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Agenda item

F S242 2024/25 Budget and Council Tax Report

Meeting of Cabinet, Monday 26 February 2024 6.00 pm (Item 10.)

Decision:

RESOLVED:

1. Cabinet is recommended to consider the report and make the following recommendations to Council for approval:

2. Council is recommended:

1. To bring forward into 2024/25 the Council’s projected 2023/24 General Fund balance of £17.0m with the aim of increasing this to £20m over the medium-term period to 2026/27 noting the Housing Revenue Account (HRA) projected 2023/24 balance of £15m with the aim of increasing to £17.6m by the end of March 2024.

2. To agree for approval the directorate estimates and estimates for the General Finance Account items set out in Table 2 in Section 14 of this report.

3. To note that the budget is a financial exposition of the priorities set out within the Strategic Plan summarised at Section 6 below.

4. To note that in line with the requirements of the Local Government Act 2003, the Interim Group Director of Finance, is of the view that:

The General Fund balances which currently stand at £17.0m and the level of other reserves are adequate to meet the Council’s financial needs for 2024/25 and that considering the economic uncertainty they should not fall below this level and that the aim is to increase these to £20m over the medium term period to 2026/27 from a review of current earmarked reserves.

This view takes account of the reserves included in the Council’s latest published 2022/23 Accounts and the movements of those reserves since that date – which have been tracked through the Overall Financial Position (OFP) Reports, and the latest OFP projections. Note also, that the projections in the HRA Budget to increase the balance to £17.6m by 31 March 2024 are also considered to be adequate at this point in time but will need to continue to be reviewed in the light of the challenges facing the HRA.

The General Fund estimates are sufficiently robust to set a balanced budget for 2024/25. This takes into account the adequacy of the level of balances and reserves outlined above and the assurance gained from the comparisons of the 2023/24 budget with the projected spend identified in the December 2023 OFP. The overall level of the corporate contingency has been set at £2m.

5. To approve the proposed General Fund fees and charges as set out in Appendix 7 for implementation from 1st April 2024.

6. To continue the policy requiring the Interim Group Director of Finance to seek to mitigate the impact of significant changes to either resources or expenditure requirements.

7. To require the Mayor, Cabinet and the Corporate Leadership Team to develop robust plans to deliver against the revised Medium Term Financial Plan included at Appendix 5 taking into account the recommendation of the S151 Officer as set out in the Section 25 Statement (Appendix 11). This is needed to maintain the financial resilience of the Council and to avoid the requirement to make short-term decisions which will adversely impact on our residents.

8. To note the summary of the HRA Budget and Rent setting report proposed to Cabinet on 22nd January 2024.

9. To authorise the Interim Group Director of Finance to implement any virements required to allocate provision for demand and growth pressures set out in this report subject to the appropriate evidence base being provided.

10.To approve:

The allocation of resources to the 2024/25 capital programme referred to in Section 22 and Appendix 6.

11.To note that the new capital expenditure proposals match uncommitted resources for the year 2024/25.

12.To agree the prudential indicators for Capital Expenditure:- the Capital Financing Requirement; the Authorised Limit and Operational Boundary for External Debt; the Affordability prudential indicators; and the Treasury Management Prudential Indicators for 2024/25 as set out in Section 23 and Appendix 3.

13.To confirm that the authorised limit for external debt of £792m agreed above for 2024/25 will be the statutory limit determined under section 3(1) of the Local Government Act 2003. Further reassurance about the robustness of the budget is the confirmation that the Council’s borrowings are within the boundaries of prudential guidelines.

14.To continue to support the approach of using reserves to manage emerging risks and liabilities.

15.To note that at its meeting on 24th January 2024 the Council agreed its Council Tax Base for the 2024/25 financial year as 77,766.9 in accordance with regulations made under section 33(5) of the Local Government Finance Act 1992. The Council Tax Base is the total number of properties in each of the eight council tax bands A to H converted to an equivalent number of band D properties.

16.To agree that the following amounts be now calculated by the Council for the year 2024/25 in accordance with Sections 31A to 36 of the Localism Act 2011.

The authority calculates the aggregate of: (in accordance with Section 31A (2) of the Act)

a) £1,374.738m being the expenditure which the authority estimates it will incur in the year in performing its functions and will charge to a revenue account, other than a BID Revenue Account, for the year in accordance with proper practices.

b) £2m being such allowance as the authority estimates will be appropriate for contingencies in relation to amounts to be charged or credited to a revenue account for the year in accordance with proper practices.

c) £nil being the financial reserves which the authority estimates it will be appropriate to raise in the year for meeting its estimated future expenditure.

d) £nil being such financial reserves as are sufficient to meet so much of the amount estimated by the authority to be a revenue account deficit for any earlier financial year as has not already been provided for.

e) £nil being the amount which it estimates will be transferred in the year from its general fund to its collection fund in accordance with section 97(4) of the 1988 Act, and

f) £nil being the amount which it estimates will be transferred from its general fund to its collection fund pursuant to a direction under section 98(5) of the 1988 Act and charged to a revenue account for the year.

17.The authority calculates the aggregate of: (in accordance with Section 31A (3) of the Act)

a) £1,263.182m being the income which it estimates will accrue to it in the year and which it will credit to a revenue account, other than a BID Revenue Account, for the year in accordance with proper practices.

b) £4.218m being the amount which it estimates will be transferred in the year from its collection fund to its general fund in accordance with section 97(3) of the 1988 Act.

c) £nil being the amount which it estimates will be transferred from its collection fund to its general fund pursuant to a direction under section 98(4) of the 1988 Act and will be credited to a revenue account for the year, and

d) £nil being the amount of the financial reserves which the authority estimates it will use in order to provide for the items mentioned in subsection (2) (a), (b), (e) and (f) above.

18.£109.338m being the amount by which the aggregate calculated under subsection (1) above exceeds that calculated under subsection (2) above, the authority calculates the amount equal to the difference; and the amount so calculated is its Council Tax Requirement for the year.

19.£109.338m being the amount at (3.2.18) divided by the amount at (3.2.15) above, calculated by the Council, in accordance with section 31A of the Act, £1,405.97 as the basic amount of its council tax for the year.

20.That the Council in accordance with Sections 30 and 36 of the Local Government Finance Act 1992, hereby sets the aggregate amounts shown in the tables below as the amounts of Council tax for 2024/25 for each part of its area and for each of the categories of dwellings.

Valuation Bands Hackney

A	B	C	D	E	F	G	H
£937.31	£1,093.53	£1,249.75	£1,405.97	£1,718.41	£2,030.84	£2,343.28	£2,811.94

21.That it be noted that for 2024/25 the Greater London Authority has stated the following amounts in precepts issued to the Council, in accordance with Section 40 of the Local Government Finance Act 1992, for each of the categories of dwellings shown below.

Valuation Bands GLA

A	B	C	D	E	F	G	H
£314.27	£366.64	£419.02	£471.40	£576.16	£680.91	£785.67	£942.80

22.That having calculated the aggregate in each case of the amounts at 3.2.20 and 3.2.21 above, the Council, in accordance with Section 30(2) of the Local Government Finance Act 1992, hereby sets the following amounts as the amounts of Council Tax for 2024/25 for each of the categories of dwellings as shown below.

Valuation Bands Combined Hackney/GLA

A	B	C	D	E	F	G	H
£1,251.58	£1,460.17	£1,668.77	£1,877.37	£2,294.57	£2,711.75	£3,128.95	£3,754.74

23.To agree, subject to the decision of Members on recommendations 3.2.16 to 3.2.18 that Hackney’s Council Tax requirement for 2024/25 be £109.338m which results in a Band D Council Tax of £1,405.97 for Hackney purposes and a total Band D Council Tax of £1,877.37 including the Greater London Authority (GLA) precept.

24.To agree that in accordance with principles approved under section 52ZB of the Local Government Finance Act 1992, and the new provisions included in the Localism Act 2011, the increase in the Council’s Council Tax requirement for 2024/25 as shown at Appendix 8 is not excessive (5% or above) and therefore does not require the Council to hold a referendum.

25.To agree the Treasury Management Strategy for 2024/25, set out at Appendix 3.

26.To agree the criteria for lending and the financial limits set out at Appendix 3.

27.To approve the Minimum Revenue Provision statement setting out the method of calculation to be used, as set out in paragraphs 23.19-23.28 below.

REASONS FOR DECISION

The Council has a legal obligation to set its Council Tax and adopt its annual budget. This report is seeking formal approval of the 2024/25 budget.

Previous decisions in this context relate to:

· The Overall Financial Position reports presented monthly to Council during 2023/24.

· The Calculation of the 2024-25 Council Taxbase & Local Business Rates report approved by Council on 24th January 2024

DETAILS OF ALTERNATIVE OPTIONS CONSIDERED AND REJECTED

The requirement to agree a legal budget and set the Council Tax for the forthcoming year has been laid down by Statute. As such there are no alternatives to be considered.

The details of the budget, including savings, have been the subject of reports to Cabinet and consideration by the Corporate Leadership Team at meetings throughout 2023/24.

As part of the political process opposition groups are permitted to put forward alternatives to these proposals for consideration. Any alternative proposals put forward will be tabled at the Council meeting on 28th February 2024.

Minutes:

10.1 Noting that this was her first Budget as Mayor, Mayor Woodley spoke to the difficult financial circumstances, the growing demand for key services, and the rising costs set against over a decade of underinvestment from the Government, which had put immense pressures on local services across the country. However, the proposed Budget was still ambitious, balancing the books at a time when so many councils were unable to do so, and would ensure the Council would work for a better Hackney in these challenging times.

10.2 The Mayor highlighted that the Council’s core spending power had reduced by £156m since 2010-11, a 40% reduction in real terms, and that this year’s funding had been set through a one-year settlement from the Government with and a proliferation of one-off grants, rather than with sustainable, long-term funding needed to plan and provide the services that residents deserve. In addition, there had also been cuts to key grants. As a result, it would be proposed to raise Council Tax by 4.99%, but at the same time increase the discount to eligible residents on low incomes to 90%.

10.3 Cllr Chapman highlighted that the Council had had to find savings to fill a £22m revenue gap this year, which required difficult decisions that would impact services. However, priority areas and front line services had been protected throughout that process.

10.4 Following the results of a recorded vote, as set out below, the recommendations were agreed.

For: (7 Members) Deputy Mayor Bramble, Cllr Chapman, Cllr Fajana-Thomas, Cllr Kennedy, Cllr Nicholson, Cllr Williams, and Mayor Woodley.

Against: 0

Abstentions: 0