To considered a presentation from the Strategic Director of Customer Services and Finance.
Minutes:
The Vice-Chair introduced the Strategic Director for Finance and Customer Services and Head of Finance to the meeting. The Chair had requested them to give a technical update in advance of the Committee’s consideration of the 2023/24 Council Tax and Budget proposals. A copy of the presentation had been circulated to Board Members.
The Strategic Director outlined that she had previously reported to Cabinet in November on planning assumptions and the impact that inflationary pressures, rising energy costs, the pay award and market volatility had had on the Council’s medium term financial planning. An £18m overspend was forecast at that point. Prior to this, it was assumed that the previously approved budget savings remained deliverable within the agreed profile. It was noted that through temporary savings and other measures, the forecast overspend had been reduced to £9.5m. Any overspend at year end would be funded from reserves. It was noted that most Councils were facing similar pressures.
In respect of the Government’s Autumn Statement, it was noted that the adult social care grant had increased. Funding earmarked for adult social care reform would be retained and made available for wider social care inflation and demand pressures. The council was also allowed to retain the estimated £3m Fair Cost of Care grant. The statement gave capacity to uplift Council Tax to 2.99% and the Adult Social Care Precept to 2%, creating a maximum increase of 5% for 2023/24 and 2024/25. The Household Support Fund would continue for a further year which would result in £4.9m for the Council.
Following the Provisional Financial Settlement, revisions had been made to the MTFS. The key headlines from the settlement were the New Homes Bonus had been extended for a further year, the Adult Care Grant was higher than anticipated and there had been an inflation increase in the Revenue Support Grant. Additional funding was also provided to adult services to support pressures within domiciliary care.
In order to balance remaining gap, the Council needed to consider savings, fees and charges, council tax and reserves. It was noted that there was a shortfall over the next three years between the Council’s expenditure and income. This equated to £6m shortfall each year
The Vice-Chair invited questions from the Board and a discussion on the following issues ensued.
Clarification was sought on the increased fees and charges if these were in line with the rate of inflation. It was outlined that this would be in the region of 10%. It was noted that the pay award had been determined nationally.
In preparing the MTFS, all assumptions were checked to ensure that they were reasonable. Adjustments would be made depending on circumstances. The current pressures could not be anticipated.
Clarification was sought about the nature of temporary savings and if any of these could be longer term. In response it was outlined that all options were being considered. An example was given that temporary savings may be made through delays to recruitment and on review a decision may be taken to delete the post, achieving longer term savings.
Details were sought on the level of Council Tax rise required to meet the budget gap. Each percentage rise to the base accrued approximately £1m and therefore, to balance the £6m gap through increases to Council Tax, it would require an 8% increase per year over the next three years. This level of increase would require a referendum.
Clarification was sought if consideration had been given to capital projects that could give revenue savings or asset sales to raise funding. The Strategic Director outlined that such actions were longer term and savings for 2023/24 would not be realised within those timeframes. Assurance was given that invest to save schemes were delivered as quickly as possible and were under constant review.
The current assumption was that £9.5m would be required from reserves to balance the budget. However, it was anticipated that this would reduce further as the temporary savings were realised.
The Vice-Chair thanked Officers for their presentation.
Resolved:
That the presentation be noted.