Agenda item

(Report by the Deputy Chief Executive Corporate Development and s151 Officer)

Councillor Jonathan Noble, Portfolio Holder for Finance, introduced a report by the Deputy Chief Executive (Corporate Development) and S151 Officer, setting out the Council’s proposed Revenue and Capital Budgets for 2022/23 and onwards, the Medium Term Financial Strategy (MTFS) to 2026/27 and associated financial documentation for approval, including the Treasury Management Strategy and the setting of fees and charges.

The report stated that the draft Local Government Settlement announced on 16 December 2021 had been finalised and provided additional detail of continuing and additional one off support to councils, including confirmation of allocations of Revenue Support Grant, Rural Services Delivery Grant and New Homes Bonus (NHB).

An additional one year allocation of New homes Bonus would be received for 2022/23 due to delays in implementing a replacement scheme, however this was likely to be for one year only with no further legacy payments expected in future years.  Some NHB (£414,000) was supporting the base in 2022/23 and plans would need to be taken forward to address the situation for future years, depending on what future schemes emerged.

A Fair Funding Review had been expected to set new baseline funding allocations for all local authorities, to simplify the existing system and to provide an up to date assessment of authorities relative needs and resources.  Early consultation had been undertaken by the Department for Levelling Up, Housing and Communities, but there was insufficient information to date for informed estimates to be made.  It was likely that any changes would be transitioned to mitigate the immediate impact on authorities (positive or negative).  The proposed budget assumed no financial changes from the review and when details became available Members would be updated.

As part of its response to Government in response to the settlement, the Council had made further representations regarding the Drainage Board Levy.  In particular its impact on the Councils ability to make use of the Council Tax that it raised through housing number increases and annual Council Tax rises to support services, rather than offset the annual levy charge increase.

The key elements of the final 2022/23 Budget and MTFS were summarised in the report and set out in detail in the appendices attached to the report.

• The 2022/23 revenue and capital estimates for the General Fund (Appendix A)
• The Medium Term Financial Strategy for the General Fund (Appendix A)
• A scheduled of movements in Council reserves (Appendix 5)
• General Fund Capital Programme (Appendix A)
• Treasury Management Strategy (Appendix 6)
• Proposed Fees and Charges for 2022/23 (Appendix 4)
• Treasury Management Strategy, MRP Policy and Annual Investment Plan 2022/23 (Appendix 6)
• The South and East Lincolnshire Councils Partnership Annual Delivery Plan 2022/23 (Appendix 7)

Key assumptions made within the current 5 year MTFS included:-

• An annual increase in Council Tax of £4.95;
• Maximising income generation through investment and growth and looking at new opportunities into the medium term;
• Allowance for unavoidable growth on services (i.e. new statutory obligations and pay and contractual inflation) but no allowance for any increase in general inflation;
• Ongoing budget challenge to ensure that budgets were aligned with corporate priorities;
• An annual delivery plan as part of the new South and East Lincolnshire Councils Partnership to look at areas for future sharing and efficiency.

The budget showed an efficiency target requirement for 2022/23 of £282,000.  Future years figures were highly volatile due to the level of uncertainty around future funding arrangements.  During the development of the budget numerous savings and income generating opportunities had and were being explored in order to address the savings requirement.  Many of the opportunities would be related to the South and East Lincolnshire Councils Partnership through partnership working and maximising the opportunities these arrangements presented.

The General Fund Specific Reserves were budgeted to reduce by £5.167m (net) in 2022/23, predominantly to fund the NNDR deficit through carried forward s31 grant.  The figure could change as a result of the outturn for 2021/22.

The five year General Fund Capital Programme focused on the core principles of capital investment and included provision for investment and growth linked to the Council’s strategic objectives.  Final decisions on the individual projects would be subject to approval and detailed business cases.   The main schemes included in the 2022/23 General Fund Programme related to Towns Fund Projects, capitalised enhancements and disabled facilities grants.

The Treasury Management Strategy had been presented to the Audit and Governance Committee on 7 February 2022. Corporate and Community Committee had considered the draft budget on 17 February and it had been referred to Council by Cabinet on 23 February 2022 with a recommendation for approval.

The proposed budget had been subject to a public consultation process, and the responses received were set out at Appendix 8.  Only 16 responses had been received and of those 86% were opposed to any increase in the council tax levels.

During debate the following comments were made:-

• The on-going conflict between Russia and the Ukraine would potentially impact on the Council’s energy bills;
• The Council should not operate as a business and not make profits from residents, its purpose was to serve the community;
• Revised fees and charges for burials and the crematorium were welcomed, but concern that some fees were listed as price on application, Members would not know what they were voting for;
• The price on application related to bespoke weddings at the Guildhall, the cost would be dependant on the services requested;
• Annual large deficits requiring efficiencies to be made could not be sustained year on year without being detrimental to the delivery of services;
• The proposed budget was balanced and continued to offer value for money in difficult circumstances;

It was noted that as a result of lobbying Government had agreed for the Internal Drainage Boards to continue to use red diesel.  However the agreement had been received too late to be taken into account for the IDB levies for 2022/23 and would be reflected in future years.

In summing up the Portfolio Holder thanked the s151 Officer and Finance Team for their hard work in preparing a balanced and prudent budget.

It was moved by Councillor Jonathan Noble, seconded by Councillor Paul Skinner and

In accordance with Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014 the vote was taken as a recorded vote:

For                                                      Against                                  Abstain

            Cllr Tracey Abbott                            Cllr Paul Goodale

            Cllr Tom Ashton                               Cllr Neill Hastie

            Cllr Alison Austin                             Cllr Martin Howard

            Cllr Richard Austin                          Cllr Brian Rush

            Cllr David Brown                              Cllr Judy Welbourn

            Cllr Katie Chalmers

            Cllr Michael Cooper

            Cllr Anton Dani

            Cllr Anne Dorrian

            Cllr Deborah Evans

            Cllr Martin Griggs

            Cllr Jonathan Noble

            Cllr Frank Pickett

            Cllr Judith Skinner

            Cllr Paul Skinner

            Cllr Aaron Spencer

            Cllr Yvonne Stevens

            Cllr Peter Watson

            Cllr Nigel Welton

            Cllr Stephen Woodliffe