Agenda item - Budget and Council Tax Setting 2019/2020 and Medium Term Financial Strategy 2021-2023 (Report No: COU/SA/19/007)

Agenda item

Budget and Council Tax Setting 2019/2020 and Medium Term Financial Strategy 2021-2023 (Report No: COU/SA/19/007)

Report No: COU/SA/19/007

Minutes:

The Shadow Council considered the above report, which presented the proposals for Budget and Council Tax Setting in 2019/2020 and the Medium Term Financial Strategy (MTFS) 2019-2023. 

 

Councillor Stephen Edwards, one of the Shadow Executive (Cabinet) Members with the responsibility for Resources and Performance, drew relevant issues to the attention of the Shadow Council, including that Report No: COU/SA/19/007 provided details of the new West Suffolk Council’s proposed revenue and capital budgets for 2019/2020 and in the medium term.  The Shadow Executive (Cabinet) had previously considered the 2019/2020 budget for the new authority and had recommended to Shadow Council the level of council tax required to help fund this budget (as set out in Section 2 of the report, and summarised below).

 

In the history of local government there had been few times that had seen such a transformation in the funding of local services as the current decade. The changes were numerous and continuous, and there was little doubt that the 2020s would bring even more changes.

 

The report provided examples of those changes and the financial challenges facing the new West Suffolk Council.Councils could no longer traditionally just deliver services if they were to meet the financial challenges and be able to continue to serve their communities. West Suffolk Council recognised and would take a proactive investment role, not only to meet the challenges brought by funding for councils, but also importantly to manage growth and ensure prosperity for its communities. The new Council must, therefore, maintain the income currently received by Forest Heath District Council (FHDC) and St Edmundsbury Borough Council (SEBC) and also deliver the investment projects, enable the building of homes and increase the business base so that new income streams would be delivered to replace those lost. This would enable the new Council to continue delivering the services and wider community support which people valued and made West Suffolk an attractive place to live, work and invest.

 

In 2019/2020, the Council’s financial plans would see further reliance on delivery of its strategic projects. Some of the projects required considerable investment, both in money - including creating new funds where needed through borrowing (supported by robust business cases) - resources and time, but that investment would build a more financially resilient and self-sufficient council, with less reliance on uncertain national or other funding. That focus on income-generating projects, which may span several years before they delivered a return, meant the Council no longer looked simply to balance a budget for one year. Importantly, these economic growth projects would bring wider long term benefits to the West Suffolk areas than purely financially robust councils, such as jobs, better health outcomes and investment in working with communities and place based initiatives.

 

Members considered the report in detail, which included the following issues for securing a balanced budget for 2019/2020 and in the medium term to 2022/2023, together with corresponding detailed appendices:

 

Section 1.2: Local Government Provisional Finance Settlement 2019/2020

Section 1.3: Council tax referendum requirements 2019/2020

Section 1.4: Setting the budget – 2019/2020 and across the medium term to 2022/2023

Section 1.5: Capital programme 2019-2023

Section 1.6: Disposal of assets

Section 1.7: Minimum Revenue Provision (MRP)

Section 1.8: General Fund Balance

Section 1.9: Earmarked reserves

Section 1.10: Strategic priorities and MTFS Reserve

Section 1.11: Adequacy of reserves

Section 1.12: Proposed council tax discount for car leavers

Section 2: Calculation of council tax

Section 3: Legal implications

 

Particular attention was given to the FHDC and SEBC Performance and Audit Scrutiny Committees’ consideration and recommendation of budget proposals for achieving a balanced budget, as presented to them in November 2018 and January 2019, as set out in Section 1.4. These in turn had been supported by the Shadow Executive (Cabinet).

 

In addition, the Shadow Council considered and supported the proposal to adopt a Suffolk-wide policy to award 100% council tax discount to West Suffolk residents aged 16-25 who were previously under the care of Suffolk County Council and who lived alone; with other care leavers; or others who were disregarded for council tax purposes (for example, full-time students). Care leavers would also be disregarded for council tax purposes so that if they lived with a single occupier, that person would not lose their 25% discount.  The cost to West Suffolk Council was likely to be a maximum of £15,000 each year.

 

Having acknowledged the issues highlighted above, the Shadow Council noted the position summarised in Sections 1.2 to 1.12, 2. and 3. of the report for securing a balanced budget for 2019/2020 and over the medium term to 2022/2023, which was based on an assumption of a 0% increase in Band D council tax for 2019/20 for the predecessor area of St Edmundsbury, and a £4.95 increase in Band D council tax for the predecessor area of Forest Heath. This assumption was in line with the approved business case for a single council for West Suffolk with council tax harmonisation planned over seven years. The level of Band D council tax for 2019/2020 was therefore agreed to be recommended to be set at £182.16 for the predecessor area of St Edmundsbury and £152.28 for the predecessor area of Forest Heath; and it was noted that the level of council tax beyond 2020 would be set in accordance with the annual budget process for the relevant financial year.

 

Councillor Edwards commended the finance team and the Performance and Audit Scrutiny Committees, together with staff and other Members across both authorities, for their work in securing a balanced budget for 2019/20 and for the medium term. He gave particular recognition to Rachael Mann, Assistant Director (Resources and Performance) and to Gregory Stevenson, Service Manager (Finance and Performance) for their roles in preparing the budget.

 

Councillor Stephen Edwards moved the recommendations, as set out in Report No: COU/SA/19/007, and the motion was duly seconded by Councillor Ian Houlder.

 

Councillor James Waters, Leader of the Shadow Council, placed his own congratulations on record for the preparation of the 2019/2020 budget and for the medium term. He considered it to be a very detailed and well-explained budget, emphasising that having been faced with numerous challenges, which had largely emanated from Central Government, and where other authorities were having to make difficult decisions regarding the continued delivery of their services, this budget would put the new West Suffolk Council in a strong, solid financial position from its inception in April 2019.

 

Councillor Julia Wakelam proposed the following amendment to the substantive motion, which was duly seconded by Councillor David Nettleton, which was to add an additional recommendation to the six under consideration:

 

“[Recommendation] (7) The Assistant Director (Resources and Performance) be authorised to ring-fence the sum of £200,000.00 from the income to be received from Business Rates (excluding Baseline Funding) to be used for developing and implementing a strategy to ensure that the operations of West Suffolk District Council become Carbon Neutral by 2022 and that the West Suffolk District becomes a Carbon Neutral District by 2030.”

 

Councillor Wakelam provided the rationale to the amendment, including highlighting that whilst the West Suffolk Councils had taken some action to mitigate the effects of climate change and global warming, she considered a significant amount of more work could be done. She provided examples of such actions and felt that by earmarking £200,000 in the 2019/2020 budget to develop a strategy in line with that stated in the above amendment, this would help West Suffolk Council to become carbon neutral by 2022 and for the district to become carbon neutral by 2030. 

 

A debate ensued on the amendment. The majority of Members could concur with the intentions of the amendment; however, it was felt that to make changes at this very late stage to an extensively detailed, comprehensive, balanced budget was not conducive as the implications of approving the amendment would not be known without further investigation.

 

Other Members stated that the Councils already had successful environmental policies and an energy framework in place.  Investment had been made in green energy projects, which not only had generated income to improve and provide better services, had resulted in Forest Heath District Council becoming the first carbon neutral district council in the country.  The intention of the amendment was therefore considered to already be in place, but for more reasons than the sole purpose of mitigating the effects of climate change and global warming. Some Members felt however, that the amendment should have provided more clarity on what the proposed allocated funding would be used for.

 

The amendment to the substantive motion was then put to the statutorily required recorded vote.  With 53 Members present, the votes recorded were 5 votes for the amendment, 46 against, and two abstentions; the names of those Members voting for, against and abstaining being recorded as follows:

 

For the amendment to the substantive motion:

Councillors Beckwith, Paul Hopfensperger, David Nettleton, David Palmer and Julia Wakelam

 

Against the amendment to the substantive motion:

Councillors Appleby, David Bowman, Ruth Bowman, Broughton, Simon Brown, Tony Brown, Bull, Burns, Busuttil, Chester, Chung, Clements, Cole, Dicker, Edwards, Evans, Everitt, Glossop, Hailstone, Harvey, Beccy Hopfensperger, Houlder, Lukaniuk, Lynch, Mason, McManus, Mildmay-White, Millar, Nobbs, Noble, Pilley, Rayner, Richardson, Ridgwell, Roach, Robbins, Rout, Silvester, Smith, Speed, Springett, Stanbury, Stevens, Thompson, Thorndyke and Waters.

 

Abstentions:

Councillors Ruth Allen and Margaret Marks.

 

The vote on the amendment to the substantive motion was therefore defeated.

 

The debate continued on the substantive motion.  Some Members expressed concern that council tax, when taking into account all precepting authorities was increasing for fewer or poorer quality services, and although this was largely due to the increase in precepts of Suffolk County Council and the Police Authority, residents were not concerned about which authority was responsible for a particular service and the West Suffolk Councils should be mindful of that.

 

The majority of Members, however, acknowledged the successful investments made by the West Suffolk Councils in services; growth and health and well-being projects; together with creating efficiencies and ensuring the effective management of resources, all of which and more had enabled the West Suffolk Councils to secure a balanced budget for 2019/20.

 

In respect of a specific question raised by Councillor David Nettleton regarding the Parkway multi-storey car park in Bury St Edmunds, this would be provided in the form of a written reply and circulated to all Members for their perusal.

 

The motion was then put to the statutorily required recorded vote.  With 53 Members present, the votes recorded were 47 votes for the motion, 4 against, and two abstentions; the names of those Members voting for, against and abstaining being recorded as follows:

 

For the motion:

Councillors Allen, Appleby, David Bowman, Ruth Bowman, Broughton, Simon Brown, Tony Brown, Bull, Burns, Busuttil, Chester, Chung, Clements, Cole, Edwards, Evans, Everitt, Glossop, Hailstone, Harvey, Beccy Hopfensperger, Paul Hopfensperger, Houlder, Lukaniuk, Lynch, Marks, Mason, McManus, Mildmay-White, Millar, Nobbs, Noble, Palmer, Pilley, Rayner, Richardson, Roach, Rout, Silvester, Smith, Speed, Springett, Stanbury, Stevens, Thompson, Thorndyke and Waters.

 

Against the motion:

Councillors Beckwith, Dicker, Ridgwell and Robbins.

 

Abstentions:

Councillors David Nettleton and Julia Wakelam.

 

It was therefore

 

RESOLVED:

 

That:

 

(1)     Having taken into account the information received by Shadow Executive (Cabinet) on 5 February 2019 (Report No: EXC/SA/19/007 refers) including the Report by the Assistant Director (Resources and Performance) (S151 Officer) set out in Attachment C, together with the up to date information and advice contained in this report (Report No: COU/SA/19/007) , the level of Band D Council Tax for 2019/20 be set at £152.28 for the predecessor area of Forest Heath, and £182.16 for the predecessor area of St Edmundsbury. (Note: the level of council tax beyond 2019/20 will be set in accordance with the annual budget process for the relevant financial year.)

 

(2)     Subject to (1) above, the following formal Council Tax resolution be adopted:

 

(i)      the revenue and capital budget for 2019-2023 attached at Attachment A to Report No: COU/SA/19/007, and as detailed in Attachment D, Appendices 1-5, Attachment E and Attachment F, be approved;

 

(ii)     a general fund balance of £5 million be agreed to be maintained, as detailed in paragraph 1.8.2;

 

(iii)    the statutory calculations under Section 30 to 36 of the Local Government Finance Act 1992, attached as Attachment J, be noted;

 

(iv)    the Suffolk County Council and Suffolk Police Authority precepts issued to West Suffolk Council, in accordance with Section 40 of the Local Government Finance Act 1992 and outlined at paragraphs 2.5 and 2.6 below, be noted; and

 

(v)     in accordance with Section 30(2) of the Local Government Finance Act 1992, the amounts shown in Schedule D of Attachment I, be agreed as the amount of Council Tax for the year 2019/20 for each of the categories of dwellings shown.

 

(3)     The Assistant Director (Resources and Performance), in consultation with the Portfolio Holders for Resources and Performance, be authorised to transfer any surplus from the 2018/2019 revenue budget to the Invest to Save Reserve as detailed in paragraph 1.8.4, and to vire funds between existing Earmarked Reserves (as set out at Attachment D, Appendix 3) as deemed appropriate throughout the year.

 

(4)     Approval be given to the Assistant Director (HR, Legal and Democratic), in consultation with the relevant service Assistant Director, to determine the establishment and the employment arrangements to deliver the Council’s priorities within agreed budgets and the principles of the Medium Term Financial Strategy.

 

(5)     Approval be given to the Flexible Use of Capital Receipts Strategy, as set out in Attachment G.

 

(6)     Council tax discount be granted to care leavers in accordance with the details set out in paragraph 1.12 and Attachment H.

 

(Councillor Stephen Edwards left the meeting at the conclusion of this item.)

Supporting documents:

 

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