Agenda item

Report on the draft budget proposed, as presented to Cabinet on 6^th January 2021.

The Chairman welcomed the Strategic Lead Finance to present an overview of the budget position and the basis for the Draft Revenue and Capital Budgets.

In presenting the budgets, the Strategic Lead Finance highlighted to the committees:

·         Changes to the local government funding formula and the business rate retention scheme are now assumed to take place in 2022/23 due to the pandemic, but this has not yet been confirmed;

·         Preparatory work in developing savings and additional income to bridge the projected deficit of £0.7m (from external factors of pay award, effect of inflation, and additional cost pressures due predominantly to homelessness, recycling and refuse staff costs, decrease in recyclable income, local plan costs) has been considered and agreed by the Budget Setting and Capital Allocations  Panel, endorsed by Cabinet.  The updated proposals, assuming agreement, would then provide a balanced budget without the need to reduce the level of service provided by the Council;

·         The draft budget includes key areas from the Council’s new Statement of Intent: Carbon reduction measures; addressing poverty; additional social housing;

·         It also accommodates additional resources to address specific staffing requirements, with external funding being sought where possible;

·         The draft budget assumes an increase in Council Tax by £5 a year;

·         The budget balance is maintained, but with the balance at the bottom of the adopted range for the General Fund Balance.

The risks for the year ahead, which may require funding and so would fall to the General Fund Balance included:

·         Implications of Covid-19 – expected loss of income or costs associated with the impact of the pandemic are considered at this stage to be mitigated with the funding provided by Government;

·         Car Park Income – the budget assumes an additional income of £300k from car park revenue through the increase in parking charges.  If Council decides to delay that increase, then that shortfall could be met from Balances or alternative funding for part of or up to a year; if the decision is not to increase charges at all, the risk is a considerable impact on further budget setting and more difficult than the position outlined in the Medium Term Financial Plan (MTFP);

·         LED – The agreed subsidy of up to £1.3m is hoped will be partially met by Government funding, as is the case with in-house leisure services.  The newly formed LED Monitoring Forum have considered initial indications from LED of their required increase in the Service Level payment, in order to maintain existing services going forward, but the rising cost is something that the Council cannot afford.  Further work by the Forum, along with appointment of independent expert advice, will provide recommended outcomes back to Cabinet and Council;

·         New proposals for the Queens Drive Open Space to be concluded and costed;

·         Actions from the Poverty Panel;

·         Management Review;

·         Brexit – effect on the Council’s main contractors.

The settlement from Government includes a new grant – Lower Tier Service Grant Allocation (LTSG).  This is a one-off grant to help with services impacted, with the Council’s allocation as £700k.  This sum is proposed to mitigate the risk of costs arising as set out above, and other currently unknown pressures during 2021/22.

The Housing Revenue Account would be debated for recommendation by the Housing Review Board.

The Capital Programme has been considered by the Budget Setting and Capital Allocation Panel (BSCAP), including the approval by Cabinet of capital projects put forward for 2021/22 that have met the set criteria and matched in priority against the funding available.

Recommendations would go forward to Cabinet before referral to Council to agree the final budget.

The joint Committees were being asked to:

·         Recommend the Draft Revenue Budget 2021/22 for adoption;

·         Recommend the Draft Capital Budget 2021/22 for adoption;

·         Recommend the Key Service Plan objectives 2021/22 for adoption.

The Portfolio Holder Finance commented on the magnificent achievement of the Strategic Lead Finance and his team in the prudent actions taken to bring forward a balanced budget without reducing service level, in an unprecedented time.

Questions, comments and clarification included:

·         Member comment on delaying the car park fee rise in order to assist the economy, impacted by the pandemic; reference was made to the Car Parking Task and Finish Forum, in that some Members felt there was additional work to be completed by that Forum and therefore no recommendation which included an increase in parking charges should go forward.  Other Members supported the increase, as they felt it was modest and made a considerable impact on the balanced budget;

·         Successful bid for section 106 funding for a capital project meant that money returned to the Capital Fund and therefore could other projects now receive funding? In response, Members were reminded of the set criteria and prioritisation process that the BSCAP worked through; projects could be considered throughout the year, but through this formal process;

·         Could the LTSG be used to assist ailing private leisure clubs, if it could be used to support LED? In response, Members had to decide how best to use that grant against the risk costs for the Council as presented; it was more appropriate to private clubs to apply for concessionary grants from Government;

·         Confirmation that the Homelessness Strategy is included in the draft budget, and that the data analyst post detailed in the report was an in-house resource to work on the mentioned “Poverty dashboard”;

·         Additional post need for the Recycling and Waste Team was explained in detail to the Committees;

·         Savings identified in the budget relating to toilets predominantly covered the Business Rate Relief, which was announced in 2020.  Cabinet would receive future reports on the toilet review, and Members were reminded of the enhanced cleaning schedule now in place for those public toilets that remained open.

A provisional recommendation to Cabinet by the Overview and Scrutiny Committees was made at this point to:

·         Recommend the Draft Revenue Budget 2021/22 for adoption;

·         Recommend the Draft Capital Budget 2021/22 for adoption.

The Chair advised that this would be revisited after the two committees had reviewed the Service Plans in both this meeting and the following session on 14 January 2021.