Decision details

RESOLVED:

That the Cabinet approves for recommendation to Council:

1)    The General Fund and Housing Revenue Account budgets and Capital Programme proposals for 2025/26 (as detailed in Appendices A, B and C) and beyond, having taken the consultation responses and select committees’ comments conscientiously into account outlined in Appendix F Budget Consultation Feedback.

2)    The Capital Strategy, Treasury Management Strategy Statement, Investment Strategy, and Minimum Revenue Provision Statement for 2024/25 to 2029/30 as detailed at Appendix D.

3)    The proposed London Borough of Hillingdon Pay Policy Statement for 2025/26 set out at Appendix E.

That Cabinet:

4)    Request the Corporate Director of Finance to bring in capacity and capability to create and deliver a Financial Improvement Plan [FIP] with support from CIPFA, as outlined in paragraph 13.14, and to report back to Cabinet on progress on a quarterly basis.

5)    Approves the land and property disposals target of £17m of Capital Receipts for 2025/26 to be used for transformation.

6)    Approve the transformation plan, as set out in Section 12, and the use of £17m of capital receipts for this purpose, subject to Government confirmation on utilising receipts for this purpose for a further year.

7)    Authorise the Corporate Director of Finance, in consultation with the Cabinet Member for Finance & Transformation, to respond on behalf of the Council to the consultation on the Mayor of London’s budget consultation.

8)    Authorise the Leader of the Council and Cabinet Member for Finance & Transformation to authorise all invest-to-save schemes as set out in Appendix A8i and other additions to the Capital Programme under the advice of the Corporate Director of Finance.

9)    Note the Period 9 (December) monthly monitoring forecast, as set out in Section 3.

10)Agrees that all drawdowns from General Contingency, Contract Risk Contingency, Risk Provision against Savings Delivery or Reserves will require Cabinet approval under the advice of the Corporate Director of Finance.

11)Agrees the introduction of a new fee as part of the recent implementation of the Border Target Operating Model.

12)Approves acceptance of gift funding in relation to a Planning Performance Agreement in accordance with the provisions of Section 93 of the Local Government Act 2003 for

                     i.        Colt Campus - £142,750

                    ii.        Colt Public Artwork - £12,500

                  iii.        Rainbow and Kirby Industrial Estate - £96,000

                  iv.        Hyde Park Hayes - £66,200

                    v.        Unit 4 Silverdale - £28,500

                  vi.        Land off Long Drive - £39,700

                 vii.        Nestle Landscaping - £19,200

13)Accepts a grant of £934,446 from North West London Integrated Care Board to fund initiatives to support hospital discharge.

14)Agree that proposals to charge for green waste collection (provisionally included in the schedule of savings) be subject to consultation and authority be delegated to the Cabinet Member for Community & Environment, in conjunction with the Cabinet Member for Finance & Transformation, to decide on such matters after considering the outcome of that consultation.  

Reasons for decision

The Cabinet Member for Finance and Transformation introduced the budget proposals for the financial year 2025/26 and the medium-term financial strategy for the five-year period ending 2029/30. It was noted that the report also addressed budget monitoring for Month 9 of the current financial year, noting an overspend of £1.2 million since month 7, leading to a projected aggregate overspend of £10.1 million for the full year 2024/25. The Cabinet Member explained that the overspend was attributed to increased costs in adult social care placements and children's social care costs, partially offset by maximisation of funding for corporate services costs.

Going forward, the Cabinet Member outlined that the budget gap for 2025/26 was initially £6.4 million but was reduced to £4.2 million due to increased grant funding confirmed in the final settlement, an increase in payroll costs, and other adjustments. It was noted that the medium-term outlook for grants was less encouraging, with static levels of business rates income expected. The Cabinet Member highlighted the need for a new national system of taxation to replace business rates and address financial pressures.

The Cabinet Member outlined that budget proposals and forecasts included measures to strengthen reserves, projected to more than double from £20.3 million to £43.7 million over the next five years. This was largely due to savings identified through transformation programmes, amounting to £66.6 million across the five years, with £34 million of those savings falling within 2025/26. The Cabinet Member raised impact of inflation, increased demand for services, and the need for cost savings and income improvement.

The Cabinet Member drew to Cabinet’s attention to the proposed financial improvement plan and resident consultation on green waste charges. The meeting concluded with thanks to the Chief Executive Officer, Chief Operating Officer, Section 151 Officer, and their teams for their extensive work on the budget and forecasts.

The Leader of the Council acknowledged the difficulty of the budget and expressed regret over the need to consult on green waste charges. He explained that the necessity was attributed to the Government's failure to fully fund the employers' National Insurance contribution and the worsening inflationary outlook reported by the Bank of England, and that these issues had delayed the final budget and required changes. The Leader commended the Cabinet Member and the officer team for their exceptional work in developing a savings programme that sought to ensure sustainability, growth in reserves and continued quality services for residents.

Following consideration of the public consultation feedback and select committee comments, Cabinet, therefore, resolved to recommend its budget proposals to the Council meeting on 27 February 2025 for final consideration. Cabinet also made several decisions within its remit in relation to the budget.

Alternative options considered and rejected

The Cabinet could have chosen to vary the proposals in its budget before recommending it to Council.