Agenda item

Report of the Chief Operating Officer (Section 151 Officer)

Cabinet considered a report of the Chief Operating Officer (Section 151 Officer) that outlined as a basis for consultation a set of new revenue budget proposals for 2024/25 to 2026/27 which represented changes to the Council’s existing Budget. Consultation views were also sought on the potential level of Council Tax and Adult Social Care Precept increases for 2024/25. The final Budget proposals and the Council Tax and Adult Social Care Precept increases would be subject to Council approval in February 2024. Appendices to the report provided: Pre-Budget Proposals and Financial Position; Consultation on proposed changes to the Council Tax Support Scheme; and Equality impact assessments (EIA).

The ambition to deliver the Council’s overall future strategy continued to be the focus of the Pre-Budget proposals. The strategy was contained within the “One Coventry Plan” which set out key priorities including: improving the economic prosperity of the city and region; improving outcomes and tackling inequalities within communities; and tackling the causes and consequences of climate change. Implicit within the plan was the Council’s commitment to delivering a range of core services to everyone in the city.

The Council’s financial plans were heavily dependent on both the allocation of Government grant resources and Government decisions which dictated councils’ tax-based income streams. It continued to be the case that it was difficult to anticipate the key decisions that the Government would make on these matters and as a result, a number of key elements of the Council’s financial plans were subject to some uncertainty with a degree of risk that the position presented in this report could be subject to change once the details of the local government financial settlement were published. The Provisional Local Government Settlement for 2024/25 was expected to be published in late

December 2023, again a very late point in the financial planning cycle, and this would provide a stronger indication of the likely position.

The Chancellor of the Exchequer set out the Government’s Autumn Statement on 22nd November 2023. The Statement provided a one-year Department Expenditure Limit position for the Department of Levelling Up Housing and Communities (DLUHC). There was no clear indication of any additional resources beyond those already notified previously, which were in line with our current planning assumptions. The Council would need to assess the provisional local government finance settlement expected late December 2023, to confirm this position.

No announcement was made to allow increases in Council Tax or Adult Social Care Precept beyond what was previously announced (3% and 2% respectively). As a result, the report recommended that the Council should consult on the basis of increasing the Adult Social Care Precept by 2%, and the Council Tax for other services by just under 3%, an overall combined rise of just under 5%.

The financial gap identified in the report would require considerable service savings or additional income proposals to address it, some of which wouldl affect services to the public. The report included proposals on which to consult, which collectively could form the basis of a balanced budget in 2024/25, albeit with financial gaps in future years. The outcome of the final Local Government

Settlement would determine the extent of the options required to deliver a balanced budget. The Council was keen to avoid the need to reduce vital services and would seek to explore all possible avenues to do this, however there was currently a strong expectation that difficult decisions would need to be included as part of the budget proposals.

A Medium-Term Financial Strategy was intended to be presented alongside the final Budget Report in February 2024. This would include the current financial context facing the Council in relation to a continued high inflation environment and difficult market conditions within both adults and children’s social care and pressures on temporary accommodation costs to meet our statutory duties in relation to preventing homelessness.

The proposals in the report were made as a basis for public consultation and the results of the consultation would be reflected in the final Budget Report in February 2024 and considered as part of the final decisions recommended in that report. Further work would be undertaken to confirm all the financial assumptions included, between now and the final Budget Report in February 2024.

An outline of the resources and the spending and savings proposals were provided in Section 2, within Table 1 of the report and on a line-by-line basis in Appendix 1 to the report. The financial proposals assume that the Council would approve an increase in Council Tax and Adult Social Care Precept by the maximum allowed.

Appendix 2 to the report contained details of proposed changes to the Council Tax Support Scheme. The report requested approval to conduct a public consultation on the proposed council tax support scheme. The budgetary challenges faced by the Council for 2024/25 required the Council to review all areas of discretionary expenditure and potentially the option to reduce the amount of support provided through the CTS scheme for working age households.

The report included an indicative outline of the Council’s prospective Capital Programme for 2024/25 based on current knowledge. This would be updated in the February 2024 Budget Report, reflecting the most up to date programme information available. The draft programme was based overwhelmingly on pre-existing decisions and patterns of expenditure.

RESOLVED that Cabinet:

1)  Approves as a basis of consultation: the revenue spending and savings options in Section 2 of the report and Appendix 1 to the report and the broad Capital Programme proposals in Sections 2.6 to 2.8 of the report.

2)  Approves as a basis of consultation: the approach in relation to Council Tax and the Adult Social Care Precept in Section 1.8 of the report, including a Council Tax rise of just under 3% and an Adult Social Care Precept of 2%.

3)  Approves an eight-week public consultation period to commence on 13th December 2023 on a draft council tax support scheme based on the preferred option detailed in Appendix 2 to the report, in accordance with The Local Government Finance Act 1992 (as substituted by the 2012 Act).