Issue - meetings

Budget and Medium Term Financial Plan (MTFP) 2022/23

Meeting: 09/02/2022 - Cabinet (Item 128)

128 Budget and Medium-Term Financial Plan (MTFP) 2022/23 pdf icon PDF 2 MB

To set out for Cabinet consideration and recommendation to Council the proposed 2022/23 budget and council tax.

The budget as presented has been drafted based on;

·     Delivering a Council Tax freeze via a 0% council tax increase in 2022/23 for the basic annual threshold.

·     Collecting the full 4% Adult Social Care (ASC) precept in 2022/23.

There are several key assumptions underpinning this budget report.

·     Government will extend, as they have previously indicated, the flexible use of capital receipts regulations to 31 March 2025.

·     These regulations, when issued, will remain broadly unchanged in allowing the councils transformation expenditure to be legitimately financed from capital receipts.

Cabinet and Council will, sometime after this meeting, approve a proposal to generate a £54m capital receipt from a bold non-traditional approach. If Council do not agree the proposal, then the budget will need to be amended as necessary.

Additional documents:

Decision:

The Leader of the Council presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'B' to these Minutes in the Minute Book.

To set out for Cabinet consideration and recommendation to Council the proposed 2022/23 budget and council tax.

The budget as presented has been drafted based on;

·     Delivering a Council Tax freeze via a 0% council tax increase in 2022/23 for the basic annual threshold.

·     Collecting the full 4% Adult Social Care (ASC) precept in 2022/23.

There are several key assumptions underpinning this budget report.

·     Government will extend, as they have previously indicated, the flexible use of capital receipts regulations to 31 March 2025.

·     These regulations, when issued, will remain broadly unchanged in allowing the councils transformation expenditure to be legitimately financed from capital receipts.

Cabinet and Council will, sometime after this meeting, approve a proposal to generate a £54m capital receipt from a bold non-traditional approach. If Council do not agree the proposal, then the budget will need to be amended as necessary.

 

RECOMMENDED that Council: -

1)            undertake a recorded vote in relation to the following items as required by the Local Authorities (Standing Orders) (England) (Amendments) Regulations 2014 which came into force on the 25 February 2014;

(a)           A net budget of £272.043m, resulting in a total council tax requirement of £228.964m, is set for 2022/23 based on the draft local government settlement figures published by government in December 2021. This is based upon:

                                     i.        a council tax freeze for 2022/23 in respect of the basic annual threshold and the collection of the social care precept of 4%.

This net increase can be compared to the 5.99% maximum permitted increase for 2022/23 and recognises that the government continue to promote council tax increases via the social care precept as a funding mechanism for social care;

                                   ii.        the key assumptions and provisions made in the budget as proposed and set out in paragraph 40 to 55;

                                 iii.        the allocations to service areas in the budget as proposed and as set out in Appendix 2a;

                                 iv.        the capital investment programme (CIP) as set out in paragraphs 109 to 131and Appendix 4;

                                   v.        the use and level of all reserves to be held by the council further to the advice of the chief finance officer as set out in paragraphs 132 to 158 and Appendix 3 to this report;

                                 vi.        treasury management strategy (TMS) and prudential indicators as set out in paragraphs 159to 170 and Appendix 5;

                                vii.        the chief officers’ pay policy statement for consideration and approval by the council in accordance with the provisions of the Localism Act 2011 as set out in paragraphs 172 to 173 and Appendix 7;

(b)           approve the flexible use of capital receipts efficiency statement as set out in paragraphs 56 to 86 including the extension of the transformation programme to £67m and the reprofiling of the associated costs and savings;

(c)           approve the requirement to enhance the  ...  view the full decision text for item 128

Minutes:

The Leader of the Council presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'B' to these Minutes in the Minute Book.

Cabinet was advised that the report set out for Cabinet consideration and recommendation to Council the proposed 2022/23 budget and council tax, and that the budget as presented has been drafted based on;

·     Delivering a Council Tax freeze via a 0% council tax increase in 2022/23 for the basic annual threshold.

·     Collecting the full 4% Adult Social Care (ASC) precept in 2022/23.

In relation to this Cabinet was informed that there are several key assumptions underpinning this budget report.

·     Government will extend, as they have previously indicated, the flexible use of capital receipts regulations to 31 March 2025.

·     These regulations, when issued, will remain broadly unchanged in allowing the councils transformation expenditure to be legitimately financed from capital receipts.

·     Cabinet and Council will, sometime after this meeting, approve a proposal to generate a £54m capital receipt from a bold non-traditional approach. If Council do not agree the proposal, then the budget will need to be amended as necessary.

The Chairman of the Overview and Scrutiny Board addressed the Cabinet advising that at their recent meeting the Board had vigorously debated the report and that the Board had proposed the following recommendation in respect of this item:

The Overview and Scrutiny Board recommended to Cabinet that the administration develops a Plan B in the event the government cancels or amends the Flexible Use of Capital Receipts regulations leaving a hole up to £54 million in the 2022/23 budget.

The Leader addressed the Cabinet in relation to the recommendation advising that the report sets out that if there were to be an issue in terms of the flexible use of capital receipts that other options would need to be considered, and that significant work had gone into this.

Councillor Cox addressed the Cabinet stressing that the budget appeared to be high on risk, high on debt and high on overspending.

Councillor Dedman addressed the Cabinet in relation to beach huts, highlighting the lack of consultation with the beach hut associations and questioning why they had not been informed or consulted in relation to references within the report to beach huts.

The Deputy Leader advised that the beach hut associations would be consulted.

Councillor Howell addressed the Cabinet with regards to the KPMG report, requesting that Councillors have sight of the report and questioning whether the council should be launching on proposals on the basis of a draft report.

Cabinet members spoke in support of the report.

In summing up the Leader of the Council addressed the points made by councillors not on the Cabinet who had raised questions in relation to the report.

RECOMMENDED that Council: -

1)            undertake a recorded vote in relation to the following items as required by the Local Authorities (Standing Orders) (England) (Amendments) Regulations 2014 which came into force on the 25 February  ...  view the full minutes text for item 128


Meeting: 31/01/2022 - Overview and Scrutiny Board (Item 160)

160 Scrutiny of Finance Related Cabinet Reports pdf icon PDF 2 MB

Budget Scrutiny 2022/23 - To consider the following budget related reports scheduled for Cabinet consideration on 9 February 2022:

 

·       Budget and Medium-Term Financial Plan (MTFP) 2022/23 (Pages xx – xx)

·       Housing Revenue Account (HRA) Budget Setting 2022/23 (Pages xx – xx)

 

The Chairs from the Children’s Services and Health and Adult Social Care Overview and Scrutiny Committees are invited to attend the Board for consideration of this item.

 

The Overview and Scrutiny Board will also consider the following report scheduled for Cabinet consideration on 9 February 2022:

·       2021/22 Budget Monitoring at Quarter 3

 

Cabinet members invited to attend for this item: Councillor Drew Mellor, leader of the Council and Portfolio Holder for Finance and Transformation.

 

The O&S Board is asked to scrutinise and comment on the reports and if required make recommendations or observations as appropriate.

 

The Cabinet reports for this item are included with the agenda for consideration by the Overview and Scrutiny Board.

Additional documents:

Minutes:

The Chairman introduced this item and advised that the Budget and Medium-Term Financial Plan (MTFP) 2022/2 and Housing Revenue Account (HRA) Budget Setting 2022/23 would be taken together and asked all parties in the meeting contribute to a constructive discussion of the issues in a respectful way. The Chairman then invited the Leader of the Council to introduce the reports. The Leader and Portfolio Holder for Transformation and Finance presented the reports, copies of which had been circulated to each member and which appears as Appendices ‘A’ and ‘B’ to these minutes in the Minute Book. The Portfolio Holder and Chief Financial Officer responded to comments and questions from the Board, details included:

 

·     A Councillor advised that residents views that they had been made aware of included that the issues outlined in the budget were not what the Council should be focused on, that much of the content went against sensible financial practice, that loans were being used to hold down council tax at the cost of borrowing, which was effectively financial engineering and that Councils should be run service providers rather becoming involved with issues they shouldn’t be. The Leader responded that the Council would be investing £50million and would deliver in the region of £1billion of savings over a 20-year period. They felt that this was good financial planning and the right thing to do at this time. However, it was understood that it was a choice regarding the level of council tax set.

·     The Chairman commented on the cost of transformation and the mechanism being used to fund it. The cost had increased significantly with savings being realised at the end of the time-period. It was noted that there were risks and that this was not what people were used to which had raised a number of concerns about this approach. A Councillor commented on the Section 151 financial warning flags across the report. The Leader responded that it was fair to say that this was a step change in financial strategy. The Council, now the tenth largest unitary authority in the country, was a very different organisation to the preceding authorities. The Council was not selling off assts in order to ensure that they would be retained for future generations. The Leader acknowledged that comments made around transformation were valid, but the programme was fundamental in achieving 5-year and ongoing financial sustainability. The Council was now in a position of looking towards a solid, balanced 5-year Medium Term Financial Plan, which was not a position the Council had always been in. It was noted that the level of debt for the Council was much smaller than other councils of a similar size.

·     The Leader advised that the Council would be delivering investment and retaining assets with utilising what was available to invest in future savings.

·     A Councillor commented that the lower council tax increase was only positive if services were fully and regularly delivered. It was noted that savings had not been achieved previously and there  ...  view the full minutes text for item 160