Agenda item

To consider any reports from Select Committees, Task Groups and any other Committees of the Council.

For Cabinet to consider the following report:

A.    Scrutiny of Draft Budget 2025/26 and Medium-term Financial Strategy to 2029/30 TO FOLLOW

RESOLVED:

1. That the Scrutiny of the 2025/26 Draft Budget And Medium-Term Financial Strategy To 2029/30 report be noted.

The Chairman of the Adults and Health Select Committee, Trefor Hogg introduced the budget recommendations from the Adults and Health Select Committee explaining that there was extraordinary pressures on the Adults Wellbeing and Health Partnerships budget which showed the net expenditure budget requirement rising by £18.5m to £524.5m in 2025-26. It was essential that the rollout of Technology Enabled Care across Surrey was encouraged to ensure better outcomes for residents. There was a recognition that changes to National Insurance and the national living wage would impact the care market and in turn impact the Council. How the Council works with the NHS needed to be factored so there is one team approach. Overall, the Select Committee felt that very strong Risk Management processes with strong independent monitoring and reporting was required to keep strict control of the risks with a focus on effective early action to correct problems.

The Leader stated that the expectation was that the increase in national insurance and the national living wage for Council employees would be reimbursed by the government but this may not extend to providers. The Government had announced £680m of additional funding into the adult social care in the budget but Surrey would get no greater than £10m of this. The majority of this would be wiped out by increased costs from providers. The Leader announced that the Government had published a white paper in relation to English devolution which sets out the government's direction of travel, which will be the first major reform of the structure of local government since 1974. The Government had requested submissions from all two tier authorities on what they believe devolution would look like. The Leader also touched upon public service reform and the council’s relationship with the NHS moving forward.

The Vice Chairman of the Children, Families, Lifelong Learning and Culture Select Committee, Jeremy Webster introduced the budget report in the absence of the Select Committee Chairman. In addition to a macro level review of the children, families, lifelong learning and cultural budget, the Select Committee chose to explore early help preventive spending and the impact of proposed funding changes on the voluntary, charity and social enterprise infrastructure organisations as its deep dive topics. The Vice-Chairman spoke on the deep dive recommendations before turning to the recommendations on the overall CFLLC budget. The committee was convinced that the value of early help improves outcomes for children and also reduces statutory demand in the long term. The Committee recommended that this spend was protected from statutory pressures. The Select Committee wanted to undertake a deep dive on voluntary sector funding but scrutiny was inhibited when a briefing on these changes promised in October was not made available to the Committee. The Committee recognised the constraints on the Councils budget and urged the Cabinet to consider any and all opportunities to extend the budget envelope proposed for the Directorate to provide further discretionary funding being ring fenced for early years funding. The Leader thanked the Vice Chairman for his update stating that the councils primary priority is to discharge its statutory functions and secondly was around investment in prevention and early intervention. He noted that there would be some additional information within the Local Government Settlement around additional funding for children’s preventative services. The Leader stated that the Council had no intention to reduce frontline staff.

The Vice Chairman of the Resources and Performance Select Committee, Steven McCormick introduced the budget report and recommendations from his Select Committee stating that the Committee had conducted a meticulous and comprehensive scrutiny of the Council's budget to ensure financial sustainability and efficiency.The Select Committee challenged officers on the deliverability of efficiencies, particularly those planned for 2024/25 and had been assured of a more rigorous governance framework to hold directorates accountable for these planned efficiencies. The Select Committee also scrutinised the Council's capital expenditure, noting the conscious effort to reduce capital financing costs in the revenue budget. Risk management had also been a focal point of the Select Committees scrutiny. The Select Committee also identified significant risks, including potential funding reform, the need to deliver efficiencies, and external economic factors such as inflation and interest rates. To mitigate these risks, the Council had established robust measures, including maintaining healthy reserves and a £20 million contingency fund, to ensure financial stability. The Committee had also scrutinised the transformation programme to ensure it will deliver long-term efficiencies.

The Leader explained that the Government had announced that from 2026 onwards there would be multi year settlements. A funding review consultation on this had been launched. Funding had been set aside for adult social care but would be distributed via a funding formula which accounts for areas of high levels of deprivation. The Leader explained that this new formula would mean that the Council would not receive any funding even though there was deprivation in the county. There was also an expectation that the Council should optimise the Council Tax it raises locally which would mean that the Council would be expected to raise Council Tax to the maximum level every year. The Leader stated that he believed that the criteria for distributing funding needed to be widened or the Council would face very challenging times ahead. The Select Committees were thanked for all their input and work into to the draft budget which was welcomed.

RESOLVED:

1. That the Scrutiny of the 2025/26 Draft Budget And Medium-Term Financial Strategy To 2029/30 report be noted.