Agenda item

This report provides an update on the overall preparation and proposals for the 2025/26 revenue budget, risks, financial resilience, and the impact of those proposals.

This report also sets out the budget proposals for the Climate Change and Ecology Policy & Accountability Committee.

Corporate Budget

Councillor Rowan Ree (Cabinet Member for Finance and Reform) gave a presentation that detailed the proposals for the 2025/26 revenue budget – including the risks, financial resilience, and impact of those proposals. He showed slides that highlighted the following key aspects.

• The Net General Fund Revenue Budget was £221m.  

• The difficulty of operating environment included reduced revenue funding, changing demographics and a sluggish national economy. 

• The key objectives of the financial plan were ensuring the safety of residents, businesses and visitors, protecting the statutory services and other Council services valued by residents, promoting prosperity, running an efficient council, ensuring strong financial governance and resilience, and preserving low council tax rates. 

• The budget headlines for 2025/26 included investing £3.5m in community safety and crime prevention, relieving pressure on statutory services, investing in the Upstream Industrial Strategy, tackling climate change and investing in sports facilities. 

• Council tax would increase by 88p per week, but it was estimated that four in 10 households would receive some sort of discount. 

Councillor Rowan Ree noted that the Revenue Budget would be presented to the Cabinet and Budget Council in February 2025 and thanked cabinet members and officers for their work in realising a balanced budget over the past year. 

Departmental Budget

Kellie Gooch, (Head of Finance, Place) gave a presentation on the department’s revenue budget 2025/26. This covered the department’s recent achievements, relevant to this Committee as follows:

Kellie Gooch, (Head of Finance, Place) also updated members on the budget implications and future strategic budget risks. This included significant funding requirements for addressing the climate and ecological emergency. Including ongoing pressure and challenges to secure funding for the H&F Plan objectives

Councillor Jose Afonso thanked Councillor Rowan Ree and officers for their presentation. He noted that a report on the 2025-30 Air Quality Plan had been presented at the last Full Council. However, he expressed concerns that the allocated funding was insufficient to deliver the necessary projects to meet the plan’s targets. He asked officers how they intended to secure funding for these projects moving forward. John Galsworthy (Director of Climate Change and Transport) noted that the team’s role was primarily to influence projects that contributed to achieving the climate target. He explained that most of the investment would come from external sources as and when it became available. Additionally, government grants would be pursued whenever possible.

Councillor Jose Afonso asked about the costs associated with the parklets on Wandsworth Bridge Road and future street scaling projects, specifically how much the Council had spent to date and how much it planned to spend in the future. John Galsworthy (Director of Climate Change and Transport) explained that the initiative had been cost-neutral with any revenue from tickets being reinvested into the high street. He clarified that the existing parklets were temporary, designed to rebalance traffic in the area. Once the final layout was determined, the parklets would be relocated and reused in the next designated location.

The Chair requested further clarification on the additional 2% increase in the staffing budget allocated for pay inflation. Kellie Gooch, (Head of Finance, Place) explained that the additional 2% was included in the budget to account for anticipated pay increases, though the exact amount was not yet known. This was an estimate for a potential pay award or inflation adjustment of approximately 2%.

Councillor Laura Janes referring to the Green Investment Strategy, requested further insight into the factors contributing to its success. Kellie Gooch, (Head of Finance, Place) explained that the strategy’s success was largely due to the Council being an early adopter of this type of borrowing, at a time when few other Council’s had pursued it. Since its initial implementation, a second tranche had been introduced, and the Council was set to be the first to move forward with a third tranche. She noted that the Council aimed to secure £5mil through a phased approach, allowing time to build and sustain effective communication.

Councillor Rowan Ree (Cabinet Member for Finance and Reform) noted that the primary goal of the scheme was to raise awareness and engagement of climate change for those that were interested. The scheme also provided a win-win outcome. The Council benefited from slightly more competitive borrowing rates while the environment and investors also gained from the initiative. He noted that he was scheduled to attend an event at the Green Finance Institute where he would discuss strategies to broaden the implementation of these schemes, ensuring they were accessible to a wider audience.

Councillor Stala Antoniades asked a follow up question with regards to the green investment strategy. She asked whether there had been opportunities to collaborate with partners from the industrial strategy and if any incentives had been offered to facilitate such partnership. Councillor Rowan Ree (Cabinet Member for Finance and Reform) explained that the first two tranches of the scheme were primarily targeted at resident in the borough. He also observed that there was a market among local businesses, many of which were interested to invest, while enhancing their corporate social responsibility and optimising their treasury management functions.

The Chair asked for clarification on how the Council was accounting for its green credentials. Kellie Gooch, (Head of Finance, Place) noted that the climate budgeting was a relatively new concept, one that the Council was still working to develop in a more robust and comprehensive manner. The Council was in the early stages of a project designed to assess spending and its impact on climate, and officers were also examining approaches adopted by other councils.

A member of the public asked a series of questions. Firstly, he enquired whether ‘climate net zero’ was still listed as the primary climate goal for 2030. Additionally, while acknowledging that the extra £120k allocated for climate related projects was a positive step, he expressed concern that this funding might be limited given the current climate emergency. He requested further clarification on the expected impact, the Council aimed to achieve with this additional investment.

Councillor Rowan Ree emphasised the importance of distinguishing between revenue and capital spending. He explained that most of the Council’s investments in climate and sustainability were capital expenditure, paid over an extended period as part of the capital budget. The original £120k had been allocated from the revenue budget and was intended to help secure larger funding opportunities.

A resident observed that the Council was already halfway between declaring a climate emergency in 2019 and asked whether the council was confident it would achieve its net zero goal by 2030. Councillor Wesley Harcourt emphasised that the net zero carbon target by 2023 remained in place. Although he acknowledged that this was a challenging goal, he explained that the Council had spent much of early 2019 developing strategies and was now focused on their implementation. He further provided an overview of the work being carried out by the Council with regards to Climate Change and Ecology and noted that capital projects would play an increasingly significant role, alongside measures to protect the community as the conditions evolved.

RESOLVED.

1.       That the Committee noted the budget proposals and agreed to recommend them to the Cabinet as appropriate.

2.       That the Committee noted the proposed changes to fees and charges and agreed to make recommendations as appropriate.