Agenda item

Draft Budget 2022-23 and Medium-Term Financial Plan

Decision:

RESOLVED:-

 

(KEY DECISION)

 

That the Executive recommended for approval to Full Council the following:-

 

a)   the 2022-23 revenue budget for approval and adoption as set out in this report, which sets:

                              

i.          a budget requirement of £628.1m including Dedicated Schools Grant of £332.3m resulting in a net revenue budget requirement of £295.9m as set out in Appendix A.

 

ii.         a total Council Tax requirement for the Council’s own purposes of £178.471m as contained in paragraph 5.29.

 

iii.        An average Band D Council Tax of £1,578.73 for North Northamptonshire Council, representing a 1.99% increase in the ‘core’ Council Tax and a further 1% for the Adult Social Care Precept. Noting that a separate Council Tax Resolution Report will be presented to Full Council as set out in paragraph 5.31.

 

iv.        the detailed proposals of savings, pressures and income generation for 2022-23 as set out within the report and Appendix B.

 

v.         the provisional dedicated schools grant budget of £332.3m for 2022-23, as detailed in Appendix C, and summarised in paragraphs 5.47 – 5.58.

 

vi.        the draft planned use of, contribution to, and movement in, reserves as identified in paragraph 5.60 and section 9 subject to the final call on reserves after any changes are required to account for final charges etc

 

vii.      the corporate budget requirements as set out in paragraph 8.1, including a contingency sum of £4.750m as set out in paragraph 8.2.

 

viii.     the Treasury Management Strategy for 2022-23 as set out in Appendix H, including the Authorised Borrowing Limit of £859m, and to note a further update to the Strategy will be provided once the disaggregation of Northamptonshire County Council’s Balance Sheet has been finalised, subject to the External Audit of the former County Council’s accounts.

 

ix.        that Council delegate authority to the Executive Member for Finance and Transformation in consultation with the Executive Director of Finance (Section 151 Officer) to agree any necessary variations to the budget prior to 1st April 2022.

 

x.         that Council delegate authority to the Executive Member for Finance and Transformation in consultation with the Executive Director of Finance (Section 151 Officer) to agree the use of the following reserves which will provide the flexibility to manage the overall budget during 2022-23.

 

·       Social Care Reserve

·       Transformation Reserve

·       Public Health Reserve

·       Waste Management Reserve

·       Risk Reserve which includes the capacity to support further/residual issues associated with the COVID-19 pandemic

 

RESOLVED:-

 

That the Executive:

 

a)    noted that the financial position has been based on the Provisional Local Government Finance Settlement announced on 16th December 2021 together with any further announcements to the date of the publication of this report.

 

b)    noted the Consultation feedback as at Appendix G for consideration;

 

c)    considered the outcome from the Finance and Resources Scrutiny Committee, as detailed at Appendix G and any subsequent representations to Committee;

 

d)    noted the Equality Impact as at Appendix F as having been taken into consideration;

 

e)   noted the Section 25 Report of the Executive Director of Finance (Section 151 Officer) as set out in Section 15, including her review of the robustness of the estimates and the adequacy of the reserves;

 

f)     delegated authority to the Executive Member for Finance and Transformation in consultation with the Executive Director of Finance (Section 151 Officer) to draft the recommended budget resolution for Council in accordance with the necessary legal requirements and to take into account the decisions of the Executive and any final changes and other technical adjustments;

 

g)    noted that the transfer of £6.585m from reserves relates to a timing issue in respect of Business Rates Reliefs to support businesses through COVID-19. This is a timing issues which recognises that these grants were awarded and accounted for in the General Fund in 2021-22 but the reduced yield in Business Rates is not reflected in the Collection Fund until 2022-23;

 

h)   delegated authority to the Executive Member for Finance and Transformation in consultation with the Executive Director of Finance (Section 151 Officer) to conclude the disaggregation of the predecessor Councils, Northamptonshire County Council’s accounts following certification and final sign off by the External Auditor.

 

 

Reason for Recommendations: To ensure that the Council complies with its Constitution and legislative requirements in setting the budget for North Northamptonshire Council from 2022-23.

 

Minutes:

The Chair, Cllr Jason Smithers invited Cllr Dorothy Maxwell to address the meeting. Cllr Maxwell made reference to Children’s Services and Education, specifically the provision of Council-employed educational psychologists and speech and language therapists to better meet the needs of local residents and to reduce the backlog of existing cases, concluding with a request to consider factoring such roles into the budget for 2022/23.

 

The Chair thanked Cllr Maxwell for her contribution.

 

The Chair stated that the formulation of the draft budget had been a challenge in balancing increased costs with a wish to learn from the past with a need to commit to the right investments while delivering a balanced budget. The Council had faced a challenging initial year as it stabilised as a new authority with the transformation process set to continue into 2022/23. It was noted that confirmation of the Local Government Finance Settlement  would allow the Council to deliver its recently adopted Corporate Plan, with a £1m investment made towards combatting climate change. The Chair concluded by offering his thanks to all members of the Finance Team who had pulled together a complex budget while facing significant challenges and uncertainties.

 

Cllr Lloyd Bunday, Executive Member for Finance and Transformation then introduced a report that set out the final revenue budget (2022-23) and Medium-Term Financial Plan for North Northamptonshire Council. The draft budget proposals had been considered by the Executive on 23rd December 2021 along with an addendum to the main budget report which provided an update following the provisional Local Government Finance Settlement, published on 16th December 2021. The settlement set out the funding for individual councils following the Spending Review which was announced on 27th October 2021.

 

The meeting noted that the draft budget had gone through a consultation period commencing on 23rd December 2021 and ending on 28th January 2022. The consultation had provided residents, local partners and other stakeholders with the opportunity to review the budget proposals and provide feedback during the five-week consultation period. The draft budgets had also been subject to extensive scrutiny by the Finance and Resources Scrutiny Committee.

 

The report set out the revenue budget for 2022-23 and the Medium-Term Financial Plan for North Northamptonshire Council, including the proposed Council Tax level for 2022-23, with the Executive requested to recommend these proposals to Council for approval at its meeting on 24th February 2022.

 

Cllr Bunday made reference to the single-year Local Government Finance Settlement, noting that it cast doubt upon levels of future settlements and pointed to several challenges facing the Council in the coming years.

 

The draft budget before members had been formulated utilising the 2021/22 budget set by the Shadow Executive in February 2021, ongoing budget monitoring forecasts and the outcomes of eight budget challenge sessions with directorates and portfolio holders. Following the conclusion of the public consultation period, analysis of the 504 responses had been undertaken and was included as an appendix to the report. It was noted that although there had been some opposition against a Council Tax increase, the Local Government Finance Settlement had been made on the basis of councils increasing Council Tax by the maximum amounts allowed.

 

Cllr Bunday stated that although there was a balanced budget this year, next year forecast a deficit of over £25m, rising to nearly £40m by 2025. In light of this, by not increasing Council Tax for the forthcoming year, a further £15m deficit would be added by the end of the 2024/25 financial year. Council Tax remained the most stable and resilient form of income councils had and given that the statutory responsibility of the Council was predominantly demand-led services, it was therefore imperative that all income streams were used to their maximum. Cllr Bunday referenced the support available to those who required assistance in meeting Council Tax payments and noted the need to treat income from its residents with respect.

 

It was heard that since the December meeting of the Executive, a number of updates had been made to the budget forecast for 2022/23 adding pressures as detailed below:

 

·         £870k - home to school transport

·         £165k - commercial lease loss

·         £148k - increased fleet fuel costs

·         £400k – insurances

·         £500k - increase in contingency for increased utility costs

 

Further savings had been identified as detailed below:

 

·         £115k trade waste

·         £203k savings in recycling

 

The meeting noted that a one-off contribution to the Children’s Trust of £594k would be met from reserves to achieve contract savings. This would be financed by a £1.208m increase in Business Rates and a £557k reduction in the contribution to reserves following the announced financial settlement.

 

Members noted the main headlines of the budget proposals, these having been updated since 23rd December 2021 meeting of Executive to reflect identified changes as well as items raised during the scrutiny process.

 

The meeting heard that the Dedicated Schools Grant was a ringfenced grant from government allocated to Local Authorities to support a range of education related services. The grant was based on a national formula, and although there was some concern from scrutiny that some areas had been reduced, this reflected a reduction in the number of pupils receiving the service. The total grant was £332.3m, leaving a net revenue budget requirement of £295.9m.

 

Councillor Bunday referenced the overview of the budget by each directorate and highlighted the main risks facing the Council as part of the budget, specifically Adult Social Care and Children’s Services, both being demand-led services subject to volatility.

 

Reference was made to the Council’s Corporate Resources, including Corporate Contingency, Treasury Management Costs and Minimum Revenue Provision. Also noted were details relating to the Pay Contingency and recurring funding for pay increases to the Real Living Wage in 2021-22, to be held centrally until allocation was confirmed.

 

Cllr Bunday drew attention to the Council’s reserves strategy, with a requirement to maintain a prudent level of reserves. It was noted that the true level of reserves would not be fully known until all the legacy sovereign authorities’ final accounts had been signed off, the impact of the Covid-19 pandemic was understood and the final outturn position of the Council’s accounts for 2021/22 had been reported.

 

Cllr Bunday concluded by stating that setting a budget for the Council was not just concerned with managing within available resources, but also where funding should be invested, recognising residents’ priorities and working with partners to jointly develop service delivery proposals, giving local families strength and self-reliance to benefit from greater self-determination and improved life chances. It was important to note that there was a balance to be maintained between encouraging growth, providing high quality universal services and protecting those that were the most vulnerable.

 

Cllr Harriet Pentland spoke to welcome the investment to fund initiatives to tackle climate change, noting the significance of this funding in the context of the Council being a new authority. The move demonstrated the Council’s commitment to the environment, with the involvement of the Climate Change, Environment and Growth Executive Advisory Panel being key to this work.

 

Cllr Graham Lawman spoke to welcome funding allocated for improvements to local bus services, noting that a consultation in this regard was already underway.

 

Cllr David Howes spoke to recognise the effort and work from officers that had gone into the drafting of the budget and also acknowledged the work and understanding of Cllr Bunday in its development.

 

Cllr David Brackenbury thanked Cllr Bunday and officers for their work in development of the budget while noting the importance of place shaping to attracthigh quality employment and housing and in turn resulting in increased income via Business Rates and Council Tax.

 

Cllr Scott Edwards responded to Cllr Dorothy Maxwell’s comments stating that her recommendation would be put forward as an idea to be developed.

 

Cllr Helen Howell spoke and stated that it was important to ensure that the Council enhanced the lives of its residents, reinforcing the value to the community of positive health and wellbeing.

RESOLVED:-

 

(KEY DECISION)

 

That the Executive recommended for approval to Full Council the following:-

 

a)   the 2022-23 revenue budget for approval and adoption as set out in this report, which sets:

                              

i.          a budget requirement of £628.1m including Dedicated Schools Grant of £332.3m resulting in a net revenue budget requirement of £295.9m as set out in Appendix A.

 

ii.         a total Council Tax requirement for the Council’s own purposes of £178.471m as contained in paragraph 5.29.

 

iii.        An average Band D Council Tax of £1,578.73 for North Northamptonshire Council, representing a 1.99% increase in the ‘core’ Council Tax and a further 1% for the Adult Social Care Precept. Noting that a separate Council Tax Resolution Report will be presented to Full Council as set out in paragraph 5.31.

 

iv.        the detailed proposals of savings, pressures and income generation for 2022-23 as set out within the report and Appendix B.

 

v.         the provisional dedicated schools grant budget of £332.3m for 2022-23, as detailed in Appendix C, and summarised in paragraphs 5.47 – 5.58.

 

vi.        the draft planned use of, contribution to, and movement in, reserves as identified in paragraph 5.60 and section 9 subject to the final call on reserves after any changes are required to account for final charges etc

 

vii.      the corporate budget requirements as set out in paragraph 8.1, including a contingency sum of £4.750m as set out in paragraph 8.2.

 

viii.     the Treasury Management Strategy for 2022-23 as set out in Appendix H, including the Authorised Borrowing Limit of £859m, and to note a further update to the Strategy will be provided once the disaggregation of Northamptonshire County Council’s Balance Sheet has been finalised, subject to the External Audit of the former County Council’s accounts.

 

ix.        that Council delegate authority to the Executive Member for Finance and Transformation in consultation with the Executive Director of Finance (Section 151 Officer) to agree any necessary variations to the budget prior to 1st April 2022.

 

x.         that Council delegate authority to the Executive Member for Finance and Transformation in consultation with the Executive Director of Finance (Section 151 Officer) to agree the use of the following reserves which will provide the flexibility to manage the overall budget during 2022-23.

 

·       Social Care Reserve

·       Transformation Reserve

·       Public Health Reserve

·       Waste Management Reserve

·       Risk Reserve which includes the capacity to support further/residual issues associated with the COVID-19 pandemic

 

RESOLVED:-

 

That the Executive:

 

a)    noted that the financial position has been based on the Provisional Local Government Finance Settlement announced on 16th December 2021 together with any further announcements to the date of the publication of this report.

 

b)    noted the Consultation feedback as at Appendix G for consideration;

 

c)    considered the outcome from the Finance and Resources Scrutiny Committee, as detailed at Appendix G and any subsequent representations to Committee;

 

d)    noted the Equality Impact as at Appendix F as having been taken into consideration;

 

e)   noted the Section 25 Report of the Executive Director of Finance (Section 151 Officer) as set out in Section 15, including her review of the robustness of the estimates and the adequacy of the reserves;

 

f)     delegated authority to the Executive Member for Finance and Transformation in consultation with the Executive Director of Finance (Section 151 Officer) to draft the recommended budget resolution for Council in accordance with the necessary legal requirements and to take into account the decisions of the Executive and any final changes and other technical adjustments;

 

g)    noted that the transfer of £6.585m from reserves relates to a timing issue in respect of Business Rates Reliefs to support businesses through COVID-19. This is a timing issues which recognises that these grants were awarded and accounted for in the General Fund in 2021-22 but the reduced yield in Business Rates is not reflected in the Collection Fund until 2022-23;

 

h)   delegated authority to the Executive Member for Finance and Transformation in consultation with the Executive Director of Finance (Section 151 Officer) to conclude the disaggregation of the predecessor Councils, Northamptonshire County Council’s accounts following certification and final sign off by the External Auditor.

 

 

Reason for Recommendations: To ensure that the Council complied with its Constitution and legislative requirements in setting the budget for North Northamptonshire Council from 2022-23.

 

Supporting documents: