Budget and Financial Strategy 2025-26

Budget Setting and Associated Financial Strategies 2025/26 - 2029/30

Contents

Introduction and Executive Summary
Budget Assumptions
Financial Resources
2024/25 Spending Plans
Budget Requirement
Reserves
The Transformation Strategy and Efficiency Plan
Risk and Sensitivity
Capital Programme
Treasury Management
Options
Appendices

1. Introduction and Executive Summary

1.1 Introduction

The economic environment continues to be challenging, the aftereffects of the global pandemic, continued international conflict and the unprecedented levels in inflation have elevated the Council’s cost base. The general election in the summer has for the first time in 14 years resulted in a change to a Labour UK Government and this has added yet more uncertainty to financing and policy, making budget setting over the Medium-Term even more challenging. Globally, political volatility is increasing with the US Presidential election outcome and further highlighted by the collapse of the French Government and turmoil in South Korea.

A white paper on Local Government Reorganisation (LGR) has been recently released with a focus on simpler structures and efficiency savings. This may see two tier Council’s restructured from as early as 2027 or 2028. This Council, despite significant uncertainty will continue to make sensible financial decisions to ensure it provides the best possible services for its residents and delivers Corporate Plan objectives. The clear message is that there are still tough choices to be made in the Medium-Term Financial Strategy (MTFS) and the Council must continue to seek efficiencies through the Transformation and Efficiency Plan (TEP) and a focus on continuing to deliver vital services to the residents and businesses of Rushcliffe.

The local government financial settlement resulted in a 0.9% increase in core spending power for 2025/26 for RBC. Given ongoing inflation this continues to make balancing the budget even more challenging. New Homes Bonus (NHB) has one final year in its current form, and its has been confirmed that we will receive £1,050,000 in 2025/26 in UK Shared Prosperity Funding (UKSPF). A significant risk for the Council in 2026/27 will be wider local government finance reform prior to any LGR which will focus on redirecting funding tor more deprived areas and Business Rate reforms and further consultation with regards to NHB. For Rushcliffe this represents a likely pessimistic outcome and is reflected in prudent financial projections going forward.

Employers National Insurance contributions (NIC) have increased by 1.2% to 15% in addition to the lowering of the threshold at which NIC becomes payable. This has a budget pressure of approximately £300,000 per annum to the Council. The final settlement confirmed that the Council will receive £123,000 in government grant for increased NICs accounting for 41% of the additional costs. Furthermore this compensation will only apply to Local Government and not any third parties used to deliver services. This therefore has implications for the supply chain of the Council such as Leisure Services and is likely to translate in rising support service, transport, premises costs etc for the Council.

There remain uncertainties around developing initiatives such as Extended Producer Responsibility Scheme (EPR) and Simpler Recycling (SR) which places additional responsibility on the Council, with funding and additional costs not yet fully known. There is currently an anticipated shortfall in funding to be met from the Collection Fund Reserve and a newly created Simpler Recycling Reserve. The Council will continue to make representations to the Government that the imposition of such duties should be properly funded by the Government as with any ‘new burden’.

Inflation has now fallen closer to the target of 2% (2.3% as at October 2024) it is more recent higher increases that have placed significant pressure on the MTFS. Energy costs have been subject to high levels of volatility and soaring prices in the past few years, whilst costs have reduced prices are expected to rise therefore, we have assumed 10% per annum in the budget. The Government uses interest rates as a key tool to contain inflation. If inflation remains higher then interest rates will be higher. Commendably the Council remains debt free, so is not yet subject to interest costs from borrowing. Higher interest rates do mean interest earned on treasury investments is elevated. The net projected financial position over the 5 years gives a virtually balanced budget of £171,900. The impact of LGR and its timing is unknown and will be factored in as the MTFS is developed further next year

The Council remains sustainable due to its range of income streams, including Council Tax, commercial property income and fees and charges, with a proportionate approach to generating income. Government assumes Council Tax will be maximised at the higher of £5 or 3% in its funding assessment and the Council has budgeted at the maximum of 2.99% (£5.31) increasing the total Band D equivalent (including Special Expenses) from £177.63 to £182.94 with Rushcliffe’s element of the charge increasing from £157.88 to £161.77 (£3.89 or 2.46%). The Council must also consider the rising costs of discretionary services and therefore the need to increase fees and charges and/or reduce expenditure. Broadly fees for discretionary services have been increased by 4% to recover the increase in the costs to deliver these services, however this is also balanced with the demand for services (given cost of living pressures) and services used by the more vulnerable in our community.

The focus is delivering our priorities within a balanced budget for 2025/26 and ensuring the budget is robust for the future. The main pressures in addition to those posed by inflation come from the new Simpler Recycling requirements and a downward trend in planning income from reduced demand from new developments. These are somewhat offset by associated savings on planning agency and various other efficiencies such as the transition to Hydrotreated Vegetable Oil (HVO) in addition to supporting carbon targets. The Council’s leisure contract is due to end in 2027, however a short-term extension to 2030 has been proposed which aims to align Council facilities under one contract end date and provides further budget efficiencies the next five years. After this extended period there may be further opportunities to generate efficiencies from the Leisure Strategy as the Council looks to undertake a full review and maximise the potential from its complete leisure portfolio and if the Council has transitioned into a new authority the opportunity for further synergy with a wider leisure portfolio.

The East Midlands Development Corporation (EMDevCo) has been wound up and transferred to the East Midlands Combined County Authority (EMCCA) meaning reserves of £200,000 held for future commitments have been repurposed to the Organisation Stabilisation reserve. The £1,000,000 allocated for land acquisition for travellers’ site has been repatriated and partially earmarked towards the acquisition of land for planting for carbon offsetting.

Capital resources are increasingly strained, with main pressures arising from Simpler Recycling, climate change and Disabled Facilities Grants. A rising asset base demands more from replacement programmes and has a knock-on effect to the challenges of balancing the revenue budget. Despite these pressures, the Council continues to develop and enhance its facilities with a budget of £27,000,000 over the 5-year Capital Programme. Schemes include focus on upgrades to facilities, (especially leisure centres to improve energy efficiency, both to reduce expenditure and deliver green objectives); play areas; vehicle replacement and delivering Warm Home Grants.

Nationally, councils are reporting difficulties in bridging their funding gaps, forcing cuts in discretionary services and an increasing reliance on reserves. Several Councils were forced to issue Section 114 notices (effectively declaring bankruptcy), and it is suggested this could worsen with one in five Councils at risk. The Council are one of the few who are debt free with a reasonable level of reserves, which helps to protect against this eventuality, but with reserves reducing from £21,400,000 in 2024/25 to £15,300,000 by end of 2029/30 financial risk remains significant. The expectation is that at some point in this period assets and liabilities will transfer to a new authority.

One-year settlements have provided little certainty for councils in recent years and the 2025/26 budget setting period is no exception, there is some hope in sight with a further stage of the Spending Review concluding in late spring 2025 and hopefully giving certainty for at least two more financial years. Thereafter there is likely to be LGR and undoubtedly further changes to funding allocations. Given the uncertainty of LGR, and the challenges of an unstable international economy and new burdens from government legislation the fact we have a virtually balanced budget for 5 years is testament to the hard work of both Councillors and officers and we will not rest on our laurels.

1.2 Executive Summary

This report outlines the Council’s Medium Term Financial Strategy (MTFS) through to 2029/30 including the revenue and
capital budgets, supported by several key associated financial policies alongside details of changes to fees and charges. Some
of the key figures are as follows:

Five-year Budget Estimate

New (Surplus)/Deficit

2025/26 - (£3,549,800)
2026/27 - £1,161,100
2027/28 - £1,057,600
2028/29 - £817,400
2029/30 - £685,600
Total: £171,900

Key Changes

Medium Term Financial Strategy - key figures
Category	2024/25	2025/26
RBC Precept	£7,419,000	£7,728,000
Council Tax Band D	£157.88	£161.77
Council Tax Increase	2.55%	2.46%
Council Tax Increase Band D with Special Expenses	£177.63	£182.94
Council Tax Increase with Special Expenses	2.90%	2.99%
Retained Business Rates	£5,463,000	£6,676,000
New Homes Bonus	£1,509,000	£1,478,000

Change in precepts - Special Expenses
Special Expenses	2024/25	2025/26	Increase / (Decrease) £	Increase / (Decrease) %
Total Special Expenses	£928,000	£1,011,600	83,600	9.01%
West Bridgford	£59.44	£64.84	£5.40	9.08%
Keyworth	£4.69	£3.21	(£1.48)	(31.56%)
Ruddington	£3.29	£3.14	(£0.15)	(4.56%)

The Local Government Act 2003 introduced a requirement that the Chief Financial Officer reports on the robustness of the budget. The estimates have been prepared in a prudent manner, although it should be recognised that there are elements outside of the Council’s control. Several risks have been identified in Section 8 of this report and these will be mitigated through the budget monitoring and risk management processes of the Council.

2. Budget Assumptions

2.1 Statistical assumptions which influence the five-year financial strategy.

Statistical assumptions which influence the five-year financial strategy
Assumed increases/inflation	Note	2025/26	2026/27	2027/28	2028/29	2029/30
Utilities	a	10%	10%	10%	10%	10%
Diesel/Fuel	b	2%	2%	2%	2%	2%
Contracts	a	3%	3%	3%	3%	3%
Pay costs increase	c	4%	3%	2%	2%	2%
Employer's pension contribution rate	d	18.50%	18.50%	18.50%	18.50%	18.50%
Return on cash investments	e	4.06%	3.75%	3.50%	3.00%	3.00%
Tax base increase	f	1.66%	1.80%	1.80%	1.80%	1.80%
Employer's National Insurance	g	15.00%	15.00%	15.00%	15.00%	15.00%

Notes to Assumptions

Inflation peaked at 11.2% in October 2022, this has steadily fallen to 2.6% as at September 2024 but is not expected to return to the Government’s target of 2% within the MTFS period. High inflation has resulted in a permanent increase in the Councils spending levels and has been built into future year budgets to ensure commitments can be met.
The Council completed successful conversion of some of the Council’s fleet vehicles to using HVO fuel. The 2025/26 diesel/fuel budget has been re-assessed as the price was less than anticipated in the 2024/25 budget cycle. Fuel by its nature is volatile in price but we have assumed a 2% increase in future years, but we will continue to review costs over the medium term.
Payroll projections have increased due to upward pressure on National Living Wage and pay negotiations which (also driven by inflation) which also include the agreed pay award for 2024/25 of the higher of £1,290 or 2.5% per employee an average of 4% compared to average 6% in 2023/24.
The Council is in the third year of its triennial valuation of the pension fund with the review due next year (covering the period 2023/24 to 2025/26). There was an increase to the employer’s contribution rate to 18.5% (from 17.9%) but a reduction in the estimated annual deficit payment (to meet historical pension liabilities) from £976,000 per annum to £840,000, £720,000, £600,000m in 2023/24, 2024/25 and 2025/26 respectively. The Council has in the past chosen to prepay the deficit however for this triennial valuation the saving from prepaying the deficit is £125,000 over 3 years. As interest rates are currently high, the lost opportunity cost from investing the funds would balance out any saving from prepaying the deficit and therefore this option does not make financial sense.
Cash investment returns are based on projections consistent with the Council’s Capital and Investment Strategy. The Bank of England Base rate dropped from 5% to 4.5% in February 2025, and it is expected that this will continue to decline with current predictions of 3.75% by December 2025 and 3% by the end of the MTFS period, recent UK and World events may affect this and projections can change.
The tax base for 2025/26 has reduced from 2% to 1.66% due to the declining trend in housing growth, this has been reduced for future years to 1.8%
A £0.3m contingency is in place to manage adverse budget variances and potential increases .

3. Financial Resources

In the Autumn spending review, The Government has reiterated its commitment to a single fiscal event each year and to holding a Spending Review every two years, setting departmental budgets for a minimum of three years. The second phase of the Spending Review will conclude in late spring 2025. It is not clear how many years the second phase will cover, but the Government’s general commitment would suggest at least 2026/27 and 2027/28. However, the recently announced white paper on English Devolution brings into question whether a longer-term settlement would be issued. This uncertainty and short-term decisions make long term planning challenging.

Across local government there was an increase in Core Spending Power of 3.2%. Rushcliffe like many district councils attained a much lower increase (for Rushcliffe 0.9%) This assumed also that district councils maximise their ability to raise Council Tax to referendum limits.

Government have expressed a commitment to funding reforms within the Local Government Finance Settlement by redistributing funding to ensure that it reflects an up-to-date assessment of need and local revenues. This is expected to include a review of the funding formula and reforms on business rates (BR) likely involving a ‘reset’ of BR growth and a potential replacement for New Homes Bonus (NHB). Rushcliffe is unlikely to see any increase in funding with a potential scenario being a reduction in overall spending power linked to removing and redistributing BR growth. It’s possible this could be initially compensated by some form of grant however the Council has taken the prudent approach and not included any such assumption in the budget.

This section of the report outlines the resources available to the Council: Business Rates, Council Tax (RBC and Special Expenses), Revenue Support Grant, New Homes Bonus, Fees, Charges and Rents, and Other Income.

3.1 Business Rates

In 2024/25 indexation was split creating multipliers for small and standard businesses, allowing the Government to protect smaller businesses from tax rises, whilst still getting the bulk of the additional revenues from indexation, which are paid by larger businesses. For 2025/26 the business rates standard multiplier will be indexed (1.65% increase), and the small multiplier will be frozen. From 2026-27 onwards, new sectoral multipliers will be set, with lower multipliers for Retail, Hospitality, and Leisure (RHL) properties along with a new multiplier for properties with a rateable value of over £500,000.

In 2025/26 the RHL relief will be reducing from 75% to 40%, resulting in a higher risk as the Council will have £1,300,000 more rates to collect. Compensation for reliefs will be paid as normal.

The Power Station ceased production in October 2024 although for 2025/26 it remains a chargeable hereditament during the decommissioning and demolition stage albeit it now makes up a much smaller proportion of total collectable rates with a charge for business rates of £833,000 (2.42%).

The business rates reset has been built into the budget from 2026/27 and assumes no loss due to fairer funding. From 2027/28 the budget includes the effect of a reset and some growth (2%). There is a high level of uncertainty regarding the reduction in retained BR following the reset and for prudence the budget has been set to assume that the Council will only retain baseline funding (the level of business rates that Government have determined the Council should receive) plus renewables (Business Rates collected from renewable energy hereditaments). Alternative scenarios are considered at section 3.2. The real impact of this is demonstrated in Table 5 with a significant reduction in business rates in 2026/27.

The Council ordinarily makes assumptions reflecting national experience of successful ratings appeals and for this year will continue to use the national average appeals percentage to calculate the provision required. The national average included in the settlement is 3.2% (the same as in 2024/25) and this is reflected in the Council’s budget for retained Business Rates.

The Business Rates element of the Collection Fund is estimated to be in surplus by £2,100,000 (RBC share £830,000) at the end of 2024/25. The balance in the Collection Fund Reserve will be repatriated to support the additional costs of Simpler Recycling (see paragraph 4.2).

The Council continues to be a partner in the Nottinghamshire Business Rates Pool for 2025/26 and an assumption has been that this will result in a share of the surplus whilst growth is still anticipated. This is not included in the budget forecast after 2026/27 as the anticipated Business Rates reset will likely remove all growth. From 2026/27 onwards, arrangements will need to be revisited for both potential changes to the Business Rates system to determine the relevant tier split between districts and Nottinghamshire County Council or the potential new system of Local Government if LGR is in place by then.

There remains a challenge in setting the Business Rates budget, such as the decoupling of the multiplier and closure of the Power Station and the Freeport, further complicated now by potential new BR system and LGR proposals.

The forecast position on Business Rates is shown below.

Forecast position on business rates
Category	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30
Retained Business Rates £'000	(£5,463,000)	(£6,676,000)	(£3,578,000)	(£3,704,000)	(£3,834,000)	(£3,970,000)
Increase / (Reduction) £'000	£558,000	£1,213,000	(£3,098,000)	£126,000	£130,000	£136,000
Increase / (Reduction) %	11%	22%	(46%)	4%	4%	4%

3.2 Business Rates Sensitivity Analysis

As explained above, there is uncertainty surrounding Business Rates from 2026/27. The level of Business Rates baseline for Rushcliffe will be adjusted at the Business Rates reset which will determine how much growth the Council retains. It is unknown at this stage what baseline will be set and for prudence we have therefore assumed the Council will receive baseline plus renewables for the remainder of the MTFS because of the Power Station closure and the reset. However, there is an upside risk that the reset will see the baseline set at higher levels than expected meaning there would be the benefit of higher growth or alternatively transitional support. The Safety Net shown in the graph below is the minimum amount the Council could receive (in accordance with government regulations) calculated as 92.5% of the baseline set for the Council.

3.3 Council Tax

The Government has assumed in future funding projections that Councils will take up the option of increasing their Council Tax by the higher of 3% or £5 for a Council Tax Band D (maintained at 3% for a third year). The overriding Rushcliffe principle is that the Council aims to stay in the lower quartile for Council Tax. The Council acknowledges the cost-of-living challenges being faced by its residents however the Council must also consider the future delivery of services and reserves needed to withstand financial shocks. The Council is required to consider Special Expenses when assessing increases against the referendum limit and together both the Special Expenses and Borough increase totalling £5 or 3%. The total increase is £5.31 or 2.99% with Rushcliffe’s element £3.89 or 2.46%. We have assumed an increase in Council Tax of 3% each year for the remainder of the MTFS. A Council Tax freeze on the RBC element of Council Tax in 25/26 would result in a reduction of £254,000 in revenue in 2025/26 and £1,600,000 over the 5 years.

The 2025/26 tax base has been set at 47,769.8 (an increase of 1.66%). The projections for 2025/26 have been based upon the current Council Tax base. Anticipated growth during 2025/26 has been calculated and included in the projections and thereafter we have assumed a 1.8% increase per annum. This will be reviewed as the Council looks to deliver its housing growth targets.

The overall net surplus is expected to be £63,000 (RBC share £6,000).

The movement in Council Tax, the tax base, precept and the Council Tax Collection Fund deficit are shown in the table below.

Movement in Council Tax, the tax base, precept and the Council Tax Collection Fund deficit
Category	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30
Council Tax Base (a)	46,989.80	47,769.80	48,629,70	49,505.00	50,396.10	50,303.20
Council Tax £ (b)	£157.88	£161.77	£165.82	£170.72	£175.68	£181.63
£ Annual Increase (RBC element)	£3.93	£3.89	£4.05	£4.90	£4.96	£5.95
% Increase	2.55%	2.46%	2.50%	2.96%	2.91%	3.39%
Gross Council Tax collected (a multiplied by b)	(7,418,700)	(7,727,700)	(8,063,800)	(8,451,500)	(8,853,700)	(9,318,200)
Increase in Precept	£326,500	£309,000	£336,100	£387,700	£402,200	£464,500
Council Tax (surplus) / deficit	£3,200	£6,100	-	-	-	-

3.4 Second Homes Premium

The Council remains committed to ensuring properties are brought into use for residents. The proposal to introduce the Second Homes Premium was approved by Members in March 2024, but the earliest that this could be implemented was from 1 April 2025. The Government has subsequently issued revised legislation, giving certain exceptions where a premium may not be imposed (for example if a property is actively marketed for sale). This will be incorporated into our policies.

3.5 Special Expenses

The Council sets a special expense to cover any expenditure it incurs in a part of the Borough which elsewhere is undertaken by a town or parish council. These costs are then levied on the taxpayers of that area. As with previous years, special expenses will be levied in West Bridgford, Ruddington and Keyworth.

Appendix 1, summarised in Table 7, details the Band D element of the precepts for the special expense areas. Expenditure in West Bridgford has increased by £87.7k, this is mainly due to the new Edwalton Community Centre £30,000, Bridge Field tree works and £25,000 capital contribution to play area works. This results in an increase in the Band D charge of £5.40 (9.08%) or 10.4p per week. Costs in Keyworth have decreased by £4,100 due to reduced annuity charge resulting from reprofiling of cemetery health and safety works from 2024/25 to 2025/26 meaning repayments via the annuity will not commence until 2026/27. This equates to a 31.56% decrease (£1.48). The Band D amount for Ruddington has decreased by £0.15 (-4.56%) the precept has remained the same and there is an increase in the tax base.

The budgets for the West Bridgford Special Expense area have been discussed at the West Bridgford Special Expenses and Community Infrastructure Levy group, given the more detailed nature of the budget.

Special Expenses
Special Expenses	2024/25 Cost	2024/25 Band D	2025/26 Cost	2025/26 Band D	2025/26 % change
West Bridgford	£903,900	59.44	£991,100	64.84	9.08
Keyworth	£14,200	4.69	£10,100	3.21	(31.56)
Ruddington	£10,400	3.29	£10,400	3.14	(4.56)
Total	£928,000	-	£1,011,600	-	-

3.6 Revenue Support Grant (RSG)

The Council no longer receives any historical RSG and this equates to £3,25,000 in lost income. The Council has mitigated the impact of this loss largely through its Transformation and Efficiency Plan. There is now a small element of RSG included in the grants line of the budget however these are operational grants that had previously been included in the net cost of services and include Local Council Tax Support Administration Subsidy and Family Annex Discount (£105,374), and now also include Electoral Integrity (£10,495) and Transparency Code funding (£8,103).

3.7 New Homes Bonus

The New Homes Bonus (NHB) scheme was intended to give clear incentive to local authorities to encourage housing growth in their areas. In 2024/25 (£1,509,000) was expected to be the final payment, however this has been extended to 2025/26. The Council will receive £1,478,000 funding, this will top up the NHB reserve and used towards future Minimum Revenue Provision (MRP) payments to offset any impact on the revenue budget and Council Tax.

3.8 Fees, Charges and Rental Income

The Council is dependent on direct payment for many of its services. The income, from various fees, charges, and rents is a key element in recovering the costs of providing services which, in turn, assists in keeping the Council Tax at its current low level. Some fees and charges have been increased to offset increased cost caused by higher-than-normal inflation and pay increases although limiting these in areas for the more vulnerable (such as home alarms).

The Fees, Charges and Rental Income budget is shown below.

Fees, Charges and Rental Income budget
Category	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30
Car Parks	(£1,118,000)	(£1,228,000)	(£1,288,000)	(£1,288,000)	(£1,328,000)	(£1,328,000)
Licences	(£317,000)	(£334,000)	(£341,000)	(£348,000)	(£355,000)	(£355,000)
Non-Sporting Facility Hire	(£154,000)	(£160,000)	(£148,000)	(£152,000)	(£157,000)	(£157,000)
Other Fees & Charges	(£733,000)	(£966,000)	(£971,000)	(£979,000)	(£988,000)	(£992,000)
Planning Fees	(£1,532,000)	(£1,585,000)	(£1,619,000)	(£1,675,000)	(£1,722,000)	(£1,769,000)
Rents	(£2,134,000)	(£2,217,000)	(£2,281,000)	(£2,284,000)	(£2,289,000)	(£2,293,000)
Service Charges	(£488,000)	(£486,000)	(£489,000)	(£489,000)	(£489,000)	(£489,000)
Crematorium Income	(£711,000)	(£759,000)	(£867,000)	(£946,000)	(£1,000,000)	(£1,054,000)
Garden Waste and Bins Sales	(£1,688,000)	(£1,770,000)	(£1,939,000)	(£2,110,000)	(£2,285,000)	(£2,466,000)
Total	(£8,875,000)	(£9,505,000)	(£9,893,000)	(£10,211,000)	(£10,613,000)	(£10,903,000)

Income assumptions are determined by several factors including current performance, decisions already taken and known risks and opportunities. Where possible, the MTFS has made provision for future inflationary increases in fees and charges to balance the cost of providing services whilst having regard for the local economy, service market position and the ability of residents to pay. Where possible income on discretionary fees have increased by 4%. Anticipated income from commercial property investments are budgeted to increase in-line with contractual rent reviews.

Car Parking charges have recently been introduced in Bingham, so there are currently no plans to increase charges further however it is proposed to increase charges at West Bridgford Car Parks. To protect short term visits, incremental increases are proposed to longer stays (over one hour) in alignment with the off-street car parking strategy. These are shown at Appendix 5.

The budget for Other Fees and Charges shows an increase from 2024/25, mainly due to the re-classification of some sales income which was previously classified as other income and increased income from Gresham all-weather pitch.

Statutory increases in Planning Fees came into effect December 2023 together with inflationary increases in non-statutory planning fees and charges. The Levelling Up Bill requires Councils to meet statutory deadlines for processing applications or risk refunding the fee.

Crematorium income is budgeted to rise steadily over the next five years as it is now establishing itself in the market.

Garden Waste, historically increased every three years, is now increased annually by £2 per annum to balance the additional costs incurred to deliver the service. The 2025/26 and 2026/27 budgets include an increase in charge of £5 for second and subsequent bins in addition to the annual inflationary increase. There will remain a differential of £5 from 2027/28 between first bin and two or more bins (see Appendix 5 for the current and revised charges).

3.9 Other Income

In addition to fees and charges, the Council also receives a range of other forms of income, these are summarised in Table 9 below. The majority relates to Housing Benefit Subsidy (£11,758,000 in 2025/26) which is the Council’s reimbursement for the costs of the national housing benefit scheme. Over recent years the subsidy has reduced due to the transfer of new claimants to Universal Credits, and this is expected to continue to decline over the coming years although offset by inflationary increases to benefits.

Other income is mainly the Leisure Services contract proposed to extend to 2030 pending further reviews of this service provision. The Transformation and Efficiency Plan includes leisure budget efficiencies of £1,732,000 over the next five years although the delivery contract for this service will be reviewed ahead of the extended contract end date of 2030. There may be additional budget efficiencies arising out of this exercise.

Interest on investments reflect assumptions based on balances available to invest and expected interest rates (see Appendix 8). Interest receipts have increased from the 2024/25 budget due to interest rate assumptions and balances available for investment. Interest rates are anticipated to reduce gradually over the next couple of years plateauing around the 3% rate. This, together with a drop in the amount available for investment (namely due to reserve balances and S106 and Community Infrastructure Levy (CIL) monies declining), will see interest on investments fall by the end of 2029/30.

Recycling Credits reduce to zero from 2025/26 as Simpler Recycling comes into effect, and this is expected to be subsumed within the Extended Producer Responsibility (EPR) funding. EPR funding has been assumed to continue at the 2025/26 level of £1,407,000 for the remainder of the MTFS however this is a risk as future funding has not yet been confirmed and if producer habits change then the funding may well reduce.

Other Government Grants consist of NNDR (£119,000), Domestic Violence (£35,000), Housing Benefits Administration (£19,000)
Universal Credits (£1,000) and Homelessness Prevention (£360,000).

Table 9 - Other Income

Other Income
Category	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30
Council Tax Costs Recovered	(£236,000)	(£305,000)	(£305,000)	(£305,000)	(£305,000)	(£305,000)
Council Tax / Housing Benefit Admin Grants	(£141,000)	(£148,000)	(£149,000)	(£154,000)	(£159,000)	(£164,000)
Interest on Investments	(£1,043,000)	(£1,435,000)	(£1,308,000)	(£1,177,000)	(£1,017,000)	(£922,000)
Other Income	(£1,340,000)	(£1,517,000)	(£1,633,000)	(£1,641,000)	(£1,649,000)	(£1,656,000)
Recycling Credits	(£200,000)	-	-	-	-	-
Other Government Grants	(£491,000)	(£534,000)	(£534,000)	(£534,000)	(£534,000)	(£534,000)
Sub Total	(£3,451,000)	(£3,939,000)	(£3,929,000)	(£3,811,000)	(£3,664,000)	(£3,581,000)
Housing Benefit Subsidy	(£12,300,000)	(£11,758,000)	(£12,103,000)	(£12,459,000)	(£12,825,000)	(£13,203,000)
Total Other Income	(£15,751,000)	(£15,697,000)	(£16,032,000)	(£16,270,000)	(£16,489,000)	(£16,784,000)

3.10 Income Summary

Table 10 - All Sources of Income

All Sources of Income
Category	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30
Retained Business Rates	(£5,463,000)	(£6,676,000)	(£3,578,000)	(£3,704,000)	(£3,834,000)	(£3,970,000)
Business Rates Pool Surplus	(£300,000)	(£400,000)	-	-	-	-
Other Grant Income (see note below)	(£616,000)	(£1,761,000)	(£1,537,000)	(£1,537,000)	(£1,537,000)	(£1,537,000)
New Homes Bonus	(£1,509,000)	(£1,478,000)	-	-	-	-
Council Tax (RBC)	(£7,419,000)	(£7,728,000)	(£8,064,000)	(£8,451,000)	(£8,854,000)	(£9,318,000)
Council Tax (Special Expenses)	(£928,000)	(£1,012,000)	(£1,100,000)	(£1,157,000)	(£1,221,000)	(£1,245,000)
Collection Fund Surplus	(£32,000)	(£835,000)	-	-	-	-
Fees, Charges and Rental Income	(£8,875,000)	(£9,505,000)	(£9,893,000)	(£10,211,000)	(£10,613,000)	(£10,903,000)
Other Income	(£15,751,000)	(£15,697,000)	(£16,032,000)	(£16,270,000)	(£16,489,000)	(£16,784,000)
Transfers from Reserves	-	-	(£526,000)	-	-	-
Total Income	(£40,893,000)	(£45,092,000)	(£40,204,000)	(£41,330,000)	(£42,548,000)	(£43,757,000)

Note - The majority of this budget is made up of EPR funding £1,407,000 announced for 2025/26 and which is assumed to continue each year going forward. Compensation for increases in NIC are also included £130,000 for each year of the MTFS. It has now been confirmed that Rushcliffe will receive £123,000. Services Grant has been abolished with Minimum Funding Guarantee continuing albeit at a reduced level for 2025/26. For Rushcliffe this amounts to £100,000. There is uncertainty in 2026/27 relating to potential Business Rates reform and how this will impact on the Minimum Funding Guarantee grant, for prudence nothing has been included. Revenue Support Grant of £123,000 incudes Local Council Tax Support admin subsidy and Family Annex Discount (included in RSG in 2024/25) and Electoral Integrity and Transparency Code funding which is not typical RSG.

4. 2024/25 Spending Plans

The Council’s spending plans for the next five years are shown below and include the assumptions in Section 2.

Table 11 - Spending Plans

Spending Plans
Category	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30
Employees	£15,502,000	£16,403,000	£16,955,000	£17,877,000	£18,619,000	£16,982,000
Premises	£1,706,000	£1,763,000	£1,858,000	£1,957,000	£2,064,000	£2,189,000
Transport	£1,651,000	£1,757,000	£1,860,000	£2,040,000	£2,217,000	£2,329,000
Supplies and Services	£5,351,000	£5,212,000	£5,327,000	£5,475,000	£5,450,000	£5,547,000
Transfer Payments	£12,283,000	£11,949,000	£12,311,000	£12,686,000	£13,069,000	£13,465,000
Third Party	£1,260,000	£1,311,000	£1,345,000	£1,402,000	£1,437,000	£1,446,000
Depreciation	£1,895,000	£1,895,000	£1,895,000	£1,895,000	£1,895,000	£1,895,000
Capital Salaries Recharge	(£240,000)	(£175,000)	(£73,000)	(£32,000)	(£30,000)	(£28,000)
Gross Service Expenditure	£39,408,000	£40,115,000	£41,478,000	£43,300,000	£44,721,000	£45,825,000
Reversal of Capital Charges	(£1,895,000)	(£1,895,000)	(£1,895,000)	(£1,895,000)	(£1,895,000)	(£1,895,000)
Transfer to Reserves	£1,078,000	£2,148,000	£1,043,000	£809,000	£365,000	£339,000
Minimum Revenue Provision	£1,178,000	£1,178,000	£739,000	£174,000	£174,000	£174,000
Overall Expenditure	£39,769,000	£41,542,000	£41,365,000	£42,388,000	£43,365,000	£44,443,000

4.1 Explanations for some of the main movements

Employee costs reflect both
Premises costs include utilities
Transport costs show an increase
Supplies and services
Transfer Payments
Depreciation is net zero impact on the general fund (fully offset by the reversal of capital charges line).
Capital
The £835,000 Collection Fund surplus relates to Business Rates (£829,000) and Council Tax £6,000.
Minimum Revenue Provision (MRP) decreases in 2026/27 to reflect

4.2 Simpler Recycling

In October 2023 the Government announced their plans for the introduction of ‘Simpler Recycling’, which intends to ensure all homes in England recycle the same materials at the kerbside. In essence the Council will incur additional costs for kerbside waste collection of both glass and food. The January Cabinet report gives more detail, and the capital section of this report details the capital consequences. There is uncertainty around the costs to bring in the new scheme in addition to increased capital replacement costs in the future. The revenue budget pressures are detailed below and the respective impact on employee costs etc are within each of the budget lines in Table 11.

Table 12 - Revenue Budget Pressure

Revenue Budget Pressure
Category	2025/26 Estimate	2026/27 Estimate	2027/28 Estimate	2028/29 Estimate	2029/30 Estimate
Glass	£40,300	£129,400	£157,500	£185,700	£189,00
Food	0	0	£613,200	£1,238,100	£1,261,000
Total	£40,300	£129,400	£770,700	£1,423,800	£1,450,000
Loss of recycling credits (replaced by EPR grant)	£231,300	£275,000	£275,000	£275,000	£275,000
EPR grant	0	(£1,407,000)	(£1,407,000)	(£1,407,000)	(£1,407,000)
Net Budget Pressure	£271,600	(£1,002,600)	(£361,300)	£291,800	£318,000

5. Budget Requirement

The budget requirement is formed by combining the resource prediction and spending plans. Appendix 2 gives further detail on the Council’s five-year Medium Term Financial Strategy.

Budget Requirement
Category	2024/25 Estimate	2025/26 Estimate	2026/27 Estimate	2027/28 Estimate	2028/29 Estimate	2029/30 Estimate
Total Income	(£40,893,000)	(£45,092,000)	(£40,204,000)	(£41,330,000)	(£42,548,000)	(£43,757,000)
Gross Expenditure	£39,769,000	£41,542,000	£41,365,000	£42,388,000	£43,365,000	£44,443,000
Net Budget Position (surplus) / deficit	(£1,124,000)	(£3,550,000)	£1,161,000	£1,058,000	£817,000	£686,000
Planned Transfer (to)/from Reserves	(£1,078,000)	(£2,148,000)	(£1,043,000)	(£809,000)	(£365,000)	(£339,000)
Revised Transfer (to)/from Reserves	(£2,202,000)	(£5,698,000)	£118,000	£249,000	£452,000	£347,000

Table 13 shows a budget surplus of £3,550,000 in 2025/26, followed by deficits in the following years: £1,161,000 in 2026/27 £1,058,000 in 2027/28 before dropping slightly in 2028/29 to £817,000 and £686,000 in 2029/30, due mostly to the reduction in Business Rates income from the anticipated reset. The total deficit position of £172,000 over the 5-year period will be managed using the Organisation Stabilisation Reserve to smooth the effect of variation in net budget requirement. The budget includes Transformation and Efficiency Plan savings of £1,700,000 over the 5-year period helping to reduce the deficit to more manageable
levels.

Planned Transfer to/from reserves include items outside of the revenue budget such as the transfer from New Homes Bonus to fund Minimum Revenue Provision (MRP).

The significant movement in 2026/27, moving from a surplus to a deficit is due to the fall out of New Homes Bonus (NHB), the Business Rates reset and corresponding reduction in rates received. This deficit position increase further in 2027/28 as simpler recycling comes into effect offset partly by reductions in MRP due to the end of payments in relation to Rushcliffe Arena.

Section 7 covers the Transformation and Efficiency Plan - including the use of reserves, balancing the budget for 2025/26 and future financial pressures.

6. Reserves

To comply with the requirements of the Local Government Act 2003, a review has been undertaken of the Council’s reserves, considering current and future risks. This has included an assessment of risk registers, pressures upon services, inflation, and interest rates.

Table 14 below details the estimated balances on each of the Council’s specific reserves over the 5-year MTFS. This also shows the
General Fund Balance. Total Specific Reserves reduce from £20,900,000 to £15,300,000 (2024/25 – 2029/30). Appendix 4 details the movement in reserves for 2025/26 which also includes capital commitments. This shows that the balance increases from £21,400,000 to £23,200,000. The in-year movement reflects the release of £1,200,000 from NHB to offset the MRP charged in the year and the in-year NHB receipt of £1,478,000. Other significant movements include topping up the Organisation Stabilisation reserve by the estimated surplus £3,500,000 and the receipt and use of EPR government grant for Simpler Recycling Reserve, as discussed at Section 4.2. What the reserves do not yet show is any commitment with regards to potential Local Government Reorganisation. Future MTFS will be updated when more information is available.

The Climate Change Action Reserve remains despite the economic pressures. The reserve supports projects that contribute to the Council’s ambitions to protect and enhance the environment including the reduction of its carbon footprint. A projected balance of £918,000 is available from 2025/26. It should be noted that a provision of £1,500,000 was made in 2024/25 to acquire land for carbon offsetting. Any unspent balance will be carried forward to 2025/26. Allocations from the Climate Change Reserve will be made as projects get approved. Existing capital schemes are assessed for any carbon reduction measures and funding from the reserve allocated. A new Simpler Recycling Reserve has been created to hold EPR government grants for use on both capital and revenue Simpler Recycling schemes – glass and food waste. The Council continues to look at avenues of external funding to support carbon reduction initiatives (such as at its leisure centres); and if successful these will be reported via Cabinet and Corporate Overview Group in their financial updates. Capital funding is not sufficient to meet the anticipated capital pressures of £3,310,000 for both food waste and glass kerb recycling collection, therefore an appropriation from the current Collection Fund Reserve is proposed of £746,000.

A Vehicle Replacement Reserve exists to support the acquisition of new vehicles, plant, and equipment arising from Streetwise insourcing. This will be actively used to support the capital programme where there are insufficient capital receipts.

The Treasury Capital Depreciation Reserve (currently £1,200,000) exists to mitigate the potential losses of reductions in the capital value of the Council’s multi-asset investments. These assets provide a considerable proportion of the Council’s total investment income but are however at-risk fluctuations on market value linked to adverse impacts on the economy of the Covid pandemic and the continued war in Ukraine. There is currently a statutory override in place until March 2025. The override is currently subject to consultation but early indications are that it will not be extended.

A new Flood Grant and Resilience Reserve was created, with an allocation of £28,000 from part of Guaranteed Funding Grant awarded for 2024/25. This reserve commenced to be used for flooding in 2024/25. It is allocated for grants of £120 for properties with integral or stand-alone garages flooded and to top up the existing flood resilience store grant scheme. Its future balance will depend on the extent of future floods and claims against the reserve.

It is important that the level of reserves is regularly reviewed to manage future risks. All the reserves have specifically identified uses including some of which are held primarily for capital purposes: Investments Reserve, Vehicle Replacement Reserve, and Regeneration and Community Projects Reserve (to meet special expense and other economic growth-related capital commitments). The release of reserves will be constantly reviewed to balance funding requirements and the potential need to externally borrow to support the Capital Programme. Being prudent, we need to ensure we do have future funds to deliver capital projects, and we aim to top up reserves from any in-year revenue efficiencies identified.

It should be noted that in the professional opinion of the Council’s Section 151 Officer, the General Fund Reserve position of £2,600,000 is adequate given the financial and operational challenges (and opportunities) the Council faces.

Table 14 - Specific Reserves

Specific Reserves
Category	Balance 31.03.24	Balance 31.03.25	Balance 31.03.26	Balance 31.03.27	Balance 31.03.28	Balance 31.03.29	Balance 31.03.30
Investment Reserves	-	-	-	-	-	-	-
Regeneration and Community Projects	£3,226,000	£3,506,000	£3,046,000	£2,452,000	£2,308,000	£2,104,000	£1,215,000
Sinking Fund - investments	£795,000	£810,000	£644,000	£324,000	£524,000	£639,000	£839,000
Corporate Reserves	-	-	-	-	-	-	-
Organisation Stabilisation	£3,262,000	£4,533,000	£7,710,000	£6,031,000	£4,955,000	£4,138,000	£3,452,000
Treasury and Capital Depreciation Reserve	£1,173,000	£1,173,000	£1,173,000	£1,173,000	£1,173,000	£1,173,000	£1,173,000
Collection Fund S31	£1,085,000	-	-	-	-	-	-
Climate Change Action	£201,000	£918,000	£818,000	£533,000	£233,000	£158,000	£158,000
Flood Grant and Resilience	-	£22,000	£22,000	£22,000	£22,000	£22,000	£22,000
Freeport Reserve	£200,000	-	-	-	-	-	-
Simpler Recycling Reserve	-	£1,020,000	£445,000	£1,448,000	£1,366,000	£1,074,000	£756,000
Vehicle Replacement Reserve	£770,000	£605,000	£460,000	£345,000	£230,000	£115,000	-
Risk and Insurance	£100,000	£100,000	£100,000	£100,000	£100,000	£100,000	£100,000
Planning Appeals	£349,000	£349,000	£349,000	£349,000	£349,000	£349,000	£349,000
Elections	£51,000	£101,000	£151,000	£201,000	£51,000	£101,000	£151,000
Operating Reserves	-	-	-	-	-	-	-
Planning	£56,000	£131,000	£75,000	£75,000	£75,000	£75,000	£75,000
Leisure Centre Maintenance	£28,000	-	-	£15,000	£30,000	£45,000	£60,000
Total Excluding NHB Reserve	£11,296,000	£13,268,000	£14,993,000	£13,068,000	£11,416,000	£10,093,000	£8,350,000
New Homes Bonus	£9,652,000	£8,131,000	£8,185,000	£7,446,000	£7,272,000	£7,098,000	£6,924,000
Total Earmarked Reserves	£20,948,000	£21,399,000	£23,178,000	£20,514,000	£18,688,000	£17,191,000	£15,274,000
General Fund Balance	£2,604,000	£2,604,000	£2,604,000	£2,604,000	£2,604,000	£2,604,000	£2,604,000
Total	£23,552,000	£24,003,000	£25,782,000	£23,118,000	£21,292,000	£19,795,000	£17,878,000

7. The Transformation Strategy and Efficiency Plan

Since 2010, the Council has successfully implemented a Transformation and Efficiency Plan (TEP), to drive change and efficiency activity to deal with the scale of the financial challenges the Council faces, currently inflation pressures and potential changes to the system of local government finance. An updated TEP (and dovetails with previous Government requirements for a Productivity Plan) is provided in Appendix 7. The Executive Management Team, alongside budget managers, have undertaken a review of all Council budgets resulting in savings which have been fed into the MTFS. The TEP focuses on the following themes:

Transformation of services to make better use of resources e.g. Service Efficiencies and Asset Reviews
Take advantage of advances in technology e.g. the Digital By Design Programme
Reduce wasteful spend within systems or for example on consultants (as part of member/management challenge)
Barriers preventing activity that the Government can help to reduce

This Programme will form the basis of how the Council meets the financial challenge summarised at Appendix 7 reducing the gross deficit position. The below demonstrates that by 2029/30 with £1,762,000 of efficiencies there remains an annual deficit of £686,000.

Table 15 - Savings Targets

Savings Targets
Category	2025/26 £'000	2026/27 £'000	2027/28 £'000	2028/29 £'000	2029/30 £'000
Gross Budget Deficit excluding Transformation Plan	£3,107	£8,133	£8,248	£8,326	£8,281
Cumulative Savings in Transformation Plan	(£5,833)	(£6,658)	(£6,972)	(£7,189)	(£7,509)
Gross Budget Deficit / (Surplus)	(£2,726)	£1,475	£1,276	£1,137	£772
Additional Transformation Plan Savings	(£824)	(£314)	(£218)	(£320)	(£86)
Net Budget Deficit / (Surplus)	(£3,550)	£1,161	£1,058	£817	£686
Cumulative Additional Transformation Savings	(£824)	(£1,138)	(£1,356)	(£1,676)	(£1,762)

The Council’s budget for 2025/26 and beyond includes the impact of inflationary increases whilst also being restricted by Government policy on commercial activity to generate additional income, limiting borrowing for wider projects dependent upon capital spending proposals, and excluding borrowing from the Public Works Loan Board (PWLB) where capital spend is solely for commercial gain. The Council has continued to review its services and processes and, where possible, identify efficiencies and increase income. The impact of the above pressures will result in a need to draw on reserves from 2026/27 onwards with 2025/26 temporarily supported by additional business rates due to the delay in the Business Rates reset.

The Council must continue to review its existing transformation projects on an on-going annual basis. In recent years, the Transformation plan has included large projects such as Bingham Arena and Enterprise Centre and Rushcliffe Oaks Crematorium, it will be a challenge to continue to identify projects against the backdrop of the cost-of-living challenge and higher levels of inflation and now LGR. Increasingly transformation will focus upon transitioning to a potential new authority and the limited capacity within the Council to do much more. Going forward, the plan includes service efficiencies and income generation, Officers continue to seek efficiencies wherever possible and look for wider projects to improve value for money, this is becoming increasing difficult in already lean budgets. Both the officers and Members have worked together to identify £1,762,000 of expected efficiencies over the 5-year period, The current transformation projects and efficiency proposals which will be worked upon for delivery from 2025/26 are given in Appendix 7. Particularly a focus on greater leisure contract efficiencies and generating more income as the Council’s cost base increases, such as in relation to green bins, car parking and the crematorium.

8. Risk and Sensitivity

The following table shows the key risks and how we intend to treat them through our risk management practices. Further commentary on the higher-level risks is given below the table.

Key risks
Risk	Likelihood	Impact	Action
Central Government policy changes e.g., Fairer Funding, ceasing NHB and Business Rates reset leading to reduced revenue; or increased demand on resources for example environmental policy changes with regards to waste will create future financial risk (Extended Producer Responsibility (EPR) and weekly food collections)	Medium	Medium	Engagement in consultation in policy creation and communicating to senior management and members the financial impact of changes via the MTFS. Budget at baseline plus renewables for business rates in years of uncertainty. Inclusion of demand and/or income in the MTFS and Capital Programme and calculations to understand the impact of any proposals
Impact on resources to transition to a new authority as part of LGR	High	High	Engage in relevant working groups and report back to Cabinet or Full Council
Lifespan of this MTFS likely to be curtailed, for example 2027/28 could be the last year for this Borough Council’s budget	High	High	To update the MTFS in future years and report to Full Council
Environmental carbon reduction and bio-net diversity gain (BNG) commitments leading to greater pressure on revenue and capital budgets	High	Medium	Climate Change Reserve being replenished (including for potential land acquisition for carbon reduction), ongoing review of significant projects and outcome of scrutiny review. A vehicle replacement reserve which will help fund, for example, electric vehicles. Apply for external funding where possible
The Council is unable to balance its budget and the budget is not sustainable in the longer term as a result of increased inflation and government funding reductions with uncertainty due to one-year settlement	Medium	Medium	Going concern report presented to Governance Group to confirm that the Council has sufficient reserves to withstand the short-term financial shocks. Budget set to include latest assumptions on inflationary increases. Further plans for the transformation strategy to mitigate risk over the longer term. Budget reporting processes and use of budget efficiencies and reserves. Maintain reserves at a sufficient level.With LGR the Council will cease to be an entity in its current form, to be referenced in future reports
Increased demand for services such as homelessness and migration or general housing growth.	Medium	Medium	Additional government funding and internal resources provided.
Risk of increased capital programme costs due to either increased demand (e.g., DFGs, Traveller’s site) or inflation.	High	High	Continuation of the waiting list for Disabled Facilities Grants (DFGs). Working with Nott’s authorities on a more equitable distribution of resources. Further resource in capital reserves to be appropriated if efficiencies are identified.
Insufficient capital resources to fund the capital programme.	Medium	Medium	Ongoing cashflow management. The Council has the ultimate recourse to borrow or lease. Review of Capital Programme to prioritise.
Opportunity for additional business rates from the Freeport or risk of liabilities if either does not progress.	Medium	Medium	Continue to monitor progress and inform business rate assumptions through Officer working Groups/Board.
Risk of financial loss resulting from the decline in the capital value of pooled investments.	Medium	Medium	Treasury Capital Depreciation Reserve to mitigate any losses. Regular monitoring of environment and fund values. Seek advice from Treasury Advisors on strategy going forward.
The ongoing impact of flooding in the borough linked to climate change.	Medium	Medium	The Council continues to deliver flood relief schemes and bears the impact of the Internal Drainage Board levy. Contingency budget maybe utilised if the levy continues to rise. New Flood Resilience Reserve created.
Understanding the impact on RBC of the Combined Mayoral Authority.	Medium	Medium	Continue to play a role in the inaugural year of the authority, and going forward, and report implications back to Council through its usual governance processes.
Unknown impact of further year of UKSPF on the budget and on staffing resources	Medium	Medium	Estimate potential revenue and capital budget allocations and prepare potential schemes in advance to be reported to future Cabinet

The Council recognises there are upside risks in maximising opportunities. The risks above can change depending on changes in the services as a result of TEP projects or other changes to the environment that the Council operated in such as the Freeport and Combined Mayoral Authority. The Council maximises income generating opportunities and efficiencies wherever possible, so it remains self-sufficient and continues to grow the Borough and provide excellent services.

The MTFS presents a net deficit of approximately £172,000 over the 5-year period and this will be funded using the Organisation
Stabilisation Reserve or by identifying other business efficiencies or further income. There is a budgeted surplus arising in 2025/26 due to the delay in Business Rates reset and this will be used to fund the deficits arising from 2026/27 onwards. Reserves are necessary to ensure the Council can continue to deliver services to its residents and to protect the Council from risks in relation to funding uncertainty and rising costs. The expectation is LGR will be within the lifespan of this MTFS and any year prior to 2029/30 given a budget surplus over the period. Any upfront costs of LGR are yet to be assessed.

9. Capital Programme

9.1 Setting the Capital Programme

Officers submit schemes to be included in a draft Capital Programme, which also includes on-going provisions to support Disabled Facilities Grants (DFG) and investment in Social Housing. This draft programme is discussed by Executive Management Team (EMT) along with supporting information and business cases where appropriate with the big projects and the overall fiscal impact reported to Councillors in budget update sessions. The draft Capital Programme continues to be further refined and supported by detailed appraisals as set out in the Council’s Financial Regulations. These detailed appraisals are included at Appendix 3 along with the proposed five-year capital programme which is summarised at Table 17. This remains an ambitious programme totalling £27,100,000 for 5 years, although the programme is diminishing as resources reduce and therefore the likelihood of borrowing increases.

9.2 Significant Projects in the Capital Programme

The Council’s five-year capital programme shows the Council’s commitment to deliver more efficient services, improve its leisure facilities, enable economic development and be more environmentally sustainable. Against a background of financial challenge, with both inflation pressures and the perilous state of public finances, the strength of the Council’s financial position is such that it continues to support economic growth and sustainable excellent services in the Borough. The Programme is approved for the five-year period and allows flexibility of investment to enhance service delivery, provide widened economic development to maximise business and employment opportunities. The programme is reviewed by Full Council as part of the budget setting process. A major focus of the Capital Programme is to improve services, be transformative and generate revenue income streams to help balance the Council’s MTFS. Significant projects in the Capital Programme include:

£971,000 is included in the programme for enhancements to the Council’s portfolio of Investment Properties. This
investment ensures that we have high quality lettable retail and business units capable of delivering a robust revenue
income stream thereby supporting economic development. Cost of works on Investment Properties are met from the
Investment Property Reserve.
A provision of £500,000 has been included for West Bridgford Town Centre Regeneration, to help ‘pump prime’ a larger initiative with public sector partners, such as pedestrianisation of Central Avenue.
The on-going vehicle replacement programme totals £6,900,000 in the programme over 5 years. This includes provision for investment in new vehicles/bins/caddies to accommodate new legislation to provide kerbside glass and food recycling – estimated expenditure £3,300,000 with expected government grants totalling £2,564,000, the balance to be met from the Simpler Recycling Reserve (topped up by transfer from the Collection Fund Reserve). The vehicle replacement programme will be subject to future review as consideration is given to transitioning to electric/hybrid vehicles.
The provision for Support to Registered Housing Providers has benefitted significantly from Planning Agreements monies arising from Land North of Bingham £3,800,000. This sum, together with the balances of other Planning Agreement monies and capital receipts set aside for Affordable Housing gives a total provision available of £4,800,000. Options for commitment of these monies continue to be assessed and has therefore been profiled to the last three years of the programme.
£2,700,000 over the 5 years for investment in the upgrade of facilities at Keyworth and Cotgrave Leisure Centres and other Leisure Facility Sites. There are planned refurbishments to changing villages; floor replacement; roof enhancements; and upgrades for plant and lighting. Schemes are considered in the light of the Leisure Strategy and are aimed at maintaining excellent standards of leisure provision.
£840,000 has been included in the programme for the development of Edwalton Community Facility. The costs for this new facility have increased since its inception. It is planned to fund this from: £250,000 New Homes Bonus and £590,000 as a Special Expense Annuity. An appraisal is included in Appendix 3.
Disabled Facilities Grants (DFGs) provision of £4,500,000 has been provided in the 5-year programme. Funding has become extremely tight to meet the statutory spending requirement and Rushcliffe had to take the unusual step of allocating £700,000 of its own resources to support spending pressures, this is not sustainable. Cabinet and Senior Officers will continue to actively lobby Central Government and Local Authorities across Nottinghamshire for additional and redistributed Better Care Fund (BCF) grant allocations. An additional allocation of £113,000 was made for 2024/25 and this increased level of support is confirmed for 2025/26 (total £939,000 including the Handy Persons Scheme which is operated by Nottinghamshire County Council). Rushcliffe’s BCF spending plans are no longer able to support DFGs, Assistive Technology (Home Alarms) or the Warmer Homes on Prescription scheme. This will be reviewed in the light of additional grant monies made available.
Anew government grant has been awarded £2,550,000 for the Warm Homes Scheme. This will greatly assist residents to improve the energy efficiency of their properties.
Rolling provisions for the Information Systems Strategy (£1,178,000 across the 5 years) will ensure that the Council keeps pace with innovative technologies, protects itself against cyber-attacks and continues to modernise services and deliver ‘channel shift’ in an increasingly virtual world.
£450,000 has been included across the 5 years to enhance Play Areas in West Bridgford on a rolling programme. These costs are subject to the West Bridgford Special Expense.
A Contingency sum of £150,000 to £100,000 has been included each year, to give flexibility to the delivery of the programme
and to cover unforeseen circumstances.
Given the projected level of the Council’s cash balances at March 2025 and future years and LGR, external borrowing is unlikely to be needed in the medium term. The cash flow balances are strongly underpinned by the holding of Developer Contributions: S106s and CIL monies. It is anticipated that the Council will not need to borrow internally either to finance the Capital Programme. The projected Capital Financing Requirement (CFR - the Council’s underlying need to borrow) reduces from is £7.7m at the end of 2024/25 to £5,200,000 at the end of 2029/30. These figures will be subject to amendment upon completion of the work needed to implement IFRS16 – the new leasing standard. The impact is not expected to be significant. The timing and incidence of internal/external borrowing will be affected by any slippage in, or additions to, the capital programme, delayed capital receipts, and cash balances and this is reflected in the CFR shown at table 2 of the Capital and Investment Strategy (Appendix 8).

9.3 Five-year capital programme, funding and resource implications

Table 17 - Capital Programme 2025/26 to 2029/30

Capital Programme 2025/26 to 2029/30
Category	2025/26 Indicative Estimate £'000	2026/27 Indicative Estimate £'000	2027/28 Indicative Estimate £'000	2028/29 Indicative Estimate £'000	2029/30 Indicative Estimate £'000	5 Year Total
Expenditure Summary	-	-	-	-	-	-
Development and Economic Growth	£761,000	£1,230,000	-	£115,000	-	£2,106,000
Neighbourhoods	£7,065,000	£4,031,000	£5,107,000	£3,235,000	£3,855,000	£23,293,000
Finance and Corporate	£518,000	£220,000	£330,000	£330,000	£330,000	£1,728,000
Total	£8,344,000	£5,481,000	£5,437,000	£3,680,000	£4,185,000	£27,127,000
Funded By	-	-	-	-	-	-
Usual Capital Receipts	(£2,719,000)	(£295,000)	(£246,000)	(£178,000)	(£795,000)	(£4,233,000)
Government Grants	(£1,650,000)	(£2,640,000)	(£1,997,000)	(£840,000)	(£840,000)	(£7,967,000)
Use of Reserves	(£3,919,000)	(£2,546,000)	(£1,577,000)	(£1,045,000)	(£1,570,000)	(£10,657,000)
Grants and Contributions	(£56,000)	0	0	0	0	(£56,000)
Section 106 Monies	-	-	(£1,617,000)	(£1,617,000)	(£980,000)	(£4,214,000)
Borrowing	-	-	-	-	-	-
Total	(£8,344,000)	(£5,481,000)	(£5,437,000)	(£3,680,000)	(£4,185,000)	(£27,127,000)
Resources Movement	-	-	-	-	-	-
Opening Balances	£16,419,000	£12,110,000	£10,189,000	£7,695,000	£5,789,000	-
Projected Receipts	£4,035,000	£3,560,000	£2,943,000	£1,774,000	£1,779	-
Use of Resources	(£8,344,000)	(£5,481,000)	(£5,437,000)	(£3,680,000)	(£4,185)	-
Balance Carried Forward	£12,110,000	£10,189,000	£7,695,000	£5,789,000	£3,383	-

9.4 Capital Funding Resources

The Council’s capital resources are slowly being depleted to fund the Capital Programme. It is projected that capital resources will be in the region of £3,400,000 at the end of the five-year life of the Programme. This comprises: £2,700,000 Earmarked Capital Reserves; £400,000 Capital Receipts; and £300,000 S106 contributions. The level of Capital Receipts will slowly be replenished by repayment of loans by third parties but will only significantly increase if major assets are identified for disposal in the future. The Council has committed to undertaking a review of all assets held.

There are no significant capital receipts expected over the course of the MTFS:

£567,000 in repaid loan principal from Nottinghamshire County Cricket Club
An estimated £50,000 per year from the Right to Buy Clawback agreement which gives the Council a share of Preserved Right to Buy arrangements following Large Scale Voluntary Stock Transfer in 2003

The capital resources position should be viewed in the context of funding the completed redevelopment of the Rushcliffe Arena. This scheme was part funded by use of the Council’s reserves and the remainder through internal borrowing. It is planned to repay this ‘internal debt’ in 2026/27 (10 years on from completion) from the income stream provided by New Homes Bonus.

The following significant capital grants and contributions will be used to support the funding of the proposed capital programme:

£4,200,000 from Planning Agreements for off-site affordable housing. £3,800,000 of this comes from a new S106 for Land North
of Bingham
£2,564,000 government grant awards under EPR to fund Simpler Recycling: glass and food waste.
£2,550,000 funding via the East Midlands Net Zero Hub to deliver Warm Home Grants.
An estimated £840,000 per annum from the Better Care Fund to deliver Mandatory Disabled Facilities Grants
UKSPF funding is covered in section 9.6.

9.5 Future Capital and Borrowing Sensitivity

Last year we projected forward to 2033/34 the impact on capital resources of spend on core capital such as property, vehicle and ICT replacement and ongoing DFG pressures. Given prospective LGR future capital spend will be the preserve of a new local authority.

The Council has always been mindful of the fundamental principles of good capital and treasury management namely ensuring we remain prudent, and it is both affordable and sustainable (i.e. the revenue consequences are built into our plans). This in line with the CIPFA Codes on Treasury and Capital management. The Council is not afraid to borrow but this must be done in a sensible and manageable way and not put Rushcliffe’s future financial and operational future at risk. Before we borrow, we will always look at utilising the Council cash balances, external funding and capital receipts as more sensible options and other factors such as the timing of loans and pervading interest rates. If a capital scheme is required that does not pay for itself and this is a corporate objective, then financial budget will be required from elsewhere, and this must be demonstrated prior to any approval. We will continue to be sensible even with the spectre of LGR and continue to adopt good professional practice and governance. The following are guiding principles that we are now following regarding the budget, to ensure the risk of the budget being unsustainable is reduced:

Where possible individuals that use facilities should pay for them
Maximise income where we can and ensure costs are recovered
Focus on reducing discretionary expenditure
Those that own assets are responsible for their maintenance
Continue to identify budget expenditure efficiencies
Maximise the use of Council assets
Defer borrowing for as long as possible and ensuing costs (using cash, balances, reserves, additional capital receipts and external funding where possible) , with individual schemes having robust business cases

9.6 Shared and Rural Prosperity Funds

In April 2022, Government launched the UK Shared Prosperity Fund (UKSPF). This is a £2.6bn fund and in September 2022, the Government also announced a Rural England Prosperity Fund (REPF) of which Rushcliffe’s allocation was £600,000.

The UKSPF and REPF funding has been fully allocated to capital and revenue projects, and it is anticipated that it will be fully spent by 31 March 2025 which is the deadline. Notification has been received that we can expect a new allocation of UKSPF funding for 2025/26 of £1,051,000. The revenue and capital budgets will be amended accordingly once schemes have been assessed and agreed. As the programme develops, capital and revenue updates will be provided to both Cabinet and Corporate Overview Group (COG) through the Council’s usual budget quarterly reporting process.

10. Treasury Management

Attached at Appendix 8 is the Capital and Investment Strategy (CIS) which integrates capital investment decisions with cash flow information and revenue budgets. The key assumptions in the CIS are summarised in the following table:

Treasury Assumptions
Category	2025/26 Estimate	2026/27 Estimate	2027/28 Estimate	2028/29 Estimate	2029/30 Estimate
Anticipated Interest Rate	4.06%	3.75%	3.50%	3.00%	3.00%
Expected Interest from Investments (£)	£1,434,900	£1,307,700	£1,176,600	£1,016,700	£922,000
Total Interest (£)	£1,434,900	£1,307,700	£1,176,600	£1,016,700	£922,000

The CIPFA Treasury Management and Prudential Codes includes guidance on existing commercial investments, reference to Environmental, Social and Governance (ESG) in the Capital Strategy, quarterly monitoring of Prudential Indicators, Investment
Management Practices (IMPs) and the Liability (or Asset) Benchmark.

The CIS covers the Council’s approach to treasury management activities including commercial assets. It documents the spreading of risk across the size of individual investments and diversification in totality across different sectors. The Council primarily focusses on maximising the returns from its existing portfolio with no new commercial investments included in the Capital Programme. The Council undertakes regular performance reviews on its commercial assets with the next review due to be reported to Governance Scrutiny Group in February 2026 and there is also a wider review of other Council fixed assets to be reviewed in the summer of 2025 by the Corporate Overview Group.

11. Options

As part of its consideration of the budget, the Council is encouraged to consider the strategic aims contained within the Corporate Strategy and, in this context, to what extent they wish to maintain existing services, how services will be prioritised, and how future budget shortfalls will be addressed.

Instead of increasing Council Tax by 3% as per the proposals in section 3.4, the Council could choose to increase by a lower amount of £5 or the Council could freeze its Council Tax. Table 19 provides details of the impact on budgets of the recommended option of a 3% increase each year (Rushcliffe’s element £3.89 (2.46%) increase in 2025/26) against the scenarios of a tax freeze (2025/26 only and £5 thereafter) or £5 each year. If the Council chose to freeze its Council Tax in 2025/26, the income foregone in is approximately £250,000 per annum and over the 5-year period £1,646,000 when compared to the 3% per annum increase. If the Council chose to increase by £5 this would decrease income by £400,00 over the 5-year period. The difference between a freeze in 2025/26 and £5 all years being £1,240,000 over the 5-year period.

Table 19 - Alternative Council Tax Levels

Alternative Council Tax Levels
Option	2025/26	2026/27	2027/28	2028/29	2029/30	Total
Band D £182.94 (Rushcliffe element £161.77) in 2025/26 and 3% thereafter	(£8,739,000)	(£9,163,000)	(£9,608,000)	(£10,074,000)	(£10,564,000)	(£48,148,000)
Total for Freeze (Band D £177.63) and £5.00 thereafter	(£8,485000)	(£8,881,000)	(£9,289,000)	(£9,708,000)	(£10,139,000)	(£46,502,000)
Total for £5.00 increase each year	(£8,724)000	(£9,124,000)	(£9,536,000)	(£9,960,000)	(£10,396,000)	(£47,740,000)

Council Tax Difference - Based on Options
Difference	2025/26	2026/27	2027/28	2028/29	2029/30	Total
Freeze vs £5.00	(£239,000)	(£243,000)	(£248,000)	(£252,000)	(£256,000)	(£1,238,000)
3% vs £5.00	(£15,000)	(£39,000)	(£72,000)	(£114,000)	(£168,000)	(£408,000)
Freeze vs 3%	(£254,000)	(£282,000)	(£319,000)	(£367,000)	(£424,000)	(£1,646,000)

Other than the above options for Council Tax increases there are no alternate proposals concerning the Budget, Medium Term
Financial Strategy or Transformation Strategy

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