Agenda item

The Deputy Chief Executive and Section 151 Officer presented the Initial Budget Setting Report for Members’ consideration.

Cabinet was informed that in the Chancellor’s statement on 29^th July 2024, a number of points relating to the budget had been raised which had implications for local government finances:

·             The budget would be announced on 30^th October 2024.

·             Local government would receive a one-year settlement for 2025/26.  There was some uncertainty about when the one-year settlement for local government would be confirmed but Officers were hopeful that this would be at an earlier stage compared to 2023.

·             The Government would be undertaking a spending review with a view to making three-year settlements for 2026/27 to 2028/29.  The Council would need to make sure that it responded to any consultations on this subject in order to help influence the budget settlement process.

·             The pay review for public sector workers was due to be fully funded by the Government.  Explicit reference had not been made to local government in this announcement, but Councils were hopeful that local authority staff would be covered through this process.

·             Charitable rate relief entitlement would be removed for private schools.  Instead of paying 20 per cent of business rates, they would in future have to pay 100 per cent of business rates.  The additional 20 per cent revenue would be paid on a 50:50 basis to the Government and the local authorities areas in which the school was situated.  Members were asked to note that there were private schools located in Bromsgrove District so the Council would benefit financially from this measure.

·             Changes would be made to Capital Gains Tax rules.

·             Increases had been announced to fuel duties, which would result in increased costs associated with the Council’s vehicle fleet.

·             Pension tax relief was being reviewed, which could have negative financial implications for the Council.

·             The Government was proposing to limit insurance increases, which could have a positive impact on the Council’s budget.

The report proposed that, in line with practice in recent years, there should be a two-tranche process for budget setting at the Council in 2025.  Every attempt would be made to ensure that any risks to the Council’s finances were addressed in Tranche 1 of the budget to help with transparency and budget planning.

Once the report had been presented, Members discussed the following points in detail:

·             The changes to the charitable rate relief status of private schools and the implications of these changes for demand for state school places locally.

·             The possible implications of the changes to the charitable rate relief status of private schools for pupils in receipt of bursaries.

·             The numbers of pupils attending private schools locally, including the numbers of young people resident in the District.

·             The timeframes for agreement of the pay award to staff.  Officers advised that it was not known when the pay award would be announced and Members were asked to note that at least one Trade Union was consulting on strike action which would potentially impact on those timeframes.

RESOLVED that the 2 Phase Budget Process is again followed for the 2025/26 to 2027/28 Medium Term Financial Plan.