Agenda item

Decision

RESOLVED

1. To consider the proposed balanced budget including movement in reserves and recommended approval to full Council.

2. To approve the creation of an £0.75m Ear Marked Reserve to mitigate the Revenue costs of Local Government Reorganisation.

3. To approve the use of the Communities reserve to fund a revenue budget of £4,000 per Member to allow the award of small local grants.

4. That an alternative option for balancing the budget should be agreed to replace costs or savings not taken forward if there are any.

5. To agree that any additional funding announced as part of the final Local Government Settlement announcement be transferred to reserves.

6. To decide which proposed new capital bids should be recommended to full Council for inclusion in the Capital Programme.

Reason for the decision:

To enable the Council to set a balanced budget.

Cllr L Shires, Portfolio Holder for Finance, Estates & Property Services, introduced this item. She began by thanking her Cabinet colleagues and officers for their support and engagement throughout the budget setting process to ensure that a balanced budget was achieved. She highlighted the challenges that residents had faced in the last two years, especially the increase in homelessness and praised officers for their work in providing temporary accommodation units during a period of extreme financial pressure.

She said that the report had been to Overview and Scrutiny Committee and there had been a request for more background information to be included and this would be added to the updated report that would be going to the next meeting of the Committee.

Cllr Shires highlighted recommendation 3, which related to the use of the Communities reserve to fund a revenue budget of £4k per member to allow the award of small local grants. She explained that the Sustainable Communities Fund had been paused in 2024/2025 and she was pleased to say that it was now being released as a local members fund. It was proposed that a cross-party working group was established to agree purpose and governance regarding the awarding of grants. Then, a four person panel comprised of two members, a legal officer and a finance officer would meet monthly to oversee the allocation of the awards.

Cllr Shires then talked through the other recommendations, which included the establishment of a reserve to deliver Local Government Reorganisation (LGR) as there was no additional funding from government for this.

Officers were now working continuously to ensure that the budget was managed carefully throughout the year, thus ensuring that savings were built into the way service areas worked rather than presented at year end.

Cllr Shires the explained that following the Local Government Financial Settlement (LGFS) in December 2025, the Council received a zero percent increase in core spending power. The impact on shire districts was considerable as the Government’s focus shifted towards metropolitan boroughs. Consequently, a significant number of district councils, including NNDC, were reliant on 95% funding floor protection to avoid real-terms and in some cases, cash terms reductions.

Cllr Shires then highlighted additional funding pressures that the Council was facing including ongoing temporary housing costs and the introduction of food waste collection. The Government had miscalculated how much this would cost and it was likely that this would have a considerable impact on future budgets if the funding gap was not addressed.

Referring to the Medium Term Financial Strategy (MTFS), she highlighted the small share of council tax allocated to NNDC – which had previously been approximately 8% of the total collected and then last year this had fallen to 7.4%. She warned that this share may change again this year but suggested that members may wish to highlight the 7.4% share when discussing council tax rates with their town and parish councils. 

The Chair said it was important to note that NNDC’s overall share of council tax was shrinking whilst its responsibilities were growing. He also referred to the under-funding of introducing mandatory food waste collection and said it highlighted the lack of understanding of rural areas by central Government. However, despite such challenges, the Council had been able to present a balanced budget and he commended officers for their hard work.

Cllr J Toye said that it was very clear that central Government did not understand rural areas. He added that NNDC was still delivering services to residents at a high standard and that North Norfolk was a great area to live in. He said that it was due to the Council’s historic prudence regarding its budgets that it was able to continue to deliver not only its statutory services but also many discretionary services such as leisure centres, public toilets and the provision of country parks.

The Chair agreed and said that the Council had a duty to maintain several key assets such as Cromer Pier but it should be remembered that this played a key role in the district’s tourism offer. He reiterated Cllr Toye’s comments about all the discretionary services that NNDC provided adding that this was in addition to having to cover very high costs relating to the provision of temporary accommodation and the upcoming mandatory collection of food waste.

Cllr C Cushing reiterated the points raised regarding the unfair funding review and said it was clear that central Government had no understanding of rural Norfolk and its needs, adding that it was harder to deliver many services in a large, rural areas than in a town or city. He said that although he agreed with the need to set money aside to deliver local government reform, he remained convinced that it would not be beneficial for North Norfolk in any way and that the delivery of services would suffer. Ultimately it meant that £750k would not be spent on services that would benefit residents.

Cllr Cushing then referred to page 103 of the report, Table 1 ‘General Fund Summary’ and sought clarification regarding the increase in ‘service delivery’.

Cllr Shires replied that page 117 (Appendix B) gave a breakdown of the detail.

The Director of Resources added that £1.3m related to ‘growth in Environmental Services’ and this was essentially allocated to the anticipated cost of food waste collection. The final cost had not been agreed with the contractor yet and negotiations were ongoing. It was hoped that this figure could be reduced and officers were actively working on this.

The Chair commented that additional costs such as this and the funding of LGR, demonstrated the financial burden that central Government was placing on the Council, adding that he agreed with Cllr Cushing’s earlier point that setting aside such huge costs, meant that less money was spent on local residents. He said that this money would be better spent on funding key areas in local government that desperately needed the funding such as adult social care and children's services.

Cllr L Withington said that she wanted to reiterated Cllr Toye’s comments about having a strong local economy as this kept people in their homes, through the provision of good, local jobs. She added that the Council was very good at bringing in grant funding and distributing this to the local economy and supporting businesses and like Cllr Cushing, she believed that the £750k allocated for LGR could be better spent on local services. Cllr Withington then spoke about the work that NNDC was doing to tackle homelessness in the District, including bringing in funding and using the second homes premium. There was also really strong partnership working that was delivering across key areas to maximise what could be achieved.

It was proposed by Cllr L Shires, seconded by Cllr J Toye and

RESOLVED

1. To consider the proposed balanced budget including movement in reserves and recommended approval to full Council.

2. To approve the creation of an £0.75m Ear Marked Reserve to mitigate the Revenue costs of Local Government Reorganisation.

3. To approve the use of the Communities reserve to fund a revenue budget of £4,000 per Member to allow the award of small local grants.

4. That an alternative option for balancing the budget should be agreed to replace costs or savings not taken forward if there are any.

5. To agree that any additional funding announced as part of the final Local Government Settlement announcement be transferred to reserves.

6. To decide which proposed new capital bids should be recommended to full Council for inclusion in the Capital Programme.

Reason for the decision:

To enable the Council to set a balanced budget.