Agenda item

Cabinet Portfolio:               Corporate Services and Finance

Strategic Directorate:         Finance and Customer Services

Consideration was given to a report that was submitted for pre-decision scrutiny ahead of the Cabinet meeting scheduled for 17 February 2020 in respect of the Budget and Council Tax 2020-21 and Medium-Term Financial Strategy.

The report provided information on the Council’s Budget and Council Tax for 2020/21 based on the Council’s Provisional Local Government Finance Settlement for 2020/21, budget consultation and the consideration of Directorate budget proposals through the Council’s formal Budget process, alongside a review of the financial planning assumptions contained within the Council’s Medium Term Financial Strategy. 

In setting the proposed 2020/21 budget, increases of 0.99% in the Council’s basic Council Tax and of 2.0% in the Adult Social Care precept were being recommended. The revenue budget for 2020/21 was the second year of a two-year budget for 2019/20 and 2020/21 that had been approved by Council on 27 February 2019. It was noted that since the introduction of austerity measures in 2010, the Council had made savings in excess of £200 million in response to the significant reductions in Central Government funding, and that this figure included savings of £16 million that would need to be delivered during 2020/21.

The Leader of the Council and the Strategic Director, Finance and Customer Services attended the meeting to respond to specific queries from Members in respect of report.

The Leader advised that while the setting of a two year budget had been effective in addressing some of the difficulties that Government austerity measures had created for the Council and had ensured that no further job losses or service reductions were required in 2020/21, there still remained much financial uncertainty for the Council that made budget planning for future years very difficult. The Leader noted that the continuing uncertainty around changes to Business Rates retention was a particular area of difficulty for future years. In view of this continued uncertainty the Leader noted the importance of the Council being able to increase its level of reserves in 2020/21 to help mitigate against the risk of future financial uncertainties

Members sought clarification that increases to the Real Living Wage had been incorporated into the budget with regard to independent sector home care service provision contracts. The Strategic Director, Finance and Customer Services confirmed that this assumption had been included. The Leader noted that the budget for 2020/21 enabled the Council to pay the Real Living Wage to all homecare staff who were employed both directly and indirectly by the Council, contributing to the  delivery of the Council’s  Social Value Policy.

Members asked several specific questions on the financial planning activities around the delivery of both Adult Services and Children’s and Young People’s Services and welcomed the greatly improved situation of the position of the Adult Services budget compared to previous years. The Leader advised that detailed service planning around anticipated service demand had enabled the effective budget management for Adult Services. The Leader noted that even with the most effective planning and budgetary control there would always be more uncertainty with regard to the Children and Young People’s budget due to the variability of service demand and the associated costs of delivery.

The Chair sought confirmation that the savings identified in the 2019/20 budget for delivery during 2020/21 would be delivered during the upcoming financial year. The Strategic Director, Finance and Customer Services confirmed that all of the required actions required to deliver the identified savings had been put in place and were being actively monitored. The Chair asked for further information on the Council’s Capital Programme and its delivery with regard to investment in Rotherham town centre and the development of town centre housing. The Leader provided further information about the delivery and funding of the Capital Programme, noting the bid that had been made to the Future High Street’s fund to support town centre improvements. Members expressed their support for the Capital Programme activities and welcomed the commitment to the delivery of mixed housing in the town centre.

The Chair asked that as the savings that had been identified for delivery during 2019/20 in the Regeneration and Environment Budget had not yet been delivered what action was being taken to ensure that they would be delivered during 2020/21. The Leader noted that the delivery of the savings identified in the Streetpride budget had been very challenging to deliver due to the demands for the service and the very complex back office and IT processes involved, but advised that he was confident that the actions taken, including the installation of new IT systems in the last year would deliver the required savings during 2020/21.

The Board sought assurances that all reasonable measures had been taken in the preparation of the budget, and that the budget took account of the risks and considerable financial uncertainty facing the Council in future years. The Strategic Director, Finance and Customer Services advised that while she could give full assurance on the budget preparation process and could confirm that contingency measures had been built in to the budget to deal with financial uncertainties, it was never possible to anticipate all possible scenarios and remove risk entirely from the budget.  The Strategic Director, Finance and Customer Services noted that the provision in the budget of increasing the Council’s General Fund Minimum Balance to £25 million was a prudent action that would reduce financial risk to the Council in future years.

The Board expressed their disappointment in the processes of Government in the setting of funding levels for local government and the difficulties and uncertainties that they created for local authorities trying to deliver essential and complex services to residents. Members asked if departments worked together across the Council in sharing best practice in managing budgets and on ways of delivering savings. The Leader advised the “One Council” approach was used and had proved to be very effective in sharing best practice and had been a major improvement to how departments had often operated in isolation in the past. 

The Chair thanked the Leader and the Strategic Director, Finance and Customer Services for attending the meeting and answering members questions.

Resolved: -

1.    That the Cabinet be advised that the recommendations to Council be supported.

2.    That further reports be brought to the Overview and Scrutiny Management Board for its consideration on the potential impact of any significant changes to government funding streams received by the Council, at a time if and when such changes occur.