Agenda item - General Fund / HRA Estimates and Capital Programme 2025/26

To consider the report of the Strategic Director for Corporate Resources.

Agreed:

RECOMMENDED that Council:-

(1) approve the overall spending proposals in respect of its General Fund and HRA revenue budgets;

(2) approve the General Fund and HRA Capital Programmes, subject to the identification of sufficient capital receipts to finance the new General Fund Capital bids in respect of IT and to grant delegated authority to the Strategic Director for Corporate Resources, in consultation with the Leader and Chief Executive to agree the final decision;

(3) in agreeing the recommendations, consider the Section 151 Officer budget assessment in 8.17 of the report;

(4) approve setting the General Fund minimum Balance at £3.100 million for 2025/26 and the HRA minimum Balance at £3.525 million for 2025/26;

(5) approve the Council Tax for each Band recommended to the Council as set out in section 8.20.3 of report, subject to Devon County Council, OPCC Devon and Cornwall and the Devon and Somerset Fire Authority confirming their Band D levels respectively; and

(6) approve the revised Council Tax levels on 25 February 2025, once the actual Council Tax amounts for Devon County Council, Devon and Cornwall Police and Crime Commissioner and the Devon and Somerset Fire Authority are set.

Reason for Decision: As set out in the report.

The Executive received the report on the General Fund revenue estimates for 2025/26 to recommend the Band D level of Council Tax for 2025/26. The report also included the proposed Capital Programme for 2025/26 and future years, and the proposals in respect of the Housing Revenue Account for 2025/26.

Particular reference was made to:-

· the Government's Provisional Local Government Finance Settlement initially offered a flat amount, but the final settlement now included an additional £183,000 for Exeter as compensation for National Insurance increases, having taken local housing revenue accounts (HRA) into consideration;

· national insurance contributions had increased costs of £669,000 for the General Fund and £91,000 for housing revenue account;

· the core spending power assumption from the Government included a Council Tax increase to the maximum level allowed under the referendum limits;

· the Government intended to reset business rates and to review the funding formula for local government funding, which could impact Exeter significantly;

· Exeter was able to implement a Council Tax increase of less than 3% or £5, with the budget assuming a 2.99% increase, but it would be for Members to determine at Council;

· a General Fund consultation had been undertaken and the results were available for Councillors and the public to support balancing the budget;

· the business rate pool for the whole of Devon, would continue, which would support the Council by around £900,000;

· the Council started the year with a projected shortfall of £3.5 million, which had remained steady throughout the year, but £2.4 million from either income or budget reductions was still required to balance the budget and stay above the minimum reserve level;

· a small increase to the General Fund Reserves minimum level was being proposed from £3.020 million to £3.1 million;

· there were challenges to the Housing Revenue Account relating to increased costs for repairs and maintenance due to a new approach, impacting the capital program in the short term, but would be beneficial longer term;

· the budget and medium-term financial plans were being recommended, to maintain the HRA minimum working balance at £3.525 million; and

· the Capital Programme had a new three-year funding request to replace vehicles under a lease agreement.

During the discussion, Executive Members raised the following points and questions:-

· clarification was sought on the National Insurance contributions, the differences in costs from April and where they were being covered from;

· the Devon Cornwall Police tax precept, had recently been agreed upon; and

· clarity was sought on the business rate reset dates outlined in the report following the recent update from the Deputy Prime Minister.

An opposition group leader expressed concerns about the inflation assumptions in setting aside £0.662 million for the budget and why there were no other ranges available?

In response to questions raised, the Strategic Director for Corporate Resources advised that:-

· a new Extended Producer Responsibility Tax for manufacturers and packaging had been introduced, which would provide an additional £1.4 million to the Council to support the National Insurance contribution challenges;

· the police precept had been confirmed as having increased by £13.70, which was important for Members who set the overall city council tax. The figures would be included in the budget reports presented to full Council;

· the business rate reset consultation would commence in 2025 but would not impact the budget until 2026-27; and

· the approach to budgeting, required a balance between under-providing and over-cutting, the general fund reserves acting as a financial management tool.

The Leader moved the recommendations, which were seconded by Councillor Wright, voted upon, and CARRIED unanimously.