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The Section 151 Officer submitted a report a copy of which had been circulated to each Member together with the recommendations made by the Scrutiny Panel at its meeting on 28 January 2025.
Councillor Dundas attended and with the consent of the Chair addressed Cabinet and endorsed the recommendations from the Scrutiny Panel and the recommendation from Governance and Audit Committee at item 7(ii) of the agenda. This would provide greater clarity on the use of reserves. It was noted that the report before Cabinet did not include a Treasury Management Statement and clarification was sought as to whether this would be included in the report to Full Council. It was disappointing that the government were not fully reimbursing the costs of the increase in National Insurance contributions, and that the support for this may only last one year. Concern was expressed about the poor performance of assets at Northern Gateway, such as the coffee shop, and more detail was required as to how the administration would close the budget gap in forthcoming years.
Councillor J. Young attended and with the consent of the Chair addressed Cabinet and thanked officers for their work on the budget. When the new Council had been formed, it had chosen to build Leisure World as a legacy project to benefit the community. With local government reorganisation looming, it was important that the Council used its remaining budget for the good of Colchester residents and to target its resources where they were most needed. It was noted that £141,000 had been budgeted for play parks, which would not meet the level of demand. Councillors needed to give clear political direction and ensure delivery in the short space of time they had left.
Councillor Sunnucks attended and with the consent of the Chair addressed the Cabinet and expressed his thanks to officers for their hard work in preparing the budget and for the co-operation the Conservative Group had received. Concern was expressed about the capital programme. The administration was proposing to approve a £40 million capital budget whilst there were substantial structural deficits. The LGA Peer Review had stressed the need to review the capital programme over two years ago, but this had not been done. Capital schemes were delayed and then rolled forward and the spend reprofiled. A realistic deliverable plan was required. Concern was expressed that the proposals may be in breach of the CIPFA Prudential Code. If approved, the capital programme for the following year would increase financing costs by £3.5 million and the whole programme would double the amount of debt. The administration needed to take the necessary decisions, spend levelling up and town deal funds on useful projects and move away from speculative property deals. Long term financial problems would not be solved by salami slicing the revenue budget. They could only be addressed through looking at the capital programme.
Councillor King, Leader of the Council and Portfolio Holder for Strategy, responded and explained that public assurances had been given on the capital programme and the Housing Revenue Account. Real progress had been made in understanding the realities of delivering and managing the programme. The programme had the right level of ambition and appropriate levels of contingency. This was a draft budget and it was possible that some minor adjustments may be made before it was submitted to Council to take account of issues raised at Scrutiny Panel or other representations received.
Councillor Cory, Portfolio for Resources, also responded. The administration would endeavour to follow the recommendation made by Governance and Audit Committee, and provide the necessary information in confidential reports, as far it could. In terms of Northern Gateway Leisure Park, it was accepted that the position on this needed to be clearer in future reports. A dedicated reserve had been established to support the budget whilst the full commercial uptake of the site was awaited. The need to use the budget to support residents whilst the Council was able to do so was understood and the draft budget provided for that through capital investment. A review of the capital programme had been undertaken, involving a cross party group of councillors. Some ambitions had been scaled back and the delivery of some project had been staggered. However, capital funding had delivered a number of projects that would benefit residents, such as the Amphora office developments, Northern Gateway Sports Park and the Mercury redevelopment. The administration would continue to collaborate with partners on the Town Deal and Levelling Up projects. It would continue to review and monitor the programme to ensure its affordability.
Councillor Cory then introduced the budget proposals and thanked those members who had contributed to its development, including members of the Scrutiny Panel and Governance and Audit Committee. The recommendation from Scrutiny Panel was welcomed and would be accepted. The position on National Insurance contributions was still to be clarified but a prudent approach to this was included in the draft proposals. The proposals delivered a balanced budget despite the challenges facing local government finance. It included the Housing Revenue Account which was delivering a surplus. The proposals would support funding towards the administration’s political priorities and provide capital investment from reserves to support asset condition spending, playpark and open space renewal, a joint review of the possible provision of a bus station and community infrastructure support. There would be a continued focus on the delivery of Fit for the Future savings. The budget proposals would ensure the Council was fit for purpose as it went forward.
Cabinet members were invited to identify their highlights from the budget proposals.
Councillor Jay, Portfolio Holder for Economic Growth and Transformation, highlighted the capital investment in operational transformation and digital delivery. This would enhance the service and support customers received, with a new approach to customer support that would include a return to some face to face contact. This investment and approach would also provide better access and equipment for members.
Councillor Sommers, Portfolio Holder for Communities, Heritage and Public Protection, highlighted the Extended Producer Responsibility scheme and the funding the Council received through this. The funding that had been received for schemes to support Holy Trinity Church, Jumbo and the Natural History Museum was welcomed. A sensible approach to fees and charges had been taken, which had allowed some charges for key services, such as dealing with bed bug infestations, to be frozen.
Councillor Goss, Portfolio Holder for Waste, Neighbourhoods and Leisure, welcomed the investment in Colchester, and in waste collection services in particular, This would fund the provision of cleaner and greener services and an extension of the services provided to flats to include food waste. There would be investment in play parks. The key issue was the removal of the weir and ensuring that Essex County Council could then repair the footbridge and open access to residents in that area again.
Councillor King highlighted that the budget would address issues that went beyond the administration but were ambitions right across the Council. The budget would also be used to leverage additional funding from government and partners. It was robust and an independent third party review had concluded that the administration should be proud of its financial position give the scale of the challenges it faced.
Councillor Cory thanked Andrew Small, Section 151 Officer, and Chris Hartgrove, Deputy Section 151 Officer, for their contribution to this and previous budgets. Arrangements were in place to appoint a new interim section 151 officer.
RESOLVED that:-
(a) The draft revenue and capital budget proposals for 2025/26 as presented in Appendices A to D of the Section 151 Officer’s report be agreed.
(b) The recommendations made by the Scrutiny Panel at its meeting on 28 January 2025 be agreed.
RECOMMENDED TO COUNCIL
(a) The budget for 2025/26 (including Revenue and Capital as set out in Appendices A, B and C of the Section 151 Officer’s report).
(b) The draft Fees and Charges proposed for 2025/26 (as set out in Appendix D of the Section 151 Officer’s report).
(c) The updated Medium-Term Financial Forecast (MTFF) 2025/26 to 2029/30 (covering General Fund and HRA as set out in Appendix E of the Section 151 Officer’s report).
(d) The level of Council Tax increase for 2025/26 (as set out in paragraph 2.4 of Appendix A of the Section 151 Officer’s report).
(e) The level of Housing Rent increase for 2025/26 (as set out in paragraph 2.4 of Appendix B of the Section 151 Officer’s report); and
(f) The Management Fee payable to Colchester Borough Homes (CBH) in 2025/26 (as set out in paragraph 2.5 of Appendix B of the Section 151 Officer’s report).
REASONS
To recommend a final draft budget for 2025/26 to the Council in February 2025.
ALTERNATIVE OPTIONS
The proposals in this report represent Cabinet’s recommended position on the 2025/26 General Fund and Housing Revenue Account budgets (both Revenue and Capital).