Agenda item

Draft Revenue budget and Capital Programme

Decision:

Cabinet received a report setting out the draft revenue budget for the financial year 2023/24. The decision had been taken to prepare a one-year budget due to the extremely high levels of volatility in the economic environment and the uncertainties surrounding future Local Government funding. The report also detailed a capital programme over 4 years as many schemes span across multiple financial years. The Council currently had borrowing headroom of £100m. Where schemes were brought forward with a financially viable business case these schemes could be added to the Capital Programmes subject to Cabinet approval.

Local Government funding remained very uncertain in the medium term due to proposed changes to the Local Government funding regime, potential reviews of Business Rates and Council Tax, and the implementation of key Government policies regarding Adult Social Care reform and the ‘Levelling Up’ agenda. The Autumn Statement had laid out the Government’s funding totals and priorities for the period 2023/24 to 2027/28. Actual allocations to individual authorities had been confirmed through the Provisional Local Government Settlement on 19 December and only provide certainty for 2023/24. These are broadly in line with the draft budget and any implications would be considered in the new year / final budget.

Changes to the revenue budget were largely focussed on changes in costs as a result of the significant increase in inflation, service demand and income (both service and corporate), and the recognition of the ongoing risks relating to global economic conditions and the wider Local Government funding regime.

The draft budget proposed was built on the proposed Council Tax base and assumes a 2.99% increase in basic Council Tax and a 2% increase for the Adult Social Care Precept, giving a total increase of 4.99%. This was the maximum allowable without triggering a local referendum and is still significantly below the rate of inflation at 11.1% at the end of October.

The Council Tax Resolution report would be presented as a separate report as part of the final budget in February 2023 and would contain the final information from the other precepting authorities leading to the total Council Tax for the area, which full Council was required to approve. The Cabinet report did not include special expenses. Discussions were ongoing to agree special expenses budgets for 2023/24, and these would also be presented alongside the final budget. The level of precept charged in Special Expenses areas formed part of the Council tax referendum threshold calculation, so final Council Tax levels could not be finalised until this matter was agreed.

The Leader suggested an amendment to Appendix 2 (Transport Portfolio Capital Programme section) to include in 2026/27:-

£4.425m on Plane and Patch
£2.15m on Footway Structural Repairs.

In total, this provided an additional £6.575m on roads and pavements in 2026/27. This was agreed by Cabinet Members, as there was a political commitment to continue to improve roads in the County. On a vote being taken it was agreed unanimously and

RECOMMENDED to Full Council :-

(1) That the outcome of the budget consultation (Appendix 4) be noted.

(2) That the current risks associated with the draft budget proposals be noted.

(3) That the draft revenue budget and capital programme for 2023/24 (Appendices 1-3) be approved, subject to an amendment to Appendix 2 ( Transport Portfolio Capital Programme) to include in 2026/27: £4.425m on Plane and Patch and £2.15m on Footway Structural Repairs (page 93 of the agenda) which will provide an additional £6.575m on roads and pavements in 2026/27 to be funded either from Corporate resources or the Government’s pothole funding (if announced).

(4) That the proposal to seek delegation from Council to Cabinet for up to £100m of new capital schemes to be added to the capital programme, through Prudential Borrowing, and where robust financial business cases have been made, be supported.

(5) That the Schedule of Fees and Charges for 2023/24 be agreed.

(6) That it be noted that a supplementary report, the formal Council Tax Resolution, will accompany the final budget submitted to full Council.

Minutes:

· The conflict in Ukraine

· The global supply chain was still feeling the effects of the covid-19 pandemic

· The exceptionally high costs of energy

· Inflation costs

· Continued covid recovery including impact on the Council’s income e.g. on car parking and an increase in working from home

· Government reforms such as education

Overall the draft budget included growth pressures of £33.2m and £30m of inflationary pressures in 2023/24 (£63 m in total), with offsetting savings /efficiencies and increased income of £30.4m in 2023/24. Cabinet had scrutinised a range of proposals to reduce the budget and had identified proposed savings of £10.1m across all portfolios included increased service income of £21 m (£30m in total). There was also £4.8m of corporate reserves but it was important only to use this for corporate contingencies where required.

The draft budget proposed was built on the proposed Council Tax base and assumed a 2.99% increase in basic Council Tax and a 2% increase for the Adult Social Care Precept, giving a total increase of 4.99%. The Leader in particular made reference to the significant pressure on the NHS and the need to keep residents out of hospital. This was the maximum allowable without triggering a local referendum and was still significantly below the rate of inflation at 11.1% at the end of October.

In terms of the draft capital programme the Leader reported that it was proposed that a recommendation be put to Council in February to add up to £100m worth of schemes to the programme, to be funded through prudential borrowing , subject to a robust business case being approved. This would include funding for economic growth and regeneration, school improvement, highways maintenance and infrastructure, waste (household recycling centres), housing and homelessness and climate change.

The Leader made reference to the Section 151 Officer who had a legal duty to scrutinise the budget and report to the Council on the robustness of the budget calculations and the adequacy of reserves as part of the budget and council tax setting decision. He also drew attention to paragraph 9 which detailed the financial risks and uncertainties of the budget.

The Leader suggested an amendment to Appendix 2 (Transport Portfolio Capital Programme section) to include in 2026/27:-

£4.425m on Plane and Patch
£2.15m on Footway Structural Repairs.

In total, this provided an additional £6.575m on roads and pavements in 2026/27.

During discussion the following points were made:-

· A Cabinet Member referred to the public consultation process and congratulated staff on receiving 1,797 responses from residents which compared well with recent response rates . More than two thirds of respondents either agreed with or were not opposed to the proposals presented. He commented that it was good to see that residents had put care and support services for older people and vulnerable adults as a priority as this was not usually prioritised. In addition that car parking should not be prioritised for council funding. Another point he highlighted was that a higher number of residents were responding from the 45-54 age range as opposed to 65 to 74 age range and that it was good to see younger people responding to the survey. He also referred to the responses from the economically active and inactive.

· A Cabinet Member referred to the difficulties of setting the budget with current Council pressures whilst also being mindful of resident’s household budgets during the cost of living crisis but there were no alternative funding options. He welcomed the high level of savings made by the Council. He particularly welcomed the additional funding in year 4 for plane and patch and footway repairs as maintaining the Council’s highway asset was vital. He referred to the financial risks and uncertainties and the importance of monitoring the budget closely particularly looking at income streams. The Leader commented that a reduction in commuting had had a big impact on Council finances.

· A Cabinet Member referred to health and social care in particular protecting providers with regard to market sustainability. Adult Social Care was particularly demand led and complex and she also commented that it was good to see that residents considered this area a priority (67%). However she expressed concern about the response on statutory responsibilities and emphasised that it was important to provide detail on this area so residents understood what it covered e.g. care packages for vulnerable residents. The Council had a duty to provide these services.

· A Cabinet Member referred to the Capital Programme and the need to fund statutory commitments. He particularly welcomed the commitment to a household waste recycling centre in Buckingham and Rights of Way.

· Reference was made to the importance of road safety and that if there was any additional funding it would also be helpful to put this towards this area.

The amendment proposed by the Leader was agreed and supported by all Cabinet Members, as there was a political commitment to continue to improve roads in the County. On a vote being taken it was agreed unanimously and

RESOLVED :-

(1) That the outcome of the budget consultation (Appendix 4) be noted.

(2) That the current risks associated with the draft budget proposals be noted.

(5) That the Schedule of Fees and Charges for 2023/24 be agreed.

(6) That it be noted that a supplementary report, the formal Council Tax Resolution, will accompany the final budget submitted to full Council.

Supporting documents: