1.         To receive an update on the final Local Government Settlement for 2025/2026 and any changes to the proposed draft budget for 2025/2026.

2.         To agree the final report of the Priorities and Resources Review 2025/2026 on the Revenue and Capital Budget for 2025/2026.

The Cabinet Member for Housing and Finance – Councillor Tyerman and the Director of Finance – Malcolm Coe gave a presentation on the latest information in respect of the Local Government Finance Settlement for 2025/2026 and responded to questions.  It was noted that the amount of compensation towards the increased National Insurance contributions was not known but was expected to be significantly lower than the actual costs, this would need to be addressed by the Cabinet when they set their final budget proposals.  Overall, it was anticipated that there was an additional £5.760m funding for the Base Revenue Budget and an additional £4.012m one off funding.

Members asked questions in relation to if the additional money for Domestic Abuse picked up the concerns of the Priorities and Resources Review Panel and how it compared to previous years; if the additional Social Care Grant would have implications for Council Tax going forward and how it would be split, especially in respect of the Integrated Care Organisation (ICO); how the Business Rates changes were calculated; how much was the National Insurance liability for the Council; would all the Extended Producer Liability be passported to SWISCo; was there any conditions attached to the £2.085m Recovery Grant; and when would the 2025/2026 Budget Digest be published.

Members were advised that the additional money for Domestic Abuse covered the areas of uncertainty plus an additional £100k.

In response to questions around the Social Care Grant, Members were advised that the Council had committed the equivalent of 2% Council Tax per annum for Adult Social Care over the next five years as part of the agreement with the ICO and 50% of the additional money should be linked to the integrated contract.  There was an opportunity to influence how the additional money was spent to ensure that it was used for Adult Social Care and not just offset against bottom line overspending and how it could be used to influence the market, encourage invest to save and how the ICO runs Adult Social Care moving forward.  It was noted that in the past some of the funding had been used for schemes from community organisations which had helped support pressures in the NHS.  Adult Social Care providers were was also likely to have significant underfunding for the National Insurance pressures.

Members were advised that the liability to the Council, excluding schools and Children’s Services and Adult Services contracts, for National Insurance was £1.7m.

The Board was informed that not all of the Extended Producer Liability funding would be passported to SWISCo as this was supposed to be about moving the cost of dealing with waste to the producer rather than the user. The full details were not yet known but there was likely to be flexibility on how the money was used but the Council needed to understand more about the costs involved.  Members requested a written response on the amount of recycling collected over the Christmas period for the last two years.

It was noted that the £2.085m Recovery Grant was not ring fenced but was expected to be one off.  It was aimed at helping struggling Councils and was targeted at Council’s with high deprivation levels.  Many Councils across the country had not received this grant.  Business Rates calculations were based on Government Formulas.

It was anticipated that the Budget Digest would be published by the end of April.

The Board welcomed the additional funding announced by the Government but was concerned in respect of the uncertainty around the National Insurance liability.

Resolved (unanimously):

That subject to the following additional recommendation, the report to the Cabinet on the Revenue and Capital Budget for 2025/2026 be approved:

4.         that a reserve be created for Children’s Services to respond to any market pressures arising from National Insurance rate increases.