Agenda item

To delegate approval to release the draft budget for consultation (report of the Deputy Chief Executive – Corporate Development (S151) enclosed).

Consideration was given to the report of the Chief Finance Officer – Public Sector Partnership Services Ltd, and the Assistant Direct – Finance, which requested delegated approval to release the draft budget for consultation.  

The Portfolio Holder - Finance, Commercialisation and Partnership presented the report and advised that it provided an overview of the 2023/24 Budget as it currently stood.  The creation of the budget had been one of the most challenging for many years.  It was set within a background of unprecedented inflationary pressures and significant changes in resident, customer and business needs. Despite these challenges the Council’s financial position meant that it was well placed and able to take a considered approach to mitigating these exceptional challenges.

The report being presented to Cabinet provided an update on the key service budget pressures, which included pay inflation, pension costs, utilities and fuel inflation - this had been offset in part by increased returns from investment balances but did not cover pressures in their entirety.

The 2023/24 provisional Local Government Settlement was announced on 19 December 2022 and was detailed within the report.

Another element of the Council’s budget was the Drainage Board Levy – like the Council, Drainage Boards were also experiencing increased cost demands.  The Council was liaising with the Boards, who were attempting to limit future increases where possible.  This was proving increasingly difficult with significant increases in power costs being experienced.  Representations to Government have been made and continued to be made due to the substantial loss of income to the Council, as the levy was previously funded through Revenue Support Grant (RSG).

Another key component of the Council budget was its share of Business Rates income.  This information was not yet available, due to changes to the national system and delays with the implementation of CAPITA system software updates which were required to produce these figures.

There was a proposed 3% Council Tax increase for 2023/24 which equated to an annual increase of £5.76 for a Band D property.

A series of short and medium-term mitigations had been identified to balance the budget, and these would be detailed further once the final budget for 2023/24 was produced.

The use of Reserves would be present within the final budget.  Similarly, consideration was still being given to the HRA budget which was also experiencing inflationary pressures.

The report recommended that delegation be provided to the Portfolio Holder for Finance, Commercialisation and Partnerships, in consultation with the Deputy Chief Executive – Corporate Development (S151 Officer) to make the decision to release the draft budget for consultation, prior to full budget proposals being provided to the next meeting of the Cabinet in February.

The following points were raised:

·         It was confirmed that the final figures from the Internal Drainage Boards would be available by the end of January 2023.

·         The Leader commented that this was the most difficult budget setting process that he could recall.  This was due to a multitude of external pressures including wage inflation; increased diesel costs (which affected SHDC disproportionally due to the district’s rural nature); and increased gas and electricity costs.  The greatest issue however was the levy charged by the Internal Drainage Boards (he commented that around 50% of Council Tax went towards this).   There had previously been recognition from Government that the work of the Internal Drainage Boards benefited the whole country and not only the areas that they covered.  One of the reasons for the increased pressure on finances was as a result of the fact the drainage board levies had originally been paid by the Government, however, this was no longer the case.  The Authority had no option but to use some of its reserves to assist with its budget.  Despite the pressures, SHDC was still in a better position than some authorities. 

DECISION:

That approval of the commencement of the budget consultation be delegated to the Portfolio Holder for Finance, in consultation with the Deputy Chief Executive – Corporate Development (S151)

(Other options considered:

·         To not commence budget consultation;

Reasons for decision:

·         To comply with the budgetary and policy framework).