Agenda item

To consider the Section 25 Report.

Councillor Liz Leyshon proposed the recommendations which were seconded by Councillor Bill Revans.

Having been duly proposed and seconded, the Council RESOLVED to:

a)    Consider and note the assurance provided by the Section 151 Officer in respect of the robustness of the 2024/25 budget proposals.

b)    Consider and note the assurance provided by the Section 151 Officer on the adequacy of reserves for 2024/25.

c)     Approve that the Level of General Reserves were maintained within the range £30m (5% of net budget) to £60m (10% of net budget).

d)    Note the Section 151 Officers significant concerns over the 2025/26 financial year and the ability to balance the budget.

e)    Note that the Section 151 would provide members with regular updates concerning the council's finances and the risks of a Section 114 notice.

The Section 151 Officer, Jason Vaughan, introduced the Section 25 Report on the 2024-25 Budget in respect of the robustness of the budget estimates and adequacy of reserves.

The Council must have regard to the statutory report and professional advice provided by the Section 151 Officer when making its decisions around the annual budget and the level of Council Tax for 2024-25 in accordance with Section 31A of the Local Government Finance Act 1992.

The report provided assurance to Council on the robustness of the 2024-25 budget estimates and adequacy of the level of reserves for the year.  It also, highlighted the Section 151 Officer’s concerns in respect of the financial position for 2025-26.

The Deputy Leader and Lead Member for Resources and Performance, Councillor Liz Leyshon, also spoke to Council and emphasised the importance of the Section 25 Report to the other items being discussed at the meeting.  She also highlighted the challenges faced by Local Government and the disparities in the Council Tax setting processes.

The Council discussed the report and the following points were raised:-

·       The Chair of the Audit Committee spoke and highlighted the scale of the challenges faced for the budget setting process this year.  He also commented on the risk of a Section 114 notice and the vast budgetary measures that would be required over the next five years.  He recommended that the Audit and Scrutiny Committees needed to work together on future budget savings.

·       Concern was raised that the ability to balance the budget relied upon a letter from the Department for Levelling Up, Housing and Communities (DLUHC), which had not yet been received.

·       Further concern was raised on the application that had been submitted to DLUHC requesting to raise the Council Tax by more than 5% which had been rejected.  However, if a Section 114 notice had been issued, DLUHC would have authorised the request to raise the Council Tax.

The Section 151 Officer agreed that the capitalisation approach by DLUHC was not adequate but due to the reserves being higher than the capital request, he could sign off a balanced budget.

·       Councillors stated their duty was to set a balanced budget and queried whether they would be able to do so at this meeting.

·       Councillors were not convinced the future of Somerset Council was sustainable.

·       Councillors highlighted that they were angry with how Local Authorities were funded and that they were left to deal with the financial hardship with little support from Central Government.  They further highlighted that the funding model was broken and needed to be remedied for the future of all Local Councils across the country.

The Section 151 Officer agreed that DLUHC needed to change their funding processes for Local Authorities.

·       The Leader of the Opposition felt he could not vote on the Section 25 report as he did not believe a balanced budget had been set and that not all councillors had been privy to confidential legal advice on the report.

·       Councillors queried what impact the Transformation Project would have on the budget.

·       Concern was raised on the increasing cost of Adult Social Care and Children Services.

·       Councillors thanked the Parish Council Clerks for all their hard work on setting the precepts this year.

·       Concern was raised on whether there was adequate reserves left after the budget saving process this year.

·       Councillors queried at what point would a Section 114 notice be issued.

The Section 151 Officer advised that there was no guarantee that a Section 114 notice wouldn’t be issued this year and if something was to happen with the budget savings, it could trigger a Section 114 notice, as the reserves were lower than what he would like them to be.

·       Councillors thanked the Section 151 Officer and his Finance Team for all their hard work.

Councillor Liz Leyshon proposed the recommendations which were seconded by Councillor Bill Revans.

Having been duly proposed and seconded, the Council RESOLVED to:

a)    Consider and note the assurance provided by the Section 151 Officer in respect of the robustness of the 2024/25 budget proposals.

b)    Consider and note the assurance provided by the Section 151 Officer on the adequacy of reserves for 2024/25.

c)     Approve that the Level of General Reserves were maintained within the range £30m (5% of net budget) to £60m (10% of net budget).

d)    Note the Section 151 Officers significant concerns over the 2025/26 financial year and the ability to balance the budget.

e)    Note that the Section 151 would provide members with regular updates concerning the council's finances and the risks of a Section 114 notice.