Councillor Evans OBE (Leader of the Council) introduced the item and highlighted the following points:

a)     This was the first time in 14 years where the Council had seen an uplift in financial support received from Government in terms of the Revenue Support Grant;

b)    Resources for Local Government had been reduced by the previous Government;

c)     The comprehensive review was a recognition of the pivotal role that Local Government played in the delivery of Public Services including, but not limited to:

i) Working with the health service on prevention;

ii) The care of vulnerable children;

iii) The well-being of vulnerable adults;

iv) Collection of bins and filling in of potholes;

d)    There were clear signals from Government that the role was Local Government and the need for repair to local finances was understood;

e)     Local Government Reorganisation and Devolution were in the pipeline which may lead to new structures. This would place additional time demands on the Chief Executive and senior staff members;

f)      Plymouth City Council (PCC) had asked the Government for exceptional financial support but not for additional money;

g)     Although PCC were challenged financially, much like other local authorities, the budget placed the Council in a strong and balanced position;

h)    The budget reinforced Plymouth’s pre-eminence in the region with regards to delivery of services and support given to partners in the private sector;

i)      Although economic development was not a statutory function, it was a function that PCC exercised to ensure growth happened. This work within the budget would support the creation of 8,000 jobs;

j)      Works from PCC included:

i) The Freeport investment;

ii) The Innovation Bars at OceansGate;

iii) Investment into the National Marine Park (NMP);

iv) Investment into the remaking of the peninsula at Plymstock;

v) The Brickfields regeneration;

k)     PCC would continue to ask the Government for resources as there was ambition for the city and Plymouth was a significant deliverer of growth for the country.

Councillor Lowry (Cabinet Member for Finance) added:

l)      Even through financial challenges, PCC was able to offer a balanced budget;

m)   The budget would be taken to City Council on 24 February 2025 to give every Councillor the opportunity to fully consider it;

n)    The budget was being predominantly spent on the provision of adult social care, children’s social care, providing support to people in homelessness and children’s special educational needs. In excess of 75% of the 2023/24 budget was spent on the provision of those services and subject to final sign off, this budget would have 83% spent on those provisions;

o)    The following additions had been made within the budget:

i) An additional £12 million had been allocated for adult social care;

ii) £724,000 had been additionally allocated for homelessness and emergency bed and breakfasts;

iii) Children’s Social Care and home to school transport had been allocated an additional £19 million;

p)    There was an increased allocation of £13.3 million from the Government;

q)    The additional cost pressures and adjustments required totalled over £50 million. These were offset by Government grants;

r)     This was a positive budget and it was highlighted that PCC would not be closing libraries, there was an increase allocation of net zero budgets to reinforce that commitments and additional money had been allocated for demand lead services;

s)     Additional commitments to Plymouth Active Leisure were confirmed, with increased funding being allocated.

Councillor Dann (Cabinet Member for Customer Services, Sport, Leisure and HR & OD) added:

t)     There were continued investments in Brickfields and Foulston Park;

u)    Plymouth Active Leisure had increased the amount of people using the Life Centre;

v)     PCC had helped the Life Centre invest nearly £500,000 into their gym equipment which had driven up membership by 6%;

w)   There would be an open weekend on 14 March 2025 at Foulston Park to celebrate the opening of the new health and well-being hub.

Councillor Lowry (Cabinet Member for Finance) continued:

x)    The budget papers did not reflect any financial provision for the cost of undertaking the referendum for a directly elected Mayor in Plymouth for which a petition had been received. The Risk Register stated that this would have significant risk and the financial implications arising from the call for a referendum of a directly elected Mayor and any resulting election without the mitigation being contingency funded would have to be identified;

y)     The cost in 2025/26 of holding a referendum would be £410,000 and the only contingency funds available were through the working balances and although the petition had yet to be validated, it was likely that PCC would need to budget for this cost;

z)     PCC had been criticised by their external auditors for the level of reserves available and although work had been put in to increasing this amount over the past few years, the cost of the referendum would immediately impact those reserves;

aa)  Proposed the following recommendation: That Cabinet recommended a revenue budget for 2025/26 to the sum of £253,008 million to City Council subject to a further draw down of £410,000 from the working balances in 2025/26 to cover the cost of the referendum for a directly elected Mayor resulting from the receipt of a petition to that effect should the proper officer agree a valid petition has been received.

Councillor Evans OBE (Leader of the Council) added:

bb)The money to run the referendum had to be found, and there was no choice but to take the money from the working balances as otherwise it would have to be drawn from other essential resources such as grass cutting or the Theatre Royal’;

cc)  Although it might be an interesting debate, there would be no money from Government to fund a directly elected Mayor, nor their office and therefore running this would be in addition to the existing cost of running the Council;

dd)Having a directly elected Mayor would not reduce the number of Councillors, nor the need for a Cabinet.

Councillor Coker (Cabinet Member for Strategic Infrastructure and Transport) added:

ee)  A proposed amendment: Subject to Cabinet agreeing item nine on the agenda that the Tamar Bridge and Torpoint Ferry Joint Committee Revenue Budget and Capital Programme and 2025/26 Business Plan would be included within the final budget for Council’s approval. 

Helen Slater (Lead Accountancy Manager) added:

ff)    It was a strong position to be able to bring a balanced budget to the new year without any financial support from Ministry of Housing, Communities and Local Government (MHCLG);

gg)  Although there had been significant budget allocations to support pressures in children’s social care and home to school transport, this level of investment was not sustainable long term;

hh)Any amendments agreed would be reflected in the final budget report.

Tracey Lee (Chief Executive) added:

ii)     The MTFP would accompany the final report to Full Council.

Cabinet agreed to the following recommendations:

It is recommended that Cabinet:  

1.     Note that this proposed budget has been based on the Letter of Assurance received in February 2024 from MHCLG (DLUHC as was), in reference to the accounting treatment of the Council’s pension arrears in 2019/20; 

2.     Note the Financial Risks as set out in Appendix 7;

3.     Note the section from the Council’s Section 151 Officer (Chief Finance Officer) on the robustness of the budget estimates and the adequacy of the level of reserves;  

4.     Note that the Fire and Police Council Tax precepts would not be confirmed until after the Cabinet meeting and delegated to the Section 151 Officer to make final amendments to Council Tax Resolution, to include Fire and Police precepts, prior to City Council;

5.     Recommend the following to City Council, subject to amendments by the Section 151 Officer in consultation with the Leader reflecting any final technical adjustments and changes upon receipt of the Final Local Government Finance Settlement;

a. The Revenue Budget 2025/26 £253.008m; 

b. The drawdown of a maximum of £2.088m of flexible capital receipts, as set out in the report;

c. The Capital Budget 2025/26 £395.864m;

d. The Capital Financing Strategy 2025/26;

e. The Treasury Management Strategy 2025/26 (incorporating the Non-Treasury Management Strategy and the Minimum Revenue Provision Statement).