Issue - meetings

2022/23 Draft Budget, Medium Term Plan and Capital Strategy (For Consultation)

Meeting: 27/01/2022 - Joint Performance Monitoring Panel and Policy Development Panel (Item 11)

11 2022/23 Draft Budget, Medium Term Plan and Capital Strategy (For Consultation) pdf icon PDF 227 KB

To consider the Draft General Fund and Housing Revenue Account 2022/23 revenue and capital estimates and the Draft Financial Medium Term Strategy (for Scrutiny) (report of the Deputy Chief Executive - Corporate Development enclosed).

 

Additional documents:

Minutes:

Consideration was given to the report of the Chief Executive – Corporate Development, which asked the Joint Panel to consider and scrutinise the Draft General Fund and Housing Revenue Account 2022/23 revenue and capital estimates and the Draft Financial Medium Term Strategy.

 

The Joint Panel received a presentation from the Deputy Chief Executive – Corporate Development which highlighted the following main areas:

  • Spending Review for 2021;
  • Revenue Budget and Medium Term Financial Plan (MTFP);
  • Reserves;
  • The Budget journey;
  • Future options and risks;
  • Ongoing budget reviews;
  • Fees and charges;
  • Housing Revenue Account (HRA);
  • Capital Programme; and
  • Treasury Management

 

Following consideration of the report and the presentation, the

following issues were raised by the Panel:

 

  • Members stated that the Internal Drainage Board (IDB) levy placed a significant burden on the authority and suggested that a change of classification to a precept would be financially beneficial to the district. Members were keen to assist with driving change in this regard.

o   The Deputy Chief Executive – Corporate Development confirmed that a significant Drainage Board levy affected only a few districts in the country, which included South Holland. While IDBs faced their own challenges, such as increased costs relating to fuel and energy contracts, the question remained as to whether a levy collected through Council Tax was the most appropriate funding mechanism.  A change to a full or phased precept would have a significant positive effect on the budget.

  • Members proposed that their support be sent to Cabinet to lobby for IDB funding to be collected by means of a precept.

 

Members asked whether the National Non-Domestic Rates (NNDR) notification had been considered advantageous to the Council, potentially indicating an improved situation than estimated in the report.

  • The Deputy Chief Executive – Corporate Development expected the financial position to remain near to the forecasted figures stated in the report, with the following caveats:
    • the yield within the Collection Fund for business rates had been changeable throughout the year and it was therefore difficult to predict the yield at the deadline of 31st January 2022 when projections needed to be made;
    • whilst yield forecasting was difficult, the Council endeavoured to seek a realistic balanced position and utilised the Collection Fund and Reserves to manage large fluctuations which resulted from the inward and outward flow of grants within the system;
    • the NNDR and Collection Fund had experienced unprecedented variables but this was balanced by the Volatility Fund over time; and
    • a permanent drop in yield, should it occur, would create a longer-term deficit gap which required funding through the utilisation of savings or cost-cutting measures.

 

  • Members referenced the Housing Revenue Account (HRA) and commented that a write-off of SHDC’s £67.456million loan from central government could result in a boost to the local economy.
    • The Deputy Chief Executive – Corporate Development could not comment on Government policy but stipulated that interest charged on the substantial debt needed to be paid, a corollary of which was a reduction of funds available for other areas.

 


Meeting: 11/01/2022 - Cabinet (Item 37)

37 2022/23 Draft Budget, Medium Term Plan and Strategy (For Consultation) pdf icon PDF 225 KB

To consider the Draft General Fund and Housing Revenue Account 2022/23 revenue and capital estimates and the Draft Financial Medium Term Strategy (for consultation) (report of the Deputy Chief Executive – Corporate Development enclosed).

Additional documents:

Minutes:

Consideration was given to the report of the Deputy Chief Executive – Corporate Development (S151 Officer) which requested that the Cabinet consider, and release for consultation the 2022/23 Draft Budget, Medium Term Plan and Strategy.

 

It was advised that an informal briefing had taken place earlier in the week to give members who could not attend the Cabinet meeting the opportunity to consider the information and ask questions.  The following points from the informal briefing and the formal meeting of Cabinet were raised:

 

·         Members asked why there was no allowance for inflation within the Key Budget Principles.

o   Officers explained that for those areas where an exceptional increase was anticipated, inflationary increases had been factored in, for example the cost of utilities is increasing significantly and a 30% increase had therefore been included.  Allowances for inflationary change were provided for on a cost by cost basis and were bespoke to the area involved – there was no inflation rise built into the basic budgets, but it had been for relevant contracts.

 

·         Members asked why the authority had previously left the Lincolnshire Business Rates Pool and now re-joined it.

o   Officers advised that the authority had originally withdrawn due to a risk at the time relating to a power station appeal which could have impacted on the pool.  The authority had withdrawn so as not to bring this risk to the Pool however, this risk was no longer in place and the authority had re-joined the Lincolnshire Business Rates Pool for 2022/23.

 

·         Members asked if the anticipated increase in utilities was also being passed on to the other services renting office space at the Council Offices at Priory Road?

o   Officers would provide a response following discussion with the appropriate service manager.

 

·         Members questioned whether any issues of concern were included within the Risk Register. The issue of utilities was provided as an example, as it was impossible to know the true figure of increases in the future.

o   Officers responded that this was listed within the risk register, included as part of the Cabinet report, under ‘Inflation rises by more than budgeted projections’.  It had been given a medium risk as a reasonable allowance for a 30% increase had been included, and this was felt to be realistic.

 

·         Members commented that this would be the last year that the authority would be in receipt of the Revenue Support Grant and New Homes Bonus – how would this affect the budget going forward?

o   Officers advised that the New Homes Bonus was not built into the base budget and went straight into reserves.  The Revenue Support Grant and the lower tier services grants were built into the budget.  There would be concerns nationwide regarding the loss of income streams, and it would be important to continue to drive savings.

o   The Leader clarified that these income streams would not disappear completely – they had been introduced as a temporary solution to the loss of the Fair Funding Review.  He reiterated however  ...  view the full minutes text for item 37