Issue - meetings

Purpose of Report

1.    To recommend to Executive the Medium-Term Financial Strategy for the period 2025-2030 and the budget for 2025/26, for referral to Full Council.

2.    To recommend to the Executive the Capital Strategy 2025-2030 for referral to Full Council

Decision

That the Council be recommended to approve the Medium Term Financial Strategy 2025-2030, and the Capital Strategy 2025-2030, which included the following specific elements:

• a proposed council tax Increase of 2.9% for 2025/26;
• the Council being a member of the Lincolnshire Business Rates Pool in 2025/26;
• the General Fund Revenue Forecast 2025/26-2029/30, as shown in Appendix 1 and the main basis on which this budget had been calculated (as set out in paragraph 4);
• the Housing Revenue Account Forecast 2025/26-2029/30, as shown in Appendix 2 and the main basis on which this budget had been calculated (as set out in paragraph 5);
• the General Investment Programme 2025/26-2029/30, as shown in Appendix 3, and the main basis on which the programme had been calculated (as set out in paragraph 6).
• The Housing Investment Programme 2025/26-2029/30, as shown in Appendix 4, and the main basis on which the programme had been calculated (as set out in paragraph 7).

Alternative Options Considered and Rejected

None.

Reasons for the Decision

The refresh of the Medium-Term Financial Strategy (MTFS) needed to be seen in the context of a high level of financial uncertainty for the Council in relation to future Government funding levels. Significant changes to future public sector departmental spending through the Spending Review 2025, the allocation of this funding to local government through reforms to the distribution methodologies, and the implementation of a Business Rates Reset, were as yet unknown but all of which had the potential to fundamentally affect the Council’s funding trajectory and MTFS.

In addition, the announcement of the English Devolution White Paper, which set out the Government’s plans to widen and deepen devolution in England and reform local government structures, could have fundamental implications for all tiers of local government.

Furthermore, the Council continued to face cost and demand pressures, along with pressures on income streams and new statutory requirements. Inflation, pay awards, national insurance contribution increases, higher maintenance and construction costs, higher borrowing costs and reductions in local income streams all had a significant impact on the Council’s cost base. The Council also continued to see increased demand for services, by those who relied on the safety net provided by local government, driven in part by the cost-of-living crisis and housing shortfall. In addition, new regulatory and statutory requirements added further cost pressures particularly in relation to recycling and housing standards/building safety.

As a result of these factors, the Council, and local government as a whole, were yet again having to update their medium-term financial strategies in an uncertain environment. It was a long time since the Council had any stability and certainty beyond a one-year timeframe, which made financial planning, and the subsequent impact on service delivery, in this climate extremely challenging.

Alongside  ...  view the full minutes text for item 93