Agenda item

To agree the draft Budget proposals for 2019/20, incorporating any feedback from the Budget Overview and Scrutiny Committee, for consultation.

Decision:

Cabinet:

1. Considered the budget proposals for 2019/20 in respect of:

·         General Fund – Revenue and Capital

·         Housing Revenue Account – Revenue and Capital

2. Agreed to the inclusion of provision within the 2019/20 General Fund Revenue Budget for a Scrutiny Officer

3. Approved consultation in respect of proposed Council Tax levels for 2019/20 for the period 21 January to 3 February 2019 (inclusive)

Reasons for decision

1.            Report number CFM485 of the Cabinet Member for Finance giving details of the draft Budget estimates for 2019/20, revenue and capital, for both the General Fund and the Housing Revenue Account

2.            The budget proposals detailed in the report that were formulated by the Cabinet working closely with senior officers through a series of workshops, with the objective to realign resources and spending plans to ensure that the key priorities and aspirations of the Council could be delivered

3.            Recommendations made by the Budget Overview and Scrutiny Committee at its meeting on 10 January 2019

General Fund - Revenue

4.            The provisional Finance Settlement for 2019/20; this was the last year of the four-year funding deal following the successful submission by the Council of an Efficiency Plan

5.            The proposed funding allocation for the Council taking account of the Settlement Funding Assessment, New Homes Bonus, Rural Services Delivery Grant and compensation for under-indexing the business rate multiplier

6.            Confirmation that the Government would bear the costs of negative Revenue Support Grant for 2019/20; an assumption was built into the report that the Council would be liable for costs negative Revenue Support Grant beyond 2019/20

7.            The overall General Fund estimates for 2019/20, with total service expenditure estimated at £13.780m

8.            Growth proposals to build capacity as set out in appendix A to report CFM485

9.            Details of savings to be made by directorate, together with a corporate savings target of £300k and transformation savings target of £200k across the three-year period

10.         Proposed allocations in the Budget to support InvestSK and Environment SK

11.         General Fund Budget assumptions set out in the report at table 6

12.         Treasury investment financial forecast information for the financial years 2019/20 to 2021/22

Council Tax

13.         Indicative income from Council Tax based on proposals which would be subject to public consultation from 21 January to 3 February: a £5 (3.25%) increase on a Band D property, a 3% increase on a Band D property or no increase

14.         The Budget proposals were compiled on the assumption that the Cabinet would wish to recommend a £5 increase on a Band D property in 2019/20

Fees and charges

15.         Draft fees and charges proposals for 2019/20 as set out in Appendix B to the report, which highlighted which charges were statutory and which were discretionary

Housing Revenue Account

16.         Draft proposals for the Housing Revenue Account (HRA)

17.         Additional items of expenditure against the HRA, which were highlighted in the report: the appointment of the Assistant Chief Executive (Housing Delivery) and an increase in the HRA proportionate share of central support and democratic costs

18.         Savings and efficiencies proposed in respect of the HRA as shown in the report at table 11

19.         Rent proposals for dwellings (a 1% rent reduction in line with Government requirements) and garages (a proposed increase of 2.5%)

Capital programme (General Fund and Housing Revenue Account)

20.         The detailed capital programme attached to the report as Appendix C (General Fund) and Appendix D (HRA)

21.         The Council’s commitment to help grow the local economy and the routes available to the Council to do this, including Deliver SK

22.         The capital strategy over the medium-term, which would focus on delivery through the acquisition, facilitation and development of strategic sites and buildings to stimulate inward investment and regeneration

23.         An allocation to the General Fund Capital Programme of £10m for 2019/20 with associated borrowing being financed in the short-term from the Regeneration Reserve on the basis that the asset would be sold within a defined period

24.         Ambitions through the HRA Capital Programme to deliver a stepped increase in the new build programme and stock acquisition programme and the objectives of the HRA Business Plan

25.         The Housing Investment Programme would continue to deliver investment into the housing stock through a range of programmes including kitchen and bathroom replacement, re-roofing and external wall insulation

Reserves and balances

26.         Details of the earmarked reserves, used to meet known or predicted liabilities

27.         The forecast balances and the proposed movements over the next three-year period shown in Appendix E to the report and the main forecast movements for 2019/20 set out within the body of the report (both General Fund and HRA)

28.         Proposed movement of reserves as set out in Table 17 of the report

The Cabinet Member for Finance presented report number CFM485, which provided draft Budget estimates for 2019/20, revenue and capital, for both the General Fund and the Housing Revenue Account together with details of Budget proposals. Specific reference was made to the Council Tax proposals, on which consultation would be undertaken, and the cessation of the Business Rates pilot, which meant that the Council would fall back to the pooling arrangement of which it was previously part. The Cabinet Member highlighted that the projected balance position for 2019/20 was a small surplus.

Cabinet Members’ attention was drawn to the savings that had been found by directorates to offset growth. Members also noted the proposal to continue with the Community Fund and the Ward Member Grant Scheme. Proposed fees and charges were set out within the report, together with a comment against each that indicated whether they were statutory or discretionary.

The Cabinet Member for Finance also referred to the Housing Revenue Account and proposals for rent levels; dwelling rents would reduce by 1% as required by Government while it was proposed garage rents should increase in line with inflation.

Finally, the Cabinet Member for Finance drew Members’ attention to proposals relating to the Capital Programme, reserves and balances and capacity bids. He also made reference to a meeting of the Council’s Budget Overview and Scrutiny Committee, which had met on 10 January 2019, and the comments and recommendations that had been made at that meeting.

One of the Cabinet members spoke about the business summits that had been held in the district and the Council’s growth ambitions, together with transformation work to make South Kesteven a more agile and modern organisation that could deliver the highest quality of services to residents across the district. This was put within the context of a financial backdrop that was considered increasingly challenging and a corporate strategy that focussed on the authority becoming financially self-sufficient.

The Council had set up a working group to consider the Council’s governance arrangements. The working group had identified the need for a Scrutiny Officer to provide dedicated support to the Overview and Scrutiny function, and officers were asked to include this within the Budget proposals. This suggestion received support from other Cabinet and non-Cabinet members who had been involved in the working group and who had attended the Budget Overview and Scrutiny Committee meeting.

Several Cabinet Members expressed their support for the Budget proposals and how they recognised the Council’s growth priorities and investment in those, and the use of the commercial element of the organisation to replace government funding. Reference was made to the companies in which the Council was involved, specifically DeliverSK, which was focussed on development and Environment SK, which was the vehicle that had been created to deliver the Council’s grounds maintenance service. Members stated that they believed that the proposals conformed with the core commitments that were made at the beginning of the administration. They felt that it was a Budget that benefitted the whole of the district, rather than focussed on one town.

Expressions of thanks were made to the Communications Team, which had been preparing consultation on the Budget and Council Tax proposals.

The Deputy Leader invited non-Cabinet Members to speak and ask questions.

One Member who spoke made reference to the Budget setting process. They stated that it would have been helpful to have contextual information about which of the savings identified in the 2018/19 Budget had been achieved. Some concern was expressed by non-Cabinet members in respect of the use of reserves and a request made for more information to help Members consider the prudence of using reserves, its appropriateness and sustainability. At the Budget Overview and Scrutiny Committee meeting, Members had been advised that the intention was to regenerate reserve levels over three to five years with income from investments. The Deputy Leader stated that a report would be presented to the Growth Overview and Scrutiny Committee on 13 February 2019, which incorporated this information. It was noted that the reserves held by South Kesteven District Councils were at higher levels than the majority of other councils in the area and that the use of reserves meant that the Council was building its asset base without borrowing to fund its investments.

Clarification was sought about the references to negative Revenue Support Grant. Members were advised that the Government had agreed to stand the cost of negative Revenue Support Grant in 2019/20. There was no indication of whether this commitment would continue beyond the 2019/20 financial year and therefore provision for making this payment was included in indicative figures. It was hoped that there would be more certainty about this following completion of the fairer funding review.

A question was asked about whether the drainage board levies could be listed separately in the Council Tax bill. Members were advised that drainage levies were directly precepted to the authority and there was no discretion for the Council to show these separately.

In response to a question on the Council Tax consultation, the Cabinet Member for Finance stated that each of the three options in the report would be subject to consultation (an increase of £5 on a Band D property, an increase of 3% on a Band D property and no increase). The results of the consultation would feed into the report which would be presented to Cabinet at its meeting on 7 February 2019, when it considered its final Budget proposals for recommendation to Council.

It was proposed, seconded and AGREED that Cabinet:

1. Had considered the budget proposals for 2019/20 in respect of:

·         General Fund – Revenue and Capital

·         Housing Revenue Account – Revenue and Capital

2. Agreed to the inclusion of provision within the 2019/20 General Fund Revenue Budget for a Scrutiny Officer

3. Approved consultation in respect of proposed Council Tax levels for 2019/20 for the period 21 January to 3 February 2019 (inclusive)