Agenda item

Report by the Chief Finance Officer

49.1     The Lead Member considered a report by the Chief Finance Officer.

DECISIONS

49.2     The Lead Member RESOLVED to approve the response to Rother District Council on proposed changes to their Local Council Tax Reduction Schemes for 2024/25 as set out below:

East Sussex County Council recognises the impact the ongoing cost of living crisis is having on local communities, particularly, those who are vulnerable, both financially and for other reasons.

As you will be aware, in common with all local authorities, the County Council continues to face significant financial challenges, with county council service departments projected to overspend by £24.8m in 2023/24. In the recent Autumn Statement, no additional funding was announced for local authorities beyond the increases that were already expected and included within our planning assumptions. Furthermore, the planned increase in the National Living Wage to £11.44 for workers 21 years and over will add significant financial costs to the wider social care provider market, increasing the financial pressure on Children’s Services and Adult Social Care in the coming years.

As we wait for the government to provide further details of funding through the local government finance settlement for 2024/25, the authority’s Medium Term Financial Plan (MTFP) presents a deficit position by 2026/27 of £64.7m. Any loss of income from Council Tax arising from these proposed changes would only serve to increase the deficit and consequently adversely impact the level of services provided to residents.

Council Tax is the County Council’s most important funding stream (70% of net budget in 2023/24) and we rely on certainty of this income to enable us to effectively plan services for the future. The Council will need to take account of any further reduction in the tax base on its income when considering options for achieving a balanced budget for 2025/26 and beyond. Any reductions in income from Rother District residents will be felt across the whole of East Sussex and potentially impact on the services on which the most vulnerable in the whole rely.

Thereby, East Sussex County Council can only support Rother District Council’s proposals to change its LCTRS if every effort is made to implement and maximise income from the Council Tax flexibilities arising from the Levelling Up and Regeneration Act 2023. It is also requested that Rother District Council provide East Sussex County Council, as the major precepting authority, with regular monitoring data that provides evidence of the actual impact of such changes.

REASONS

49.3     Rother District Council are consulting on proposals to change their Local Council Tax Reduction Scheme which will see a reduction on Council Tax income received by the County Council.

49.4     Whilst the proposals address particular concerns within the authority, the impact of the reduction in income will be felt for County Council services that support the needs of residents across the whole of East Sussex.

49.5     The response to the consultation reflects potential negative impact of the changes and recommends only supporting the proposed amendments to the Local Council Tax Reduction Scheme if Rother District Council implement the additional flexibility offered to councils from the Levelling Up and Regeneration Act 2023.