Agenda item

(Report to Follow).

The Head of Financial and Customer Services presented the Medium Term Financial Plan 2021/22 to 2023/24 (including the Capital Programme and the Housing Revenue Account (HRA)).  During the delivery of this presentation the following matters were highlighted for Members’ consideration:

·                A key proposal detailed in the report was that Council Tax should be increased by £5.  This would result in a slightly higher return to the Council than an increase of 2.99 per cent and was the maximum level at which Council Tax could increase.

·                There had been a significant financial gap for 2021/22 which had been addressed in the report.

·                This budget gap had partially been addressed through projected income and savings.

·                The Council had also received funding for one year only from the New Homes Bonus (NHB), which had not been anticipated.

·                There were unavoidable pressures which had had to be built into the budget.

·                A key pressure on the Council’s financial position was related to Rubicon Leisure Limited.  A significant proportion of the Covid-19 grant funding that the Council had received from the Government would be allocated to addressing the financial pressures relating to the company.

·                In excess of £700,000 of earmarked reserves had been used to help balance the budget for 2021/22.

·                The capital bids included one in respect of Disabled Facilities Grants.  These were not funded by the Council but were distributed by the authority.

·                A capital bid had also been included for electric vehicle charging points and Officers were anticipating that the Council would receive grant funding to support this initiative.

·                The capital programme had been reprofiled as a number of projects in the programme could not be delivered during the Covid-19 pandemic.  This reprofiling work enabled the Council to realign the MRP (minimum revenue provision) in respect of investment income.

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

·                There remained some uncertainty about what would replace NHB funding for Councils in the future.  There was also continuing uncertainty in relation to the Fair Funding Review and localisation of business rates.

·                The impact of the Covid-19 pandemic during the period of the plan was a risk factor that was difficult to address.

·                The Council had already distributed a lot of grant funding to local businesses that had been impacted by the Covid-19 pandemic.

·                Another risk to the Council’s future budget position was Brexit.  There remained uncertainty about how Brexit would impact on local businesses, which in turn could have implications for the business rates collected by the Council.

·                The position of the HRA had improved significantly when compared to recent years.  This was partly due to the fact that the Council was once more able to increase rents paid by Council tenants as well as to an improvement in the turnaround times for void properties.

·                The Council was intending to invest in more Council houses and this was reflected in the HRA capital programme, where capital reserves would fall from £13 million to £3 million.

·                Officers were anticipating that there would be an increase in capital receipts which would have a beneficial impact on the HRA moving forward.

Following the presentation of the report, the Portfolio Holder for Finance and Enabling Services, Councillor David Thain, was invited to speak on the report.  Councillor Thain commented that the Council had achieved a balanced budget for 2021/22 despite the impact that the Covid-19 pandemic had had on local authority finances.   The proposed budget aligned more closely with the Council’s strategic purposes and supported the green thread that ran through the Council Plan.  There remained the need to make savings moving forward and further decisions would need to be taken.  Councillor Thain concluded by thanking the Financial Services department for their hard work and the Budget Scrutiny Working Group, particularly the Chair, for their work during the year.

Members subsequently discussed the report in detail and welcomed the positive news about the position of the HRA.  The Committee noted that the Repairs and Maintenance team had been prioritising urgent work during the Covid-19 pandemic and questions were raised about the extent to which work that had not been completed during this time had been factored into the budget.  Officers clarified that it was recognised that this work would need to be completed once the threat posed by Covid-19 had receded and for this reason the savings for this service achieved in 2020/21 had not been built into the budget for future years.

Reference was also made to the bid that had been submitted for Christmas lights and questions were raised about the need for an annual bid to be submitted in respect of this matter.  Members suggested that additional funding should be requested from local businesses to help cover these costs moving forward.

The Committee noted that a significant level of reserves was being used to balance the budget in 2021/22 and Members questioned whether this was prudent and the extent to which any limits were placed on the use of reserves for this purpose.  The Committee was informed that the reserves had been in place for some time but had never been used, therefore it was appropriate to use the reserves for this purpose.  However, it was acknowledged that reserves could not be reused again at a later date and the budget would need to be balanced in a different way in future years.

During consideration of this item the Chair of the Budget Scrutiny Working Group, Councillor Jenny Wheeler, advised Members that the group had recently discussed the potential for tensions to arise between the resources available to the Council and the services that the authority delivered.  Many Councils faced similar tensions, as local authorities needed to be able to fill gaps where there was considered to be market failure.  To address these tensions, the Council needed to achieve service efficiencies moving forward in order to continue to meet the needs of residents and deliver in relation to the strategic purposes.

The financial support that had been and continued to be provided by the Council to Rubicon Leisure Limited was also discussed.  Members acknowledged that the appropriate body to scrutinise the financial position of the company was the Shareholders Committee, not the Overview and Scrutiny Committee.  Given the significant amount of funding involved, Members urged the Shareholders Committee to scrutinise the financial position of the company and contributions from the Council in detail moving forward. 

Consideration was given to the information that had been provided in the report about proposed savings and income.  Members raised concerns that there was not always sufficient detail available to enable Members and the public to assess the value of the proposals.  By contrast, further detail was provided in the financial monitoring reports and this made those documents easier for Members to review. Officers acknowledged this issue and confirmed that this would be raised for consideration at a forthcoming meeting of the Corporate Management Team (CMT).

Clarification was requested with respect to the purpose of the £8,000 savings that had been proposed for equalities.  Officers explained that these savings had arisen as an Officer had requested a reduction in working hours.  Clarification was also requested about the purpose of the proposed extra income for the community lottery.  The Committee was advised that this related to the income from the community lottery in cases where participants did not nominate a local charity that would receive their contribution.  This budget would be allocated to supporting local community groups.

RESOLVED that

the report be noted.