Agenda item

A report by the Deputy Chief Executive Corporate Development (S151 Officer)

The Deputy Chief Executive for Corporate Development / Section 151 Officer presented the report to committee.

Providing a brief update on the current position members were advised that the value of the additional IDB levy remained unknown and at the time of the report the figures had been estimated and were a substantial increase on previous years.  Members were assured that the Council was liaising with the local Drainage Boards who had been trying to limit their increases where possible but it had proved impossible due to the pressure of power costs along with other contributory factors. Representations continued to be made to Government in respect of the loss of income to the Council.

Members were further advised that the PSPS contract was still being finalised along with the S113 charges and the MRP was under consultation.

Referencing the Key Budget Pressures members were advised an award for 2023/24 (£1925 per pay point) had been agreed in November 2023 being a rise of up to 9.42% for the lowest paid through to 3.88% for those on the highest bands. For 2024/25 a 3.5% increased has been assumed with this moving to 3% for 2025/26 and then 2.5% from 2026/27 onwards.  Pension contributions would be 23.6% in 2024/25 with an additional lump sum amount payable towards the deficit on the pension scheme. The rate applied only to those staff in the local government pension scheme. The pension contribution rate was assumed to stay at 23.6% throughout the life of the MTFS. The return on cash investment reflected the current Bank of England base rates and the forecasts provided by our external treasury advisors. Electricity and gas costs had been based on 2023/24 actuals and current contract prices. Vehicle fuel costs had been based on 2023/24 actuals and current fuel prices.

The previous Medium Terms Financial Strategy (MTFS) had committed to a Council Tax increase in line with the maximum allowed under the recent Local Government Settlement.  For BBC in 2024/25 it was a £7.20 (3%) per annum increase (for band D properties).That figure would generate additional income of £146k and the increase was reflected throughout the life of the MTFS. The tax base projections for 2023/24 indicated growth of 28 band D equivalent properties (0.1%) reflecting the slow-down in the housing market and the increasing demand for Council Tax Support. This will generate additional income of £6k.  Future growth has been projected at 1.5%.

The National Non-Domestic Rates Form (NNDR1) production was particularly important in terms of changes to the business rate yield which heavily influenced not just our own budgets, but also the Pool we are part of within Lincolnshire and significantly the County Council.  This was an area of focus as the Council sought to understand the changes within the yield, particularly as a result of economic impacts and changes in Government Policy. In order to manage and review this important income stream and the changes within it regular review meetings were taking place internally. There had also been some significant changes which need further and detailed consideration in terms of growth and appeals.

The capital programme was subject to final additions such as the new long term Towns Fund (£20m) and any other announcements that may be received by the time of publication.  A final version of the programme would be presented to Council on 4th March 2024 for approval.

The five year General Fund Capital Programme included provision for Investment and Growth linked to the Councils Strategic objectives, mainly funded through grant funding from Towns Fund, Levelling Up Funds and UKSPF.  The four main areas of continued investment being, Disabled Facilities Grant; IT Systems; Vehicle replacement e.g. Waste and the support of Grant Funding bids.

General Fund Specific Reserves were budgeted to reduce by £70k in 2024/25, this was predominantly to fund the Capital Programme which had seen slippage on some of the larger schemes. This figure would be adjusted once the outturn for 2023/24 is known.

In terms of balancing the budget the following Short Term areas included as part of the budget setting process had comprised of Service Reviews planned. Continued work to engage on the Internal Drainage Board financing challenge and reviewing of all new pressures and service budgets to consider efficiency opportunities and alternative options.

Members were also advised that in order to facilitate delivery and to align constitutions across the SELCP, in addition to providing administrative ease for implementation of funding streams, it was proposed that some changes would be made as part of the budget setting decision making process .

Committee deliberation followed which included:

Concern was noted that the efficiency targets continued to be a key challenge and with the Council operating on nearly a skeletal staffing and the limited increase of 3%, members stressed their concern on the overall situation.  There was further recognition of the ongoing worldwide situation in respect of the fluctuating impact on the price of oil and fuels.

Further concern was tabled at the substantial proposed increase by the Internal Drainage Boards and the overwhelming pressure such an increase would mean to the Council.  However, Members did tabled their congratulations to the officers on their advice that they were challenging and lobbying the Government and agreed that the announcement of the additional £3million indicated they were taking notice of the lobbying.

Members were advised that the NNDR figure tabled within the report, would shift prior to the final report for Cabinet and Full Council, and it was expected that the shift would be a beneficial one.

Additional agreement was tabled by some members in that Boston was a very small Council and was suffering due to the actions taken by previous Councils who had decided not to implement any increase in Council Tax, resulting in the Council being unable to grow the budget back.

Responding to questions, officers advised that the current value of the Municipal Buildings was £2.5million. The number of full-time employees took into account TUPE for those members of staff at the Geoff Moulder Leisure Centre and clarification was also provided that the tax base for BTAC residents had declined due to a higher uptake of Council Tax in the BTAC area.   In response to a request for more information in respect of the transport cost, a member was advised that additional information would be provided after the meeting.

In conclusion, Members agreed the report tabled and acknowledged the work of the officers in its compilation.  They further offered their support to officers for the ongoing lobbying of Government in respect of the Internal Drainage Board levy.