Agenda item

To approve: 1) The General Fund and Housing Revenue Account Budget for 2023/24 including the use of reserves, Medium Term Financial Strategy, Capital Programme and Strategy, Treasury Management Strategy, MRP Policy and Annual Investment Strategy, Fees and Charges for 2023/24; 2) Approval of Council Tax for recommendations to Full Council; and 3) the Annual Delivery Plan (report of the Deputy Chief Executive – Corporate Development (S151)).

Consideration was given to the report of the Deputy Chief Executive – Corporate Development (S151) which presented the General Fund and HRA budgets for 2023/24 including the use of reserves, Medium Term Financial Strategy, Capital Programme and Strategy, Treasury Management Policy/Strategy, MRP Policy and Annual Investment Strategy and the Annual Delivery Plan.

The Portfolio Holder – Finance, Commercialisation and Partnership presented the report, advising that the Budget position had changed slightly to that presented at the last Cabinet meeting.  The following background was provided:

·       The 2023/24 budget was one of the most challenging budgets ever set , the extent of issues faced being significant and occurring at the same time.  There were changes impacting on a variety of areas including Business Rates, staff pay and pensions, fuel, power and contracts.  However investment income had improved.  There were a large number of assumptions to be made, the largest being around pay increases, investment income and the IDB levy – this made the budget very uncertain and subject to change.  More recent pressures relating to homelessness and the cost of living crisis continued to impact on residents’ and the Council’s budgets.

·       With regard to the IDB levy, significant representation had been made to the Government on this issue.  Following a meeting between the Leader, our MP and the minister, a further response to the concerns raised as part of the budget consultation process was awaited.  The embedding of the levy within the budgets was considered a structural defect of the funding formula with the removal of RSG over a number of years.  Work was also ongoing with the IDBs and other affected Councils.

·       With this hugely significant pressure increasing this year by £332,000 (around £541,000 over two years), which was embedded within the budget, and with the constraint of the referendum limit, it was necessary to recommend a £5.76 increase in Council Tax for a Band D property.  This would raise £257,000 towards the £3.1million IDB levy which now made up 55% of all Council Tax raised.  However, with the majority of residents being in properties lower than Band D, this would be a lower increase for most households.

·       Despite the challenges, there had been success in securing access to grant funding – Changing Places; Green Home Grants; UKSPF; Levelling Up Fund; and NPO.  These now featured in SHDC’s and delivery partners’ 2023/24 revenue and capital budgets.  In additions, other funding bids had been submitted and outcomes on these were awaited.

·       The capital programme was now a very significant part of the budget and delivery would take place in this and future years through the Green Homes Grants, Levelling Up Fund and UKSPF.  It was important to support and drive growth in the area, and a budget to achieve this had been created.

·       In respect of the HRA, investment continued in replacing stock that had been subject to Right to Buy, and the improvement of housing stock and sheltered accommodation.  The programme of acquisitions and build through Welland Homes continued, which contributed to providing quality market rent properties and income for the General Fund.

·       With the financial challenges ahead, and savings targets within budgets, consideration was being given to areas of improved efficiency, greater commercial-mindedness, and work with partners to achieve better outcomes for lower cost.  Work across the S&ELCP and close working with PSPSL was critical to these efforts.  In addition, further challenges lay ahead in respect of government plans to change Business Rates Funding arrangements, and other significant changes around waste collection following the Environmental Act.

In summary:

·       Inflationary pressures across the board had impacted heavily on the Budget;

·       The Budget would balance with the use of Reserves, and with an efficiency target of £885,000, to be achieved by 31 March 2024;

·       If part or all of the IDB levy was covered by the Government by 31 March 2024, the use of Reserves may not be required;

·       Council Tax was to increase by £5.76 on a Band D property;

·       Additional interest on investments of just under £1million was included in the Budget balance;

·       Government funding remained very similar to what it had been previously;

·       The Housing Revenue Account was forecast to achieve a surplus of £2.2million which would be used to fund more affordable homes.  Decent Homes would continue to be provided across the District;

Finally, the Portfolio Holder advised of an error at 10.1 of the covering report – an efficiency target of £881,000 had been stated – the correct figure was £885,000.

 The following points were raised:

·       In response to whether, if successful, any Government support in relation to IDBs would be for one year or ongoing, the Leader confirmed that in his view it would only be likely for a year.  However, although discussions had been positive, it was made clear that a decision on support still had to be made and was by no means certain. 

·       A leaflet providing information on the breakdown of how Council Tax was calculated would continue to be sent to residents with their bill.

·       The importance of a sufficient budget for IT within the Capital Programme was raised – it was noted that the Capital Programme was still being assessed and that IT provision would be considered as part of this.

·       All recommendations were for consideration at Council on 2 March, with the exception of recommendation 9 within the report (laid out separately within the decisions below).

DECISION:

That Cabinet notes the results of the Budget Consultation process at Appendix 5;

RECOMMENDATIONS TO COUNCIL:

That Cabinet approves the following recommendations for onward referral to Full Council on 2 March 2023:

1)    That the Revenue Estimates for the General Fund, HRA and Spalding Special for 2023/24 (Appendices 1, 1a, 1b and 1c) be approved;

2)    That the Council Tax for a Band A property in 2023/24 be set at £130.26 (£3.84 per annum increase on 2022/23 levels) and Band D £195.39 for 2023/24 (a £5.76 per annum increase on 2022/23 level);

3)    That the Spalding special expenses for a Band A property be set at £16.98 for 2023/24, (previously £16.38 in 2022/23) and Band D £25.47 for 2023/24, (previously £24.57 in 2022/23);

4)    The additions to and use of reserves (as detailed at Appendix 1) be approved;

5)    The Medium Term Financial Strategy (at Appendix 1) be approved;

6)    The Draft Capital Programme and Capital Strategy (Appendices 1 and 2) be approved:

7)    The Treasury Management Policy 2023/24 (Appendix 3a) and Treasury Management Strategy, including the Minimum Revenue Provision Policy and Annual Investment Strategy 2023/24 (Appendix 3b) be approved;

8)    The Annual Delivery Plan for 2023/24 (Appendix 4) be approved;

9)    That Full Council delegates approval to the Deputy Chief Executive Corporate Development (S151) , to account as required for any s31 grant and reserve transactions required in respect of the Collection Fund;

10)That delegated authority be given to the Deputy Chief Executive Corporate Development (S151), in consultation with the Portfolio Holder for Finance, Strategy and Partnerships, to make any necessary amendments to the budget, prior to Council, for any required final adjustments or due to late notifications.

(Other options considered:

·       No other options were put forward.

Reasons for decision:

·       To comply with the budgetary and policy framework).