Agenda item

The Cabinet considered a report of the Director of Corporate Resources which presented the County Council’s proposed 2025/26 to 2028/29 Medium Term Financial Strategy (MTFS) for approval, following consideration of the MTFS by the Cabinet in December and the Overview and Scrutiny bodies in January and receipt of the Local Government Finance Settlement.  A copy of the report marked ‘Agenda Item 4’ is filed with these minutes. 

 

Due to changes arising from the final Local Government Financial Settlement and receipt of final Business Rates information from Leicestershire district councils, Appendices A, B, C and E of the report had been revised and a copy of these is filed with these minutes.

 

Mr Breckon CC emphasised the difficult position faced by the County Council, as set out in the four year plan, and the importance of remaining financially resilient.  However, he highlighted the additional funding specifically earmarked for vulnerable children and adults, repairing roads and flooding, which was welcomed.  It would be possible to have a balanced budget this financial year, through the use of reserves, but costs were expected to increase over the life of the MTFS.

 

Mrs Radford CC commented on the increase in National Insurance and the effect on employer costs.  This had had a significant impact on organisations which employed care providers, particularly those who worked on a part-time basis, and concern was raised that some care homes had reduced the number of beds available due to the operating costs.

 

Mrs Taylor CC commended the Children and Family Services department in achieving an Outstanding rating from Osted despite the County Council being the lowest funded authority.  She also expressed concern that the Government had promised the increase in National Insurance costs would be funded, but to date, this had not occurred.

 

RESOLVED:

 

That the following be recommended to the County Council:

 

(a)            That subject to the items below, and following changes arising from the final Local Government Finance Settlement and receipt of final Business Rates information from Leicestershire district councils, approval be given to the Medium Term Financial Strategy (MTFS) which incorporates the recommended net revenue budget for 2025/26 totalling £617.2m as set out in the revised Appendices A, B and E of this report and includes the growth and savings for that year as set out in the revised Appendix C;

 

(b)           That the revised Appendices A, B, C and E be approved to reflect the changes in Business Rates, grant income and a reduction in the growth contingency, which taken together have no impact on the use of reserves;

 

(c)             That approval be given to the projected provisional revenue budgets for 2026/27, 2027/28 and 2028/29, set out in the revised Appendix B to the report, including the growth and savings for those years as set out in the revised Appendix C, allowing the undertaking of preliminary work, including business case development, engagement and equality and human rights impact assessments, as may be necessary to achieve the savings specified for those years including savings under development, set out in Appendix D;

 

(d)            That approval be given to the early achievement of savings that are included in the MTFS, as may be necessary, along with associated investment costs, subject to the Director of Corporate Resources agreeing to funding being available;

 

(e)            That the level of the general fund and earmarked reserves as set out in Appendix K be noted and the planned use of those earmarked reserves as indicated in that appendix be approved;

 

(f)              That the amounts of the County Council's Council Tax for each band of dwelling and the precept payable by each billing authority for 2025/26 be as set out in Appendix M;

 

(g)            That the Chief Executive be authorised to issue the necessary precepts to billing authorities in accordance with the budget requirement above and the tax base notified by the District Councils, and to take any other action which may be necessary to give effect to the precepts;

 

(h)            That approval be given to the 2025/26 to 2028/29 capital programme, totalling £439m, as set out in Appendix F;

 

(i)              That the Director of Corporate Resources following consultation with the Lead Member for Resources be authorised to approve new capital schemes, including revenue costs associated with their delivery, shown as future developments in the capital programme, to be funded from funding available;

 

(j)              That the financial indicators required under the Prudential Code included in Appendix N, Annex 2 be noted and that the following limits be approved:

 

	2025/26 £m	2026/27 £m	2027/28 £m	2028/29 £m
Operational boundary for external debt
i)  Borrowing	201	197	232	271
ii) Other long term liabilities	6	6	6	5
TOTAL	207	203	238	276
Authorised limit for external debt
i)   Borrowing	211	207	242	281
ii) Other long term liabilities	6	6	6	5
TOTAL	217	213	248	286

(k)             That the Director of Corporate Resources be authorised to effect movement within the authorised limit for external debt between borrowing and other long-term liabilities;

 

(l)              That the following borrowing limits be approved for the period 2025/26 to 2028/29:

 

(i) Maturity of borrowing:-

 

	Upper Limit	Lower Limit
	%	%
Under 12 months	30	0
12 months and within 24 months	30	0
24 months and within 5 years	50	0
5 years and within 10 years	70	0
10 years and above	100	25

 

(ii)  An upper limit for principal sums invested for periods longer than 364 days is 20% of the portfolio.

 

(m)           That the Director of Corporate Resources be authorised to enter into such loans or undertake such arrangements as necessary to finance the capital programme, subject to the prudential limits in Appendix N;

 

(n)            That the Treasury Management Strategy Statement and the Annual Investment Strategy for 2025/26, as set out in Appendix N, be approved including:

 

(i)         The Treasury Management Policy Statement, Appendix N; Annex 4;

(ii)        The Annual Statement of the Annual Minimum Revenue Provision as set out in Appendix N, Annex 1; 

 

(o)            That the Capital Strategy (Appendix G), Investing in Leicestershire Programme Strategy (Appendix H), Risk Management Policy and Strategy (Appendix I), Earmarked Reserves Policy (Appendix J) and Insurance Policy (Appendix L) be approved;

 

(p)            That it be noted that the Leicester and Leicestershire Business Rate Pool will continue for 2025/26;

 

(q)            That the Director of Corporate Resources, following consultation with the Lead Member for Resources, be authorised to make any changes to the provisional MTFS which may be required as a result of changes arising between the Cabinet and County Council meetings, noting that any changes will be reported to the County Council on 19 February 2025;

 

(r)              That School funding is subject to a 0.5% transfer of funding to the High Needs Block of the Dedicated Schools Grant;

(s)             That the Leicestershire School Funding Formula is subject to capping at 0.28% per pupil and continues to reflect the National Funding Formula for 2025/26;

 

(t)             That delegated authority be given to the Director of Children and Family Services, following consultation with the Lead Member for Children and Family Services, to agree the funding rates for early years providers.

 

(KEY DECISION)

 

REASONS FOR DECISION

 

To enable the County Council to meet its statutory requirements with respect to setting a balanced budget and Council Tax precept for 2025/26, to allow efficient financial administration during 2025/26 and to provide a basis for the planning of services over the next four years.

 

To enable early work to be undertaken on the development of new savings to address the worsening financial position.

 

That school budgets are capped at a per pupil gain of 0.28% necessary to undertake the 0.5% transfer of funding from the Schools Block to the High Needs Block of the Dedicated Schools Grant and to ensure they do not exceed the Schools Block Dedicated Schools Grant but continue to reflect the 2025/26 National Funding Formula.

 

To enable rates to be set for early years providers for 2025/26.  The delegation will enable the rates to be set for the providers.