Agenda item

To provide the Governance, Strategy & Resources Scrutiny Board with the budget reduction requirement and the Administration’s budget proposals for 2025/26 and a forecast of the 2026/27 position having regard to the Provisional Local Government Finance Settlement (PLGFS) published on 18 December 2024. The report also presents the financial forecasts for the remainder of the Medium-Term Financial Strategy (MTFS) period 2026/27 to 2029/30.

Consideration was given to a report of the Director of Finance which provided the Scrutiny Board with the budget reduction requirement and the Administration’s budget proposals for 2025/26 and a forecast of the 2026/27

position having regard to the Provisional Local Government Finance Settlement (PLGFS) published on 18 December 2024. The report also presented the financial forecasts for the remainder of the Medium-Term Financial Strategy (MTFS) period 2026/27 to 2029/30.

It was reported that the starting point for preparing the 2025/26 revenue budget estimates is the underlying base budget of £289.1m. The 2024/25 revenue budget forecast outturn position highlights a current unfavourable projected variance of £14.2m; which will need to be financed from reserves. This is in addition to the general contribution from reserves of £10.8m towards the 2024/25 budget approved by Council in February 2024, plus contributions from other Earmarked Reserves for specific projects/initiatives of some £4.6m. This means the total contribution from reserves in 2024/25 will be some £29.5m: a situation that is not sustainable and which has significantly reduced the financial resilience of the Council.

The report advised that the Council Tax position for 2025/26, was:

-       The Council Tax Base is 59,501, up from 58,380 in 2024/25 and slightly under the position assumed in February 2024.

-       A 2.99% increase in general purpose Council Tax increase is proposed together with a 2% increase for the Adult Social Care Precept.

-       An increase of 4.99% would not require a Council Tax referendum as it would be within the referendum criteria issued by the Government in the PLGFS.

-       The Council proposes to continue to provide no Council Tax Empty Property Discount and increase the Empty Property Premium from 1st April 2025.

-       Total Council Tax to be generated for use by the Council based on the Tax Base and the 4.99% increase (including the Adult Care Social Precept) is £122.5m in 2025/26.

-       Note that the Council Tax levels for precepting Authorities or Parish Councils’ respective Council Tax levels for 2025/26 will be confirmed during January or February 2025

The report outlined the proposed savings that were required to balance the 2025/26 budget. There were a total of 25 savings proposals presented in accordance with Political Portfolios. Overall, approximately 120 FTE posts were affected, of which over 80% were currently vacant.

The Leader of the Council and Cabinet Members each presented the budget reduction proposals within their individual Portfolio area. Scrutiny Board members were able to ask questions of the portfolio holder to seek further information and clarification of the proposals following which all of the proposals were endorsed to Cabinet.

RESOLVED: that the Report  and the following recommendations be accepted and commended to Cabinet

1 The policy landscape and context in which the Council is setting its revenue budget for 2025/26;

2 The financial forecasts for 2025/26 and 2026/27 having regard to the Provisional Local Government Finance Settlement and associated funding announcements;

3 The Flexible Use of Capital Receipts at a value of £2.6m for 2025/26 and 2026/27;

4 A proposed overall 2025/26 Council Tax increase of 4.99% for Oldham Council services (2.99% for general purposes and 2% Adult Social Care Precept) resulting in the charges set out at Table 12 of the report;

5 The 2025/26 Budget Reduction proposals at a value of £8.8m;

6 The proposed transfer of reserves of £1.05m to improve the financial robustness of the Council;

7 The proposal to draw on the Collection Fund for major preceptors of £137.0m for Borough Wide services and £122.5 m for Council services (subject to confirmation);

8 The proposed net revenue expenditure budget for 2025/26 for the Council, set at £320.8m;

9 The proposed fees and charges as set out in the schedule included at Appendix 6;

10 The level of general fund balances supporting the 2025/26 budget of £18.9m underpinned by the agreed policy on Earmarked Reserves;