Agenda item

The report before Council set out the final revenue budget (2023-24) and Medium-Term Financial Plan for North Northamptonshire Council. The draft budget proposals were considered by the Executive on 22^nd December 2022 along with an Addendum to the main budget report which provided an update to Members following the provisional Local Government Finance Settlement, which was published on 19th December 2022, following a written statement from the Secretary of State for Levelling Up, Housing and Communities.

         The budget consultation period commenced on 22^nd December 2022 and ended on 27^th January 2023. The draft budgets had been subject to scrutiny by the Finance and Resources Scrutiny Committee. The consultation provided residents, local partners and other stakeholders the opportunity to review the budget proposals and provide feedback during the five-week consultation period.

         The budget was further updated for the latest position and presented to Executive at its meeting on 9^th February, for approval and recommendation on to Council.

         The Final Local Government Settlement was announced on 6^th February 2023 (after the report to Executive on 9^th February had been published) and had resulted in additional funding of £95k; the Services Grant had been increased by £90k and the Rural Delivery Services Grant had been increased by £5k. To maintain a balanced position the corporate contingency budget had been increased by £95k – the final budget proposals included this change.

         The report set out the revenue budget for 2023-24 and the Medium-Term Financial Plan for North Northamptonshire Council, including the proposed Council Tax level for 2023-24, for approval at this meeting.

         The Revenue Budget 2023-24 and Medium-Term Financial Plan formed part of a full suite of budget reports being presented to the Council at the meeting. These included the Housing Revenue Account Budget 2023-24, the Capital Strategy, Capital Programme, and the Treasury Management Strategy. These reports together would provide a framework for revenue and capital planning for 2023-24 and into the medium term. The Council Tax Resolution for 2023-24 was included within the report.

         The main headline assumptions within the draft budget proposals were:

·              A balanced budget for 2023-24.

·              Further investment of circa £57m to both protect vital services and invest in service change and improvement.  This included requirements set out within the 2022-23 medium term financial plan that remained in place for 2023-24.  The overall investment allowed for demand and cost increases including Home to School Transport, Adult Social Care and the Children’s Trust.  The Trust was also seeking further one-off investment of £2.2m county wide (c£1m from North Northamptonshire) to help deliver further service improvements and generate efficiencies.

·              These pressures were offset, in part, by savings, efficiencies and income generation across Council Services of £17m which included new direct service grants.  This figure also included the continuation of savings already included as part of the 2022-23 medium term financial plan and which remained deliverable. The remainder of the resource requirement had been met through improved business rates income, council tax income and Government grants.

·              The use and retention of reserves to support non-recurring investment in service improvement, fund time limited projects, pump-prime invest to save schemes and help manage risk.

·              The investment in Social Care recognised the increase in the National Living Wage from 1 April 2023 to £10.42 per hour and the reversal of a 1.25% increase in national insurance contributions for care providers, following the changes put forward by Government.

·              Changes following the reversal of the 1.25% National Insurance charge more widely had been matched with a reduction in Government grant funding.

·              An increase in Council Tax of 4.99%, consisting of 2.99% for the “core” council tax and 2% for the Adult Social Care precept, which resulted in a new Band D equivalent Council Tax of £1,657.51, an average weekly increase of £1.52 (based on Band D equivalent) from the previous year. 

·              No change to the Local Council Tax Support Scheme for 2023-24, which would continue at 25%.

·              Inclusion of a contingency to mitigate against uncertainty, which totalled £3.7m and was equivalent to around 1% of the Council’s Net Budget.  This recognised that there remained uncertainty in funding and spending predictions.

·              An allowance for a pay award of 4% in 2023-24 which would be subject to final determination as part of national pay negotiations.

·              Officers would continue to seek efficiencies in order to help address the budget requirement from 2024-25 and into future years.

 

Appendix A set out the summary position for 2023-24 and the indicative forecast for 2024-25 and 2025-26.

Work had been undertaken to review the budget requirement across all service headings and seek mitigating actions (or savings) in order to remain within the funding envelope and set a balanced budget for the Council in line with statutory requirements.  The content of the report, along with the detail in Appendix B, outlined the pressures and savings for each of the Directorates.  These had been the subject of scrutiny by the Finance and Resources Scrutiny Committee in accordance with the budget strategy and timeline paper that was presented to Executive on 10th November 2022.

As part of the 2023-24 budget setting process a number of Budget Challenge Sessions were held to help inform the budget process, these consisted of Officers and Executive Members and the objective of these sessions were:

 

·              To remind all service areas of the financial position of the Council and the need to ensure value for money. 

 

·              To understand the risks and pressures in the budget, including any new risks for 2023-24 and identify any efficiencies to offset against these.

 

·              To review the existing medium term financial plan for 2023-24 onwards including the pressures and savings already included and whether these remained valid for inclusion in the budget.

 

·              To utilise the information gathered to date during 2022-23 monitoring to inform the budget planning for 2023-24.

 

·              To understand the planned service developments, alongside the associated costs/benefits and timing.  This will include the continuing disaggregation of former County services between North Northamptonshire and West Northamptonshire Councils, as well as service change.

 

The outcome was to achieve an agreed way forward on the service proposals for 2023-24 and beyond for consideration as part of the Medium-Term Financial Plan and this formed the basis of the contents of the report.

 

As part of the budget process, scrutiny was undertaken over two phases through the Finance and Resources Scrutiny Committee.  The first phase, during late October/early November 2022, considered the 2022-23 in-year position based on the forecast as at Period 6.  This was to enable scrutiny members to question and understand the underlying financial position and its potential impact in to 2023-24.  Building on this, the second phase, which was held in January 2023, considered the detail of the 2023-24 budget proposals.

 

Each phase of Scrutiny required a separate budget task and finish scrutiny session for each of the following main service areas:

 

·        Children’s and Education Services – including the Children’s Trust

·        Place and Economy

·        Enabling and Support Services – Finance, Performance, Communications, ICT, Customer and Governance

·        Adults, Communities and Wellbeing Services, including the HRA.

 

The Children’s Trust were also subject to a two-phase scrutiny process which completed in December 2022, to enable the sum to be agreed in January 2023 in line with the contract requirements.

 

A full Member Budget Briefing Session was held prior to the publication of the draft budget in December and the budget proposals were also discussed with Trades Union representatives in January (as part of the Joint Consultative Forum).  Separate budget sessions were also offered to the recognised political groups.

 

 

Councillor Lloyd Bunday MOVED the report’s recommendations. These were SECONDED by Councillor Mark Rowley.

Councillor Bunday noted the difficult national and international factors that were impacting on the Council’s budget setting process for 2023/2024, particularly citing rising fuel and utility costs. Cost of living increases and increased salary costs also had a significant impact on the Council. These factors had also impacted on the Council’s contractors and partners.

Council also noted that there was limited scope for the Council to increase its income streams, and it continued to be heavily reliant on Council Tax, Business Rates and Government grants.

Councillor Bunday stressed that although a balanced budget was being proposed for 2023/24 there was currently a projected gap of £18m in 2024/25 rising in subsequent years. These projections would be made worse should the Council not increase Council Tax to the maximum permitted without reference to a local referendum.

Measures to protect vulnerable households would continue, and it was noted that additional Government support to assist residents on low incomes had been received.

Councillor Bunday stressed the hard work over a number of months that had resulted in the proposals before Council and thanked both officers and fellow members for their time and resource.

The importance of ensuring that the Council retained a healthy level of reserves was further stressed by Councillor Bunday. This was particularly appropriate given that the Council was still relatively new. The importance of the Council’s Treasury Management Policy and the continued need to keep this under review was also cited.

The following amendments to the report received from the Labour Group were MOVED by Councillor Matt Keane and SECONDED by Councillor John McGhee: -

• That an additional £2m is allocated to staff pay, which will either contribute to or pay for any pay award that is agreed by the NJC. This will mean that the amount set aside for a potential pay award at NNC is 6% rather than 4%. This will be funded from contingency budget. 

 

• We would like to give Pen Green Nursery in Corby a one off £250k Grant. To help them mitigate the loss of core funding. This will be financed from smoothing reserves. We will move that council recommends this and it is passed to executive to endorse. 

 

• We would like to use £69k from the general reserve to fund a concession to those on council tax support who have been hit hardest by the green waste charge. We would like a 25% reduction. This will be for one year based on position you are in on day you sign up.

 

• We would like to use £60,000 out of general reserves to fund one educational psychologist with the specific aim of prevention. This educational psychologist will have a specific aim of prevention and as such will be available for educational settings to purchase hours. The average educational psychologist in the UK earns between £38,000 £50,000 pounds per year. I'm looking at an entry level of £50,000 for the salary with on costs that will cost in the region of £60,000 per annum. On a calculation of £60,000 / 48 weeks of the working year that gives us a weekly cost of £1250 to recoup per week. Broken down into 30 working hours leaving 10 hours for reports that would be an hourly cost of £41 pounds per hour to sell to a school to break even. The average hourly cost for a private educational psychologist is around £180 per hour rising to £210 per hour. If we were able to sell 30 hours per week at £180 we would have an income of £5400 per week. Removing the £1250 for outlay gives us an overall profit per week of £4150 pounds. Over the year this will translate into £199,200 profit a year.

 

In introducing the amendments, Councillor Keane stated that these had resulted from listening to the concerns of local residents. Councillor Keane stated the amendments had been fully costed and if approved would improve the lives of residents in North Northamptonshire. In seconding the amendments, Councillor Colquhoun paid particular attention to the proposal of a one-off grant of £250k to the Pen Green Integrated Centre, which was vital for the important and valued work of the Centre to continue serving local residents.

Following debate a vote was taken on the amendments. The amendments fell.

Those voting for the amendments: - Councillors Anslow, Armour, Best, Leanne Buckingham, Lyn Buckingham, Colquhoun, Dell, Hakewill, Keane, Lee, J McGhee, Z McGhee, Pengelly, Tubbs, Tye, Watts.

Those voting against the amendments: - Councillors Allebone, Binley, Bone, D Brackenbury, W Brackenbury, C Brown, S Brown, Bunday, Carr, Carter, Dearing, Edwards, Hallam, H Harrison, Howell, Howes, Irwin, Jackson, Lawal, G Lawman, L Lawman, Levell, Marks, Maxwell, A Mercer, G Mercer, Nichol, Pandey, Partridge-Underwood, Powell, Rowley, Shacklock, Smithers, Smith-Haynes, Tebbutt, Ward, Weatherill, Wilkes.

Those abstaining: - Councillors Addison, Bell, Harrington, Henson.

(There was a 10-minute adjournment in the meeting. Councillor Anslow left the meeting at this point.)

Councillor Hakewill on behalf of the Green Alliance Group provided a response to the budget proposals within the report.

Following debate of the substantive motion, a recorded vote was taken as required by statute.

RESOLVED that: -

a)       the 2023-24 revenue budget as set out in the report be approved, which included and set:

                                                           

i.         a budget requirement of £691.553m including Dedicated Schools Grant of £354.963m resulting in a net revenue budget requirement of £336.590m as set out in Appendix A.

 

ii.        a total Council Tax requirement for the Council’s own purposes of £189.419m as contained in paragraph 5.27.

 

iii.       An average Band D Council Tax of £1,657.51 for North Northamptonshire Council, representing a 2.99% increase in the ‘core’ Council Tax and a further 2% for the Adult Social Care Precept, as set out in paragraph 5.31, noting the separate Council Tax Resolution Report attached at Appendix K.

 

iv.      the detailed proposals of savings, pressures and income generation for 2023-24 as set out within the report and Appendix B.

 

v.        the provisional dedicated schools grant budget of £354.963m for 2023-24, 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 – 5.65 and section 9 and the reserves strategy as set out in Appendix D

 

vii.     the corporate budget requirements as set out in paragraph 8.1, including a contingency sum of £3.746m as set out in paragraph 8.2.

 

viii.   the Treasury Management Strategy for 2023-24 as set out in Appendix H, including the Authorised Borrowing Limit of £798.12m with a further update to the Strategy to 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.

 

b)       delegated authority be granted to the Executive Member for Finance and Transformation in consultation with the Executive Director of Finance and Performance (Section 151 Officer) to agree any necessary variations to the budget prior to 1st April 2023.

 

c)       delegated authority be granted to the Executive Member for Finance and Transformation in consultation with the Executive Director of Finance and Performance (Section 151 Officer) to agree the use of the following reserves which will provide the flexibility to manage the overall budget during 2023-24.

 

·        Social Care Reserve

·        Transformation Reserve

·        Public Health Reserve

·        Waste Management Reserve

·        General Risk Reserve

 

d)       the forecast financial position for 2024-25 and 2025-26 be noted and that this would be reviewed as further information became available and updated as part of the budget process for 2024-25 onwards;

 

e)       that the financial position had been based on the Final Local Government Finance Settlement announced on 6th February 2023;

 

f)        the consultation feedback as summarised in the report be noted as attached at Appendix E;

 

g)       the Equality Impact Screening Assessment as at Appendix F be noted as having been taken into consideration;

 

h)       the outcome from the Finance and Resources Scrutiny Committee, as detailed at Appendix G and the representations to Executive be noted;

 

i)         the Flexible Use of Capital Receipts strategy as set out in Appendix J be approved.

 

j)         the Section 25 Report of the Executive Director of Finance and Performance (Section 151 Officer) as set out in Section 15 be noted, including the Executive Director’s review of the robustness of the estimates and the adequacy of the reserves;

 

k)       delegated authority be granted to the Executive Member for Children, Education and Skills and the Executive Member for Finance and Transformation in consultation with the Executive Director of Children’s Services and the Executive Director of Finance and Performance (Section 151 Officer) to approve North Northamptonshire’s Schools Funding;

 

l)         the transfer of £3.879m from reserves be noted, relating to a timing issue in respect of Business Rates Reliefs. This was a timing issue which recognised that these reliefs were awarded and accounted for in the General Fund in 2022-23 but the reduced yield in Business Rates was not reflected in the Collection Fund until 2023-24;

 

Council further RESOLVED that: -

 

j)       the legal background to setting the budget and Council Tax as set out in Appendix I be noted.

 

k)     the Council Tax Resolution attached as Appendix K to the report, which was based on the budget proposals be approved, and which:

 

•        Calculated the Council tax requirement in accordance with Section 31A of the Local Government Finance Act 1992 as amended by the Localism Act 2011.

 

•        Calculated a basic amount of Council Tax and an amount of tax for each valuation band (the Council element) in accordance with Sections 31B and 36 of the Local Government Finance Act, 1992, as amended.

 

•        Set an amount of Council Tax for each category of dwellings in each valuation band in accordance with Section 30 of the Local Government Finance Act, 1992.

 

Those voting in favour of the recommendations – Councillors Allebone, Bell, Binley, Bone, D Brackenbury, W Brackenbury, C Brown, S Brown, Bunday, Carr, Carter, Dearing, Edwards, Hallam, Harrington, H Harrison, Howell, Howes, Irwin, Jenney, Lawal, G Lawman, L Lawman, Levell, Marks, Maxwell, A Mercer, G Mercer, Nichol, Pandey, Partridge-Underwood, Pentland, Powell, Rowley, Shacklock, Smithers, Smith-Haynes, Tebbutt, Ward, Weatherill, Wilkes.

Those voting against the recommendations – Addison, Armour, Best, Leanne Buckingham, Lyn Buckingham, Colquhoun, Keane, Lee, J McGhee, Z McGhee, Pengelly, Watts.

Those abstaining – Dell, Henson, Tubbs.

(There was a 45-minute adjournment in the meeting. Councillors Nichol, Lawal, Harrington, Bell & Pengelly left the meeting at this point.)