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Agenda item
Revenue Budget 2020/21 Revised and 2021/22, plus Capital programme 2021/22 - 2023/24
- Meeting of Budget, Cabinet, Monday, 8th February, 2021 6.30 pm (Item 314.)
- View the background to item 314.
Decision:
Cabinet recommends that full Council:-
(i) Approve the revised revenue budget for 2020/21 (Appendix A).
(ii) Approve the draft 2021/22 revenue budget (Appendix A)
(iii) Approve a 1.99% increase in the Borough Council's part of the Council Tax.
(iv) Agree that car parking charges remain frozen for 2021/22
(v) Agree that the absolute minimum level of reserves that shall be retained be £6m (plus General Fund Balance).
(vi) Approve the Capital Programme 2020/21 (revised) to 2023/24 (Appendix P).
(vii) Approve the proposed expenditure from the Renewal and Repairs Reserve, and Information Technology Reserve (Appendices J and I respectively) and those items from other reserves shown in Appendix H that can proceed without further reference to Cabinet or Council.
(viii) Approve that the use of the monies in the budget and Reserves for "Invest to Save" schemes be determined by the Chief Finance Officer in consultation with the Leader of the Council.
(ix) Agree that the Council does not seek to undertake any capital project/scheme purely for yield that would prevent the Council from borrowing either commercially or from the PWLB.
(x) Approve the revised Land and Property Disposal Programme (Appendix L) and agree that disposals can be brought forward if market conditions make it sensible to do so.
(xi) Agree that where a Capital scheme involves a net increase in overall revenue costs to the Council, or where any guarantee is to be provided which does, or could, incur costs for the Council, such decisions continue to be made by full Council.
(xii) Agree that, no Council properties or land be disposed of, either by sale or long leasehold, at less than market value without further express approval by Full Council.
(xiii) Agree that schemes marked with an asterisk in the Capital Programme can proceed without further reference to Cabinet or Council.
(xiv) Agree that work on Priority Income and Efficiency Reviews (PIER) through the Strategic Oversight and Planning Board should continue, and where possible identify a sustainable budget for a period in excess of one year. A mid-year review, for members and officers, to be undertaken in the light of the continuing severe financial pressures.
(xv) Approve the detailed recommendations in Appendix M, which relate to the setting of Council Tax in accordance with Sections 31 to 36 of the Local Government Act 1992 (Appendix M – to be provided/updated for full Council).
(xvi) Approve that the budget be amended as necessary to reflect the final grant figures including Disabled Facility Grants - once received.
(xvii) Full Council adopt the existing Council Tax Support scheme subject to amendments to allowances in line with national changes. Determination of the allowances to be delegated to the Chief Finance Officer in line with prior year practice.Minutes:
The Chief Finance Officer introduced the report to present the revised revenue budget for 2020/21 and a budget for 2021/22. The revised budget for 2020/21 takes account of the known variations to expenditure and income streams that have occurred since setting the budget in February 2020.
The Covid-19 pandemic has had a significant effect on the Council’s income streams and expenditure. The Capital Programme has also been impacted with delays and additional costs arising from Covid-19. The report identifies that a balanced budget can be achieved in 2021/22 although this involves using £1.483m of reserves. The forecast deficit for 2022/23 is £2.2m, in 2023/24 and 2024/25 it is estimated at £2.5m.
The Chief Finance Officer confirmed that both Council Tax and Business Rates income have been impacted and this will likely continue into next year. Government support for individuals and businesses, including the furlough scheme, has meant that many people have not had to claim for the Council Tax Reduction Scheme. However, as support winds down over the next few months an increase in the cost of the scheme can be expected in 2021/22.
Due to prudent decision making the Council has sustained adequate financial reserves to cover the forecast deficit for the next financial year whilst maintaining the agreed minimum level of reserves. Thereafter unless there is an increase in support from central government substantial savings will need to be identified.
If the recommendations are approved by Council, there will be an increase in the Borough’s part of the Council Tax in 2021/22 of 1.99%.
Both the Chief Finance Officer and Leader of the Council thanked the finance team and other services for their efforts in producing the budget and identifying savings.
Councillor Chowney proposed approval of the recommendations, seconded by Councillor Forward.
RESOLVED (unanimously):
Cabinet recommends that full Council:-
(i) Approve the revised revenue budget for 2020/21 (Appendix A).
(ii) Approve the draft 2021/22 revenue budget (Appendix A)
(iii) Approve a 1.99% increase in the Borough Council's part of the Council Tax.
(iv) Agree that car parking charges remain frozen for 2021/22
(v) Agree that the absolute minimum level of reserves that shall be retained be £6m (plus General Fund Balance).
(vi) Approve the Capital Programme 2020/21 (revised) to 2023/24 (Appendix P).
(vii) Approve the proposed expenditure from the Renewal and Repairs Reserve, and Information Technology Reserve (Appendices J and I respectively) and those items from other reserves shown in Appendix H that can proceed without further reference to Cabinet or Council.
(viii) Approve that the use of the monies in the budget and Reserves for "Invest to Save" schemes be determined by the Chief Finance Officer in consultation with the Leader of the Council.
(ix) Agree that the Council does not seek to undertake any capital project/scheme purely for yield that would prevent the Council from borrowing either commercially or from the PWLB.
(x) Approve the revised Land and Property Disposal Programme (Appendix L) and agree that disposals can be brought forward if market conditions make it sensible to do so.
(xi) Agree that where a Capital scheme involves a net increase in overall revenue costs to the Council, or where any guarantee is to be provided which does, or could, incur costs for the Council, such decisions continue to be made by full Council.
(xii) Agree that, no Council properties or land be disposed of, either by sale or long leasehold, at less than market value without further express approval by Full Council.
(xiii) Agree that schemes marked with an asterisk in the Capital Programme can proceed without further reference to Cabinet or Council.
(xiv) Agree that work on Priority Income and Efficiency Reviews (PIER) through the Strategic Oversight and Planning Board should continue, and where possible identify a sustainable budget for a period in excess of one year. A mid-year review, for members and officers, to be undertaken in the light of the continuing severe financial pressures.
(xv) Approve the detailed recommendations in Appendix M, which relate to the setting of Council Tax in accordance with Sections 31 to 36 of the Local Government Act 1992 (Appendix M – to be provided/updated for full Council).
(xvi) Approve that the budget be amended as necessary to reflect the final grant figures including Disabled Facility Grants - once received.
(xvii) Full Council adopt the existing Council Tax Support scheme subject to amendments to allowances in line with national changes. Determination of the allowances to be delegated to the Chief Finance Officer in line with prior year practice.Reasons:
1. The Council must by law set a balanced budget. It will have used the remainder of its Transition Reserve along with some of the General Reserve to fund 2020/21 expenditure.
2. A major overhaul of the funding mechanism for local authorities has again been postponed and when combined with a one year Spending Review, continues to provide considerable uncertainty on funding for 2022/23 and beyond.
3. Despite identifying Priority Income and Expenditure Review (PIER) savings of £484,000 these are insufficient to balance the budget in 2021/22 without the use of General and other Reserves. Further significant savings need to be found during 2021/22 in order to reduce the call on the General Reserves, achieve a balanced budget, and ensure that reserve levels can be maintained at above the minimum recommended level.
4. The Council needs to be in a position to match its available resources to its priorities across the medium term and to maintain sufficient reserves and capacity to deal with potentially large and unexpected events in addition to fluctuations in income and expenditure levels – as highlighted by the Covid-19 crisis. In the light of increased in–year spend on temporary accommodation this requires a much greater degree of service cuts elsewhere and spend within housing areas must remain under regular review.5. The Council remains exposed to a much greater degree of volatility in terms of its income from Non Domestic Rates and expenditure in terms of Council Tax Support claims – the cost falling directly on the Council and the preceptors. The potential downside risks of Brexit and the increased reliance on income streams provide greater volatility to the Council's funding. On top of this is the impact of covid-19 and an economic downturn.
6. The government have provided additional funding for 2020/21 which has significantly helped the financial position and there are some additional measures that will assist with the 2021/22 position; These are detailed later in the report.
Supporting documents:
- Budget Report 2021-22 - Cabinet February 2021 (1)- 28 Jan 2021, item 314. PDF 805 KB
- HBC Finance Budget Summary 2020-21 and 2021-22 Appendices, item 314. PDF 510 KB
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