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.
Financial pressures on the public sector as a whole and more specifically the Council continue to be challenging with demand for services rising and an unstable economic climate where the country has seen the cost of living increase, high inflation, income deprivation and poverty rising.
The Council has met these challenges head on through value for money service delivery, shared services, economic growth and strong financial management. We have also utilised built up reserves to continue to provide vital services for the residents of Darlington, however, the significant additional demand for services is putting unprecedented pressure on affordability. Our reserves, despite additional savings achieved, will therefore be fully depleted by the end of 2027/28.
The new Government administration has recognised the significant pressure in public services and additional funding for core services was announced in the budget along with a promise of a fundamental reform of how local government is funded. However, this is not a panacea and we do not yet know what this reform will look like or what the specific impact for Darlington will be. Given the overall government finances it is unlikely to fully fill the sustainability gap we are anticipating.
The Council Plan vision is for Darlington to be one of the best places to live, learn, work and invest in the UK, with a strong and sustainable economy, health and thriving communities and opportunities for all. The MTFP is shaped to help fulfil this vision by directing the resources available to the areas where most impact can be made.
This ambition is not an overnight fix, inclusive economic growth takes time, particularly in this economic climate, but the Council have been successful in attracting major employers and government departments to the town bringing with them high quality jobs.
Darlington is definitely a place for business and this economic growth will help Darlington thrive and meet its vision.
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 2025/26 have not been confirmed and as a result the 2025/26 – 2028/29 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 2025/26 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 2025/26.
The Council’s General Fund balance as at 1st April 2025 is estimated to be £11.458m
Budget breakdown
The Council has set a revenue budget of £137.426m for 2025/26 which is summarised below:
| Group | £m |
|---|---|
| Chief Executives Office | 0.329 |
| People Group | 90.541 |
| Economy and Public Protection Group | 1.832 |
| Environment, Highways & Community Services Group | 26.010 |
| Resources & Governance Group | 15.728 |
| Financing costs | 4.028 |
| Joint venture - Investment return | (1.977) |
| Council wide | 0.663 |
| Council wide contingencies | 0.272 |
| Total net revenue budget | 137.426 |
Budget funding breakdown
| Item | £m |
|---|---|
| Council tax | 70.341 |
| Business rates retained locally | 27.080 |
| Top up grant | 8.302 |
| Revenue support grant | 4.743 |
| New homes bonus | 0.545 |
| Better care grant | 4.488 |
| Social care grant | 12.731 |
| Children and families grant | 0.692 |
| Children’s social care prevention grant | 0.570 |
| National Insurance offset | 0.810 |
| Recovery grant | 1.616 |
| Homeless grant | 0.242 |
| Extended producer responsibility | 2.627 |
| Use of reserves | 2.639 |
| Total | 137.426 |
A detailed report prepared by the Chief Officers Executive (COE) was presented to Cabinet on 3 December 2024 for consultation.
The views of all Scrutiny Committees were fed back via the Economy & Resources Scrutiny Committee to Cabinet on 4 February 2025.
The results of the consultation and other updates were considered at the meeting and the budget was recommended to Council on 20 February 2025.
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 £97.487m between 2025/26 and 2028/29.
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.
£1,959.11 is the amount paid to the Borough Council for band D properties excluding the average Parish Precept. The percentage increase for 2025/26 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 (£282.24 for Band D)
- Durham and Darlington Fire and Rescue Authority precept (£123.12 for Band D)
- parish areas the Parish Council’s precept (ranging from £18.15 to £62.26 for Band D)
The latest version of the Medium Term Financial Plan was approved by Cabinet on 4 February 2025 and by Council on 20 February 2025.