Agenda and minutes

Venue: Herefordshire Council Offices, Plough Lane, Hereford, HR4 0LE

Contact: Samantha Gregory, Democratic Services Officer 

Link: Watch this meeting live on the Herefordshire Council Youtube Channel

Items
No. Item

46.

APOLOGIES FOR ABSENCE

To receive any apologies for absence.

Minutes:

There were apologies from Councillors Powell and Hurcomb.

47.

DECLARATIONS OF INTEREST

To receive declarations of interests in respect of Table A, Table B or Other Interests from members of the committee in respect of items on the agenda.

Minutes:

None.

48.

DRAFT MINUTES pdf icon PDF 227 KB

To approve and sign the minutes of the meeting held on 19 December 2024.

Minutes:

Resolved:       That the minutes of the meeting held on 19 December 2024 be approved as a correct record and signed by the Chairperson.

 

 

49.

Questions from members of the public pdf icon PDF 446 KB

To receive questions from members of the public.

 

Additional documents:

Minutes:

Questions received and responses given are attached as appendix 1 to the minutes.

50.

Questions from councillors pdf icon PDF 396 KB

To receive questions from councillors.

 

Additional documents:

Minutes:

Questions received and responses given are attached as appendix 2 to the minutes.

51.

Reports from Scrutiny Committees

No scrutiny reports have been received. 

Minutes:

There were no reports from scrutiny committees for consideration at this meeting.

52.

2025/26 Draft Budget- Revenue pdf icon PDF 551 KB

To present the draft 2025/26 revenue budget, Medium Term Financial Strategy and the Treasury Management Strategy. 

 

The Council has a statutory responsibility to set a Budget and Council Tax in advance of the new financial year.  The 2025/26 Revenue Budget and Medium Term Financial Strategy 2025/26 to 2028/29 will be recommended to Council in February 2025

Additional documents:

Minutes:

The member for finance and corporate services introduced the report.  It was confirmed that despite the challenges and reduction in grant funding the council had achieved a balanced budget for 2025/26. 

 

It was noted that in 2024/25 the council received £6.9m in Rural Services Delivery Grant funding and £0.2m in Services Grant, totalling £7.1m. The November 2024 policy statement confirmed the introduction of £1.53 billion in new grant funding for local government across 3 priority grants; recovery fund of £600m; a social care grant of £680m and children services prevention grant of £250m.  It was noted that these grants would be funded, in part, by the abolition of the Rural Services Delivery Grant of £110m and the Services Grant of £87m.  It was noted that the Rural Services Delivery Grant recognised the increased financial pressures in delivering services in a rural county.  

 

It was highlighted that the council is committed to ensuring that funding appropriately reflects rural needs and the additional cost pressures of service delivery and demand in rural areas.  It was confirmed that responses on the provisional settlement and local authority funding reform had been made and the council will also actively engage in the fair funding review in March 2025. 

 

The provisional settlement announced by Central Government on the 19th of December 2024 confirmed that Hereford would receive zero funds under the new recovery grants and a total of £369k under the new children's social care prevention grant.  This resulted in a net loss of £6.766m against the previous year.  It was highlighted that rural authorities only received £22.8m (3.8% of the available from the recovery grant) and there was a significant gap in the position of rural counties compared with urban authorities.  It was also noted that there was a £2.5m reduction in Central Government grant funding since 2024/25.  The reduction in Central Government grants results in less funding per head than urban areas despite the increased cost of service delivery to rural communities.

 

It was confirmed that the provisional revenue budget for 25/26 totalled £232m and the revenue budget proposal for 2025/26 was highlighted at Appendix C. It was noted that the Medium-Term Financial Strategy (MTFS) had a 3.99% increase in council tax planned.  However, due to the impact of central government’s reduction in the council’s preliminary settlement the council have had to accept a 4.99% increase in council tax was needed.  

 

It was highlighted that in February 2024 the council unanimously approved the implementation of council tax premiums for empty properties and second homes in line with regulation and guidance issued by the Secretary of State. The total council tax income of £146.5m in the 2025/26 draft revenue budget includes estimated income of £3.1m in premiums which apply to second homes and empty properties.

 

It was noted that the 2025/26 revenue budget included additional business rate income retained from the Hereford Enterprise Zone of £1.3m.  It was confirmed that any additional rate income retained above the budgeted income of £1.3m will be transferred to  ...  view the full minutes text for item 52.

53.

2025/26 Draft Capital Investment Budget and Capital Strategy Update pdf icon PDF 713 KB

To recommend to Council for approval the revised capital investment budget and capital strategy for 2025/26 onwards.

 

Additional documents:

Minutes:

The member for finance and corporate services introduced the report.  The capital programme reflects capital investment which generates benefits for the county. It was noted that on 6th December 2024 at full Council an amendment for several IT projects was approved.  Appendix B set out the approved capital programme, as of December 2024. 

 

It was confirmed that the proposed capital programme for 2025/26 presented an ambitious programme of capital investment which was aligned to the priorities of the council plan across people, place, growth and transformation. 

 

It was highlighted that 18 capital investment budget proposals, totalling £58.12m had been identified to be funded by prudential borrowing, capital receipt reserve and reserve revenue reserves. It was also noted that to ensure the council utilised the levelling up fund grant as early as possible and used council match funding last, the Hereford city transport package for the transport hub would increase the grant funding by £2.5m and reduce the amount of council borrowing required.

 

It was confirmed that a review of all prospective capital funding requests had been completed to ensure the financial impact of the funding requests were taken into account in the Medium Term Financial Strategy.

 

It was highlighted that as part of the 2016/17 local government finance settlement the government announced new flexibilities which allowed local authorities to use capital receipts to fund transformation expenditure. This was updated in 2025/26 and extended to 2029/30. Therefore £0.6m in 24/25 and £0.6m in 25/26 revenue transformation works would be funded from the use of capital receipts reserve. 

 

It was confirmed that inclusion in the capital programme was not approval to proceed. Each project would be subject to its own governance, a full business case would be presented to cabinet for approval, where required, and compliance with the council's contract procedure rules. 

 

It was confirmed that the council is committed to the first phase of the western bypass, and is aiming to be on site to deliver the current scheme to the South of the city in 2026.   Once completed this new bypass connection for the A49 from the South to the North of the city will deliver the western growth corridor creating over 10,000 new homes and over 300 acres of new employment land. It was noted that this project, previously named as the ‘Southern Link Road’, had been renamed in the capital programme to ‘Hereford Western Bypass Phase 1’. The increase in capital budget is proposed to be funded from borrowing, and grants would be sought to reduce the amount of borrowing required.

 

It was confirmed that social and affordable housing needs across the county remained a high priority for the council. It was noted that the acquisition for housing provision of £5m (which was added to the capital programme in July 2024), was already being used to bring forward schemes to deliver social housing to meet the county’s urgent need. The £5m funding was considered adequate for 2025/26.  However, should other opportunities come forward, council approval would be  ...  view the full minutes text for item 53.