Decision - General Fund Budget Planning and Resource Update 2025-26

This report presents the General Fund resource and cost estimates for 2025-26 and the 4-year MTFS period for noting. The report also seeks approval of the approach for setting the annual revenue and capital budget for 2025-26.

That Cabinet: 1) Note the planning assumption of a Council Tax increase of 2.99% over the 4-year Medium-Term Financial Plan period and an Adult Social Care Precept of 2.00% or the equivalent in grant funding in 2025/26. 2) Note the funding assumptions and net expenditure projections for 2025/26 including a projected budget shortfall of £36.730 million. 3) Note the Medium Term financial projections for 2025/26 to 2028/29 and the predicted budget gaps totalling over £105 million over the period. 4) Note the proposed budget development approach and that members will use this to develop 4-year medium-term service and financial plans and proposals for Budget Council consideration, including detailed budget proposals to set a legally balanced budget in 2025/26 and enable the Council Tax for the year to be set. 5) Note the planning assumption of recurrently funding transformation enabling resources of at least £1 million, as set out in paragraphs 7.5 to 7.6 , from the revenue budget rather than the previous practice of utilising capital receipts since 2016/17. 6) Note that projections for next year and the Medium Term Financial Plan (MTFP) will be updated following government funding announcements expected in Autumn 2024 and Spring 2025.

The report assesses financial risks affecting the council’s Medium Term Financial Plan, including inflation, pay awards, social care demand, homelessness, income shortfalls and uncertainty over future government funding. It sets out the potential financial impacts of these risks and the proposed monitoring, control and mitigation measures.