The Leader introduced the report (previously circulated) of the Chief Officers Executive requesting that consideration be given to the Medium Term Financial Plan (MTFP) for 2025/26 to 2028/29 (also previously circulated) for consultation, including setting a budget and council tax increase for 2025/26.
The submitted report stated that the Council was facing significant and unparalleled financial challenges stemming from reductions in public spending; the aftermath of Covid; the current economic climate; increased cost of living; income deprivation and rising poverty; high inflation; and the increased demand for services particularly in relation to adults and children’s social care and homelessness. Although the Council had previously met the challenges faced head on the significant additional demand for services was putting unprecedented pressures on affordability and despite additional savings achieved, the Council’s reserves would be fully depleted by the end of 2026/27.
It was reported that the additional funding for core services had been announced in the budget along with a fundamental reform of how local government was funded; Darlington currently had the second lowest Council Tax in the North East, which limited the amount the Council could raise to fund the spending pressures; savings of £3.649m had been achieved following a review and challenge of services; and that reserves would be utilised to meet the funding gap. The MTFP had been developed to help meet the vision and priorities contained within the Council Plan despite the financial challenges faced, by directing the resources available to the areas where most impact could be made.
Reference was made to the additional funding announced by the Chancellor in the budget in October and to the Local Government Finance Settlement. As the Local Government Settlement was not expected until late December, a number of assumptions had been made in the draft 2025/26 budget which aimed to ensure that the Council set a legal budget and continued to provide the core offer of services to the residents of Darlington.
Details of the projected expenditure and income; budget pressures and savings; schedule of proposed fees and charges; assumptions used to prepare estimates; projected Revenue Outturn 2024/25; and proposed Capital Medium Term Financial Plan 2025/26 to 2028/29, were all also appended to the submitted report.
RESOLVED - That the Revenue Medium Term Financial Plan (MTFP) and the Capital Programme, as set out in Appendices 6 and 7 respectively to the submitted report, be approved for consultation, including:-
(a) a Council tax increase of 2.99 per cent plus a two per cent Adult Social Care Precept to fund social care for 2025/26;
(b) the Schedule of Charges, as set out in Appendix 3 to the submitted report; and
(c) the efficiency savings, transformation and the services reviewed proposed.
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 MTFT in the medium term.
(e) To ensure investment in the Council’s assets is maintained.