Agenda item

Report number: COU/WS/21/003

Council considered the above report, which presented the proposals for Budget and Council Tax Setting in 2021 to 2022 and the Medium Term Financial Strategy (MTFS) 2021 to 2025.

 

The 2021 to 2022 budget had been prepared in the context of not only the significant challenges facing local government, such as reductions in national funding streams, but also a national and worldwide Covid-19 pandemic. Since the outbreak of Covid-19 in the UK, a number of events had occurred which had had a significant impact on all local government, including West Suffolk Council’s financial position in the current financial year and these were expected to continue into 2021 to 2022. Some of these had been restrictions imposed by Government which would continue to affect the Council’s investments, assets and services; and other events had been announcements of Government financial support.

 

The Council had played a vital role in responding to the pandemic, in supporting businesses and communities for example, as well as running essential services during challenging conditions. Further details were provided in section 1 of the report, including the impact of Covid-19 on the Council’s financial position which would not be fully known for a significant time.

 

The medium term plans had also been prepared in the context of significant uncertainties around Government policy, examples of which were contained in section 1.8 of the report, while continuing to acknowledge the economic impact, challenges, uncertainties and unknowns of the Covid-19 pandemic.

 

Councils nationally were expected to achieve a balanced budget through savings and producing local income to fund services due to reduced Government funding. This year, as a one off to assist with the expected continued impact of Covid-19, the Council would see an increase in funding from the Government.  However, members noted this would not completely neutralise the impact expected from the pandemic. Nor would it address the financial challenges that already existed for local government following a decade of funding reductions and increases in the demand for services such as housing and homelessness support.

 

Despite this and the additional pressures presented by Covid-19, through prudent budgeting, a review of the Council’s vacant posts, investment as well as transformation, West Suffolk Council was in a good financial position. However, while this meant a balanced budget could be set for 2021 to 2022 there were gaps to be met in later years, as set out in the report.

 

Members considered the report in detail, which included the following issues for securing a balanced budget for 2021 to 2022 and plans for the medium term from 2021 to 2025, together with corresponding detailed appendices:

 

Section 1:    Background and context, which included reference to the Council’s ‘Investing in our growth agenda’ and the proposed transformation of West Suffolk Council 

Section 2:    Provisional Local Government Finance Settlement, which included reference to the Revenue Support Grant and Rural Services Delivery Grant; the new Lower Tier Services Grant; the future of New Homes Bonus; the homelessness and rough sleeping funding allocation; Covid-19 support funding;  funding from the sales, fees and charges lost income reimbursement scheme; funding from the National Leisure Recovery Fund; business rates and business rates reliefs; Collection Fund deficits; funding for council tax support; and council tax referendum limits.

Section 3:    Council tax for 2021 to 2022

Section 4:    Setting the budget – 2021 to 2022 and across the medium term to 2024 to 2025

Section 5:    Capital programme 2020 to 2025 (including disposal of surplus assets)

Section 6:    Minimum revenue provision (MRP)

Section 7:    General fund balance

Section 8:    Earmarked reserves

Section 9:    Strategic priorities and MTFS reserve

Section 10: Adequacy of reserves

Section 11:  Calculation of the council tax

 

Having acknowledged the issues highlighted above, Council also noted that currently, council tax made up approximately one fifth of the authority’s budget (exclusive of housing benefit) and therefore only contributed to a fifth of service delivery. West Suffolk Council charged around 11 percent of a local council tax payer’s bill with the rest comprising precepts from the County Council, Police and Crime Commissioner as well as the relevant Parish or Town Council. It was recognised that any increase in council tax would place an extra burden on tax payers but it meant vital services would be protected. Covid aside, bridging the gap between income and demand remained the single biggest challenge facing local government across the country.

 

To help secure a balanced budget for 2021 to 2022, on 9 February 2021, the Cabinet had recommended an average £4.99 increase in Band D council tax across both predecessor areas of St Edmundsbury and Forest Heath.  The budget for council tax for 2021 to 2022 and future years was based on the option to harmonise the two predecessor areas (St Edmundsbury and Forest Heath) using the average Band D rate across both predecessor areas, harmonising the council tax bills by 2022 to 2023, whilst maximising the council tax receipts to protect services and to support the Council’s investment plans. For 2021 to 2022 this represented an average Band D weekly increase of 22 pence (for the predecessor area of Forest Heath) and three pence (for the predecessor area of St Edmundsbury).

 

Therefore, the level of Band D council tax for 2021 to 2022, was recommended by Cabinet to be set at £185.40 for the predecessor area of St Edmundsbury and £175.59 for the predecessor area of Forest Heath. Noting that just over 70 percent of West Suffolk residents were in bands A to C, these would actually see a lower increase.

 

Councillor Broughton drew relevant issues to the attention of Council, including commending the finance team and the Performance and Audit Scrutiny Committee, together with staff and other members across the authority for their work in securing a balanced budget for 2021 to 2022 in such challenging and unprecedented times, and for developing plans in the medium term. She welcomed the Government’s recently announced roadmap out of England’s current Covid-19 lockdown and in the coming weeks, work would be undertaken to understand the impact of the national recovery strategy on the Council’s own recovery plans and its key budget assumptions for the next year and beyond.

 

A detailed debate ensued which included a number of comments, observations and questions, including:

 

a.       The perceived lack of investment in Brandon by local ward members who felt that West Suffolk Council was not supporting prosperity for Brandon or delivering like for like services as appeared to be the case for the rest of the district. Issues such as new housing development (and any accompanying s106 monies), community halls and a bypass were examples given as areas that were lacking in Brandon. In response, other members stated that amongst other initiatives, Brandon Leisure Centre would benefit from an almost £2 million investment to upgrade its current leisure offer; local communities themselves had led and worked in partnership with the Council and others to bring forward new and refurbished community centres within their own areas; Brandon ward members were encouraged to actively engage in the new West Suffolk Local Plan development process and look to overcome environmental challenges that had historically restricted housing development in the locality; and it was the responsibility of the Highways Authority or Highways England regarding the construction of a bypass.

 

b.       Whilst the Labour Group commended all staff and officers across the Council for their sterling work during the pandemic, and congratulated those involved for achieving a balanced budget for 2021 to 2022, the Group felt it could not support approval of the budget due to the consistent under-funding received from central Government. In response, members noted that whilst the ongoing lack of sufficient funding was not acceptable, the Council, with partners, was continuing to lobby in the strongest terms for fairer funding. In the meantime, a balanced budget had been achieved in extremely challenging and unprecedented times due to previous prudent financial decisions made by the Council. 

 

c.       The Council’s income had been severely impacted in the past year and therefore under the circumstances, this was considered by the majority of members to be the best budget that could have been achieved. No alternative budget had been presented by those that did not support these proposals.

 

d.       As recovery plans from Covid-19 were now beginning to emerge, the proposed budget enabled support for the recovery process and several examples were given in respect of how the proposed budget would help implement and achieve those plans in accordance with the Council’s strategic framework and themes of the Medium Term Financial Strategy.

 

e.       Support provided to those in housing need, including accessing vital Government funding and the provision of much needed temporary accommodation which had particularly shown an increase in demand due to the pandemic; and the role of Barley Homes within the budget, with developments now coming forward to provide new homes, including affordable housing, as well as providing an income for the Council. 

 

f.       Whether it was the right time to continue with the council tax harmonisation plans which had been agreed before the impact of the pandemic was known. With many residents now facing their own personal financial challenges, it was questioned by Councillor Ian Shipp, Leader of the Independent Group, whether the Council’s reserves should be utilised further to balance the budget in the present circumstances. In response, members noted that in these exceptional circumstances, reserves had been used significantly to balance the budget for the current year, however this was not sustainable for future years. The Council often had to make difficult, but prudent, financial decisions and it was imperative that in time, reserves were replenished to demonstrate financial resilience and maintain sustainability. 

 

Using West Suffolk Council, Suffolk County Council and Havebury as an example of different bodies cutting their own areas of land in the St Olaves ward, Cllr Paul Hopfensperger asked whether there was some way of rationalising the grass cutting undertaken by various partners across the district as he felt this would be more cost effective than the present arrangements. In response, Councillor Broughton stated that a written reply would be provided and circulated to all members in due course.

 

The majority of members acknowledged that despite the financial challenges being faced including the added pressures of Covid-19, the Council had made, and were continuing to make, successful investments in services; growth, environment-improving and health and well-being projects; together with creating efficiencies, resilience and ensuring the effective management of resources, all of which and more would enable West Suffolk Council to secure a balanced budget for 2021 to 2022 with sustainable medium term plans in place.

 

The motion was then put to the statutorily required recorded vote.  With 59 members present, the votes recorded were 44 votes for the motion, 15 against, and no abstentions; the names of those Members voting for and against being recorded as follows:

 

For the motion:

Councillors Augustine, Beckwith, Broughton, Simon Brown, Tony Brown, Bull, Burns, Chester, Chung, Clements, Cole, Crooks, Drummond, Evans, Everitt, Frost, Glossop, Griffiths, Harvey, Hood, Beccy Hopfensperger, Paul Hopfensperger, Houlder, Lay, Luccarini, Marks, Mason, McManus, Mildmay-White, Nettleton, Nobbs, Rayner, Richardson, Roach, Rout, Rushbrook, Andrew Smith, John Smith, Soons, Springett, Stevens, Thompson, Thorndyke and Williamson.

 

Against the motion:

Councillors Alecock, Bradshaw, Clarke, Dawn Dicker, Roger Dicker, Hanlon, Hind, Lukaniuk, Neal, Palmer, Shipp, David Smith, Waldron, Waterman and Wittam.

 

Abstentions:

None

 

It was therefore

 

Resolved:

 

That:

1.       Having taken into account the information received by Cabinet on 9 February 2021 (Report number: CAB/WS/21/008) including the Report by the Assistant Director (Resources and Performance) (Section 151 Officer) set out in Attachment C, together with the up to date information and advice contained in Report number: COU/WS/21/003, the level of band D council tax for 2021 to 2022 be set at £175.59 for the predecessor area of Forest Heath, and £185.40 for the predecessor area of St Edmundsbury. The level of council tax beyond 2021 to 2022 will be set in accordance with the annual budget process for the relevant financial year.

 

2.       Subject to recommendation 1 above, the following formal council tax resolutions be adopted:

 

a.       the revenue and capital budget for 2021 to 2025, attached at Attachment A and as detailed in Attachment D (Appendices 1 to 5), Attachment E (Appendices 1 to 3) and Attachment F be approved.

 

b.       A general fund balance of £5 million be agreed to be maintained, as detailed in paragraph 7.2 of Report number: COU/WS/21/003.

 

c.       The statutory calculations under Section 30 to 36 of the Local Government Finance Act 1992, attached at Attachment I, be noted.

 

d.       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 11.6 and 11.7 of Report number: COU/WS/21/003, be noted.

 

e.       In accordance with Section 30(2) of the Local Government Finance Act 1992, the amounts shown in Schedule D of Attachment H be agreed as the amount of Council Tax for the year 2021 to 2022 for each of the categories of dwellings shown.

 

3.       The Assistant Director (Resources and Performance), in consultation with the Portfolio Holder for Resources and Performance, be authorised to vire funds between existing Earmarked Reserves (as set out at Attachment D, Appendix 3) as deemed appropriate throughout the medium term financial planning period.

 

4.       Approval be given to the Flexible Use of Capital Receipts Strategy as set out in Attachment G.