Issue - meetings

To submit a report by the Director of Function (Resources)/Section 151 Officer.

It was resolved to note the contents of the Medium-Term Financial Plan 2024/25 to 2025/26 and to approve the assumptions made.

The report of the Director of Function (Resources)/Section 151 Officer incorporating the Medium-Term Financial Plan for 204/25 to 2025/26 was presented for the Executive’s consideration.

Councillor Robin Williams introduced the report as setting out the Council’s likely resources requirement for the next two financial years along with details of how the Council plans to balance the resource requirement with the funding available.

The Director of Function (Resources)/ Section 151 Officer drew attention to information in the report which included the Council’s current financial position as regards the budget that was set in  March 2023 and how it was funded, a comparison with previous years dating back to 2018/19 as regards the variation in the funding gap over the six year period, the wider context in relation to the national economic outlook and budget and changes in Welsh Government funding over the past decade. It was noted that pressures on the Welsh Government budget at the present time mean that the scope to provide additional funding for local government in the next two years is limited and that for every 1% reduction in Welsh Government funding the Council Tax has to increase by 3 to 4% to make up the difference. The Welsh Government has announced an indicative all Wales local government funding settlement for 2024/25 of 3% with no indication given for 2025/26. This is based on the UK Government’s spending review on 2021 which did not factor in the significant rise in inflation seen in 2022 and 2023.

At the end of the 2022/23 financial year the Council reported a net underspend of £1.212m (2.37%) with all services except Adults and Children’s social care and Housing reporting an underspend against their budget. This resulted in an increase in the Council’s general balances to £13.966m. As £3.789m of these reserves have been allocated as funding for the 2023/24 budget, the level of reserves moving forwards stands at £10.186m which is equivalent to 5.83% of the net revenue budget for 2023/24. This compares to the target figure of £8.7m (5%) which was approved by the Executive.

The Section 151 Officer guided the Executive through section 5 of the report which set out in detail the areas considered to be the main budget pressures facing the Council over the tenure of the Plan and their potential impact on the Council’s budget going forwards. These include pay increases, energy costs, demand in Children and Adults’ services, a rise in homelessness and general inflation as well as a number of other headings where there are pressures in the form of increasing costs, commitments and/or need for services. By taking account of all the issues described in section 5 and the Council’s income position referred to in section 6  and using the assumptions set out in Appendix 2 to the report it is estimated that the Council’s net revenue expenditure budget will increase by £13.072m in 2024/25 (to £187.641m) and by £5.368m in 2025/26 (to £193.082m), an increase of 10.6% over the two-year period.

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