Agenda item

Report of the Chief Officers Executive

The Chief Officers Executive submitted a report (previously circulated) to seek approval for a Medium Term Financial Plan (MTFP) for 2025/26 to 2028/29, including setting a budget and Council Tax increase for 2025/26, and also the approval of a 2025/26 to 2028/29 Capital Programme.

The submitted report stated the Council continued to face significant and unparalleled financial challenges which stemmed from reductions in public spending between 2010 and 2019 where the Council’s budget was reduced by £46m in real terms, a 36% reduction in budget.  This financial position had been further compounded in the aftermath of covid and an unstable economic climate, which had seen the cost of living is increasing, high inflation, income deprivation and poverty rising.

The submitted report stated that the Council had previously met the challenges faced head on through value for money service delivery, shared services, economic growth, and strong financial management and had utilised built up reserves to continue to provide vital services for the residents of Darlington, however it was noted that significant additional demand for services was putting unprecedented pressure on affordability and despite additional savings achieved the Council’s reserves would be fully depleted by the end of 2027/28.

It was reported that the provisional Local Government Finance Settlement was published on 18 December 2024, and confirmed funding for one year only, along with the Council Tax referendum limits of 3% Council Tax and 2% for Social Care precept. It was noted that the provisional settlement was positive and provided additional grant funding for Darlington, along with an extension on the New Homes Bonus for an additional year, however, it was anticipated the increase in employers National Insurance contributions announced in the budget will fall short of the resource being made available by £0.670m which was an additional MTFP pressure and furthermore the increase in CPI directly impacted on our social care contracts and had reduced the benefit of additional grant funding.

The submitted report stated that future years funding had not been confirmed and that the consequence of this was that the 2025/26 – 2028/29 MTFP had an eye to future years but did not seek to presume what the future would look like, and aimed to ensure that the Council could set a legal budget in 2025/26 and continue to provide our core offer level of services to the residents of Darlington.

The following Amendment was moved by Councillor Toms and seconded by Councillor Dulston:

‘Make necessary adjustments to the MTFP to continue necessary resource to the Stronger Communities Fund.

In Appendix 6, page 73, ‘Medium Term Financial Plan 2025 to 2029’ in the box ‘Balances’ insert a line ‘Transfer to Stronger Communities Fund (0.050)’ for the financial year 2025/26 and make all necessary adjustments to the relevant calculations.’

In accordance with the requirements of the Budget and Policy Framework Rules a vote on the Amendment was taken of those Members present at the meeting and there appeared:-

For the Amendment – The Mayor; Councillors Bartch, Crudass, Mrs. Culley, Dulston, Durham, Henderson, Holroyd, Keir, Laing, Lee, Mammolotti, Marshall, K. Nicholson, Pease, Renton, Mrs. Scott, Snedker, Toms, Tostevin and Walters (21)

Against the Amendment – Councillors Ali, Anderson, Baker, Beckett, Coe, Cossins, Crumbie, Curry, Dillon, Garner, Harker, Johnson, Kane, Layton, Mahmud, McCollom, McEwan, McGill, M. Nicholson, Porter, Ray, Dr. Riley, Roche, Storr and Wallis (25)

Abstentions – Councillor Allen (1) 

Amendment Lost. 

The Substantive Motion was then put to the meeting. In accordance with the requirements of the Budget and Policy Framework Rules a vote on the recommendation was taken of those Members present at the meeting and there appeared:-

For the Motion – Councillors Ali, Allen, Anderson, Baker, Beckett, Coe, Cossins, Crumbie, Curry, Dillon, Garner, Harker, Henderson, Johnson, Kane, Layton, Mahmud, Mammolotti, McCollom, McEwan, McGill, M. Nicholson, Porter, Ray, Dr. Riley, Roche, Snedker, Storr, Toms and Wallis (30)

Against the Motion – The Mayor, Councillors Bartch, Crudass, Mrs. Culley, Dulston, Durham, Keir, Laing, Marshall, K. Nicholson, Pease, Renton, Mrs. Scott, Tostevin and Walters (15)

Abstentions – Councillor Holroyd (1) 

(Note: Councillor Lee was not present at the meeting at the time that the vote was taken).

Motion Carried. 

RESOLVED – That:

(a)         the response and comments received to the consultation be noted.

(b)         the Revenue MTFP as set out in Appendix 6 and the Capital programme as set out in Appendix 7, including the following, be approved:

(i)          A Council Tax increase of 2.99% plus a 2% Adult Social Care Precept to help fund social care for 2025/26.

(ii)         The Schedule of Charges as set out in Appendix 3.

(iii)        The efficiency savings, transformation and services reviewed proposed.

(c)          a delegation for Cabinet to vary the Revenue Budget for 2025/26 by up to £0.5m without further Council approval, be approved.

(d)         a delegation for Cabinet to vary the Capital Budget for 2025/26 by up to £0.5m without further Council approval, be approved.

REASONS - The recommendations are supported by the following reasons:

(a)         The Council must set a budget for the next financial year.

(b)         To enable the Council to continue to plan services and finances over the medium term.

(c)          To ensure decisions can be made in a timely manner.

(d)         To reduce the pressures on the MTFP in the medium term.

(e)         To ensure investment in our assets is maintained.