained that the MTFO included assumptions regarding interest rates, borrowing costs and the projected growth in the capital programme. As the year progressed the Council was able to make more accurate predictions which was reflected in the improved budgetary position.

Public Health budget – further information was requested regarding the rise in the public health budget, the Chief Finance Officer explained that the figure reflected the additional pressures of delivering services through contracts including inflation, national changes relating to National Insurance contributions and the National Living Wage. She added that the government had not yet announced the Public Health grant allocation for 2025/26 but this would also be included in the final budget report when confirmed.

Temporary Housing – A Member requested further information regarding progress of the temporary housing scheme which the Council had approved in January 2024, the Chief Finance Officer stated that a full update would be provided in the budget report to Cabinet and Council, the monitoring showed an improved position, however the situation remained challenging.

Capital Programme – it was asked whether the planned development of a council chamber in Gun Wharf had been reconsidered following the announcement of the local government reorganisation. The Chief Operating Officer stated there had been no decision to stop the programme, however the works included repairs to deal with the current safety issues in the building which were still required and would take place.

Medway 2.0 – it was asked how savings associated with Medway 2.0 would be monitored and the Council ensured it did not impact on local services. The Chief Finance Officer stated the budget aimed to sustain the investment in statutory services which had resulted in recent positive inspection results. The Chief Operating Officer added that the services where savings would be made by Medway 2.0 had now been identified and the savings were included in those sections of the budget. Consequently the explicit savings target for Medway 2.0 had been removed from the budget.

The Chief Information Officer stated that Corporate Management Team had reviewed the Medway 2.0 report which had previously been considered by this committee and new services were now being designed, which included greater use of AI and automation

Local Government Reorganisation – in response to a question whether the council had a budgetary provision to undertake the work required by the local government reorganisation the Chief Operating Officer stated that the Government had indicated it would provide funding to undertake the work required to deliver reorganisation, and in January, Council agreed to the creation of a new policy resource that would be reflected in the final budget for Cabinet and Council.

Decision:

The Committee commented on the proposals outlined in the Draft Capital and Revenue Budgets in so far as they relate to the services within the remit of this committee and considered the comments from the individual Overview and Scrutiny Committees, as set out in Appendix 1, and forwarded those to Cabinet.