Agenda and draft minutes

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To agree any items to be dealt with after the public (including the press) have been excluded. Thereare no itemswhich officersrecommendshould be dealtwithin thisway.

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The Committees considered the recommendation from the Recycling & Waste Partnership Board meeting of 12 November 2024 to review the budget volatility of material prices during the budget setting process.

The Director of Place introduced the recommendation and advised that, in a volatile market with fluctuating commodity prices, a prudent approach should be adopted when setting the budget. 

Discussion and responses to questions included the following points:

·        Estimates for budget setting purposes were based on the previous year’s figures.

·        All East Devon waste is sent for recycling in the UK or Europe and cost estimates were based on worst case scenarios using figures generated by the Council itself.

·        It was noted that there was also fluctuation in figures for each different type of recycled material eg. glass, paper and plastics.

·        It was also noted that promoting the waste hierarchy [Reduce, Reuse, Recycle] could impact income from recycling, but that this was a longer term issue.

·        There was discussion regarding increasing capacity for collecting cardboard going forward.

·        The volatility in material prices for recycling has potential for putting pressure on the budget.

The Scrutiny Committee and the Overview Committee agreed to note the budget volatility of material prices during the budget setting process.

The Director of Finance presented the report which set out the draft revenue and capital budgets for 2025 / 26 as adopted by Cabinet on 8 January 2025.  As required by the Constitution, the Scrutiny and Overview Committees were asked to consider the draft budget and make recommendations for Cabinet to consider at its meeting on 5 February 2025 when making final budget proposals to recommend to Council.  The Housing Review Board would undertake the same function in relation to the Housing Revenue Account.

Directorate Service Plans had been prepared alongside the draft budget and had been considered at a joint meeting of the Scrutiny and Overview Committees on 10 December 2024.

In presenting the report the Director of Finance highlighted the following points:

·        The Local Government Finance Settlement was published on 18 December and the assumptions made in the report had not been materially affected by the Settlement.

·        There was concern regarding the methodology in the Settlement for calculating the reimbursement of the increase in employer’s National Insurance costs.  It now appeared that the Council would only be reimbursed for 1/3^rd of the increased cost.  Local Authorities and other bodies were taking this up with central Government and the outcome of this would be known when the final Settlement is published in February.

·        The Local Government Policy Statement, issued on 28 November 2024, had raised concerns regarding the rebalancing of local government finance between councils, and the potential impact of this on EDDC’s draft budget, including abolishing the Rural Services Delivery Grant and a Services Grant, both of which the Council currently receives.

·        More positively, all councils will receive additional income from Extended Producer Responsibility for Packaging (EPR) payments which will be guaranteed and are not ringfenced.

·        Taking all changes into account, the Council will be at a standstill position for its Core Spending Power, with no inflationary increase.

·        Members were asked to note the detailed budget analysis provided through the definition of “Controllable” and “Non-Controllable” expenditure and income, with “Non-Controllable” costs referring to internal transfers between services within the Council.

·        Significant variations in costs between years were noted in the report.

·        Specific areas of risk were highlighted at point 2.15 of the report [page 15], including the increase in National Insurance contributions, the new town budget, pressures around staffing capacity and skill gaps.

·        The draft budget proposed a 3% increase in council tax which is the maximum allowed within the Referendum regulations, resulting in a £5 increase to £171.78 for a band D property for 2025/26.

·        It was proposed to keep the General Fund Balance at the upper end of the adopted range between £4m and £4.8m to mitigate the risk of a higher pay inflation than that assumed in the draft budget.

·        Risk areas included re-basing of business rates and potential end of the new homes bonus scheme in future years.

·        A fees and charges schedule was attached to the budget papers.

·        The draft budget for the Housing Revenue Account would be scrutinised by the Housing  ...  view the full minutes text for item 44.