Agenda item

Report of the Chamberlain.

Members received a report of the Chamberlain concerning the City Fund 2024/25 Budget and the Medium-Term Financial Plan.

The Chairman and the Chamberlain introduced the report, and the Committee proceeded to consider each section of the recommendations in turn. A Member asked if the issuing of service charge bills could be expedited to allow for certainty on the amount that social tenants would be required to pay. Officers replied that additional resource in the Financial Services team would allow for service charges to be issued on a quarterly basis, in order to provide better notice to residents. The Member also asked officers to consider how to advertise the support available to residents.

RESOLVED, that - the Committee endorses the report and the below recommendations for onward approval by the Court of Common Council:

1.0         To note and approve the overall budget envelopes for City Fund.

1.1         Additional funding is required to be approved for new on-going cost pressures and have been included as budget uplifts:

1.1.1     Agreed pay award from 1^st July 2023.

1.1.2     Net 3% inflation uplift to local risk budgets.

1.1.3     £470k for City Fund Adult Social Care and Children Services.

1.1.4    £2m central provision to cover assumptions for Ambition 25 (Reward Refresh) – subject to recommendations of the Corporate Services Committee.

1.1.5     £210k increase in legal costs to support specialist advice.

1.1.6     £330k on-going City Fund support to Electoral Services.

1.1.7    £400k provision for possible increases to members allowance – subject to recommendations of the Civic Affairs committee.

1.1.8    £56k shortfall (split across City Fund and City’s Estate) to Occupational Health Physician Services.

1.1.9     £59k (3%) uplift to the London Symphony Orchestra grant.

1.1.10    £189k (3.47%) increase to the Museum of London grant.

1.2         For Cyclical Works Programme (CWP):

1.2.1    Additional funding totalling £62.7m to address the backlog of works £27.1m, forward plan £34.0m, plus £1.6m towards delivery of the programme across the next 5 years from 2024/25 (Appendix A, paragraphs 22 to 28).

1.2.2    Funding identified from reserves in City Fund, endorsed by Finance Committee in December, to be ringfenced to the programme (paragraph 50).   Delivery will need to be managed robustly to avoid cost creep.

1.2.3    £25m was allocated to the Barbican Centre, approved by Court of Common Council 9 March 2023 to address critical health and safety needs and to fund the development of a business case to consider replacement of more fundamental infrastructure than is covered in a cyclical works programme.

1.2.4    Any further funding for the Barbican Centre to be considered separately and as part of its own strategic business plan (paragraph 29).

1.3         To address inflationary pressures going forward assumptions include 2% uplift from 2025/26 onwards.

1.4         Savings still to be achieved from Development of City commercial income streams through Barbican Management, Commercial - procurement, and from implementation of the Enterprise Resource Planning system have been reprofiled to (£3.3m) 2025/26 and (£0.6m) in 2026/27 respectively. Permanent savings from previous savings programmes are expected to crystallise by 2024/25 see paragraphs 63 and 64.

1.5         Other one-off pressures and opportunities for transformation in 2024/25 outlined in paragraph 27 to be funded from forecast carry forward underspends from 2023/24.

1.6         Unfunded additional revenue bids (paragraph 26) to be avoided during 2024/25, unless these can be prioritised from savings or income generated from the Corporation’s Resource Prioritisation Refresh Programme (RPR).

1.7         Increase the rents for social tenants within the Housing Revenue Account by 7.7% for 2024/25, as supported by Childrens & Community Services Committee on 25 January in order to balance the HRA across the MTFP.

1.8         As in previous years, it is recommended the earmarked security reserve retains £1m as a minimum and is reviewed regularly.

1.9         Approve the overall financial framework and the revised Medium-Term Financial Strategy (paragraphs 17 to 73).

1.10      Approve the City Fund Net Budget Requirement of £201.8m (Appendix A, paragraph 7)

Key decisions:

The key decisions are in setting the levels of Council Tax and National Non-Domestic rates:

2.0         Council Tax – paragraphs 54 to 57

2.1  To approve an increase of 2% social care precept, raising c£165k p.a. in response to the ongoing pressures in homelessness and adult social care. This is recommended given the pressures within adult social care totalling £310k p.a.

2.2  To approve an increase of 2.99% on core Council Tax raising c£247k p.a. This is recommended to address £160k pressure on children social care and bridge the gap on adult social care as above.

2.3  To note if both increases are approved, the 4.99% increase will increase income by £412k and raise Band D rate by c£48.00 to £1,051.62 (before GLA precept). This increase is not excessive and is below the threshold to require a referendum and much needed for continued support to vulnerable members of society.

2.4  To determine that a fully funded means tested council tax reduction scheme will continue in place for those on low incomes and least able to pay more. This means that those that are least able to afford it will continue to receive 100% support with their council tax bills.

2.5  To determine the Local Discretionary discount for Care Leavers between the ages of 18 to 25 is continued for 2024/25.

2.6  Determine the amounts of Council Tax for the three areas of the City (the City, the Middle Temple and the Inner Temple to which are added the precept of the Greater London Authority (GLA) - Appendix B.

2.7  Determine, that as in previous years no discount (0%) is awarded to unoccupied and unfurnished and uninhabitable dwellings for 2024/25.

2.8  Determine that a premium is levied on long-term empty property for 2024/25 of 100%, 200% and 300% on properties that have been empty for 2, 5 and 10 years respectively. This is a continuation of the Premiums charged in 2023/24.

2.9  Introduce a new long-term empty property premium of 100% for properties that have been empty for longer than 12 months in 2024/25.

2.10   Determine that a Second Home Premium is introduced in 2025/26. 12 months' notice is required to introduce this additional charge.

2.11   It is recommended that, having regard to the government guidance issued, the Chamberlain be given the discretion, delegated to the Assistant Director, Financial Shared Services, to reduce or waive the long-term empty premium charge in exceptional circumstances.

2.12   Approve that the cost of highways, street cleansing, waste collection and disposal, drains and sewers, and road safety functions for 2024/25 be treated as special expenses to be borne by the City’s residents outside the Temples (Appendix B).

3.0         Business Rates – paragraphs 58 to 61

3.1  To approve an increase of up to £0.04p in the £ in Business Rate Premium raising up to c£8.1m p.a. to support the ongoing pressures on the Police and security costs (paragraphs 40 to 43, 52).

3.2  Award a Discretionary Discount under S47 Local Government Finance Act for qualifying Nursery Schools of up to 100%.

3.3  Note that the Non-Domestic Rate multiplier of 54.6p and a Small Business Non-Domestic Rate Multiplier Rate of 49.9p have been set by Central Government for 2024/25 (Appendix A, paragraph 9).Note that, in addition, the GLA is levying a Business Rate Supplement in 2024/25 of 2.0p in the £ on properties with a rateable value of £75,000 and above (Appendix A, paragraph 12).

3.4  Delegate to the Chamberlain the award of discretionary rate reliefs under Section 47 of the Local Government Finance Act 1988 (Appendix A, paragraph 11).

4.0         Capital Expenditure

4.1  Approve the Capital Strategy (Appendix F).

4.2  Approve the Capital budgets for City Fund and the allocation of central funding from the appropriate reserves to meet the cost of the 2024/25 bids – release of funding being subject to approval at the relevant gateway and specific agreement of the Resource Allocation Sub Committee at gateway 4(a) (paragraphs 70 to 73)

4.3  Approve the continuation of the allocation of central funding in 2024/25 to provide internal loan facilities for the HRA, currently estimated at £14.6m respectively.

4.4  Approve the Prudential Code indicators (Appendix D).

4.5  Delegate authority to the Chamberlain to determine the final financing of capital and supplementary revenue project expenditure.

5.0      Treasury Management Strategy Statement and Annual Investment Strategy 2024/25 (Appendix E)

5.1  Approve the Treasury Management Strategy Statement and Annual Investment Strategy for 2024/25, including the treasury indicators – Appendix E.

5.2  Approve the authorised limit for external debt (which is the maximum the City Fund may have outstanding by way of external borrowing) at £432.8m for 2024/25; and the Minimum Revenue Provision (MRP) for 2024/25 at £1.4m (MRP policy is included within Appendix E – Treasury Management Strategy Statement and Annual Investment Strategy Statement 2024/25 - Appendix 2).

6.0         Chamberlain’s Assessment

6.1  Take account of the Chamberlain’s assessment of the robustness of estimates and the adequacy of reserves and contingencies (paragraphs 76-80 and Appendices A, C and H respectively).