Agenda item

RESOLVED: To

1.1.          Consider the responses to the budget engagement with residents and statutory consultation with businesses (set out in Section 10 of this report and detailed more fully in Appendix J).

1.2.          Consider and have due regard to the equalities impact assessment undertaken on the budget proposals as set out in Appendix N.

1.3.          Approve the responses to the Scrutiny and Overview Committee recommendations (to follow after publication of this report – Appendix O) on the budget proposals as set out in Section 20.

1.4.          Approve that (subject to Full Council approving the budget and any further decisions required of the Executive) that Corporate Directors be authorised to implement their respective growth and savings proposals for 2024-25 in accordance with the recommendations within this report, the Council's Constitution, Financial Regulations, relevant Schemes of Delegation and undertake any further consultation required, including regarding the Equalities Impacts of specific decisions within the Budget envelope as approved by Full Council.

1.5.          Propose to Full Council for approval an increase in the Croydon element of the 2024-25 council tax charge by 2.99% (Band D £53.98).

1.6.          Propose to Full Council for approval a 2% increase (Band D £36.11) in the 2024-25 Adult Social Care precept levy.

1.7.          Note, based on the Mayor of London’s draft consolidated budget, a proposed 8.58% (Band D £37.26) increase regarding the Greater London Authority precept.

1.8.          Propose to Full Council for approval, the calculation of budget requirement and council tax as set out in Appendix I and note that the inclusion of the GLA precept will result in a total increase of 5.69% (Band D £127.35) in the overall Croydon council tax bill.

1.9.          Propose to Full Council for approval the setting of the Council’s own total net expenditure budget for 2024-25 at £361.267m.

1.10.       Propose to Full Council for approval the detailed programme of revenue savings, income, demand pressures and legacy budget corrections, by directorate, as set out in Appendix C.

1.11.       Propose to Full Council the proposed £5m budget in 2024-25 to support delivery of the transformation programme.

1.12.       Propose to Full Council the Reserves Policy set out in Appendix M.

1.13.       Propose to Full Council for approval that the Corporate Director of Resources be authorised to collect and recover National Non-Domestic Rate and council tax in accordance with the Local Government Finance Act 1988 (as amended) and the Local Government Finance Act 1992.

1.14.       Note the revenue budget assumptions detailed in the report and budget projections to 2027- 28 made by the Corporate Director of Resources in agreement with the Chief Executive and with the Corporate Management Team.

1.15.       Note the Council’s request for a Capitalisation Direction from the Department of Levelling Up, Housing and Communities [DLUHC] of up to £38m for 2024-25, £9.439m relating to 2019-20 and current assumption that up to a further £38m per annum in exceptional financial support will be required for future years.

1.16.       Note that all Directors will be required to report on their projected financial position compared to their revenue estimates in accordance with the 2024-25 monthly financial performance reporting timetable.

1.17.       Note the statement (Appendix K of the Report) of the Corporate Director of Resources and S151 Officer, under Section 25 of the Local Government Act 2003, regarding the adequacy of reserves and robustness of estimates.

1.18.       Note that the provisional Dedicated Schools Grant allocation for 2024-25 will increase by £28.583m to £466.825m (section 12 of the Report).

1.19.       Propose to Full Council that the necessary determinations are made as billing authority under Section 11B of the Local Government Finance Act 1992 for financial year 2024- 2025 to the effect that where permitted, for dwellings that have been unoccupied and substantially unfurnished for a period of at least one year the amount of Council Tax will be increased by 100% where the period is less than 5 years, by 200% where the period is at least 5 years but less than 10 years, and by 300% where the period is at least 10 years, and that the discount under Section 11(2)(a) shall not apply.

1.20.       Propose to Full Council that the necessary determinations are made under Section 11C of the Local government Finance Act 1992 as billing authority for financial year 2025-2026 to the effect that where permitted, for dwellings where there is no resident of the dwelling and the dwelling is substantially furnished, the amount of Council Tax will be increased by 100%, and the discount under Section 11(2)(a) shall not apply.

1.21.       Propose to Full Council that the Council Tax Support scheme (statutory local council tax reduction scheme) under Section 13A(2) of the Local Government Finance Act 1992 is not changed from that agreed by Full Council resolution on 1st March 2023.

The Executive Mayor introduced the Budget 2024-25 and Medium Term Financial Strategy 2024-28 Report which proposed a deliverable budget for 2024-25. The budget planned to include £30 million in savings for 2024-25 with an ongoing asset disposal programme that aimed to deliver £200 million of receipts over the period 2022-2026.

The Chair of Scrutiny and Overview, Councillor Rowenna Davis, shared with Cabinet that following the Scrutiny and Overview Committee (the Committee) receiving the report, the outcome concluded with the following:

-       That the council could not balance its books without exceptional support of national government, and there was a gap of £38 million pounds wide that was to be filled next year. To fill this hole, the council was to seek permission to borrow from national government for capitalisation and selling assets to meet general expenditure. Though there was no guarantee national government would provide the money for the council to stay afloat.

-       The Committee noted that the council was doing all that they could with ambitious plans for savings, and based on the information provided, it was concluded that those proposed were deliverable whilst meeting the statutory needs of vulnerable residents, although the scale, pace and wide-ranging nature of the savings meant that they would need to be closely monitored.

-       The Homes Sub-Committee had reservations relating to the Housing Revenue Account and was not assured without further data particularly on the housing stock conditions survey which should reveal more on sale of investment needed.

-       In comparison to last years budget there was concern relating to the £5 million pound economic demand pressures budget which had been removed; though the use of this budget had helped balance the books for this years budget to plug the increased costs associated with rises in demand for emergency accommodation; and thus without this extra cushion of the economic demand fund, the pressure on the council to stick to its budget would become even greater.

-       It was important how the council would mitigate risks and, on the risks register in Appendix L, not all risks listed were quantified and some did not have any mitigating actions attached.

-       In regard to transformation, the scale and pace of this was essential though not where it needed to be.

-       The Committee noted that the council was sticking with the government maximum rise of 4.99% in council tax. The reduction of the council tax hardship fund from £2 million pounds to £500,000 pounds was questioned, and the Committee was pleased that the money had been reallocated to the council tax support scheme, though the Committee was not convinced that the low take up of the scheme was due to the lack of need rather than lack of awareness, and more work to promote awareness was advised.

-       Real improvements in the quality of transparency were noted by the Committee, though in the budget an extra £9.4 million pounds of capitalisation above and beyond of what was expected was to be requested from government due to a historic contractual issue for highway works and improvements and requested for more thorough information on this.

The Cabinet Member for Finance, Councillor Jason Cummings, informed the Cabinet in terms of the council tax, that it was a 4.99% increase in terms of the council’s portion of council tax which was in fulfilment of the promise made from last year to not go over the cap this year. Borrowing was not forecasted to increase this year or next year, which was good for the council, though this was limited by the extent of the asset disposal programme. The removal of the economical demands pressures had made the budget slightly riskier, though still predicated on the £38 million pound capitalisation direction, however pointed out that in this financial year, the capitalisation direction was £63 million pounds which showed an improvement in terms of the reduction in capitalisation of £25 million pounds year on year which was a significant move. Lastly, the off-log financial sustainability data had shown that the average debt servicing cost was 8% across England, and 16% in Croydon, further, the total debt of a council across England was 226%, and in Croydon 478% which had shown that the debt Croydon was carrying was heavily significant.

The Corporate Director of Resources and Section 151 Officer, Jane West, shared that in Appendix K, the pressures the council faced focused back on the historic s114 which was served. In regard to the robustness in the budget estimates, a lot of work had been undertaken for the budget to remain robust for this financial year, this included working thoroughly with the Corporate Management Team. In regard to the removal of economic pressures contingency budget, the accuracy of the budget in place had given reassurance for a robust budget, though the position was more at risk than the current year with less room to maneuverer. Lastly, the balances available had not been used and the reserves held had not been used.

The Shadow Cabinet Member for Finance, Councillor Callton Young, asked whether the report in the public interest could be amended to be more open about the following key aspects of the budget and budget strategy; what progress was there on the negotiations with government for the debt write-off; and could there be more transparency on the budget setting process. On the general funds, could the council properly fulfil its roles without having all the key papers, and was there satisfaction that the report was sufficient for all Members to challenge the risks to the council of the removal of the economic demand reserves for 2024/25 and the provision proposed for demand and demographic pressures in 2024/25 where half was provided in the following year.  Also, the reduction of two-thirds of the council’s hardship funds that was designed to protect low-incomed households with financial difficulties in relation to council tax increases. Further, was there satisfaction that the report and in Appendix D was sufficient enough for Members to provide challenge to the transformation plans. Lastly, with the forecast that £142 million pounds should be received by the council at the end of next month from assets disposals, did the report adequately allow Members to challenge the contribution and pace of asset disposals that the council needed to make to reduce debt, and what contribution did the capital receipt from the councils rent resonance investment made to the debt reduction. 

The Executive Mayor responded that the process of the budget was more open and transparent with the Scrutiny and Overview Committee receiving papers at a much earlier stage to review and asked questions and provided recommendations, and further there was opportunity for all Members of the council to review and seek support from offices to address alternatives or other options for the budget should this be required. The negotiations with government were on-going. The council’s hardship fund was being moved to the council tax team, and it was noted that many more people were being supported through the council tax support scheme and the council was ensuring all residents were aware of all types of support available. The Corporate Director of Resources and Section 151 Officer, Jane West, added that the hardship fund £1.5 million was being reallocated to the council tax support as the request for such support was required by residents; further, relating to the resonance investments, the figures were included in the capital receipts projections and a third of the money had been received.

The Executive Mayor in Cabinet RESOLVED: To

1.1.        Consider the responses to the budget engagement with residents and statutory consultation with businesses (set out in Section 10 of this report and detailed more fully in Appendix J).

1.2.         Consider and have due regard to the equalities impact assessment undertaken on the budget proposals as set out in Appendix N.

1.3.         Approve the responses to the Scrutiny and Overview Committee recommendations (to follow after publication of this report – Appendix O) on the budget proposals as set out in Section 20.

1.4.         Approve that (subject to Full Council approving the budget and any further decisions required of the Executive) that Corporate Directors be authorised to implement their respective growth and savings proposals for 2024-25 in accordance with the recommendations within this report, the Council's Constitution, Financial Regulations, relevant Schemes of Delegation and undertake any further consultation required, including regarding the Equalities Impacts of specific decisions within the Budget envelope as approved by Full Council.

1.5.         Propose to Full Council for approval an increase in the Croydon element of the 2024-25 council tax charge by 2.99% (Band D £53.98).

1.6.         Propose to Full Council for approval a 2% increase (Band D £36.11) in the 2024-25 Adult Social Care precept levy.

1.7.         Note, based on the Mayor of London’s draft consolidated budget, a proposed 8.58% (Band D £37.26) increase regarding the Greater London Authority precept.

1.8.         Propose to Full Council for approval, the calculation of budget requirement and council tax as set out in Appendix I and note that the inclusion of the GLA precept will result in a total increase of 5.69% (Band D £127.35) in the overall Croydon council tax bill.

1.9.         Propose to Full Council for approval the setting of the Council’s own total net expenditure budget for 2024-25 at £361.267m.

1.10.     Propose to Full Council for approval the detailed programme of revenue savings, income, demand pressures and legacy budget corrections, by directorate, as set out in Appendix C.

1.11.     Propose to Full Council the proposed £5m budget in 2024-25 to support delivery of the transformation programme.

1.12.     Propose to Full Council the Reserves Policy set out in Appendix M.

1.13.     Propose to Full Council for approval that the Corporate Director of Resources be authorised to collect and recover National Non-Domestic Rate and council tax in accordance with the Local Government Finance Act 1988 (as amended) and the Local Government Finance Act 1992.

1.14.     Note the revenue budget assumptions detailed in the report and budget projections to 2027- 28 made by the Corporate Director of Resources in agreement with the Chief Executive and with the Corporate Management Team.

1.15.     Note the Council’s request for a Capitalisation Direction from the Department of Levelling Up, Housing and Communities [DLUHC] of up to £38m for 2024-25, £9.439m relating to 2019-20 and current assumption that up to a further £38m per annum in exceptional financial support will be required for future years.

1.16.     Note that all Directors will be required to report on their projected financial position compared to their revenue estimates in accordance with the 2024-25 monthly financial performance reporting timetable.

1.17.     Note the statement (Appendix K of the Report) of the Corporate Director of Resources and S151 Officer, under Section 25 of the Local Government Act 2003, regarding the adequacy of reserves and robustness of estimates.

1.18.     Note that the provisional Dedicated Schools Grant allocation for 2024-25 will increase by £28.583m to £466.825m (section 12 of the Report).

1.19.     Propose to Full Council that the necessary determinations are made as billing authority under Section 11B of the Local Government Finance Act 1992 for financial year 2024- 2025 to the effect that where permitted, for dwellings that have been unoccupied and substantially unfurnished for a period of at least one year the amount of Council Tax will be increased by 100% where the period is less than 5 years, by 200% where the period is at least 5 years but less than 10 years, and by 300% where the period is at least 10 years, and that the discount under Section 11(2)(a) shall not apply.

1.20.     Propose to Full Council that the necessary determinations are made under Section 11C of the Local government Finance Act 1992 as billing authority for financial year 2025-2026 to the effect that where permitted, for dwellings where there is no resident of the dwelling and the dwelling is substantially furnished, the amount of Council Tax will be increased by 100%, and the discount under Section 11(2)(a) shall not apply.

1.21.     Propose to Full Council that the Council Tax Support scheme (statutory local council tax reduction scheme) under Section 13A(2) of the Local Government Finance Act 1992 is not changed from that agreed by Full Council resolution on 1st March 2023.