To receive the draft Budget proposals for 2025/26 from the Director of Finance.

The Director of Finance had provided a presentation for the Draft Budget proposals for the year 2025/26 and gave an introduction beginning with the headline numbers and the budget gap, which had increased to £25.59m. The presentation detailed the main areas of the Executive’s draft budget proposals and the Director of Finance highlighted the key assumptions within those proposals. The presentation also touched on the budget approach and the draft savings programme for 2025/26. Like previous years, two further sessions were to come in November.

The Chair thanked the Director for the presentation, recognising the sobering reality of the situation.

Councillor Coggins asked about the reserves of the Council. A recent Manchester Evening News article had suggested Trafford had healthy reserves available (£53m), however, the Councillor had previously understood that Trafford had relatively low reserves. Councillor Coggins asked whether the Director could provide more detail on this. The Director of Finance highlighted the difficulty in comparing different districts positions, as different treasurers announce their accounts differently. Referring to the article, Salford stood out to the Director as when they had considered Salford’s statement of accounts, there equivalent to Trafford’s £53m was around a quarter of a billion. Concluding, the Director informed Members that Trafford was a relatively low reserve funded Council, not with the same resilience as the Council’s neighbours.

Councillor Axford, on National Insurance, asked what the extent of the impact would be on employees. The Member also asked about the savings identified by CIPFA from work done by other authorities, and what this referred to. A further question on a possible Council tax referendum was also asked.

On the Council Tax referendum level, the Director confirmed this would be announced as part of the provisional settlement in December, with the Council discretion then to decide whether it goes up to that level or not.

As part of the CIPFA review, a list of considerations was provided to Trafford on what could be done, and this was being considered as part of finance and change, which was being worked on currently.

On National Insurance, the Director outlined the current and future positions, which will see it come in at a lower pay and be charged at a higher rate. For the Council’s direct staff, a new burdens funding would support this, but the Director was concerned about what it could mean for the Council’s providers such as Amey and those in social care. As such, the budget set it out with provisional estimates, which could significantly exceed any additional funding.

Councillor Axford asked further whether there were any predictions the Council had on the level of Council tax. The Leader of the Council recognised that it could go up or down, but they felt it would stay at 4.99%, with national government being mindful of the cost of living. The Leader asked Members to be mindful of the positive financial impact for the Council, every percentage point Council tax goes up, so if it does stay the same, savings would need to found from elsewhere.

Councillor Glenton asked whether there had been any progress on recovering any of the funds owed to the Council by Manchester Airport, following the support provided during COVID. The Director of Finance remarked that the Council was a shareholder in the airport, and up to the pandemic did received dividends from the airport, which were hit when the pandemic began. A number of shareholder loans had also been supplied to the airport to support regeneration activity, for which the Council earns interest returns on. The Director did however mention that the airport does not owe shareholder dividends until they are profitable, with forecasts suggesting that this will begin towards the end of the decade.

The Chair asked if there was any information on how lobbying for additional government support had been going. The Director referenced elements of positivity, however, suggested that it could never be enough. It had previously been expected that non-essential departments would experience cuts, but the Autumn statement had proved to not be to the extent as expected. The Leader referenced significant engagement undertaken with the Ministry of Housing, Communities and Local Government (MHCLG) on Trafford’s specific financial situation. The Leader suggested that a lot of information still needed to be digested and understood, however, they felt areas were improving.

Councillor Butt asked whether the Government raising passenger duty on short and long-haul flights would affect the performance of the airport, and as such the rate at which the airport begins to pay back the Council. The Leader suggested that this would be unlikely to have an impact on the profitability of the Manchester Airport Group, as it was a tax more aimed at the flights themselves. The Director of Finance confirmed that any future impact would be considered at future meetings with the airport group.

Councillor Frass referred to the recent increase on what could be recycled in black bins, which would lead to a lower usage of the grey bin. The Member asked whether the Executive was aware of any savings possible which might be made from levies which could exist on landfill sites. The Director of Finance put the waste disposal levy at around £16m and suggested that he would take this away to consider. The Leader felt it could have a positive impact in the future, highlighting the good working relationship between waste authorities and local authorities.

The Chair thanked both the Director of Finance and the Leader of the Council for the detailed presentations and responses.

          RESOLVED:

1)    That the draft budget proposals for 2025/26 be noted.

2)    That the Director of Finance consider the future possible impacts increased recycling could have on the waste disposal levy.