Agenda item - General Fund Budget Planning & Resource Update: 2026- 27 to 2029-30

34.1    Cllr Taylor presented to the committee. It is very early on in the budgeting process for next year. Key points included: the overall General Fund increases from £264m to £281m and there are levels of financial pressure across different services; the cost and demand from Adult Social Care, Children’s Services, Home to School Transport, and temporary accommodation and rough sleepers, which has the largest cost. Although there is an overall increase in cash funding, the severe pressures have resulted in a shortfall of £40m. The council has very low reserves in comparison to other local authorities. In-year pressures relate to forecast pressures for next year and if they are not mitigated, it will have an impact on future years. There is a plan to deliver temporary accommodation more innovatively to reduce this impact, but the council has a duty to accommodate families who are homeless; housing benefit does not cover all temporary accommodation costs and the council picks up the shortfall. Budget proposals are being drafted at the moment, and they will come back to scrutiny later in the year.

34.2    Cllr Sykes asked about developments with temporary accommodation, about the MHCLG Fair Funding Review and how the reserves comparison with other local authorities was calculated. Cllr Taylor said that there is a large amount of work going on to proactively support families and prevent them from having to go into temporary accommodation. The council is using interventions such as block booking, and utilising vacancies in existing stock, such as the LPS Blocks. They are looking into turning buildings or bits of land into accommodation or to invest in in-house accommodation or sell commercial assets to buy accommodation. John Hooton said that the calculation for the reserves looks at both general and earmarked reserves. Essentially, the council has very limited reserves. Other councils have large amounts set aside which makes them more financially stable.

34.3    Cllr Loughran asked how to engage with residents and businesses to tackle the shortfall as there might be opportunities for pairing up particularly with businesses or community wealth building models. Should the council be buying more properties? Cllr Loughran asked for an explanation of the revised business rates model.  Cllr Taylor said that public engagement with the budget setting process is never high, although the online tool deployed last year did attract some interest. When engaging with stakeholders, they are encouraged to think about how they can help the council to unlock solutions. There is an argument to buy more property for housing as it would result in lower costs and the council would own an asset. John Hooton explained that as part of the changes to local government funding, the government is re-baselining where the council is in terms of the amount paid by businesses and the proportion that is kept by the council. 

34.4    Cllr Sykes asked where the £125,000 for the redevelopment of Palmeira Square came from considering there is a condition mentioned in the report not to add capital projects that have not already been planned for. Cllr Taylor said he would need to check the timing of that decision.

34.5    RESOLVED – that the report be noted.  

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Additional information provided following the committee from John Hooton:

The £125,000 investment in Palmeira Square came from the existing parks capital programme, so it did not result in additional spend over and above the approved programme. There was no budget ‘decision’ on this as such as it came from an existing budget, but I note that the initiative was announced in August.