Agenda item

 

To agree the Budget and Council Tax level for the 2017-18 financial year.

Further to Minute No. 171 of the meeting of the Cabinet/Commissioners’ Decision Making Meeting held on 13^th February, 2017, consideration was given to the report which proposed the Council’s Budget and Council Tax for 2017/18 based on the outcome of the Council’s Final Local Government Financial Settlement, budget consultation and the consideration of Directorate budget proposals through the Council’s formal Budget and Scrutiny process (Overview and Scrutiny Management Board) alongside a review of the financial planning assumptions within the Medium Term Financial Strategy.

 

The Leader of the Council confirmed this was the third time that he had had to deliver the budget and the seventh year of Tory austerity and spoke about:-

 

·                1,700 jobs lost from Rotherham Council over that time period. Potentially another 1,000 to go over the coming three years as another £66 million budget gap was being faced.

 

·                The biggest changes to Local Government funding not just of our lifetimes, but of anyone’s lifetime.

 

·                The unprecedented situation of Central Government telling Councils that if they want to meet the growing need of elderly and vulnerable adults – as we do – then we must send the bill to Council tax payers.

 

·                Members having to reflect deeply on the needs of their community, on their priorities, in order to draw together the proposals.

 

·                The thousands of conversations with staff and residents over the last two years resulting in the new Council vision. It’s about our home, about our community, and what kind of place we want to live in.

 

·                Committing an additional £10 million towards improving child safeguarding to recruit more permanent children’s social workers, and better equip them for the challenges that they face, recruit more foster carers and support more families to keep children out of care.

 

·                Two years ago additional investment was given to survivors of Child Sexual Exploitation in Rotherham the support that they had long waited for. More than 400 survivors have accessed that support and it would continue.

 

·                The crisis in funding for Adult Social Care and the particular pressures that affect our service. Over the last ten years the adult population of Rotherham had grown by less than 2%, but the population aged over 65 had grown by 10%.

 

·                Through the Adult Social Care levy, investment would be made in meeting the needs of vulnerable young people who were becoming independent adults, and protect services that would otherwise have to be restricted.

 

·                Protecting street cleansing and grounds maintenance in villages and localities. The first £5 million capital investment in the 2020 Roads Programme had already seen an additional 150 roads across the borough resurfaced, and the Council was committed to delivering a further £10 million over the next three years.

 

·                Taking responsibility against the people who litter the environment and who should pay the cost of cleaning it up, with more fines and prosecutions with tougher enforcement.

 

·                Protecting the revenue funding for the economic development team, and standing behind capital investment commitments towards revitalising the town centre. Alongside the commitment to devolution, work will continue with neighbours to help to secure the next generation of jobs and employment.

 

·                In the last year, more than 4000 people relied on the Food for People in Crisis scheme.

 

·                Balancing this budget requires that the council continues to shrink and money would have to be saved on back office support services, on the estate of buildings, tough decisions around Public Health contracts, including ceasing Council funding for the Ministry of Food.

 

·                More revenue would be raised from some more commercial parts of the Council’s operations, like the Civic Theatre and Rother Valley Country Park.

 

·                The level of subsidy provided to school support services would shrink.

 

In setting the proposed 2017/18 Budget, Council were asked to approve an increase of 1.99% in the Council’s basic Council Tax and a further 3% increase for the Adult Social Care precept; a combined increase of 4.99% for 2017/18.

 

Although this report contained proposals to balance the revenue budget for 2017/18, further work needed to be undertaken to bring forward proposals for future years to enable the Council to establish a clear and sustainable financial plan which addresses the estimated £42m financial gap that remained over the next two years (2018 to 2020).

 

This Budget incorporated over £10m of additional investment in Children’s safeguarding and over £3m of additional direct investment in Adult Social Care alongside indirect budget increases resulting from increased costs of current service provision. It will enable the reinstatement of the Joseph Rowntree Foundation Living Wage rate from April 2017 for the Council’s own staff and will also provide £100k funding to help to partially mitigate the impact of Welfare Reform on the most vulnerable – through the provision of a budget for food parcels and crisis loans.

  

Whilst doing this, the Budget minimises, as much as possible, the adverse impact on universal services (those which benefit all Rotherham residents as opposed to targeted services for people with specific needs) and also provided some additional income streams related to leisure activities. The Budget would provide resources to support and enable the delivery of the specific savings included within this report and to assist with the development and delivery of the further £42m savings that are required over the next two financial years.  

 

This report also provided feedback from both public and partners in relation to the budget proposals that were published on the Council’s website for consultation until 3^rd January, 2017 (Section 5).

 

Councillor Jepson congratulated officers on the comprehensive documentation presented as part of this item, but could not support the budget proposal going forward due to the concerns and financial penalties for Town and Parish Councils throughout the borough. 

 

Councillor Carter described the Labour Party dominance in Rotherham and risk he believed they were taking in presenting this budget with the current low borrowing rates and prices increasing which, from experience, would lead to interest rates going up. 

 

He described the struggle from another decade of Conservative rule and the forecasts of Labour losing its stronghold.  Rotherham’s reputation had been damaged, people were struggling and he warned about financial mismanagement.  He believed the Labour Party were increasing debt by taking an extension out on Rotherham’s mortgage which would have to be paid back at some point.  The proposals were for a 5% rise in Council Tax under an administration who had not collected £8 million in Council Tax and Business Rates forcing working families to pay more whilst letting businesses off the hook.  He urged Members to reject the budget  and he himself would be voting against.

 

Councillor Beck referred to Appendix 3b of the Capital Programme for 2017/18 and the fund of £7.5 million, which was to replace Council houses lost through the Right to Buy Scheme which forecasted at 160 homes for this next year.

 

The Council in Rotherham was committed to delivering and creating a strong housing market that everyone could access and for those that could not access the housing market there were services here prepared to support them.  Every effort was being made to create more housing for people in the social housing sector where they needed it most and on this basis he was fully in support of the budget.

 

Councillor Steele described the cuts enforced on this Council by the initial Coalition Government and the now Conservative Government.  Rotherham was having to manage on less money, but would continue to protect the most vulnerable, protect the elderly and protect the young.

 

He expressed his surprise at the comments made by Councillor Carter at his first Council meeting  and would have liked to have seen his alternative budget had he submitted one.  Whilst the whole Budget had been scrutinised and agreed there were still some concerns, but this would be supported and monitored over the next twelve months.

 

Councillor Cooksey referred to the austerity programme which illustrated vast power differentials between local and national Government, the burden transfer of responsibility onto Councils, the biggest squeeze on spending by local authorities by 37% which would fall further and how poorer the area the greater its needs and reliance on government grants which saw Rotherham within the 20% of the most deprived areas suffering with things such as child poverty and lower life expectancy.  Austerity was not a political choice and not a necessity.  The Tory Government must be held responsible for the cuts.

 

Councillor Ellis echoed the views of her colleagues about why the Council was having to make cuts in services.  She expressed her sadness on International Women’s Day that the average Rotherham woman suffered in poor health for twenty-two years and the average man for twenty-one years with the expectation on Local Government to do their best. 

 

This was an abdication of responsibility and a disgrace and also an abdication of UKIP’s responsibility for not putting forward an alternative budget.  It was a disappointment that last year the then Leader indicated the party had no business acumen and felt they could not present an alternative budget, which could be the same view as their present leader.  More was needed from this present Government and more from the UKIP party, the main opposition.

 

Councillor B. Cutts described the current situation in the present Council as wanting more, more and more and drew attention to the position with children’s homes, the current economics and the need to keep eyes open and look deeper.  He would be objecting to the proposals.

 

Councillor Short responded on behalf of the UKIP Party who made a conscious decision not to submit an alternative budget, for one it would have been voted against, but secondly Members of UKIP had participated fully in the budget and the detailed savings proposals.  He described the contribution to the preparation of the budget, which had little room for alternatives and the difficulty facing the authority through the use of reserves.  Any figures quoted by the UKIP Party had been authenticated by officers.  He referred to poor financial practices in the past and how this situation would no longer be allowed or accepted.

 

Overspends in Children and Young People’s Services were well documented and he wished to comment on the financial position and going forward to what extent could the Council be confident to deliver in 2017/18 with no overspend, to what extent would the Council be able to deliver savings for 2018/19, the extent to identify and deliver sustainably the new savings gap of £40 m for the next two years.  The proposed requirement of £3m per annum to replenish the reserves was quoted and he questioned the strategy to use reserves earlier and replenish later, whether it would be possible to replenish at a later date and what would be the position if not possible. 

 

Questions had been raised with managers about the savings proposals and the confidence of delivery.  This would very much depend on Cabinet Members holding officers to account and the need for remedial matters to bring budgets back into control. 

 

Questions again were asked if the Council had sufficient reserves for unseen eventualities given the high reductions and whether it was safe to go below the level recommended.

 

In summary, Scrutiny had requested monthly budget monitoring reports and it was suggested that should there be an overspend officers come prepared with remedial action to what action was required to get budget under control. 

 

The Budget proposals would be supported as it was recognised the Council had to allocate resources accordingly without putting itself in too much debt.

 

Councillor Roche endorsed the comments by the Leader about Adult Social Care and protecting the most vulnerable people in our town.  Cuts were now impacting on front line services since all back office efficiencies had been realised.  It was difficult to make comparisons with what other authorities were doing.  Members were not happy having to make cuts, but there was simply nowhere else to go.

 

Councillor Sheppard indicated this was the seventh straight year of cuts, the cause of the cuts and how austerity decisions were not necessary, but political.  Here in Rotherham difficult choices had to be made with the budget and how those most vulnerable could be protected.

 

Councillor Watson echoed Councillor Sheppard and Councillor Cooksey’s comments and the political choice of austerity and the choices that had led to the preparation of the Budget today.

 

Cabinet Members had been questioned and scrutinised, but a sensible conclusion had now been reached with sound financial management which he had been party to, which included sensible decisions for Children and Young People’s Services.

 

Councillor Sansome also passed comments on the practices of the coalition and current Government.

 

This Budget was not one anyone wanted to vote for as it was driven by the Government cuts and not by aspirations.  However, as part of the Budget process financial reports had been requested on a monthly basis and had involved the Strategic Director for Finance attending to explain how she was keeping control of the spend.

 

Councillor Hoddinott responsible for Waste, Roads and Community Safety outlined the challenges facing services which had had to adapt to the cuts to the budget.

 

This year would see the continuation of the 2020 Roads Programme with an extra £10m funding to the resurfacing of the roads, which Members had fed into.  In other areas close working would continue with businesses and residents in keeping areas looking smart through sponsorship and volunteering opportunities.

 

The point by Councillor Jepson was noted.  There were huge opportunities to work together.  These were no easy times, but this Budget protected services that mattered to residents, delivering services what Councillors were elected to do and most importantly provided for investment into Children’s Services.  Councillor Hoddinott was proud to vote for the Budget.

 

In response Councillor Read advised Councillor Jepson that the Parish Council grant given by Government had been folded into the Revenue Support Grant and whilst he could understand his and Parish Council concerns, it was not there any longer.

 

He welcomed Councillor Short’s contribution and explained the savings were there to be delivered with no place to hide.

 

Councillor Read advised Members that the demand pressures on social care were causing difficulties, but the Council would face the difficulties over the course of the next few years.

 

Was this Budget sustainable, it was not known as the Council had never been in this position.  However, comparatively Rotherham was in a good position and a long way from failing to discharge statutory responsibilities, but it was uncertain if this continuation of savings could be delivered.

 

Drawing attention to the reserves the proposals would allow for half of additional investment smooth over medium term, whilst minimising the impact on other services.  It was right and proper that Members held officers to account.

 

Austerity was a political choice, endorsed by coalition and this Government and comments about taking risks from the budget and borrowing and Council Tax collection rates (which were in the top 1% in the country) were unfair criticism.  The Council was in the right place for paying the cost of borrowing to assist with the capital programme and budget investments. 

 

Resolved:-  (1)  That the Budget and Financial Strategy for 2017/18, as set out in the report and appendices, including the need to deliver £24m of budget savings and a basic Council Tax increase of 1.99%, be approved.

 

(2)   That the Government’s proposals for the maximum Adult Social Care precept of 3% on Council Tax for 2017/18 to fund additional costs and investment in Adult Social Care Services be approved.

 

(3)  That the precept figures from South Yorkshire Police Authority, South Yorkshire Fire and Rescue Authority and the various Parish Councils within the Borough to be incorporated into Council Tax bills as set out in the Statutory Resolution in Appendix 6  be noted.

 

(4)  That that an updated Medium Term Financial Strategy (MTFS) be brought back to Cabinet in 2017/18 after the accounts for 2016/17 have been closed. 

 

(5)  That the proposed use of reserves as set out in Section 3.5 be approved.

 

(6)  That the comments and advice of the Strategic Director of Finance and Customer Services (Section 151 Officer), provided in compliance with Section 25 of the Local Government Act 2003, as to the robustness of the estimates included in the Budget and the adequacy of reserves for which the Budget provides (Section 3.9) be noted and supported.

 

(7)  That the consultation feedback from the public and partners following publication of Directorate budget savings proposals on the Council’s website for public comment from 1st December 2016 to 3rd January 2017 (Section 5) be noted.

 

(8)  That the use of in-year Capital Receipts to maximise capitalisation opportunities arising from service reconfiguration to deliver efficiencies and improved outcomes for clients and residents, and thereby minimise the impact of costs on the revenue budget as included in the Flexible use of Capital Receipts Strategy 2017/18 (Appendix 5) be approved.

 

(9)  That the proposed Capital Strategy as presented in Section 3.7 and Appendix 3A and 3B, to a value of £280.240m be approved.  This required prudential borrowing of £49.636m to fund non-HRA schemes over the five year period, for which provision has been made in the revenue budget for the associated financing costs. 

 

(10)  That the Capital Strategy budget be approved and managed in line with the following key principles:-

 

    i.       Any underspends on the existing approved Capital Programme in respect of 2016/17 be rolled forward into future years, subject to an individual review of each carry forward by the Strategic Capital Investment Group.

 

   ii.       In line with Financial Regulation 13.8, any successful grant applications in respect of capital projects will be added to the Council’s approved Capital Programme.  This will include projects that are included within the Development Pool, where funding has yet to be identified.  

 

 iii.       Capitalisation opportunities and capital receipts flexibilities will be maximised, with capital receipts earmarked to minimise revenue costs.

 

(11)  That the prudential indicators and limits for 2017/18 to 2019/20 contained in this report. (Appendix 4 – Section 3.1 – 3.4) be approved.

 

(12)  That the Minimum Revenue Provision Policy Statement which sets out the Council’s policy (Appendix 4 – Annex A) be approved.

 

(13)  That the Treasury Management Strategy for 2017/18 to 2019/20 and the Authorised Limit Prudential Indicator (Appendix 4 – Section 3.5) be approved.

 

(14)  That the Investment Strategy for 2017/18 to 2019/20 (Appendix 4 – Section 3.5.5) be approved.

 

Mover:-  Councillor Read, Leader             Seconder:-  Councillor Alam

 

(The Mayor (Councillor Lyndsay Pitchley); Councillors Alam, Albiston, Allen, Andrews, Beaumont, Beck, Bird, Brookes, Clark, Cooksey, Cusworth, J. Elliot, M. Elliott, R. Elliott, Ellis, Fenwick-Green, Hoddinott, Ireland, Jarvis, Jones, Keenan, Khan, Lelliott, McNeely, Mallinder, Marles, Marriott, Napper, Read, Reeder, Roche, Rushforth, Russell, Sansome, Senior, Sheppard, Short, Steele, Taylor, Julie Turner, Tweed, Vjestica, Walsh, Watson, Williams, Wilson, Whysall, Wyatt and Yasseen voted in favour of the proposals)

 

(Councillors Carter, B. Cutts and Jepson voted against the proposals)