Agenda item

Further to the meeting of the Overview and Scrutiny Committee earlier in the cycle, this report updates Cabinet on issues relating to the Medium-Term Financial Strategy.  It also takes Members through the necessary procedures in order to set the Budget for 2025/26.

Members are asked to note that at the time of writing this report, the final settlement has not been received.  All figures contained in the report are based on the provisional settlement. 

Further to the reports to the Overview and Scrutiny Committee earlier in the cycle the joint report of the Chief Executive and Director of Finance and Transformation, the Leader and Cabinet Member for Finance and Housing updated the Cabinet on issues relating to the Medium Term Financial Strategy (MTFS) and gave details of the necessary procedures to be followed in order to set the budget for 2025/26.

Members noted that at the time of publishing the report, the final settlement had not been confirmed, all figures contained in the report were based on the provisional local government settlement, which was better than anticipated, but saw an overall funding decrease on 2024/25 funding of £514,000 (8.5%).

The Director of Finance and Transformation advised that the final local government finance settlement figure was now confirmed as detailed in the supplementary report published in advance of the meeting.  The final settlement was more than the provisional settlement by £157,550 due to the inclusion of a grant in relation to the increased cost of Employers’ National Insurance contributions, and it seemed appropriate to transfer the additional funding to the earmarked ‘Transformation Reserve’.. 

As a result of increased NNDR receipts and the better-than-expected settlement the Borough Council had a balanced budget for 2025/26 and had been able to set aside funds in earmarked reserves for key priorities.  In addition, an initial assessment of reserves had facilitated a recommendation to release additional funds for key priorities.  Members noted that it was anticipated that changes to Local Government Funding affecting Grants and Business Rates would reduce grant funding to the Council.  The latest projected funding gap was £2.8m over the medium term.  In addition, commitment of saving £200,000 (release of office accommodation) and £625,000 (cost and client numbers within temporary accommodation).

*RECOMMENDED: That

(1)        the sum of £1.25m held as a general fund (working) balance and a sum of £2.2m from the Budget Stabilisation Reserve, totalling £3.45m, are transferred to the Tonbridge Town Centre reserve, and specifically set aside for the funding of the redevelopment of the Angel Leisure Centre;

(2)        the Revenue Estimates, as presented to the Overview and Scrutiny Committee on 23 January 2025, together with the subsequent adjustments detailed at paragraph 9.5, be endorsed and adopted by Council;

(3)        the Capital Plan be updated, as set out at paragraph 11.10, and adopted by the Council;

(4)        the Capital Strategy as presented to the Overview and Scrutiny Committee on 23 January 2025, be endorsed and adopted by Council;

(5)        the prudential indicators listed in paragraph 12.7, including the liability benchmark indicator and 12.11, be endorsed and adopted by the Council;

(6)        for the financial year 2025/26, the Borough Council’s annual minimum revenue provision be noted as ‘nil; subject to the comment at paragraph 12.8;

(7)        the updated MTFS, set out at Annex 10a be noted and endorsed;

(8)        the updated Savings Transformation Strategy, attached at Annex 10b, including the proposed scale and timing of each of the required savings and transformation contributions set out at paragraph 14.14, be noted and endorsed;

(9)        the special expenses calculated in accordance with the Special Expenses Scheme and set out at Annex 13b, be endorsed;

(10)    the Statement provided by the Director of Finance and Transformation as to the Robustness of the Estimates and the Adequacy of the Reserves, as set out at Annex 16a, be noted and endorsed;

(11)    the calculation of the Borough Council’s council tax requirement at Annex 17 be noted;

(12)    the additional funding of £157,550 allocated through the Final Local Government Finance Settlement in respect of additional Employers’ National Insurance contributions , be noted; and

(13)    the transfer of this additional funding to the earmarked Transformation Reserve, be endorsed.

*Recommended to Council