Issue - meetings

Report of the Director of Finance and Resources (Section 151 Officer)

The Cabinet considered a report of the Director of Finance and Resources (Section 151 Officer), which would also be considered by Council at its meeting on 20th February 2024, that followed on from the Pre-Budget Report approved by Cabinet on 12th December 2023 (minute 50/23 referred) which had since been subject to a period of public consultation. The proposals within the report would now form the basis of the Council's final revenue and capital budget for 2024/25 incorporating the following details:

•  Gross budgeted spend of £867.8m (£55.8m or 7% higher than 2023/24).

•  Net budgeted spend of £277.5m (£17.0m or 7% higher than 2023/24) funded from Council Tax and Business Rates less a tariff payment of £22.2m due to the Government.

•  A Council Tax Requirement of £175.9m (£11.5m or 7% higher than 2023/24), reflecting a City Council Tax increase of 4.9% detailed in the separate Council Tax Setting report on today’s agenda.

•  A number of new expenditure pressures, policy proposals and technical savings proposals.

•  A Capital Strategy including a Capital Programme of £157.5m including expenditure funded by Prudential Borrowing of £41m.

•  An updated Treasury Management Strategy, Capital Strategy, and a Commercial Investments Strategy.

The financial position in this Budget Report was based on the Final 2024/25 Local Government Finance Settlement published on 5th February 2024. Whilst the Government had provided an additional £3.2m of social care grant for 2024/25, the Settlement represented an ongoing net reduction in resources compared to the Pre-Budget report of c£2.1m per annum. The position after 2024/25 remained uncertain as the Government’s spending plans were effectively the second year of a 2-year settlement, and the final year of the 5-year Comprehensive Spending Review. This therefore provided no certainty or stability for local government finances beyond 2024/25. Reviews in relation to the local government financial allocation model and Business Rates retention would not now happen in this parliament and would therefore need to be a focus of attention for the new government, following the general election expected later in 2024. As a result, it was impossible to provide a robust medium term financial forecast at this stage and the Council had instead made some planning estimates for future years. Initial assumptions indicated a strong likelihood that there would be a substantial gap for the periods following 2024/25. The view of the Director of Finance and Resources (Section 151 Officer) was that the Council should be planning for such a position.

The Pre-Budget Report was based on an increase in Council Tax of 4.9% and this position had been maintained for the final proposals in the report. This incorporated an increase of 2.9%, which was within the Government’s limit of 3% above which a referendum would need to be held plus a further 2% Adult Social Care (ASC) Precept in line with Government expectations. The precept was essential to enable councils including Coventry to manage increases in the costs of care. In total, the rise in Council Tax bills would be the equivalent  ...  view the full minutes text for item 78