About council tax and how it is spent

We plan to spend £1,158 million on providing services to residents. The total gross expenditure for 2024/25 is allocated as follows:

This is funded from a number of sources, including central government, council tax, business rates and fees and charges on services we provide. The table below reflects the estimate of gross income to be received in 2024/25.

Schools are funded by a dedicated schools grant from central government and £580m has been allocated in 2024/25. This amount includes both maintained schools and academies but excludes sixth form funding and pupil premium.

The adult social care precept is a special charge which the government allows to be added on top of basic council tax to help deal with the growing financial pressures on social care services for adults and older people. Any money raised through the precept must be earmarked for social care.

The government limits how much the precept can increase by and for 2024/25 this is set at 2%. This is 2% on the whole of the previous year's average council tax, including the previous adult social care precept, and not just a 2% increase on the previous year's adult social care precept.

How this is set out on council tax bills is specified by the government.

You cannot opt out of paying the adult social care charge, even if you currently do not receive adult social care. This is a charge set by the government.

The government sets out the rules on how much councils can increase council tax. For 2024/25 the government confirmed the limit for increases to core council tax at 2.99% and 2% for the adult social care precept.

If we want to increase it by any more than these levels set by the government, we must hold a local referendum.

Local authorities are required by law to have a balanced budget. That is a financial plan based on sound assumptions which shows how income will equal spend over the short and medium-term. Plans would take into account deliverable cost savings and/or local income growth strategies as well as usable reserves.

Reserves are like household savings. The money has been put away to pay for something in the future like a car or as a resource for emergencies such as when the boiler breaks down unexpectedly.

There are two types of council reserves:

1. Earmarked reserves - these are already committed to be spent.
2. General reserves - these are for responding to unexpected events such as major funding issues.

Like savings, reserves can only be spent once. If we are not careful in making the best use of our reserves we will be exposed to the risk that if some serious unexpected expenditure is necessary, the money just will not be there.

Our capital budget is spent on fixed assets. That includes new buildings and major refurbishments, buying land or buildings and investment in shares or bonds. The capital budget can be funded from the revenue budget, through borrowing within strict parameters set by the government or from capital receipts. We can only borrow to support the capital budget not to pay for everyday services. Capital receipts such as the sale of assets can only be used to either repay debt or to support the capital budget.

If, for example, we were to sell an office building we owned, the money received would be a capital receipt and could only be used to repay debt or for the capital budget. It could not be used for funding social care or home to school transport costs or other revenue funded services. Repayment of debt might sound like a good option, however much of our debt is at low fixed interest and we may have to pay significant penalties for paying off debt early.