Agenda item

The Medium Term Financial Plan 2021/22 to 2024/25 is due to be pre-scrutinised at a meeting of the Overview and Scrutiny Committee scheduled to take place on Thursday, 11^th February 2021.  As this meeting will take place after the publication of the main agenda for the Executive Committee meeting, any recommendations from the Overview and Scrutiny Committee on this subject will be reported for the Executive Committee’s consideration in a supplementary pack.

 

 

The Head of Financial and Customer Services presented the Medium Term Financial Plan 2021/22 to 2023/24.  During the presentation of this report the following matters were highlighted for Members’ consideration:

 

·                The preparation of the budget had been really challenging as it had taken place during a global pandemic and at a time of significant uncertainty regarding local authority finances.

·                The Council could increase Council Tax by 2.99 per cent or £5.  Redditch Borough Council had opted to increase Council Tax by £5 as this would result in a slightly higher return for the authority.

·                There had been a gap in the budget for the 2021/22 financial year which had needed to be addressed when balancing the budget.

·                The proposed budget would result in a return of £44,000 to balances in 2021/22.  However, there remained a gap in place for 2022/23 and 2023/24 which would need to be addressed moving forward.

·                The Council had received a significant amount of grant funding from the Government to help manage the impact of the Covid-19 pandemic on the authority’s financial position.  A large proportion of this grant funding would be allocated to supporting Rubicon Leisure Limited.

·                Over £700,00 of earmarked reserves had been used to help balance the budget in 2021/22.  Members were advised that these funds could not be reused in future years.

·                The Council had received financial contributions from the New Homes Bonus (NHB), which had been unexpected, though this was only available for one year.

·                A significant contribution to balancing the budget had also been made through the Lower Tier Services Grant, though there was uncertainty about the position of this grant moving forward.

·                The budget had been balanced without falling below the minimum balances threshold for the Council.  However, there was a risk that, if a similar approach was adopted to balancing the following year’s budget, the Council could fall below those minimum levels.

·                A significant bid for capital funding had been included for Disabled Facilities Grants, though these were not funded by the Council.

·                There was also a relatively large bid for capital funding for electric vehicle charging points, though some of these costs would be offset with grant funding.

·                The position of the Housing Revenue Account (HRA) had improved considerably when compared to recent years and Officers were anticipating a return of £96,000 to balances in 2021/22.

·                The improving position of the HRA was partly as a result of the increase that the Council was now permitted to make to rents for Council properties.

·                Efficiency savings had also been achieved by the Housing Department which had had a beneficial impact on the HRA.  There had been a reduction in the turnaround time for void properties and this, together with investment in new Council houses, was resulting in an increase in rent collection for the authority.

·                There had been savings in Repairs and Maintenance in 2020/21, as there had been a focus on priority work only during the Covid-19 pandemic.  However, Officers recognised that any delayed work would still need to be delivered and therefore those savings had not been built into the budget moving forward.

·                The Covid-19 pandemic had impacted on local businesses and the Council had distributed a significant number of business grants to companies that had been affected.

·                Brexit was starting to impact on businesses in the Borough, particularly those companies involved in overseas trade.  A lot of information was provided on the Council’s website to help businesses that were affected.  It remained unclear what impact this would have on business rate collection levels in the future.

 

Following the presentation, Members discussed the report in detail.  There was general consensus that the Financial Services team should be thanked for their hard work in preparing the budget, particularly at a time of significant upheaval due to the Covid-19 pandemic.  Tributes were also paid to staff working in the Housing Department for their hard work that had helped to improve the position of the HRA compared to previous years.

 

Reference was made to the Overview and Scrutiny process and Members noted that both the Budget Scrutiny Working Group and the Overview and Scrutiny Committee had pre-scrutinised the report.  It was acknowledged that scrutiny Members had raised some useful points, particularly in respect of the need for clarification on the purpose of some proposed savings and income.

 

The Committee also noted that the Council remained subject to a Section 24 Notice and questions were raised about the potential for this to be lifted.  Officers confirmed that the external auditors were still reviewing the Council’s accounts for the 2019/20 financial year and there was some uncertainty about whether the Section 24 Notice would be reissued.

 

Members commented that at the previous meeting of the Executive Committee reference had been made to the potential for Members to lobby the Government regarding the need for greater certainty about the financial position of local authorities, particularly district Councils, moving forward.  The Leader confirmed that this issue had been raised at a central level and that the District Councils Network (DCN) was lobbying the Government on behalf of district Councils about this matter.

 

The Committee discussed the position with regard to collection of business rates during the Covid-19 pandemic and clarification was requested about how this was operating.  Officers explained that the Council could claim 75 pence in the pound of business rates.  The authority could also spread bad debt provisions over a longer period of time than usual and this took into account that the Government would step in to cover loses. 

 

During consideration of this matter Members requested the following additional information for consideration in relation to the budget prior to the Council meeting scheduled to take place on 22^nd February 2021:

 

·                Further information about the earmarked reserves that had been used to balance the budget for 2021/22. 

·                Additional information about the Covid-19 grant funding that had been received by the Council from the Government to help manage the impact of the pandemic.  Specifically, Members requested further information about the amount of grant funding that had been received and how this had been spent.

·                Information about the grant funding that had been distributed to local businesses by the Council, to include the total amount distributed, the number of companies that had applied for funding, the number of businesses that received funding and the eligibility criteria.

·                Further information about the amount of grant funding that the Government had provided to the Council to distribute amongst local businesses.

 

RECOMMENDED that

 

1)        the Unavoidable costs be approved:

                       

                                    2021/22 £1.393m

                                    2022/23 £58k

                                    2023/24 £65k

 

2)        the Revenue Bids be approved:

                                   

                  2021/22 £230k

                  2022/23 £244k

                                    2023/24 £224k

 

3)        the Identified Savings be approved:

                       

                  2021/22 £1.163m

                  2022/23 £524k

                                    2023/24 £545k

 

4)        the General Fund Capital Programme bids be approved:

 

2021/22 £1.064m

                                    2022/23 £999k

                                    2023/24 £904k

 

5)        the General Fund capital programme be approved:

 

2021/22 £4.269m

                                    2022/23 £6.147m

                                    2023/24 £4.149m

 

 

 

6)         the net general fund revenue budget be approved:

                 

                                    2021/22 £10.496m

                  2022/23 £10.093m

                  2023/24 £10.080m

 

7)        the Housing Revenue Account Budget be approved:

                             

                  2021/22 £24.694m

                  2022/23 £24.893m

                  2023/24 £25.391m

 

8)        the Housing Revenue Account Capital Programme be approved:

                             

                  2021/22 £12.611m

                  2022/23 £12.167m

                  2023/24 £11.881m

 

9)        the increase of the Council Tax per Band D at £5 for 2021/22 be approved; and

 

10)     the transfer to Balances of £44k for 2021/22 be approved.