REPORT OF THE TREASURER ON THE BUDGET 2025/26

1. INTRODUCTION

The Committee needs to recommend a budget and a precept for 2025/26 to the Council.

Members may recall that 12 months ago the Council approved an increase in the precept from £47.60 to £56.60. In the autumn the Council's HR and Finance Committees considered, and approved, some significant staffing changes needed to stabilise the Council following the Council's acceptance of additional responsibilities. These staffing changes have a significant financial impact in the current financial year and an even greater one in 2025/26 and in subsequent years. In my report to this Committee in November I explained that there was likely to be a significant overspend of the 2024/25 budget. The report also indicated that the budget for 2025/26 was likely to require a significant Council Tax increase.

The appendices attached to this report provide:

• Revised estimates for the current year; and
• A draft budget for 2025/26 .

2. ACTUAL INCOME AND EXPENDITURE TO 31DECEMBER 2024

Accepted good accounting practice requires that budgetary control be carried out during each financial year. This has been happening as usual at officer level but also by this Committee in November when it considered a report on budgetary control at the halfway stage of the financial year.

These papers do include a column showing 'Actual Apr-Dec' and this is taken into account in the next column i.e. Revised Estimate for 2024/25.

3. REVISED ESTIMATE 2024/25

Total net expenditure per the Revised Estimate for 2024/25 is £465,728 compared with the Original Estimate of £393,499 so an overspend of £72,000 is now forecast. This compares with a forecast overspend of £83,000 reported to the Committee in November. The £72,000 includes the paddling pool resurfacing costing an estimated £35,000 which was approved by Finance Committee in November 2023. The other major variation relates, as referred to in paragraph 1 above, to salaries where the revised estimate exceeds the original budget by nearly £35,000. The elements of this included (a) overtime worked by Town Clerk whilst Admin Assistant on sick/injury leave; (b) regrading of post of Town Clerk from 1October; and (c) new starter Assistant Town Clerk, Sarah Harris, from 13" January.

The two major variations that have occurred were known of in the autumn and this, it is felt, indicates that effective budgetary control is in place.

4. DRAFT BUDGET 2025/26

The summary page of the draft budget shows Total Net Expenditure for 2025/26 of £503,956. By far the biggest figure in our budget is Salaries and this figure has been calculated on a person-by person basis and takes account of pay awards (a 4% increase in the pay bill in 2025 has been assumed), increments where relevant and includes provision for National Insurance and employer pension contributions. Prices have increased in the last 12 months or so and allowance is made for this where it appears to be required. In relation to income the recommendations of the Parks Committee are:

• cemetery fees -an increase from £900 to £950 in the 'headline' charge for full burials but no increase in the £400 charge for burial of cremated remains; and
• allotment rents -an increase this time, from £54 to £56 (large plots) and from £27 to £28 (small plots).

The issues arising in preparing the draft budget for 2025/26 include:

• Increase in salaries costs due to addition of two new posts in the budget (only one has been filled thus far) and regrading of post of Town Clerk;
• Paddling pool - see para 5 below;
• 'Bids' from Parks Committee- see para 6 below;
• Savings - where possible, the Council need to find these so as to keep precept increases as low as they reasonably can be;
• VE+80 Day - £500 provision included in non-recurring costs section of budget;
• Size and use of earmarked funds and reserves -see paragraph 7 below;
• Need for working balances (might be called contingency)- see paragraph 8(b) below;
• Does the work of the Stourport Future group have any implications for the budget? (not that I know of);
• Does the talked-about abolition of Wyre Forest District Council have any implications for the Town Council's budget? (not that I know of).

5. PADDLING POOL

The new surface has not been a complete success though the pool was open nearly every day through the season. There was a significant loss of water and this has not yet been resolved. Following discussion with our contractor it is felt that we should authorise them to conduct a pressure-testing review. This will cost £1,200 per day and will require between one and three days. Following that it is likely that we will require work to be done which will improve the resilience of the pool for many years ahead. The Council will not need to repeat the funding it has already committed but will need to meet the cost of enhancement. It is suggested that £16,000 be provided for in the budget as a one-off non-recurring item. This would only be spent if there was a strong case for doing so following the pressure-testing review.

6. BIDS FROM PARKS COMMITTEE

At their meeting on 20th January Parks Committee supported the following bids for inclusion in the budget:

• A replacement for the current ride-on mower which is, apart from other issues, not fully compliant with latest health and safety standards- cost up to £16,000 to be met from vehicle and plant fund;
• Hand tools - grinder, impact driver etc. - cost of £250 to be met from vehicle and plant fund;
• Uniforms for parks staff cost of £500 to be provided for as a non-recurring item in the budget;
• Additional Portakabin (second-hand) for storage of Christmas lights - cost of £1,500 to be met from vehicle and plant fund.
• Villeneuve Gardens - cost of £1,200 to improve the border above the canal, including fence and new planting, be provided for as a non-recurring item in the budget.

The Committee felt that, for the time being, the proposal for an all-inclusive piece of play equipment costing £18,000 to replace the old 'Rocket' play equipment in the memorial park could not be afforded.

7. FUNDS AND RESERVES

Council policy is to maintain a number of funds to avoid 'spikes' in expenditure that distort the pattern of expenditure between financial years. The programme attached shows the 4 funds, the annual contributions to them from the budget and the forecasts of spending from those funds. The forecast use this year of these funds includes using £35,000 to meet the cost of resurfacing the paddling pool (£6,000 from the elections fund and £29,000 from the Civic Centre fund). The programme for 2025/26 shows, in accordance with paragraph above, (a) the replacement of the ride• on mower; (b) some allowance, £250, for new hand tools and (c) provision for additional Portakabin.

The programme attached also shows the new 'localism renewals' fund which will build up funds to, in due course, meet significant replacement/renewal costs at the paddling pool, the riverside toilets and the Community Centre.

8. DETERMINATION OF THE PRECEPT FOR 2025/26

(a) COUNCIL TAX BASE

The Town Council's Council Tax base has been set by the District Council at 7,256 compared with 7,093 in 2024/25. This means that:

• with no increase in the current charge of £56.60 the precept income to the Town Council would increase from £401,000 to £410,000; and
• a £1 increase to the Council Tax from the current charge of £56.60 to £57.60 would increase the Council's precept income by a further £7,256.

The amount of increase this time in the taxbase is felt to be disappointingly low in light of all the new development in the town but less disappointing than it was last year.

(b) WORKING BALANCE

Council policy was for some years to maintain a minimum balance of £50,000 but it was agreed four years ago to increase this to £70,000.

The Council does also hold a number of earmarked reserves and the balances on these are forecast as follows:

(c) PRECEPT FOR 2025/26

Members will, as always, have to strike a balance between protecting the Council's services, both now and for the foreseeable future, and minimising the Council Tax. It is recognised that different members may strike this balance differently but the Council has to come to a decision.

The draft budget for 2025/26 attached is based on an increase of £16.10 (from £56.60 to £72. 70)• an increase of 28%. This leaves balances at only around £70,000. I am happy to discuss this with members but achieving a higher level of balances would require an even greater increase in the precept.

Members may be interested to see how the Stourport precept in 2024-25 compared with that of other sizable town and parish councils in Worcestershire.

Members are, of course, very welcome to discuss all these issues and the draft budget figures can be amended as appropriate.

9. RECOMMENDATIONS

It is RECOMMENDED that the Committee Recommends to Council:

1. A decision in relation to burial fees and allotment rents;
2. 2. Approval of the Revised Estimates for 2024/25;
3. 3. Approval of a draft Budget for 2025/26 and the Funds and Reserves schedule.
4. 4. An appropriate level of precept after taking into account the draft Budget, any further budget 'bids' and the remainder of this report.

I will be pleased to respond to any questions arising and help the Committee to decide on its recommendations.

Graham Shaw, January 2025