Agenda item

Noted:

(a)  The budget gap and the actions being taken to bridge it for 2021/22 – 2023/24. Note that the Housing Revenue Account, Dedicated Schools Grant, Capital Programme and the Flexible Capital Receipts Strategy to deliver future transformation and savings will be included in the February 2021 Budget and MTFS Report.

(b)  The need toseta balancedbudget, each year, acrossthewholeoftheMTFS period

Approved to include in budget Cabinet would recommend to Council:

(c)  The Council would apply for a capitalisation directive to enable it to balance the 2021/22 and 2022/23 budgets, allowing time to identify further savings whilst tackling the impact of COVID-19.

(d)  The Council repay its minimum revenue provision by using further capital receipts in 2021/22 and 2022/23; and creates full provision for these costs in the revenue budget by 2023/24.

(e)  The Council increase:

  i.  its general band D Council Tax by 1.99% the maximum permitted without a referendum as previously planned; and

  ii.  its Adult Social Care Precept by 3.00% as assumed by Government in the recently announced spending review to cover the rise in demand and more complex needs arising from the pandemic including a growth in mental health issues.

(f)  The proposed service savings and efficiencies of £12.392m for 2021/22 to 2023/24, of which £9.067m relates to 2021/22 as set out in Appendix C be submitted to Full Council in February for approval.

The Executive Director of Corporate Operations introduced a report that set out an interim position of the Council’s Medium Term Financial Strategy and associated spending plans for the three years to 2023/24. 

The report was focused on the revenue budget for 2021/22 and it was noted that Covid-19 had had a significant negative impact on the Council’s financial plans for next year.  All local authorities were facing financial challenges arising from the pandemic and the Council was continuing to manage the in-year pressures, however, the medium term implications were substantial.  These included reductions in Council Tax and Business Rates revenues, which accounted for approximately 80% of the Council’s income; rising costs; demand pressures on Council services; impacts on savings targets; and reduced income from fees and charges and commercial revenues.  It was noted that the Local Government Finance Settlement was due to published in mid-December.

The Cabinet noted that the current budget gap for 2021/22 was currently £8.6m, which included a one off pressure of £5.4m arising from a one off backdated payment for a business rate revaluation.  The main assumptions underpinning the budget were reviewed as set out in paragraph 8.1 of the report.  A package of savings totalling £12.4m over the period of the MTFS, £9m of which were in 2021/22 was set out in the appendix to the report.  Further work was taking place to identify and refine savings proposals.  An overall Council Tax increase of 4.99% was assumed, which included a 3% adult social care precept, subject to Council approval in February.

As with many local authorities the Council had held some informal discussions with the Ministry of Housing, Communities and Local Government to seek permission for a Capitalisation Directive to help balance the budget.  The Cabinet agreed that this option should be progressed, noting that only the Secretary of State could permit such action.

The Cabinet recognised that Covid-19 had had major impacts on the Council finances in the short and medium term and agreed the plan of work to enable a balanced budget to be set for 2021/22.  A wide range of actions had already taken place to reduce costs, identify savings and generate income from disposals.  At the conclusion of the discussion, the recommendations were agreed.

Resolved –

That the following matters be noted:

(a)  The budget gap and the actions being taken to bridge it for 2021/22 – 2023/24. Note that the Housing Revenue Account, Dedicated Schools Grant, Capital Programme and the Flexible Capital Receipts Strategy to deliver future transformation and savings will be included in the February 2021 Budget and MTFS Report.

(b)  The need toseta balancedbudget, each year, acrossthewholeoftheMTFS period

That it be agreed that:

(c)  The Council would apply for a capitalisation directive to enable it to balance the 2021/22 and 2022/23 budgets, allowing time to identify further savings whilst tackling the impact of COVID-19.

(d)  The Council repay its minimum revenue provision by using further capital receipts in 2021/22 and 2022/23; and creates full provision for these costs in the revenue budget by 2023/24.

(e)  The Council be recommended to increase:

  i.  its general band D Council Tax by 1.99% the maximum permitted without a referendum as previously planned; and

  ii.  its Adult Social Care Precept by 3.00% as assumed by Government in the recently announced spending review to cover the rise in demand and more complex needs arising from the pandemic including a growth in mental health issues.

(f)  The proposed service savings and efficiencies of £12.392m for 2021/22 to 2023/24, of which £9.067m relates to 2021/22 as set out in Appendix C to the report be submitted to Full Council in February for approval.