Agenda item - Budget 2024/25

Budget 2024/25

Meeting of Budget, Cabinet, Tuesday 20 February 2024 7.00 pm (Item 7.)

Deputy Leader of the Council and Cabinet Member for Finance

Decision:

AGREED: That Cabinet reviewed the Council’s approach to balancing the budget and agreed and recommend that Council approved:

i) The net budget for 2024/25 of £118.721m as set out in the main body of the report.

ii) Fees and Charges for 2024/25 as set out in Appendix F to the Report.

iii) The Flexible Use of Capital Receipts for the purposes outlined in Appendix G of the report.

iv) The statement of MRP policy contained in Appendix H to the report under the heading Minimum Revenue Provision

v) The Capital Strategy 2024/25 as set out in Appendix H to the report.

vi) The consolidated Capital Programme for 2024/25 as set out in Appendix I

vii) That delegated authority is given to the Executive Director of Place and the S151 Officer, in consultation with the Cabinet Member for Finance to approve the inclusion of the proposed PSDS project, subject to business case.

viii) The breakdown of projects with the highway resurfacing programme as detailed in Appendix J to the report.

ix) The breakdown of projects within the footway maintenance and construction programme as detailed in Appendix J to the report.

x) The Treasury Management Strategy for 2024/25 as set out in Appendix K to the report, including the Treasury Management Policies and Lending Counterparty Criteria

xi) The prudential indicators as set out in Appendix K to the report, including the Operational and Authorised limits for external borrowing.

xii) The allocation of the £165.017m Dedicated Schools Grant as set out in Appendix L to the report.

xiii) The updated Pay Policy Statement for 2024/25 as set out in Appendix M to the report.

xiv) An edit to the budget that showed the following lines in Fees & charges as *For Consultation* - Outdoor Facilities - Football, Rugby, Cricket, and Lawn Tennis, with the final increase in fee to be delegated to the Executive Director of Place in consultation with the Cabinet Member for Communities & Leisure.

Minutes:

AGREED: That the order of business be changed so that item 7 is heard first, followed by items 8 & 9 due to the number of registered speakers.

Councillor Jones, Deputy Leader of the Council and Cabinet Member for Finance, said that before she wished to introduce the report to Cabinet, she believed that Councillor Reynolds, Cabinet Member for Communities & Leisure, wished to propose an edit to the budget. He wished for an edit to be made to show the following lines in Fees & charges as *For Consultation* - Outdoor Facilities - Football, Rugby, Cricket, and Lawn Tennis, so that any proposed increase could be consulted on properly with the affected sports groups. He said that the final increase in fee would then be delegated to the Executive Director of Place in consultation with himself as Cabinet Member. This edit was accepted by Councillor Jones as the relevant Cabinet Member, along with the rest of the Cabinet as a whole.

Councillor Jones continued her introduction by saying that many councils across the country were setting budgets in a challenging environment of increased social care demand and costs, increased borrowing costs and increased contract costs. Frustratingly the borough also had to deal with the legacy decisions around council tax and capital spend that had long lasting effects on the borough’s spending power. The amount that the council had to spend was £322 per resident less than comparable councils. She said that last year, the outgoing Section 151 Officer also warned that given the level of savings identified, the Council needed to assure itself that there were robust plans and processes in place to deliver and report on the delivery of savings during the current financial year of 2023/24. She added that it appeared obvious to her that given the budget overspends, the robust plans and processes were not in place in February 2023 to deliver the savings that were needed.

Councillor Jones then said that for 2024/25, the borough had to take a different approach and not base the budget on amendments to previous years, as was usual. They had started from the bottom up and had calculated current demands, current costs, current income, looked at trends, strengthened the confidence in the numbers used and addressed any issues that were found whenever and however they came about. There was a £6.00m budget gap and in addition to this, the borough had to address the Adult Social Care £5.00m gap between the 23/24 base budget and demand. The plans to provide growth of nearly £10.00m and savings of £7.50m were already in place and would have the appropriate resources available, in order to achieve the targets. Moving forward, this would be monitored by both the Executive Leadership Team and the Cabinet monthly, following improvements to the finance reporting.

Councillor Jones then discussed changes to the draft budget following the public consultation and also the increase in the settlement grant, which were detailed on Page 5 of the report. Included within this were a prudent estimation of income from the observation wheel, staffing resource and use of flexible capital receipts to resource the transformation projects. This had allowed the borough to increase the contingency budget to £3.60m, which was up from the £2.40m seen last year, with the intent to add any unused contingency to the reserves in April 2025. She thanked the residents, groups and businesses that took the time to respond to the consultation, with one outcome being that ‘first’ parking permits were frozen.

Councillor Jones then discussed the Medium-Term Financial strategy. The current levels of funding RBWM were not generating sufficient surpluses to create capacity for growth, with a choice having to be made on whether to allocate to growth pressures or improve the borough’s financial resilience by increasing reserves. The growth Items were shown in Appendix D, with the most notable factors being the £5.20m in Adult Social Care and £2.60m in Childrens Social Care to address the inadequacies in the 2023/24 budget. In the last decade, Social Care had increased from being 54% of net revenue expenditure to nearly 80%, which had greatly impacted other services.

Councillor Jones then added that many fees and charges were agreed in principle in December and were implemented early, with the remaining fees and charges in Appendix F having not yet been approved. She then said that Appendix H showed that the total capital program was £30.50m with £10.80m being projects that had slipped from previous years. Capital spend was being restricted to the necessary infrastructure, funded by an external grant, and therefore reduced the need for borrowing. She said that the high level of debt currently held by the borough, put pressure on the revenue budget amounting to £13.00m or 11% of the overall budget. In addition, the Capital program was at Appendix I and set out the new bids for 2024/25 and the committed capital spend to 2028/29.

The Treasury strategy at Appendix K highlighted the importance of the borough’s cashflows, borrowing and investments. Large amounts of unfunded borrowing had left the authority with around £200.00m of debt. More work was needed to generate better quality forecasts to inform management decisions going forward and support was already in place to strengthen both capacity and capability. She added that the remaining appendices included the Dedicated Schools Grant, the Pay Policy, the Equality Impact Assessments, and the Chief Finance Officer’s Report.

In terms of the CFO Report, Councillor Jones drew the Cabinet’s attention to the key risks of Contingency, Change, Control, Complacency and Capacity and the mitigations detailed against these risks. She added that there were also some recommendations from the Corporate Overview & Scrutiny Panel that met in January 2024. Concerns were raised regarding defects at Braywick Leisure Centre for example. She said that there was a trade-off between the description and the volume of information that was published, with the descriptors in the tables having been given more focus than before, with the situation having been set out more transparently than in other years.

Councillor Jones then said that in relation to CIL, buying social housing took large amounts of capital or borrowing, neither of which the council was in a position to do. The borough was looking into the eligibility for Homes England funding and the preference was to use the balance of S106 monies as a contribution to Social Housing providers with the council holding nomination rights.

Councillor Jones concluded by saying that the enormous effort of officers and councillors, in a very challenging situation and despite last year’s budget being inadequate, a balanced budget had been delivered. £5.20m of growth had been added to Adult Social Care, £2.60m to Childrens and the contingency had been increased by £1.20m to £3.50m. She noted that the borough was delivering services at a much lower cost than other councils, but the actions set out in the report such as the following, put the borough in good stead. These were:

• the transformation programme

• the capital project management

• the increased financial governance

• putting back the processes that had disappeared over the years

• the increase in capacity

• the focus on income generation

Councillor Jones ended her submission by thanking the Executive Director of Resources and her team, the Senior Leadership Team, and officers across the council, as the borough now had a challenging but deliverable budget.

Elizabeth Griffiths, Executive Director of Resources, wished to thank officers for their hard work since September 2023 to deliver a balanced budget. She said that £7.00m in efficiencies were needing to be delivered in-year. The flexible use of capital receipts were used to add temporary resource to aid in delivering this. Legacy cuts to Council Tax had seen a lot less funding being available compared to that of local neighbouring authorities. The budget would have to increase by a quarter to match them. This was along with a legacy of debt that needed to be serviced.

Stephen Evans, Chief Executive, wished to add to this by saying that every line of the budget had been gone through to eliminate any spending that could feasibly be removed. Proposals of Council Tax increases and increases in fees and charges were not easy decisions to take, however as Councils appeared to now be self-funded, these decisions had to be made. He said that presenting a balanced budget was a huge moment for any Council, especially with the weak financial resilience that had been seen. He said that he did believe that the Council was on the right track, however further work of course needed to be done.

Councillor Tisi, Cabinet Member for Children’s Services, Education & Windsor, said that she wished to comment on some of the positive aspects of the budget that were being seen in Windsor specifically. These included the west Windsor healthy routes to school, money allocated to improve the health suite at Windsor Leisure Centre and the tennis courts by Alexandra Gardens. The Youth Council had also brought attention to street lighting within the borough. She then said that it was the administration’s intention to certainly continue with the operation of the Windsor Museum, however the previous administration had cut the budget for this, meaning alternative ways and models would need to be explored.

Councillor Davies, Cabinet Member for Climate Change, Biodiversity & Windsor Town Council, thanked officers for their hard work and their initiative in seeking funding for achieving the administration’s ambitions. The public sector decarbonisation scheme for Windsor Leisure Centre would see gas fire boilers being replaced by air source heat pumps, which would improve sustainability. She then added that a new full-time position of a climate partnership co-ordinator had recently been recruited to, with a start date of March 2024, which was seen as a major positive in taking the partnership forward.

Councillor Reynolds said that the public sector decarbonisation fund money was fantastic, with a grant being obtained from Central Government of over £8.00m. He said that there had recently also been a £0.400m investment into the new gym at Windsor Leisure Centre, which was a massive bonus for residents. In addition to this, he praised the £0.200m that was being used towards the health suite, as Councillor Tisi had just mentioned.

Councillor Bermange, Cabinet Member for Planning, Legal & Asset Management, wished to make the point about what had changed within the last two months, since the draft budget last came before Cabinet. A public consultation had occurred, allowing residents to provide feedback on the proposed budget, but also this had led to in-year changes to the finances also, which would be picked up on in item 6. He then referred to Appendix O of the report, which made statements about the robustness of the estimates and the reserves. He said that the announcement from the Secretary of State was also a one-off, with the additional funding being used to assist with the next financial year’s reserves.

Councillor Jones completely agreed with this and replied by saying that during her time as a Councillor since 2011, reserves seen before were as low as £5.00m, with no contingencies. No other decision could possibly be made to ensure that the contingencies were there, other than what had been agreed now.

Councillor Del Campo, Cabinet Member for Adults, Health & Housing Services, thanked the public for their responses during the consultation period, which had been read and taken into account. She continued by saying that it was very important to look after the borough’s most vulnerable residents, who would always be at the forefront of their minds. Some comments from the consultation that were specifically picked out, which really resonated with her were that adult support should be a Central Government funded subject, and not by the Council. She said that income tax was a fair way to tax people, however Council tax was not as fair, due to it being a regressive tax. She did not want to increase this, however there was not much alternative due to the financial challenges that the Council faced.

Councillor Del Campo added that care home charges were negotiated very hard, and the borough were seeking to hold them to a much lower amount than what was first proposed moving forward, for which she was very proud of the borough’s commissioners. The idea of the borough having its own care home was something that was also being looked at, however if it proved to not be cost-effective, then this would of course not be pursued. She noted that it was however still early days in this process.

The Chair then invited Peter Haley, Gerald Hyder, John Baldwin, and Andrew Hill to address Cabinet for 3 minutes each as registered public speakers.

The Chair’s responded to Peter Haley’s comments by saying that the new administration had been left with a mess to fix and said that this would take time however he was very much determined to assist with the issues mentioned around shop mobility in Maidenhead, following the demolition of the Broadway car park.

Councillor Reynolds responded to Gerald Hyder by saying that he wished to work with Councillor Tisi as Cabinet Member for Windsor to look at what potential routes could be taken to potentially relocate the location of the Windsor Museum for example. He could not understand some of the legacy ideas of the previous administration surrounding the museum, which had left it in its current state.

Councillor Jones responded to John Baldwin’s comments by saying that not all adult social care providers were looking for increases, with only 1 or 2 providers potentially only looking for higher incomes. She added that she had indeed challenged aspects of the previous budget, including that of Children’s Services, in addition to the word ‘review’ being used too many times in the previous budget. She added that the issuing of a Section 114 notice would be the worst outcome for residents, which she did not endorse.

The Chair thanked him for his comments and said that he believed that the previous administration knew that they were going to lose power, so began to stuff the finances, as nobody would be able to stop them. Councillor Jones then also responded to Andrew Hill’s comments and stated that there would never be a fire sale of Council assets.

Councillor Price then spoke as a non-Cabinet Member and thanked officers and the Cabinet for the draft budget as it was a lot clearer, more transparent, and comprehensive, compared to previous years, in addition to the resident-friendly terminology that had been used. She then said that Appendix O was a masterpiece in explaining why the borough were in the situation that they were in, and why such measures were being needed to be taken. She then said that it was clear that issues existed with paper spreadsheets being used, assets failing to be maintained and building a new leisure centre at Braywick with defects amongst others. She added that residents feared what deals existed between developers and the Council. She asked how many more stones were yet to be turned over and how confident were the Cabinet that the reserves were sufficient in order to cope with the unknowns.

Councillor Jones replied by saying that at the moment, the Cabinet just did not know. Three new persons had been brought in and a lack of audit had allowed for this to all occur, with a lot more still expected to be seen both positive and negative.

Councillor Price then expressed disappointment with the little amount of reference to levelling up, at a time when Central Government were stopping the Household Support Grant. She asked if the Cabinet were working closely enough with social housing providers such as Abri and the community organisations. There was also no mention of various religious groups in the borough who did so much for the community. Councillor Jones replied by saying that the Council tax reductions scheme did exist, and that communication was the key there in getting this message out to those who needed it. In addition to the business rates reduction scheme for local charities too. Again, communication was the key for this. In relation to religious groups, the Chair agreed that religious groups and better phrase faith groups, would be added to the list of groups.

Councillor Price then asked about the plans for transformation and noted the previous Cabinet Transformation Sub-Committee and its lack of meetings last year. Councillor Jones then explained what the proposed process was going to be for this going forward, with directorate meetings, an overall board and with results being reported publicly at Cabinet.

Councillor Wilson then spoke as a non-Cabinet Member. He thanked officers for their hard work when it came to the budget. He said that the CFO Report showed the borough to be on a financial cliff edge, however he was optimistic. He said that it was good to see things being repaired, including things being reported 2 weeks prior to the month’s end, which was a more rewarding and better position to be in. He also liked the reference to income generating opportunities and when thinking of Windsor itself, there were of course a vast number of visitors to the town annually, specifically tourists. He then placed on record his thanks that there was a line in the budget for the re-opening of the Eton Wik library. He then made a transparency request, which was to disclose the gross income and costs for parking. It was currently quite hidden and believed that it would go down well with residents, when currently it was a difficult topic for them. Councillor Jones said that the average amount that was brought in from parking, was just under £13.00m. Greater governance processes were also going into the Prop Co.

He then asked about officer pay and what was being discussed to boost compensation and disparity between the pay of RBWM staff and that of neighbouring local authorities. Councillor Jones said that if the money was there, then of course they would increase officer pay to bring it more in line with neighbouring authorities. Terms and conditions were being enhanced, which was as much as could be done in the current circumstances.

In reference to Eton Wick library, Councillor Reynolds replied by saying that he wished to continue working hard with him, Councillors, and residents to drive this forward. Introducing a tourist tax was also being looked into, however it could not be seen to harm local businesses.

Councillor J Tisi then spoke as a non-Cabinet Member. He also praised the Cabinet and officers for their work on balancing the budget, especially considering the borough’s position compared to that of other local authorities. He stated that he disagreed with what an earlier public speaker had said, which implored the Council to submit a Section 114 notice and bite the bullet so to speak. He did not think this was the correct route to go down and fully supported the response from Councillor Jones earlier in the meeting. He then commented on the unrealistic income target set for the Windsor Museum.

Councillor J Tisi asked in reference to Appendix O, it appeared that there appeared to be a deficit for the current year for around £6.00m or £7.00m and if this was still the case. Councillor Jones replied said that at month 9 the overspend showed £9.00m, which reduced to £5.200m, when the unallocated contingency budgets were applied. However, another £1.00m was being looked at as an additional overspend in month 10.

His second question was about the lack of audit and stones being unturned, he asked what the Cabinet’s thoughts were on the cut of £0.082m in audit funding and how comfortable the Cabinet Member for Finance was with this. Councillor Jones replied by saying that there was a significant capacity issue within the Council and when this existed, it was difficult to do the positives whilst also going through an audit too. Stephen Evans said that good governance and internal audits were very important, which he welcomed. The proposed internal audit plan included over 600 days of audit. Adults and Children’s Services were also two of the most regulated services out there, which added greater pressure on the balance between auditing and overburdening officers. Elizabeth Griffiths said that a new process was in place to assess which audits they needed to do, in addition to the involvement of both the Corporate Leadership Team and the Executive Leadership Team. It was all about creating an internal audit system that was beneficial and deliverable to staff and the borough as a whole.