Agenda item - Update on General Fund and Housing Revenue Account Budgets 2025-26 EXE24-090

Reporting Person – Stephen Fitzgerald

The Executive RESOLVEd

That (i) the current assessment and categorisation of the approved 2024/25 budget into the three categories of “one-off”, “debt overhang” and “underlying” elements, be noted;

(ii) the process put in place to compile the 2025/26 Budget and Medium-Term Financial Strategy [MTFS] be noted and endorsed;

(iii) the planned timetable and schedule of activities to deliver a final Budget and MTFS report at the end of February / beginning of March 2025 be noted and endorsed; and

(iv) the proposed approach to consultation on the proposed budget be noted and endorsed.

Reason: The Council is legally required to set a budget (considering the longer-term outlook through an MTFS, which is, in the opinion of the s151 Officer, robust and allows for adequate future levels of reserves to manage potential risk levels. The report appraises Members of the work undertaken and planned to provide Council with budget options that meet those requirements.

The development and delivery of a sustainable and balanced budget is integral to the over-arching Woking For All Strategy, which is the Council’s corporate plan. The overall approach to setting the 2025/26 budget remains in accordance with the guiding principles adopted by the Council in July 2023, and in particular included the need to be a smaller and more efficient Council, looking to fund non-statutory services only where they were self-funded.

The Leader, on behalf of the Portfolio Holder, Councillor Roberts, introduced the report which provided an update on the work being undertaken to prepare the 2025/26 Budget and Medium Term Financial Strategy (MTFS). Following the previous budget update report to the Executive before the summer, it was explained that the report before the Executive outlined the next steps towards delivering a balanced budget for 2025/26 and to securing a sustainable position in the Council’s financial strategy to 2027/28.

It was noted that the Council would need continued exceptional financial support in 2025/26 as it worked towards the managed rationalisation and disposal of investments and resulting debt reduction. The Executive noted that the Council’s likely residual debt after disposal and rationalisation of its investments in company holdings and property was expected to be of a value which would require a new approach from Government. Discussions with Government regarding a permanent and sustainable solution to the legacy debt challenge was ongoing. The importance of delivering a balanced budget for 2025/26 in order to give the Government confidence that the Council was returning to a financial sustainable position was highlighted.

The Executive was advised that the report indicated a £5m underlying budget gap for 2025/26. Officers were reviewing options for addressing the budget gap with a focus on corporate and strategic workstreams. It was intended to bring proposals to the December Executive.

Regarding the Housing Revenue Account (HRA), it was noted that the level of reserves had been improved following adjustments to historic recharges. A 30 year business plan was being prepared to inform a strategy to deliver sustainable HRA finances.

The Leader set out the proposed timetable for the budget setting process. As last year, it was likely that a Special Council meeting would be required in early March 2025 for final Budget and Council Tax setting. The Executive welcomed that the Resource and Finance Scrutiny Committee and Finance Working Group would be scrutinising the budget proposals.