Medium Term Financial Plan (MTFP)
The Council has a long established process of operating a medium term approach to its financial planning and in line with this it reviews the plan at least on an annual basis when it firms up the budget for the forthcoming year, by approving a detailed budget and Council Tax level.
In doing this, the Council also takes due consideration of future year demands on its resources and establishes its firm proposals for the coming year with due regard to prudent financial management in the medium term. The Council has a successful track record of managing its resources in this way.
The financial pressures on the public sector as a whole and the Council more specifically have been significant over the last few years in the aftermath of Covid with service demand soaring particularly in social care and the challenging economic climate. Furthermore, this was on the background of a decade of significant financial challenge following the reductions in public sector spending.
Through good leadership, governance, and financial management, coupled with value for money service delivery, the Council has responded well to these challenges by continuing to provide vital core services to the residents of Darlington, and investing the resources available in protecting our most vulnerable and growing our economy.
The current economic climate however continues to present significant financial challenges to the Council’s budgets. High inflation and interest rates, energy costs, income deprivation and poverty rising placing more demand on services and national living wage rises are putting significant pressure on affordability and unless additional government funding is forthcoming the Council will need to undertake a fundamental review over the next year to decide what and how services will be delivered in the coming years.
The Council’s key ambition is to grow the Darlington economy and attract companies into the area to create more and better paid jobs to ensure all our residents will benefit.
The Council has continued to be successful in attracting major employers to the town with a number of central government departments making Darlington their northern base and other companies wanting to relocate to the area. Darlington is definitely a place for business and this economic growth will help Darlington to thrive and meet its ambitions.
The Local Government Finance settlement confirmed funding allocations for the Council with additional grant funding for social care. The Council tax referendum limits remain the same at 3% for Council Tax and 2% for Adult Social Care Precept.
Future years funding beyond 2024/25 have not been confirmed and as a result the 2024/25 – 2027/28 MTFP whilst having an eye to future years does not presume what the future will look like. The MTFP aims to ensure that the Council can set a legal budget for 2024/25 and continue to provide our core offer level of services to the people of Darlington.
The Council’s MTFP reflects the Local Government Finance settlement and includes council tax increases of 2.99% plus 2% Adult Social Care Precept (4.99% in total) for 2024/25.
The Council’s General Fund balance as at 1st April 2023 is estimated to be £16.384m
Budget breakdown
The Council has set a revenue budget of £127.694m for 2024/25 which is summarised below:
| Group | £m |
|---|---|
| People Group | 84.432 |
| Chief Executives Office & Economic Growth | 1.472 |
| Services Group | 25.347 |
| Operations Group | 13.580 |
| Financing costs | 3.547 |
| Joint venture - Investment return | (1.517) |
| Council wide pressures/(savings) | 0.631 |
| Council wide contingencies | 0.202 |
| Total net revenue budget | 127.694 |
Budget funding breakdown
| Item | £m |
|---|---|
| Council tax | 65.872 |
| Business rates retained locally | 26.081 |
| Top up grant | 8.390 |
| Revenue support grant | 4.572 |
| New homes bonus | 0.436 |
| Improved better care fund | 4.488 |
| Adult Social Care Support Grant | 3.753 |
| Social Care Grant | 7.153 |
| Services Grant | 0.166 |
| Strengthening Families Grant | 0.500 |
| Use of Reserves | 6.283 |
| Total | 127.694 |
A detailed report prepared by the Chief Officers Executive (COE) was presented to Cabinet on 5 December 2023 for consultation.
The views of all Scrutiny Committees were fed back via the Economy & Resources Scrutiny Committee to Cabinet on 6 February 2024.
The results of the consultation and other updates were considered at the meeting and the budget was recommended to Council on 15 February 2024.
Capital Programme
The Council has an extensive capital programme with significant resources invested to purchase, improve, protect and maintain our assets, to enable the Council to deliver its priorities, for example purchasing land to enable road improvements or investing in new and modernising council housing. The Council continues to deliver a significant capital investment programme in the main funded from the Housing Revenue Account (HRA) and grant or other external funding which is targeted at specific schemes and programmes such as Transport and Schools. Furthermore, investment from the Tees Valley Combined Authority (TVCA) along with other external funding sources are being used for economic growth initiatives.
The Council can also supplement these funding sources with its own resources such as capital receipts or prudential borrowing where there is a need, however as capital receipts are limited, and prudential borrowing comes with future revenue implications there must be a strong case for doing so.
The MTFP includes planned capital investment of £98.384m between 2024/25 and 2027/28.
Council Tax
In setting the budget the Council has regard to public expectations and demands for services and the impact on Council Tax.
Government support in the form of Formula Grant is determined by national formulae and does not vary with local spending decisions.
£1,866.02 is the amount paid to the Borough Council for band D properties excluding the average Parish Precept. The percentage increase for 2024/25 is 4.99% which is made up of 2.99% for Council Tax and 2% for Adult Social Care Precept.
In addition to the Council’s own requirements, Council Tax bills include
- the Office of the Durham Police Crime and Victims’ Commissioner precept (£268.24 for Band D)
- Durham and Darlington Fire and Rescue Authority precept (£118.12 for Band D)
- parish areas the Parish Council’s precept (ranging from £20.38 to £61.20 for Band D)
The latest version of the Medium Term Financial Plan was approved by Cabinet on 6 February 2024 and by Council on 15 February 2024.