Issue - meetings

Purpose of Report

To seek approval for, and make recommendations to the Council regarding:

·        Revenue Budget 2025/26 and Medium Term Financial Strategy to 2027/28

·        Capital Five Year Spending Plan

·        Treasury Management and Capital Strategy

·        Housing Revenue Account Budget 2025/26 and Medium Term Financial Plan

Considered – A joint report of the Chief Executive and the Corporate Director Resources setting out the financial issues and risks for North Yorkshire Council and asking the Executive to make recommendation to the Council regarding the Revenue Budget for 2025/26, the Council Tax for 2025/26 and the Medium Term Financial Strategy (MTFS) for 2026/27 to 2027/28.

The Executive Member for Finance and Resources, Councillor Gareth Dadd, introduced the report and thanked the Corporate Director Resources and his team for their work on the budget.  The financial settlement and longstanding issues over income and demand had made this one of the most difficult MTFS and budgets to put together for this council and its predecessors.  He referred to the removal of the £14.3m Rural Services Delivery Grant, which had been introduced in recognition of the higher costs of service delivery in rural areas, whilst this had been partly offset by some additional grants and funding, the net effect of the grant loss would be in excess of £21m per annum, leading to a worsening position in funding terms of £6m per annum. 

Councillor Dadd reported that when assessing the Council’s position the government had assumed that council tax would be put up by the maximum amount, which was considered to be unfair as average earnings were below that of other areas and average council tax was already higher.  He went on to make the following key points:

·       Efficiencies and savings of £34m for next year were being made, with a planned accumulated sum of £63m by 2027/28, but this would not be enough and in less than 2 years after the end of the MTFS the Council would run out of useable reserves. 

·       A total of £90m of savings had been made as a result of Local Government Reorganisation, but the benefits of this would deplete over time.

·       There was no alternative to a proposed increase of 4.99% for Council Tax, an assumption of 2.99% increase had been made for future years.   

·       The Council would continue to prioritise spend for the most vulnerable including the council tax reduction scheme and growth in social care for adults and children.

·       The proposed spending review by government ahead of next year’s settlement presented a risk for future years

The Corporate Director Resources, Gary Fielding, drew Members’ attention to the following key points:

·       The table at paragraph 2.7 outlined a projected shortfall of £4.9m in 2025/26, increasing to £34.4m in 2027/28 at the end of the MTFS.  This was predicated on an assumption that there were no changes to funding formulas, which was unlikely.  The table also showed a significant amount of growth, but this was offset by increased demand for services, increasing costs, which included waste harmonisation and investment in council housing funded through the second homes premium.

·       Council approval was also required for the Council Tax Reduction Scheme, attached as an Appendix to the Addendum report circulated the previous day, and there was an additional recommendation for Executive on this.

·       Paragraph 4.3.10  ...  view the full minutes text for item 606