Denbighshire County Council - Agenda item

To consider a report by Councillor Gwyneth Ellis, Lead Member for Finance, Performance and Strategic Assets (copy enclosed) seeking Cabinet’s support of the proposals to set a balanced budget for 2025/26 prior to Council on 20 February 2025.

RESOLVED that Cabinet –

(a) supports the proposals outlined in the Medium Term Financial Plan (MTFP) 2025/26 – 2027/28 (Appendix 1 to the report), detailed in Section 4 of the report, in order to set the budget for 2025/26;

(b) approves the average Council Tax rise of 5.29% for council services plus an additional 0.71% for the increase in the levy to the North Wales Fire and Rescue Authority; this equates to an overall uplift of 6.00% proposed (paragraph 4.5 of the report);

(c) delegates authority to the Head of Finance and Audit, in consultation with the Lead Member for Finance, to adjust the use of cash reserves included in the budget proposals by up to £500k if there was movement between the draft and final settlement figures in order to allow the setting of Council Tax in a timely manner;

(d) supports the strategy for use of reserves as set out in paragraph 4.6 of the report, and

(e) confirms that it has read, understood and taken account of the Cumulative Well-being Impact Assessment as set out in Section 7 of the report.

Councillor Gwyneth Ellis presented the report setting out the impact of the Welsh Government’s Provisional Funding Settlement for Local Government 2025/26 and proposals to set a balanced budget for 2025/26, including the level of Council Tax.

The financial challenges facing the council, along with all other local authorities, was reiterated and reference was made to the continual budget setting process. Councillor Ellis thanked members and officers for their contributions to that process and was pleased to be a position to present a balanced budget to Cabinet.

Councillor Ellis and the Head of Finance and Audit guided Cabinet through the report.

The implications of the provisional settlement had been reported at the last meeting and reiterated in the context of the budget proposals for 2025/26. The increase in the settlement was above the planning assumption previously reported in the Medium Term Financial Plan and Strategy (MTFP/S). Although positive and welcomed it did not resolve the financial challenges in setting a balanced budget in 2025/26, which would still require a combination of savings and increases in Council Tax.

The budget proposals had been shown in the MTFP (Appendix 1 to the report) which also included the budget pressures (£23.854m) and savings proposals (£4.170m). A Council Tax rise of 5.29% plus an additional 0.71% for the increase in the levy to North Wales Fire and Rescue Authority equating to an overall uplift of 6.00% was proposed to generate £5.257m additional yield in 2025/26. The proposed use of earmarked reserves was also highlighted within the budget setting. The schools’ position was set out with a total funding increase of 5.91% with no reductions to budgets. Reference was then made to financial projections and funding assumptions for future years which remained challenging. In closing, tribute was paid to the excellent work carried out to enable presentation of a balanced budget for approval.

The Leader thanked the Lead Member and Head of Finance and Audit for the comprehensive introduction to a complex report and also thanked members for their contributions to the budget setting process and officers for the hard work carried out. Cabinet echoed those sentiments and welcomed the better than anticipated settlement which meant less of a focus on service reduction as part of the savings proposals given the funding gap was not as severe as the planning assumptions.

Cabinet discussed further elements of the budget as follows –

· the challenges for schools were recognised and the schools’ position was set out. Given schools made up the largest part of the total budget at 33% it was difficult to protect the schools budget in its entirety. It was proposed that schools would receive a total increase in funding of 5.91% in 2025/26 which included all inflationary increases (including pay and employers’ national insurance). Schools had been asked to prepare for a reduction (after the inflationary increases) of between 3% and 5%. However, given the better than expected settlement the current proposal was not to include that reduction in the budget proposals

· the importance of the transformation agenda was further highlighted, and the increased settlement above planning assumptions would allow extra time to progress and focus on those transformational projects to ensure sustainability for future service delivery and funding had also been set aside for that purpose

· there was some discussion on the budget setting process and the way in which it had evolved over recent years, predominantly due to necessity given the financial position facing the authority, and the need to align service delivery with the cost of service delivery was highlighted; it was process of continual improvement and continued to evolve. The importance of involving members in the process as much as possible and providing opportunities for feedback was highlighted; it was hoped feedback would increase in future as the process continued and evolved

· work was ongoing to further develop the communication plan and members were keen for greater engagement and interaction with both public and partners. Assurances were provided in that regard and future plans included information to be issued with council tax bills, information shared on the Council’s website and through social media channels to communicate those messages.