Agenda item

Budget and Council Tax 2021-22 and Medium-Term Financial Strategy Update

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 15 February 2021 in respect of the Budget and Council Tax 2020-21 and Medium-Term Financial Strategy. The Leader of the Council, the Chief Executive, the Strategic Director – Finance and Customer Services, the Assistant Director - Financial Services and the Head of Corporate Finance attended the meeting to present the report.


The Deputy Leader and Cabinet Member for Children and Young People’s Services, the Cabinet Member for Adult Social Care and Health, the Cabinet Member for Corporate Services and Finance, the Cabinet Member for Corporate Services for Cleaner, Greener Communities, the Cabinet Member for Housing, the Assistant Chief Executive, the Strategic Director - Children and Young People, and the Strategic Director - Regeneration and Environment were also in attendance at the meeting.


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 1.99% in the Council’s basic Council Tax and of 1.0% in the Adult Social Care precept were being recommended. The report also detailed the proposed revenue budget for 2021/22, an updated capital programme to 2023/24 and the updated Medium-Term Financial Strategy to 2022/23.


The report stated that the Council had faced considerable challenges during 2020/21 in its response to the global pandemic, with the impact of COVID-19 seeing a significant shift in how the Council had been able to function and provide services to residents. The impact of the COVID-19 emergency had seen significant financial pressures for the Council due to additional expenditure and lost income and the delayed delivery of planned savings and cost reductions. The report stated that whilst these financial pressures would largely be covered in year by financial support grants from Government, the long-term financial impact of COVID19 and financial support available to the Council remained uncertain.


The report stated that since the introduction of austerity measures in 2010, the Council had had to make savings in excess of £200million in response to the significant reductions in Central Government funding. The two-year budget for 2019/20 and 2020/21 that had been set at Council in February 2019 and reviewed during 2020/21 had required £34million of budget savings and cost reductions to be delivered to meet estimated funding gaps over the two years, including savings that had been agreed in previous years for delivery across this timescale. It was noted that over £16million of these savings and cost reductions would have been completed by the end of the current financial year, however £18million of agreed budget savings were still required to be delivered during 2021/22.


The Leader in introducing the report advised that while there would be no cuts to services during 2021/22 it would be essential that the £18million of identified savings were delivered in order to deliver a balanced budget. The Leader also noted the positive position of the Council’s reserves, including the budget contingency reserve that were in a more positive position than had been projected. The Leader advised that while ideally no rise in Council Tax would be needed that the proposed 2.99% increase in Council Tax, that was below the 5% referendum threshold, was possible due to strong financial management and the healthy level of reserves.


The Leader noted the significant financial challenges that the response to the pandemic had created for the Council, but advised that the greatest financial challenges were still to be realised as the full level of the economic impact of the pandemic was not yet fully apparent. The Leader noted areas of Council activity that would address the economic impact of the pandemic on the Borough in areas including employment, food poverty and digital exclusion.


The Chief Executive noted the extensive work that continued to be carried out to manage the ongoing challenges financial challenges of the pandemic in addition to the ongoing challenges of delivering already identified savings and the uncertainty of Government funding streams. The Chief Executive noted that the ongoing uncertainty around Government funding had informed the decision for the schemes that had been identified in the Capital Programme to be limited to activities that could be completed within 2021/22.


Members asked that with residents living longer, and often with ongoing health problems and disabilities, what plans the Council had to respond to the financial challenges that this created. The Cabinet Member for Adult Social Care and Health advised that planning activity surrounding the challenges of a growing older population was taking place in consultation with the Health and Wellbeing Board, and noted that the ultimate objective was to support as many residents to stay in their own homes for as long as possible. The Assistant Director - Strategic Commissioning who was in attendance at the meeting advised that some of the planned changes to how homecare was delivered had been impacted by the pandemic, with the more ambitious transformational activity being deferred to future years. The Strategic Director – Finance and Customer Services noted the Council’s proposed 2% Adult Social Care Precept on Council Tax for 2021/22 that would generate additional Council Tax income of £2.2m that would then be allocated to the 2021/22 Adult Social Care budget. 


Members welcomed the positive focus of the budget with its proposed investments in activities that supported young people and focused on increasing social value. Members asked how the spending plans that had been included in the budget would be communicated to residents in a way that ensured that it was clear that how the money was being spent was the choice of the Council, and not by direction from the Government. The Leader noted that communicating budget plans across the Borough was always challenging and advised that information on spending priorities and budget plans would, as always, be included with Council Tax bills. The Leader advised that the Communications team were working on alternative and innovative plans for the future on how the content of the budget could be communicated with residents.


Members asked what action was being taken to address the projected budget overspend in the Children and Young People’s Services Directorate. The Strategic Director - Children and Young People’s Services assured members that planned activity in the Directorate was taking place to reduce the overspend including increasing the number of in-house foster carers and focusing on how support for looked after children was stepped down safely. The Strategic Director advised that focussed activity that would enable the right support to be provided at the right time along with a reduction in the number of out of Borough placements for looked after children would help reduce costs.


The Leader noted the severe impact of the pandemic on the Children and Young People’s Services Directorate and how delays in the court system had meant that looked after children were remaining in the Council’s care for much longer than had been planned and budgeted for. The Leader advised that 97% of the Council’s overspend had come from the Children and Young People’s Services Directorate. The Deputy Leader and Cabinet Member for Children and Young People’s Services noted that the budget for 2020/21 had assumed a 20% reduction in the number of looked after children in the Council’s care which had then not been realised due to the unforeseen impact of the pandemic. The Strategic Director advised that the situation regarding delays in the hearing of delayed court cases was now improving.


Members noted with concern the low number of responses that had been received to the Council’s budget consultation with residents. The Leader advised that the late confirmation of the Local Government Finance Settlement had reduced the time available for the consultation and the fact that the consultation was online only due the impact  of the pandemic had limited the number of responses received. The Leader advised that consultations regarding specific services or projects tended to get a better response as residents found these consultations more relevant to them and their communities. The Chief Executive noted that as the budget for 2021/22 was in a large part a continuation of the current budget priorities there was nothing significantly new on the Council’s spending priorities that residents may have felt they needed to comment on.


Members asked whether that in retrospect the two-year budget for 2019/20 and 2020/21 had been a good decision. The Leader advised that having two-year budget had provided greater certainty and had also enabled better planning as many projects needed more that one year for their implementation. The Strategic Director – Finance and Corporate Services noted that longer term budget planning was always beneficial for forward planning and advised that in the current year with the demands of the pandemic, that the two-year budget had meant that it had not been necessary to start work on the delivery of newly identified savings which could have been problematic given the situation.


Members welcomed the planned investments and public realm spending in town and village across the Borough. The Cabinet Member  - Cleaner, Greener Communities noted the significant focus of spending in her area of responsibility on projects that would contribute to a safer and cleaner Borough and that would also address the issues raised by the Council’s Declaration of a Climate Emergency. The Cabinet Member reaffirmed the Council’s commitment to increased tree planting, and how the requirement to plant trees and improve the natural environment would be part of all new developments in the Borough.  Members reaffirmed their support for the Council’s commitment to tree planting but noted that it was essential that consideration was given to ensure that the trees that were planted were suitable for their proposed location.


The Chair asked the Leader how confident he was that the savings that were required to be delivered as part of the budget, including the savings that had not be delivered during 2020/2, would be delivered on time. The Leader noted that as all the easy to deliver savings had already been delivered, the savings that that were planned were larger and more complex transformational activities. The Leader advised that despite the challenges of delivering these complex projects, that were also not being made any easier by the demands of the pandemic, that he was confident that the required savings would be delivered on time.


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 Chair asked the Cabinet Member for Corporate Services and Finance on his level of confidence on the soundness of the Budget proposals. The Member for Corporate Services and Finance stated that he had full confidence in the proposed Budget for 2021/22.


The Chair thanked the Leader, the Cabinet Member for Corporate Services and Finance and the Strategic Director – Finance and Customer Services for attending the meeting and answering members’ questions. The Chair also thanked the other Cabinet Members, Strategic Directors and officers that had also attended the meeting to answer members’ questions.


Resolved: -


That Cabinet be advised that the recommendations be supported.

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