Agenda item

The Council is asked to consider the Revenue and Capital Budgets for the 2025/26 financial year for both the General Fund and Housing Revenue Account.

 

A report from the Group Head of Finance and Section 151 Officer is attached and considers the recommendations made by the Policy and Finance Committee following its meeting held on 13 February 2025 in respect of the Council’s Budget for 2025/26. The minutes from this meeting are attached.  

 

The associated statutory resolutions have been received from West Sussex County Council and the Sussex Police and Crime Commissioner in terms of precepts.

 

This item will be presented using the order below in line with Council Procedure Rule 4.3 [Procedure for Debate at Special Meetings]:

 

(i)             Welcome by the Chair

(ii)            Presentation by the Leader of the Council to deliver his Budget Statement – Councillor Lury will make his Budget Statement and will propose the recommendations, including the associated statutory resolutions required in agreeing the Budget.

(iii)          To be moved by – Councillor Lury

(iv)          Councillor Nash to second (may reserve his right to speak)

(v)           Questions to be responded to by invited speaker(s) and/or Officers from:

(a) Members and

(b) Any other persons permitted by the Chair

(vi)     Statements may then be made by:

(vi)          Councillor Gunner to respond on behalf of the Conservative Group

(vii)         Councillor Northeast  to respond on behalf of the Labour Group

(viii)       Councillor Wallsgrove to respond on behalf of the Green Group

(ix)          Councillor Huntley to respond on behalf of the Independent Group

(x)           Councillor Goodheart to respond on behalf of the Arun Independent Group

(xi)          Any other person permitted by the Chair

(xii)         Open debate

(xiii)       Councillor Nash to respond as seconder

(xiv)       Councillor Lury to respond as proposer

(xv)        Recorded Vote required [in line with Council Procedure Rule 20.6

(xvi)       Chair to conclude the debate

          The Chair confirmed that this Special Council Meeting had been called to consider the Budget for 2025/2026 and to set the Council Tax for Arun District Council. Councillors were referred to 17 recommendations set out within the agenda papers for them to consider as well as the need to note four further recommendations and the minutes from the meeting of the Policy & Finance Committee held on 13 February 2025.

 

          Before inviting the Leader of the Council, Councillor Lury, to present his Budget Statement, the Chair reminded councillors of the procedure for this meeting as confirmed in the Constitution at Council Procedure Rule 4.3 and as set out in the covering agenda for the meeting.

 

Councillor Lury commenced his budget statement by formally proposing the recommendations set out in the report confirming that Councillor Nash would then second the proposals.  He outlined that local government had to suffer the vagaries of government policy which impacted its operation. There were two challenges to highlight being the Fair Funding Review and the reset of business rates. Those risks had been considered in finalising the budget. Councillor Lury stated that history was a recurrent theme, and he referred to the last conservative budget which had resulted in a structural budget deficit of £5.2m and included growth of over £1m. This resorting to raiding council reserves was not sustainable or financially prudent. Councillor Lury was therefore pleased to be able to announce that this budget had reduced the deficit substantially to £1.88m. The administration had  achieved this by approving £1.5m savings in 24/25 and by freezing non-essential growth for 2 years. A policy of charging council tax on second homes had been implemented achieving additional income of £355k and freeing up homes that were otherwise standing empty. Councillor Lury referred to other financial strategy work streams which were well under way such as the asset review and retendering of the waste contract to deliver further savings in 2025/26. He was pleased to announce that all of this had been achieved without the need for compulsory redundancies or cuts to front line services. Prudence remained at the fore of this budget and dictated that adding non-essential growth would be reckless at this time considering future government reforms and potential financial demands from the Littlehampton Harbour Board.

 

Councillor Lury then turned his attention to the Housing Revenue Account (HRA) where it had been necessary to make the difficult decision to increase rent and introduce service charges of 2.7%. He stated that due to the economic environment imposed onto the council, this had significantly impacted the income base resulting in the HRA balance remaining below the council’s £2m target level. The service charge de-pooling policy was hoped to generate significant income next year and it was confirmed that a hardship fund would be established to alleviate the pressure on those impacted the most. The HRA reserve was forecast to reach over £1.48m edging closer to the council’s £2m target.

 

Councillor Lury then turned to the council’s capital programme confirming that this was being developed in a cautious fashion with new schemes added mainly where the council had taken advantage of government grants. This had funded the acquisition of new housing properties allowing the council to purchase these at 50-60% of their market value. The council was still committed to the successful completion of the district’s Levelling-Up fund projects at the Alexandra Theatre in Bognor Regis and the Seafront Projects in Littlehampton which would boost and attract tourism to the district. There were also projects underway such as the Bognor Regis Arcade and the construction of two hotels, one in Bognor Regis and one in Littlehampton confirming growth in inward investment.  Finally, Councillor Lury announced that the council would receive two major additional payments in 2025/26 from government which was the Extended Producer Responsibility for Packaging (EPR) payment in the sum of £1.4m and an additional £800k in Homelessness Prevention Grant. Council Tax for 2025/26 would be increased by 2.99% representing an additional £6.23 or 12p per week for an average Band D property. Councillor Lury emphasised that this budget confirmed less borrowing from reserves and showed a substantial improvement in terms of the health of the HRA. 

 

Councillor Lury repeated his thanks to the Group Head of Finance and Section 151 Officer and his team for the development of the budget and the clear and concise advice that had been provided, and he urged councillors to support it.

 

 

The recommendations set out within the budget were then seconded by Councillor Nash as Deputy Leader of the Council.

 

          In line with the procedure for debates at Special Meetings, the Chair confirmed that he would now invite questions from members to officers. No questions were asked.

 

          The Chair then invited Councillor Gunner to respond to Councillor Lury as the Leader of the Opposition and Leader of the Conservative Group.

 

Councillor Gunner responded by stating that the budget meant more tax and hardship for residents. This included an increase in development and new housing; increased bills and the highest council tax in many years. Whilst residents were struggling, businesses were too and were facing a triple threat of increased costs which would result in many of them not being able to survive these increasing pressures. Councillor Gunner stated that it was councillor’s  responsibility to correct these wrongs and provide the necessary support to businesses and the environment. The most difficult realisation to accept was the proposed implementation of new service charges representing an increase in costs for the most vulnerable of Arun’s tenants in the sum of up to £521 per year. Councillor Gunner confirmed that 43% of tenants were already struggling to make ends meet and that this was before these charges had been introduced. He questioned why other political groups within the alliance were choosing to support the budget when it confirmed cuts to play areas and proposed thousands of additional new houses. Councillor Gunner listed a range of cross-party election pledges which he said had been broken stating that this was a misleading and disappointing budget as it did not support a commitment to climate change initiatives; it did not boost or support the local economy; and it proposed subjecting the most financially vulnerable to an increase in the cost of living through council tax and service charges increases.

 

          Turning to the budget consultation exercise undertaken, Councillor Gunner questioned its purpose when the results received had been clearly ignored. Responding to the reduction in budget deficit confirmed, it was fact that this had reduced only due to the EPR payment received and because of increasing car parking charges. Councillor Gunner stated that this was a budget that lacked any ambition and so he could not support it.

 

          The Chair then invited Councillor Northeast to respond on behalf of the Labour Group. Firstly, he thanked the Group Head of Finance and Section 151 Officer and his team for establishing a balanced budget and to all officers who had played a positive role in producing what was the alliance’s second budget. Councillor Northeast acknowledged that this was not a perfect budget, however it attempted to put right wrongs inherited from the previous administration. It attempted to slow down totally unsustainable levels of raided balances that had been inherited. Improvements had been made, and the inherited deficit had reduced by making savings in using expensive agency staff and by renting out sections of the civic centre to the probation service and the NHS. Councillor Northeast highlighted the challenges that had been faced in building the budget and the difficult decision to increase rents and introduce service charges of 2.7%. It was hoped that increases in universal credit would cover these costs for most tenants but to ensure that those who were affected the most, a hardship fund would be established. Having reflected on the reasons why the HRA had plundered to unsustainable levels, Councillor Northeast stated that he welcomed the new EPR payment and increase in Homelessness Prevention Grant received. 

 

          The Chair invited Councillor Wallsgrove to respond on behalf of the Green Group.  She made strong reference to the housing supply numbers which had been introduced by the previous administration which had been blighting the district for years. Councillor Wallsgrove fully supported the budget and stated that she was confident that officers would support those residents that would struggle to pay the small increase in rents.

 

          The Chair then invited Councillor Huntley to respond on behalf of the Independent Group. He confirmed that he supported the budget and that he agreed with the statements that had already been made, especially in relation to housing numbers. Councillor Huntley stated that the alliance had worked hard to reduce the inherited £5.2m budget deficit and that this budget confirmed an improved position as it had achieved savings; had not introduced any cuts to front line services; had encouraged inward investment; and confirmed the delivery of much needed regeneration.  

 

          The Chair invited Councillor Harty to respond on behalf of the Arun Independent Group in the absence of Councillor Goodheart. He confirmed his group’s support to what was a fair and balanced budget, and he thanked the Group Head of Finance and Section 151 Officer and his team.

 

          The Chair thanked Group Leaders for their responses and invited debate.

 

The first to speak was Councillor Greenway on the introduction of new service charges and the establishment of a hardship fund to support those most in need. He questioned where this was in the budget.  Having responded to the statements made by Group Leaders earlier, Councillor Greenway returned to this proposal reconfirming his strong views that this would severely impact the most vulnerable tenants. He referred to the report considered by the Housing & Wellbeing Committee in June 2024 introducing this policy as this confirmed that 54% of tenants residing in the district most deprived wards would be directly impacted and these were residents that were struggling the most financially. Three wards in the district had been placed in the top ten of the most deprived wards in the country and so Councillor Greenway  questioned why service charges of up to £520 per annum were being proposed.  

 

          Councillor Greenway then proposed an amendment. This amendment was to Recommendation 1 in the report (1) that the General Fund as set out in Appendix 1 is approved. The amendment proposed was as follows:

 

          To fund:

 

·      The creation of a Hardship Fund of £75,000 to mitigate the impact of the rise in Service Charges, the terms of which to be agreed by the relevant committee

 

To be paid for:

 

·      Reduction in the Contingency budget of £75,000 to be taken from unallocated contingency

 

 

Councillor Greenway then explained why he was proposing his amendment. The report that had been considered by the Housing & Wellbeing Committee mentioned that most of the impacted residents would find that this increase would be covered by an increase in their benefits which illustrated his point being made which was why was the council prepared to charge residents costs they could not afford. It was because 74% of them were in receipt of housing benefit or universal credit. This did not make sense and as the Group Head of Housing had confirmed that officers were concerned about affordability and were working on creating a hardship fund, but that fund was not in the budget report.

 

          Councillor Alison Cooper then seconded the amendment.

 

          A request was made to adjourn the meeting to allow Alliance Group Leaders to consider this amendment.

 

          Having had a debate on whether the meeting should adjourn, this was putto the vote and declared CARRIED.

          The Chair confirmed an adjournment for ten minutes.

 

Having resumed, the Chair invited debate on the amendment, titled amendment 2. 

 

Those speaking against the amendment highlighted that it was proposing a suggestion already put forward which was the introduction of a hardship fund. Councillor Birch, as Chair of the Housing & Wellbeing Committee, confirmed that a report would be brought to the next meeting of the committee to be held in March providing full details for members to consider. It was confirmed residents in receipt of either housing benefit or universal credit would not be affected by the introduction of service charges as their benefits would fully cover this cost. Those that fell outside of being able to claim these benefits would receive help.

 

Debate continued with other councillors confirming that the amendment was not necessary as a hardship fund was in place to provide much needed support. This had been confirmed in the minutes of the Policy & Finance Committee held on 13 February 2025 and had been confirmed by the Leader of the Council in presenting his budget speech.

 

Those speaking in support for the amendment stated that it presented a simple solution to creating the hardship fund mentioned by others in providing their budget statements. The unallocated contingency could form this fund and provided an opportunity to do something positive for the district’s residents.

 

          As seconder to the amendment, Councillor Alison Cooper confirmed that the hardship fund was not featured in the budget, there was no figures to confirm how this would assist those that needed this support. She thanked Councillor Greenway for his amendment and for the work and research he had undertaken to bring the reality of people’s circumstances to light. This sudden change in charges needed mitigation for those who were unable to afford it without hardship. She had long argued that owner occupiers of buildings with communal areas should pay service charges, but this was indiscriminate and was affecting everybody not just owner occupiers. She disagreed with the sentiment that those in receipt of benefits would not be affected as not all claiming benefits would remain on benefits and they would then be subjected to additional costs.

 

          In line with Council Procedure Rule 20.6 – the voting on the amendment was recorded.

 

          Those voting for the amendment were Councillors Bicknell, Mrs Bower, Mrs Cooper, Cooper, Edwards, Elkins, Greenway, Gunner, Kelly, Lloyd, Madeley, Partridge, Patel, Pendleton, Purser, Stainton and Turner (17). Those voting against were Councillors Ayling, Batley, Birch, Blanchard-Cooper, Butcher, Harty, Haywood, Huntley, Jones, Lawrence, Long, Lury, May, McAuliffe, McDougall, Nash, Northeast, O’Neill, Oppler, Penycate, Stanley, Wallsgrove, Warr, Wiltshire, Woodman, Miss Worne, Mrs Worne and Yeates (28). Councillors Tandy and Walsh abstained from voting.

 

          The amendment was therefore declared LOST.

 

          The Chair then returned to debate and Councillor Pendleton confirmed that she wished to propose a further amendment to the budget which had been fully costed, did not require any cuts to services or the need to take from the council’s reserves. Her amendment was proposing use of unallocated funds. Councillor Pendleton then read out her amendment, which was as follows:

 

(a)  Approves the General Fund Budget as set out in Appendix 1:

 

To fund:

 

·      Increase in the Environment budget of £95,000 to include an extra £60,000 for Land Drainage and an extra £35,000 for Coast Protection

·      Increase in the Economy budget of £111,000 to fund a new Business Rates Hardship Fund, the terms of which to be agreed by the relevant Committee

 

To be paid for:

 

·      Reduction in the Contingency budget of £108,000 to be taken from unallocated contingency

·      Increase in the grant from Government of £98,000 due to increase in payments to cover increase in the National Insurance contributions

This amendment was then seconded by Councillor Cooper.

 

The Chair invited debate on this amendment. Many spoke against it outlining concern and the risks associated with using the contingency budget which was there for good reason.  Statements were made that increasing the coast protection budget by £35k would achieve very little. Although there were councillors who would be in favour of increasing environmental protection funding, the sums indicated would not deliver any impact; significant change or meaningful benefit.

 

Those speaking in support of the amendment focused on the need to create a business rate hardship fund to support the district’s businesses who would struggle further come April 2025 when the new business rate charges would come into force on top of other pressures being felt especially in the hospitality industry. They felt that it was vital to show businesses that the council cared about this sector and the district’s economy at this critical time.  The amendment was also responding to key points arising for the public consultation undertaken on budget proposals.

 

Debate then returned to the vulnerability of the coastline where it was confirmed that any financial assistance would provide multiple benefits and would assist in combatting the many challenges the district had with flooding, drainage issues and coast protection.  Any investment would also protect eco systems and help preserve valuable habitats and would provide an enhanced resilience to climate change. 

 

(Councillor Elkins declared a Personal Interest as a Member of the Local Government Association’s (LGA) Coastal Special Interest Group).

 

          Councillor Cooper, as seconder of the amendment, urged members to support it for all the reasons already outlined and as a hardship fund for local businesses would make a huge difference for small businesses that were struggling to survive. 

 

          In line with Council Procedure Rule 20.6 – the voting on the amendment was recorded.

 

          Those voting for the amendment were Councillors Bicknell, Mrs Bower, Mrs Cooper, Cooper, Edwards, Elkins, Greenway, Gunner, Kelly, Lloyd, Madeley, Partridge, Patel, Pendleton, Purser, Stainton and Turner (17). Those voting against were Councillors Ayling, Batley, Birch, Blanchard-Cooper, Butcher, Haywood, Huntley, Jones, Lawrence, Long, Lury, May, McAuliffe, McDougall, Nash, Northeast, O’Neill, Oppler, Penycate, Stanley, Wallsgrove, Warr, Wiltshire, Woodman, Miss Worne, Mrs Worne and Yeates (27). Councillors Harty, Tandy and Walsh abstained from voting (3).

 

          The amendment was therefore declared LOST.

 

          The Chair then returned to the substantive recommendations. 

 

          Following further debate, Councillor Nash, as seconder to the recommendations, confirmed that the council could be cautiously optimistic  that the year ahead for Arun residents presented a positive way forward. There was more money coming from central government and the council’s dependence on reserves was reducing. The HRA was beginning to recover financially; extra funding from the EPR payment and the council tax premium on second homes combined with a sound and prudent financial strategy meant that services could be maintained for residents with a minimal increase in council tax and a minimal increase for tenants. With the de-pooling of service charges to tenants to improve the HRA position, most tenants would feel no impact as a hardship fund would be introduced to assist those in need.  Big challenges remained ahead with the Fair Funding Review and the Business Rates Review and so it was important to continue deploying the financial strategy approved last year. Other challenges ahead included the council’s relationship with the Littlehampton Harbour board coupled with devolution and local government reorganisation. Despite these, the budget presented an encouraging way forward and so Councillor Nash encouraged members to support it.

 

          Councillor Lury, as proposer of the recommendations, made some corrections to some of the statements that had been made. He confirmed that a continued period of chronic underfunding of local government meant that Council Tax and rents had to increase. The wider public budget consultation process had been launched by this administration which had seen more residents completing the survey compared to last year. Plans were in place to ensure that this consultation would be undertaken earlier for the 2026/27 budget to enable the results to be considered when setting the budget. Councillor Lury urged members to support what was a responsible and prudent budget.

 

          In line with Council Procedure Rule 20.6 – the voting on the recommendations was recorded.

 

Those voting for the recommendations were Councillors Ayling, Batley, Birch, Blanchard-Cooper, Butcher, Harty, Haywood, Huntley, Jones, Lawrence, Long, Lury, May, McAuliffe, McDougall, Nash, Northeast, O’Neill, Oppler, Penycate, Stanley, Wallsgrove, Walsh, Warr, Wiltshire, Woodman, Miss Worne, Mrs Worne and Yeates (29). Those voting against were Councillors Bicknell, Mrs Bower, Mrs Cooper, Cooper, Edwards, Elkins, Greenway, Gunner, Kelly, Lloyd, Madeley, Partridge, Patel, Pendleton, Purser, Stainton, and Turner (17). Councillor Tandy abstained from voting.

 

          The council

 

                     RESOLVED – that it

 

                    

(1)  Approves the General Fund budget as set out in Appendix 1;

 

(2)  Approves that Arun’s Band D Council Tax for 2025/26 is set at £214.62, an increase of 2.99% over 2024/25;

 

 

 

(3)  Approves that Arun’s Council Tax Requirement for 2025/26, based on a Band D Council tax of £214.62, is set at £14.354 million, plus parish precepts as demanded, to be transferred to the General Fund in accordance with statutory requirements;

 

(4)  Approves the Housing Revenue Account (HRA) budget as set out in Appendix 2.

 

(5)  Approves that HRA rents are increased by 2.7% to an average rent of £115.64 per week for 2025/26 in accordance with the Regulator of Social Housing guidance (Rent Standard 2020 and Limit on annual rent increases 2025/26 publications); 

 

(6)  Approves that HRA garage rents are increased by 2.7% to an average rent of £16.04 per week (excluding VAT); 

 

(7)  Approves that existing HRA sheltered service charges for communal heating; lighting and water/sewerage charges be increased by 2.7% plus additional increases on a scheme by scheme basis to cover retrospective increases in utility costs, with the aim of balancing costs with income;

 

(8)  Approves that new HRA communal service charges are introduced from 1 April 2025 as agreed in the Service Charge Policy and De-Pooling of Charges report to the Housing & Wellbeing Committee on 18 June 2024;

 

(9)  Approves the capital programme as set out in Appendix 3;

 

(10)                Approves that the HR/Payroll system is included in the Council’s capital programme; and

 

(11)                Approves the Statutory Resolutions set out in Appendix 5.

 

And the Council is requested to note that:

 

(12)                The Group Head of Finance, in consultation with the Leader of the Council has approved a tax base of 66,877 for 2025/26.

 

(13)                The submission of the Council’s NNDR1 return (the estimate of the Council’s Business Rate income for 2025/26) to the Ministry of Housing, Communities and Local Government.

 

 

 

 

 

 

(14)                That the General Fund budget will draw down £1.885 m of the Council’s Usable Revenue Reserves as set out in Appendix 4. However, it should be noted that this level of draw down is a significant improvement from the budgeted draw down of reserves in previous years, (£3.55 m and £5.19 m in 2024/25 and 2023/24 respectively).

 

(15)                That the Council’s minimum Usable Revenue Reserves balance remains at £10 million; and

 

(16)                That the Housing Revenue Account budget will provide a surplus of £0.66 m which will increase Housing Revenue Account  forecast balance to £1.55m bringing them closer to the Council’s set minimum balance of £2m

 

(17)                Resolves that for 2025/26 any expenses incurred by the Council in performing in part of its area a function performed elsewhere in its area by a Parish/Town Council or the Chair of a Parish Meeting shall not be treated as special expenses for the purposes of Section 35 of the Local Government Finance Act 1992.