Chair explained that Head of Finance was
presenting a budget briefing to committee, supported by the Council
Leader, who was covering items seven and eight in place of the
Cabinet Member for Finance and Corporate Assets, who could not
attend the meeting. If any confidential items needed discussing,
committee could vote for a confidential session at the end of the
agenda. Strategic Finance Manager was present virtually.
A presentation was
given using slides and can be viewed on the YouTube recording for
the full information: https://www.youtube.com/@SouthandValeCommitteeMeetings
Head of Finance briefed the committee on the
following:
Section 1:
Revenue
- Context of budget setting –
our legal duties, what a balanced budget means - appropriate
reserves without heavy reliance on them. Over recent years there
had been improvement in having less reliance on reserves at the
council.
- Appendix A1 – base budget
2023-24, what formed part of the base budget. A net expenditure
decrease of £1.1 million. There
were beneficial effects of the interest rate rise, but also needed
to consider cost increases in conjunction.
- Appendix B1 and B3 –
discretionary items, such as temporary grant funding for
2023-25.
- Core revenue spending power had
increased 4.9% - settlements, government grants and council tax.
Increase in core revenue spending power in response to economic
climate. New Homes Bonus had gone down, reduced to four years from
six overall. Uncertainty from central government on the future of
this. Through increased grant funding and interest rates, a fair
sum was put to reserves.
- Extra surplus on collection funds.
Council tax will go up via increasing tax base and within
referendum rules on increasing council tax rates.
- Included a one-off funding guarantee
of £2.3 million. Revisions to council tax were in line with
the council tax referendum principles.
Section 2:
Capital
- Details of schemes in Appendix D1
(internal funding) and D2/D3 (CIL funded).
- Wantage teaching pool will be funded
by S106 receipts from the Valley Park development.
- Didcot Wave pool and Didcot
North-East Leisure centre (in South Oxfordshire) – Valley
Park S106 receipts would be used from Vale of White Horse District
Council. Due to these leisure facilities being the nearest
catchment area for Valley Park (Vale) residents to make use of, as
there would not be those facilities on site. Didcot was Valley Park
resident’s nearest town (South Oxfordshire)
Section 3: Medium
Term Financial Plan (MTFP)
- Key variables/assumptions shown of
expenditure and income
- Inflation – applied what we
see as inflation. Consideration given to contracts ending over
time.
- See appendix F – row 28
expectations of inflation. Row 40 shows cost increases offset with
inflationary increases.
- Core government funding assumptions
– uncertainty, assumption was that government funding will
reduce and council tax rises.
- 2025 onwards, the balances looked
challenging but there were many variables that could not be
predicted with much certainty. However, the assumptions made were
prudent regarding lack of certainty on government funding.
- Alternative scenario was given where
the one-off funding was left in the MTFP.
- Strong progress on transformation
work, leading to financial stability - including IT strategy,
Cornerstone, grounds maintenance, customer service and
front-of-house and development management.
Committee discussed the prudent approach and
asked for clarification, discussing the balance between potential
government funding decreases and increases in council tax. With
reduction of New Home Bonus, the one-off funding figure from
central government was the balancing number after council tax
increases were factored in (bespoke figures for each council
provided to central government).
Discussion was had regarding borrowing
options. It was explained that potential borrowing was to fund
capital programmes only when capital receipts had been used.
Borrowing against the life of an asset.