Agenda item

Please note that although not a Cabinet recommendation this item links to item 15 and the Council is requested to make the following resolutions:

 

1.            That the following, as submitted to and recommended by the Cabinet as the Budget for 2020-21 be approved:

                      i.        the 2020-21 Net Revenue Budget in respect of the Council’s own services be approved at £14,235,800.

                    ii.        the 2020-21 Council Tax Requirement in respect of the Council’s own services be approved at £8,975,796.

                   iii.        that Council approve a Council Tax of £165.81 (Band D equivalent).  This represents a £5.00 (3.11 %) increase on the Band D charge.

                   iv.        That the uncommitted revenue budget of £483,900 be transferred to the General Fund Reserve to mitigate the deficit expected in 2021-22.

                    v.        That the capital programme, including the asset renewal programme (appendix 1c and 1d of the February Cabinet report) be approved.

 

2.    That Council approve the Resolutions in Appendix A.

 

The Chairman invited Mr Wilding to introduce the item and drew attention to the report which could be found on the amended document circulated to members prior to the meeting. He confirmed that there were six recommendations to Council detailed on the front sheet.

 

Mr Wilding explained that the report follows on from Council’s approval of the Financial Strategy in December. Cabinet reviewed and then recommended the budget and level of Council tax in February.  The Report to February’s Cabinet set out the Budget Spending plans of each of the portfolios and these plans together with the various funding streams, underpin the balanced budget. The budget process involves close working between individual budget managers and the Council’s finance team.  The process ensures that service delivery priorities are met within the constraints on public sector financial resources.

 

He added that the draft financial settlement from the Government was broadly as anticipated, and this draft was finalised last week unchanged.  Effectively the 2020-21 settlement is an extension to the previously agreed four-year settlement due to the Government Funding reforms being delayed until at least 2021-22.    

 

He confirmed that it is an important statutory requirement that the council has a balanced revenue budget over the period of the 5 year financial strategy. Some of the key variables and issues that impact the forthcoming financial year are detailed in this report and supporting appendices, namely, income from fees, charges and rents; use of reserves; and Council tax.

Mr Wilding explained that he recommended that the council takes up central government’s offer of allowing a rise in Council Tax by £5 for Band D properties (or less than 10 pence per week) and equivalent increases for other property Bands. The change would help to offset the continued reduction of central government funding. The Council Tax increase will generate an extra £270,667 per year and assist in closing the budget deficit that would otherwise emerge in the medium term.  Not to approve would leave the Council with a deficit to address in later years. This measure is taken alongside the continuing work on the 2016 deficit reduction plan which aims to generate further income and savings amounting to just under £1m over the next 5 years. Mr Wilding pointed out that this Council continues to protect the most vulnerable in our community by maintaining 100% council tax relief for those in most need.

 

Mr Wilding then referred to the agenda supplement for the Cabinet on 4 February where the overall 2020-21 budget is summarised in the income and expenditure statement at page 62 and 63.  A corrected page 63 was circulated as a supplementary Cabinet agenda paper. The correction shows a net revenue requirement of £14.236 million.  The draft budget shows a net surplus of £484,000 for 2020-21.  However, the Council’s approved Financial Strategy shows that in the two subsequent years the total deficit is forecast to be £500,000.  This deficit is largely due to spending reductions by WSCC which have resulted in additional costs to this Council of approximately £1m per annum.  It is therefore prudent to reserve the 2020-21 surplus by transferring it to the Council’s General Fund Reserve in order to off-set future deficits and avoid unwanted service reductions.

 

He then outlined that the budget process identifies major variances by department and service area between the 2019-20 budget and that for 2020-21 in the February Cabinet Supplement pack (on pages 64 and 65).  The variances are explained in the notes section on page 66 to 69.  The most significant variation is the loss of recycling credits which amounts to £769,000 per year.

 

He then confirmed that as in previous years members from both Overview and Scrutiny and Corporate Governance and Audit committees nominated members to form a joint Task & Finish group (TFG) to review and scrutinise the budget spending plans as part of the process in drafting this budget that is presented today. The T&F members reported back to their respective committees that they were satisfied with the explanations given by officers at the meeting.

 

Mr Wilding then drew attention to the budget summaries by portfolio on pages 71-86, in the supplement pack.  The details behind these figures can be found in the draft budget book on to the council’s website. The Capital and Projects Programme and Asset Replacement Programmes are set out at page 87 and page 93 respectively and the Resources Statement is at page 103.  All projects included in the Capital Programme have already had approval from the Cabinet and Council, but some may be subject to a separate future report along with a Project Initiation Document before the funding is released.  He confirmed that the Statement of Reserves remains robust and healthy and is shown at pages 105-113.  This statement also highlights the purpose of specific reserves and the respective authorisations for their use, and demonstrates that the Capital Programme and Asset Replacement Programmes are fully funded, as demonstrated in the prudential indicators set out in page 115 of the supplement pack, along with the Council’s Minimum Revenue Provision (MRP) Policy (pages 116-117) which states our arrangements for the repayment of any debt. This is a requirement of the Prudential Code even if the Council is debt free.

 

With reference to the Council Tax Resolution Report on page 1 of the agenda supplement Mr Wilding explained the proposals through to the legal Resolutions necessary for setting the Council Tax, incorporating the precepts required by West Sussex CC, Town and Parish Councils and The Police and Crime Commissioner for Sussex. The overall proposed Council Tax by band for each parish, broken down by precepting authority, is set out in Appendix B (page 7 to 16).

 

Mr Wilding then thanked Mr Ward, Mrs Belenger and all the finance team for their hard work and diligence on this year’s budget.

 

Mr Wilding then invited Mr Ward to confirm the amendments to the recommendation following the approval of schemes at Cabinet and Council (3 March 2020). Mr Ward confirmed that recommendation 2.1 v should be amended to read:

 

That the uncommitted revenue budget of £521,800 be transferred to the General Fund Reserve to mitigate the deficit expected in 2021-22.

 

Mr Moss then proposed the following amendments:

 

Amendment to recommendation 1.4

 

That sufficient part of the uncommitted revenue budget of £521,800 be held in earmarked reserves while Cabinet gives proper consideration to the following initiatives to be funded from these reserves:

 

a)    The urgent employment of Planning Consultants and Legal Advisors to support Officers of the Council in preparation of the Local Plan and provide direct assistance to Parish Councils in the preparation of their Neighbourhood Plans. The maximum costs to be £150,000.

b)    £100,000 to be allocated between the 4 Air Quality Management Areas (AQMA’s) to deliver projects to decrease air pollution specifically in these hazardous areas. The money could be used flexibly for consultancy as well as being available to fund greening projects.

c)    Financial support for the delivery of the Local Cycling and Walking Infrastructure Plans (LCWIPs) to increase safe and sustainable cycle journeys across the District. Consideration to be given to incentive schemes (e.g. Love to Ride), physical infrastructure delivery and the creation of a temporary part or full time post of an Active Travel Officer who would coordinate with colleagues at West Sussex County Council. The total costs to be £120,000.

 

Any remaining balance of the uncommitted revenue budget to be placed in the General Fund Reserve.

 

Amendment to recommendation 1.5

 

That the capital programme, including the asset renewal programme (appendix 1c and 1d of the agenda report) be approved subject to modification by:

 

a)    The earmarking of £1,000,000 of what is current General Fund reserves (approximately 10% for the projected 2019-2023 fund) for a new Climate Capital Investment Reserve to be used to stimulate rapid and significant carbon reductions across the District.

b)    The Environment Panel is tasked to work with the newly appointed Climate Emergency Officer to draw up criteria by which proposals to draw down funding from this reserve could be evaluated.

c)    Final approval of any uses of the fund to be made by Cabinet and Council.

 

Additional recommendation

Council notes that the very positive all-member workshop on the review of the Corporate Plan, facilitated and supported by peers from the Local Government Association, took place too late to feed meaningfully into the budget-making process.

 

In order that all councillors can contribute fully the Council therefore resolves to:

 

a)    Begin the Corporate Plan and budget-setting process in June rather than September, or as early as necessary for all councillors to consider the shape of the budget in conjunction with the Corporate Plan.

b)    Bring forward member workshops in line with the above, including any to which Local Government Association Peers are invited, subject to their availability, so that new priorities may be identified and considered in the new budget.

c)    Ensure that confident dedicated officer support be allocated to opposition groups early in this process to enable all members to make informed, legal and properly costed contributions to the process including well-drafted amendments and/or to put an alternative budget to the Council for consideration.

d)    Ensure that nothing in items A, B or C should impact upon deadlines imposed upon the Council by law and/or auditing requirements.

 

Mr Johnson added the following amendment recommendation 1.4:

 

Taking into account any earmarked reserves resulting from amendments to agenda item 14, the remaining balance of the uncommitted revenue budget be transferred to the General Fund Reserve to help mitigate the deficit expected in 2021-22 providing it is available to help staff access the support they need to mitigate stress at work and it is not needed to help independent ‘small shop’ traders mitigate any negative economic impact of the Covid-19 outbreak by providing assistance with their rent payments.

 

Both combined proposals were seconded by Mr Hughes.

 

Members took a short break to allow discussion of the proposals.

 

Mr Ward responded to the proposals and explained that the proposals would not short cut the approval process for any project funding. Projects would still require a PID and then approval by Cabinet, or if over £100,000 approval by Full Council. He added that putting money into general funds rather than ringfencing allows greater flexibility of spend and less constraints.

 

With regard to the timescale of the Budget Mr Ward explained that the Budget timetable starts in August. It is then taken to a Cabinet Strategy meeting in September/October. The Business Routeing Panel also see the budget timetable proposals. The Panel includes the Chairs of Corporate Governance and Audit Committee and Overview and Scrutiny Committee. There is also a Budget Task and Finish Group which consists of appointed members from both Committees. The opposition leader is also invited to strategy days.

 

Mr Ward went on to stress that the council is in an extremely unstable period financially as the government have not confirmed funding beyond one year, and the extent to which we are reliant on the local economy to generate income from fees and charges to balance our budget. The emergence of the Corona virus is a significant threat to the world economy and was not a risk that was foreseen when the financial strategy was approved before Christmas. Mr Ward therefore urged caution when considering committing the balance of the revenue budget.

Members discussed their views in support and against the proposals. Mr Brown referred to his proposal and explained that the amendments had been designed to make sound business cases. He asked that members be given budget options to choose from.

 

Mr Sutton proposed that a vote be taken. This was seconded by Mr Dignum.

 

The results of the first recorded vote on the amendment proposed by Cllr Moss and Cllr Tim Johnson which was seconded by Cllr Hughes were as follows:

 

Cllr Apel – For

Cllr Bangert – For

Cllr Barrett – Absent

Cllr Barrie – Absent

Cllr Bell – Against

Cllr Bowden – For

Cllr Briscoe – Against

Cllr Brown – For

Cllr Dignum – Against

Cllr Duncton – Against

Cllr Elliott – Against

Cllr Evans – For

Cllr Fowler – For

Cllr Graves – Against

Cllr Hamilton – Against

Cllr Hobbs – Against

Cllr Hughes – For

Cllr D Johnson – For

Cllr T Johnson – For

Cllr Lintill – Against

Cllr Lishman – For

Cllr McAra – Against

Cllr Moss – For

Cllr Oakley – Against

Cllr O’Kelly – For

Cllr Page – Absent

Cllr Palmer – Against

Cllr Plant – Against

Cllr Plowman – Absent

Cllr Potter – Against

Cllr Purnell – Against

Cllr Rodgers – For

Cllr Sharp – For

Cllr Sutton – Against

Cllr Taylor – Against

Cllr Wilding - Against

 

Total – 14 For, 18 Against, 0 Abstain, 4 Absent

 

The amendment was not carried.

 

The results of the second recorded vote on the recommendations (as amended) were as follows:

 

Cllr Apel – Abstain

Cllr Bangert – Abstain

Cllr Barrett – Absent

Cllr Barrie – Absent

Cllr Bell – For

Cllr Bowden – Against

Cllr Briscoe – For

Cllr Brown – Against

Cllr Dignum – For

Cllr Duncton – For

Cllr Elliott – For

Cllr Evans – Against

Cllr Fowler – Abstain

Cllr Graves – For

Cllr Hamilton – For

Cllr Hobbs – For

Cllr Hughes – Abstain

Cllr D Johnson – Against

Cllr T Johnson – Against

Cllr Lintill – For

Cllr Lishman – Abstain

Cllr McAra – For

Cllr Moss – Against

Cllr Oakley – For

Cllr O’Kelly – Against

Cllr Page – Absent

Cllr Palmer – For

Cllr Plant – For

Cllr Plowman – Absent

Cllr Potter – For

Cllr Purnell – For

Cllr Rodgers – Against

Cllr Sharp – Against

Cllr Sutton – For

Cllr Taylor – For

Cllr Wilding - For

 

Total – 18 For, 9 Against, 5 Abstain, 4 Absent

 

The recommendation as amended was carried.

 

RESOLVED

 

1.    That the following as submitted to and recommended by the Cabinet as the Budget for 2020-21 be approved:

 

a)    The 2020-21 Net Revenue Budget in respect of the Council’s own services be approved at £14,235,800.

b)    The 2020-21 Council Tax Requirement in respect of the Council’s own services be approved at £8,975,796.

c)    That Council approve a Council Tax of £165.81 (Band D equivalent). This represents a £5.00 (3.11%) increase on the Band D charge.

d)    That the uncommitted revenue budget of £521,800 be transferred to the General Fund Reserve to mitigate the deficit expected in 2021-22.

e)    That the capital programme, including the asset renewal programme (appendix 1c and 1d of the February Cabinet report) be approved.

 

2.    That Council approve the Resolutions in Appendix A.