Consideration was given to the report of the Interim Deputy Chief Executive and Section 151 Officer on the draft Revenue Budget for 2024/25.  The budget had been scrutinised by the Overview and Scrutiny Committee (OSC) on 22 January 2024 and a copy of the Minutes arising from the OSC meeting had been appended to the report for Cabinet’s consideration.  Also appended to the report were details of the summary draft Revenue Budget, the summary information for each service area, main changes from the updated 2023/24 budget, Capital Programme, summary of the budget consultation responses, proposals for new Council Tax premiums, consideration of the Council Tax Reduction Scheme (CTRS) for 2024/25, summary of cashless car parking consultation and fees and charges.

The following key issues were highlighted:

•     the overall financial position had improved since the report to the OSC by £442k, taking the forecast drawdown from reserves down from £626k to £185k, the reasons for this were detailed in the report;

•     the draft Local Government Finance Settlement (LGFS) applied to 2024/25 did not guarantee any future funding streams beyond the following year and was again a further single year settlement;

•     the Council’s Core Spending Power (CSP) had been set at £12.9m, an increase of £0.6m from 2023/24, equating to 5.1%;

•     the small Business Rates Multiplier for 2024/25 would remain frozen again at 49.9p, but councils would be compensated for any reduction in income because of this decision;

•     the Department for Levelling Up, Housing & Communities had increased the overall Revenue Support Grant (RSG) in line with Consumer Price Index inflation, however the Council effectively had a negative RSG, but would not be required to pay over negative RSG;

•     for 2024/25, to ensure the Council remained within the referendum limit, it was assumed that a Council Tax increase of 3% to £204.56 would be agreed for a Band D property, subject to any final decision regarding special expenses;

•     the detailed precept budgets from Rye and Bexhill-on-Sea Town Councils had not been received at the time of drafting the report so it had not been possible to undertake an assessment of special expenses. It was recommended that the Deputy Chief Executive be granted delegated authority in consultation with the Cabinet Portfolio Holder for Finance and Governance, to make any final changes necessary in respect of special expenses once the position had been reviewed and reported to full Council on 26 February 2024;

•     the Council would receive several government grants, including New Homes Bonus (£136k), Rural Services Delivery Grant (£72k), CSP Minimum Funding Guarantee (£778k), Services Grant (£15k) and New Burdens Grant (awaiting further details) although these were pending the final settlement announcement;

•     the Benefits Administration, Local Council Tax Support and Homelessness Prevention grants did not form part of the CSP calculation and were still subject to confirmation;

•     the Medium Term Financial Strategy forecast, reported to Cabinet on 6 November 2023 which outlined several cost pressures that might affect the Council’s budget, had been reviewed and were discussed within the report;

•     the Council’s ‘Fit for the Future’ programme proposed a total of £3.3m savings to be made through efficiencies, income and savings identified from several areas, which were detailed within the report.  Total savings of £3.1m had been included within the provisional budget figures;

•     the amount of Reserves required to fund the Revenue Budget in 2024/25 equated to £0.2m; and

•     a fundamental review of the Capital Programme was being undertaken to ensure capital schemes remained affordable and continued to deliver the outcomes originally anticipated. No new proposals or capital growth items had been included within the updated programme, except for any recent Committee decisions.

The budget consultation closed on 17 December 2023 and 694 responses had been received, the highest level of response the Council had ever had to a budget consultation.  A summary of the results was attached to the report at Appendix E. It was noted that in general terms, respondents were supportive of the proposals.

Following the introduction of the Levelling Up and Regeneration Act 2023, there were opportunities for the Council to consider changes to its approach relating to certain discretionary areas of the Council Tax, concerning empty properties and second homes; the former could be introduced by April 2024, the latter required the decision to be taken at least 12 months before the financial year to which it would apply, so would therefore not take effect until the 2025/26 financial year. (Full details could be found at Appendix F to the report.)

It was proposed to change the CTRS for the 2024/25 financial year, to introduce a new, 100% funded scheme from April 2024. The proposed changes would improve the overall maximum level of support to 100% for the lowest income and most vulnerable working age applicants and remove the £5 per week minimum payment.  (Full details was contained within Appendix G to the report.)

During the debate, the following points were noted:

•     Members acknowledged the 582 respondents to the cashless car parking consultation and noted that issues raised would be discussed with the Head of Neighbourhood Services;

•     Members thanked the Interim Deputy Chief Executive and the Cabinet Portfolio Holder for Finance and Governance for their work in developing the budget and acknowledged the limits which had to be worked within;

•     Members were satisfied that an extra 1% had been added to the staff pay award budget;

•     Members agreed that the level of reserves be kept at a higher level than that recommended by the Council’s external auditor, Grant Thornton; and

•     Members were pleased to see the changes proposed to the CTRS.

The draft Revenue Budget had been balanced for 2024/25 by the planned use of just under £0.2m from Usable Revenue Reserves, which would reduce Reserves to £5.2m by 31 March 2025. From 2025/26, onwards the projections saw contributions going back into reserves, which would take reserve levels back up to around £8.0m by 2027/28. The Council’s ability to deliver a balanced budget was even more dependent on strong financial management and the delivery of the ‘Fit for the Future’ financial resilience programme.   

RECOMMENDED: That:

1)   the expenditure and budget for 2024/25 as detailed in Appendix A to the report be approved along with the anticipated use of reserves;

2)   the updated Capital Programme set out in Appendix D to the report be approved;

3)   the Council Tax for 2024/25 at Band D be increased by £5.94 (2.99%) and set at £204.54 (subject to any changes to special expenses yet to be confirmed);

4)   the proposals contained within Appendix F to the report regarding council tax premiums for empty homes and second homes be agreed as follows;

•     empty homes - the application of the current premium of 100% for all dwellings which are unoccupied and substantially unfurnished (empty dwellings) is reduced from a period of two years to one year with effect from 1 April 2024;

•     second homes - the application of a premium of 100% for all dwellings which are unoccupied but substantially furnished (second homes) be applied with effect from 1 April 2025;

•     that the Deputy Chief Executive be authorised to agree with the major preceptors the funding of any award under Section 13A (1)(C) of the Local Government Finance Act 1992 (reduction in liability) from the Collection Fund; and

•     that the Deputy Chief Executive be granted delegated authority in consultation with the Cabinet Portfolio Holder for Finance and Governance to make any necessary changes to the policy in line with the Council’s requirements and any guidance given by the Secretary of State or regulation;

5)   the proposed changes to the Council Tax Reduction Scheme  be approved for 2024/25 with a move from an 80% funded scheme to a 100% funded scheme;

6)   the fees and charges contained within Appendix J to the report be approved and the Deputy Chief Executive be granted delegated authority in consultation with the Cabinet Portfolio Holder for Finance and Governance to make any necessary changes; and

7)   the Deputy Chief Executive be granted delegated authority in consultation with the Cabinet Portfolio Holder for Finance and Governance to make any final changes necessary in respect of special expenses once the position has been reviewed.

(Councillor Field declared an Other Registrable Interest in this matter in so far as she was a Member of East Sussex County Council (ESCC) and as the matter directly related to the finances of the ESCC, in accordance with the Members’ Code of Conduct left the meeting during the consideration thereof.)

(Councillor Timpe declared an Other Registrable Interest in this matter in so far as she was a Member of Bexhill-on-Sea Town Council and involved with the Manor Barn, Bexhill and in accordance with the Members’ Code of Conduct remained in the meeting during the consideration thereof.)