Agenda item

To receive the Medium Term Financial Strategy 2025/26 to 2028/29.

The Cabinet Member: Finance, Governance & Customer Services presented the Medium Term Financial Strategy which gave an update on the key uncertainties, financial pressures and increase in demand for the provision of social care services.  

A consultation would take place between 7 January 2025 and 5 February 2025 with key stakeholders, voluntary and community sectors, Town and Parish Councils, businesses and cross-party Business & Finance Scrutiny committee. Views would also be sought from local residents through the Council’s website.

Following the consultation, a report containing the budget and finalised levels of Council Tax would be brought back to the Cabinet meeting being held on 13 February 2025 which would contain recommendations to be considered at Full Council on 27 February 2025 and would ensure that the Council’s medium-term financial position remained sustainable and robust.

Since the approval of the current Medium Term Financial Strategy on 29 February 2024, which covered a four year period to 2027/28, there had been significant changes to the national economy. Locally, Councils had seen an increase in demand for key services and higher costs, particularly in relation to adult social care. 

Due to these factors, the Government published a policy statement in November 2024 which set out the proposals for the 2025/26 Local Government Finance Settlement and confirmed a real term increase of 3.2% and a new recovery grant worth £600m to be distributed to areas with greater need and demand for services. The settlement also included a £250m Children’s Social Care Prevention Grant.

The report highlighted that the Council had managed to maintain financial stability and set a balanced budget for 14 consecutive years and had continued to offer the lowest level of council tax in the Midlands and of any unitary authority in the country despite the requirement for a general increase. In 2024/25, the Council achieved a net budget revenue of £157m, with £88m generated from council tax and £57m generated from business rates.

A total of £181.7m savings had been delivered by the Council since 2009 as a result of reduced government funding, despite an increase in costs and demand for services such as Adult Social Care.  Due to the current high levels of financial pressure arising from increased demand in services, a general council tax increase for 2025/26 across all council tax bands of 2.99% equivalent to £0.69p per week for an average Band B property would be proposed as well as a 2% increase for the adult social care precept. All funding raised through the council tax increase would be invested in the provision of social care services.

Cabinet Members highlighted the increase in demand in both adult and children’s services and asked residents to take part in the consultation.  Members highlighted how the Council had continued to deliver high quality homes, create new jobs, provide transport networks, protect and enhance green spaces and invest in improving local schools, demonstrating ambition for the Borough and the local community.

The Leader of the Liberal Democrat Group supported the report and was pleased to see a 7% increase in government grants. He expressed concerns surrounding the proposed increase to council tax and additional pressures many families would face as a result. He asked the Cabinet to confirm what contingency plans had been considered for next year’s budget.

The Leader of the Conservative Group thanked officers for the detailed report however requested that information pertaining to government grants be set out more clearly.  He asked that responses received as part of the consultation process be considered before the report returns to Cabinet and Full Council for debate. 

The Leader of the Council confirmed that the Council’s contingency plans remained the same as those set out in previous budget reports and thanked officers for their hard work and due diligence.

RESOLVED – that:

a)    the contents of this report be noted with the main aims being:

·       For the 14th Year running, to maintain the financial stability of Telford & Wrekin Council and set a balanced budget;

·       To continue to have the lowest level of Council Tax in the Midlands for the services we provide and amongst the lowest Council Tax of any Unitary Authority in the Country, see graphs at Appendices 1 and 2;

·       That the Council continues to invest in its main priorities, a few examples being:

-            £7.7m investment into Social Care to support the most vulnerable in our community

-            £94m on high quality homes and new neighbourhoods

-            £54m for Growth Fund to bring jobs to the borough

-            £30m for highways and transport schemes

-            £26m for Towns Fund projects to revamp local centres

-            £1.7m for protecting and enhancing green spaces

-            £45.2m invested into expanding improving local schools

b)    the proposed revised Medium Term Financial Strategy (MTFS) set out in this report for consultation between 7 January 2025 and 5 February 2025 be approved;

c)    a general council tax increase for 2025/26 across all council tax bands equivalent to £0.69 per week for an average Band B property, which will be fully invested in the provision of social care services for the most vulnerable members of our community be approved;

d)    a council tax increase for 2025/26 for the Adult Social Care precept across all council tax bands equivalent to £0.46 per week for an average Band B property, which will be fully invested in the provision of social care services for the most vulnerable members of our community be approved;

e)    the savings delivered of £181.7m since 2009/10 as a result of reduced government funding from 2011 whilst the cost and demand for many Council services have been increasing and in particular for Adult Social Care be noted;

f)      that 75 pence in every £1 the Council spends is now allocated to Social Services be noted;

g)    that a number of the investments made in this report also generate a financial benefit, as well as fulfilling their primary purpose, which is invested in front line services be noted; and

h)    national and international economic pressures which have resulted in an extremely challenging financial outlook for U.K public services with interest rates remaining high be noted.