Issue - meetings

Report from the Cabinet Member for Finance and Resources.

Decision

1.          Cabinet considered the budget proposals for 2021 in respect of:

·       General Fund – Revenue and Capital

·       Housing Revenue Account – Revenue and Capital

2.          Cabinet approves that consultation be carried out in respect of proposed Council Tax levels for 2021/22 for the period 13-26 January 2021 (inclusive).

3.          Cabinet approves the cessation of the Deepings Special Expense Area from 1 April 2021.

4.          Cabinet considered the proposed fees and charges for 2021/22 as set in the supplementary Appendix D of the joint report from the Cabinet Member for Finance and Resources and the Cabinet Member for Housing and Planning.

5.          Cabinet approves the increase of the regeneration reserve by £500k by the following movements:

·       £250k movement from the Commercial reserve.

·       £250k movement from the Invest to Save reserve.

6.          Cabinet approves the Climate Change reserve be included in the 2021/22 budget framework proposals at a minimum level of £20k.

Considerations/reasons for decision

·             Joint report from the Cabinet Member for Finance and Resources and the Cabinet Member for Housing and Planning on the Budget Proposals for 2021/22 and indicative budgets for 2022/23 and 2023/24 giving details of the draft budget estimates for 2021/22, revenue and capital for both the General Fund and the Housing Revenue Account (HRA).

·             The Council had approved a Corporate Plan that sets out a clear vision and key actions over the period of the Plan 2020 - 2023.  The budget proposals had been formulated within the context of the Corporate Plan ambitions and alignment to the five priorities; Growth and our economy; Housing that meets the needs of all residents; Healthy and strong communities; A clean and sustainable environment; A high performing Council.

·             The budget proposal had been built against a backdrop of financial challenges; the delay in the national review of the local government funding formula and the detrimental impact the Covid-19 pandemic has had on the Council’s resources.

·             The proposals had been formulated by the Cabinet, working closely with senior officers, through a number of budget sessions.  Workshops had been held which focused on the spending ambitions of the Council to drive forward the Corporate Plan within financial parameters.

·             The financial outlook for 2021/22 remained uncertain and the budget proposal were underpinned by a number of assumptions relating to the recovery of income levels and future expenditure projections.

·             The Provisional Settlement from Government had included a number of financial measures to support the financial assumptions which included the income losses compensation scheme which would continue to June 2021 and a one year lower tier un-ring fenced grant.

General Fund – Revenue

·             An increase in Local Government core spending power of 4.5% for 2021/22. The increase was calculated on the assumption that Council’s will maximise the Council Tax increases available.

·             A new lower tier services grant of £365k had been allocated to the Council for 2021/22 only.

Council Tax

·             Indicative income from Council Tax based on proposals which would be subject to public consultation from 13 January 2021 to 26 January 2021; a £5  ...  view the full decision text for item 44

The Cabinet Member for Finance and Resources presented the report on the Draft Budget Proposals for 2021/22, the General Fund and the Housing Revenue Account. A Stakeholder consultation was being launched between 13-26 January 2021.  He referred the Cabinet to the amended Fees and Charges proposal that had been sent out by email that morning.  The proposals before Members were based on the draft Local Government’s Finance Settlement funding proposals which had been published on 17 December 2020.  The final settlement would be known in February 2021.   The budget had been formulated within the context of the actions outlined in the recently approved Corporate Plan, to reflect the costs and income impact of the Covid-19 pandemic, and the current financial landscape, which was underpinned by a prudent financial approach.  Variations to the budget were likely and therefore, it was possible that an amended budget would be required later in the year, but was being kept under review.

Funding levels were similar to that of 2020/21, however a one-off lower tier services grant had been allocated of £362k, it was proposed that the grant be moved to the Budget Stabilisation Reserve.

Table 5 of the report listed key budgetary proposals to ensure that a balanced position was achieved and to support the ongoing transformation of services to ensure efficiency and value for money. 

Also detailed within the report were the levels of investment and fees for the Council owned companies. The funding levels were aligned to the business plans of the Companies, which had been considered by the Companies Committee. The Cabinet Member for Finance and Resources urged caution in respect of the management fees for LeisureSK Ltd, which had been completed before the current lockdown and closure of all leisure centres.

Assumptions within the budget had been made in relation to a Council Tax increase of £5 for Band D properties to £168.62.  A final decision would be made by Cabinet following the results of the consultation at its next meeting in February 2021 to make a recommendation to Council.

A key element of the budget setting income for the Housing Revenue Account (HRA) was rental income.  The Government’s rent setting guidance formula was Consumer Price Index (CPI) +1%.  The Government had reduced the CPI to 0.5% in September 2020 and the rent increase for 2021/22 was 1.5%.  This had resulted in a lower than projected rental income within the HRA Business Plan.

It had only been possible to present a one-year balanced revenue account budget due to the pressures of rising expenditure and the forecast reductions in income.   Reserves would need to be used to maintain service levels.  Work would be done with the Cabinet Member for Housing and Planning to address the issues for the budget setting for 2022/23.

A summary of the Capital Programme was shown at Tables 15/16 along with Appendix B for both the General Fund and the Housing Revenue Account.   The General Fund was focused on investment in the Council’s assets and the  ...  view the full minutes text for item 44