Agenda item

Report No: COU/SE/16/003

Council considered Report No: COU/SE/16/003 which presented the proposals for Budget and Council Tax Setting in 2016/2017 and the Medium Term Financial Strategy. 

 

Attention was firstly drawn to the amended version of Attachment A, which had been previously circulated by email, as referred to in Minute 126 above.  The costs had now been shown with internal recharges removed in order to give greater clarity on support services.

 

Councillor Ian Houlder, Portfolio Holder for Resources and Performance drew relevant issues to the attention of Council, including that Report No: COU/SE/16/003 set out details of the Council’s proposed revenue and capital budgets for 2016/2017.  The Cabinet had been required to consider the 2016/2017 budget for the authority and had recommended to Council a proposed council tax increase of 1.952%, which equated to an increase in £3.42 for an average Band D property, to help fund this budget.  The council tax precept for St Edmundsbury Borough Council (SEBC) in 2016/2017 would therefore be £178.65 for an average Band D property.

 

The Council continued to face considerable financial challenges as a result of uncertainty in the wider economy and constraints on public sector spending.  In this context, and like many other councils, difficult financial decisions were needed to be made.  The Council had however, an excellent track record of achieving substantial year-on-year budget savings and generating new income.

 

Budget pressures included:

 

(a)     increased demand in key services such as Housing Benefits and Housing;

(b)     inflationary costs and employer’s pension liabilities;

(c)     increase in business rate appeals; and

(d)     changes to Government policies, including the Local Government finance settlement. The Council had seen a 67% cumulative cut in Revenue Support Grant (RSG) funding over the three years from 2013/2014 to 2015/2016 with a cut of 49% for 2016/2017.  

 

Financial uncertainty continued beyond 2016/2017, namely:

 

(a)     A Business Rate 100% Retention Scheme was expected by 2020, however, detail was yet to be forthcoming on how this would be implemented.

 

(b)     The Government had announced a four year RSG to cover the period up to 2019/2020; however, details regarding qualification and the associated risks were unclear.   Further cuts were expected in subsequent years with an expectation that there would be no RSG available to the borough by 2019/2020. 

 

(c)     A number of consultations would be undertaken in 2016, including the future of New Homes Bonus and changes to the Local Government finance system, therefore the outcomes and implications of these were not yet known.

 

(d)     The Council Tax Freeze Grant, which incentivised councils to freeze their council tax levels had not been included in the settlement for 2016/2017 onwards.

 

The above increased the risk of uncertainty but may provided opportunities to influence the future financial situation, such as by behaving more commercially.

 

Councillor Houlder continued and thanked Members of the Performance and Audit Scrutiny Committee for their scrutiny of a number of proposals that had been worked on to bridge the approximate budget gap of £1.9 million for 2016/2017.  All staff and Members alike were then commended for their input to enable a sustainable budget to be delivered in 2016/2017. 

 

Councillor Houlder then moved the recommendations contained in the report, which were duly seconded by Councillor John Griffiths, Leader of the Council.

 

Councillor David Nettleton proposed an amendment to the substantive motion, which was duly seconded by Councillor Bob Cockle.  The amendment sought to increase council tax by 0.67%, which equated to an increase in £1.17 for an average Band D property, making the annual total £176.40 instead of £178.65, the difference being £80,000.  Councillor Nettleton explained that this would be balanced by a forecast of a higher yield from parking fees of £80,000 based on past and current performance. 

 

Following Councillor Nettleton’s speech and explanation of his proposed amendment, a debate was held on the amendment.  Some concern was expressed that Forest Heath District Council (FHDC), SEBC’s shared services partner, was proposing a 0% council tax freeze for 2016/2017, which equated to £137.43 for an average Band D property, and a few Members considered SEBC’s council tax payers were in effect, subsidising FHDC’s council tax payers. 

 

In response, Councillor Griffiths explained that each Council’s financial affairs were independent from each other and there was no cost subsidy.  Where costs were shared, such as staffing arrangements, these had been undertaken in line with the approved cost sharing basis, which had been recently scrutinised by the Performance and Audit Scrutiny Committee before being approved by Council.  This was reviewed and signed off as part of the audit of the Council’s Statement of Accounts. He added that the budget comprised a whole raft of budget assumptions and Councillor Nettleton’s amendment was based on an unpredictable assumption.     

 

The amendment to the substantive motion was then put to the statutorily required recorded vote.  The votes recorded were 7 votes for the amendment, 36 against and no abstentions.  The names of those Members voting for and against being recorded as follows:

 

For the amendment:

Councillors Tony Brown, Burns, Cockle, Crooks, Hind, Nettleton and Robbins 

 

Against the amendment:

Councillors Broughton, Simon Brown, Buckle, Bull, Chung, Clements, Everitt, Farthing, Fox, Glossop, Griffiths, Hailstone, Beccy Hopfensperger, Paul Hopfensperger, Houlder, Marks, Betty McLatchy, Ivor McLatchy, Midwood, Mildmay-White, Pollington, Pugh, Rayner, Richardson, Rout, Rushen, Speed, Springett, Stamp, Stevens, Thompson, Thorndyke, Wade, Wakelam, Frank Warby and Patsy Warby

 

Abstentions:

None

 

The amendment to the substantive motion was therefore defeated.

 

The debate then turned to the substantive motion.  The majority of Members supported the budget for 2016/2017 and acknowledged that given the financial pressures, uncertainties and challenges placed upon the Council by Central Government, a significant amount of hard work had been undertaken by staff and Members to achieve a sustainable budget, and therefore a nominal rise in council tax for 2016/2017 should be supported.

 

Councillor Griffiths also placed on record his congratulations to all staff and Members for the 2016/2017 budget.  He highlighted that services continued to be preserved and delivered, and improved where possible.  Council tax had previously been frozen before it became ‘fashionable’ to do so, which recognised the forward thinking of SEBC.  Previous investment in the borough had paved the way for further investment from the Local Enterprise Partnerships and other partners, which had placed the Council (and West Suffolk) in a strategically stronger position in the longer term.  The proposed increase in council tax was below inflation, and gained his full support.

 

The substantive motion was then put to the statutorily required recorded vote.  The votes recorded were 38 votes for the motion, 3 against and 2 abstentions.  The names of those Members voting for, against and abstaining being recorded as follows:

 

For the motion:

Councillors Broughton, Simon Brown, Buckle, Bull, Chung, Clements, Cockle, Everitt, Farthing, Fox, Glossop, Griffiths, Hailstone, Hind, Beccy Hopfensperger, Paul Hopfensperger, Houlder, Marks, Betty McLatchy, Ivor McLatchy, Midwood, Mildmay-White, Pollington, Pugh, Rayner, Richardson, Rout, Rushen, Speed, Springett, Stamp, Stevens, Thompson, Thorndyke, Wade, Wakelam, Frank Warby and Patsy Warby

 

Against the motion:

Councillors Tony Brown, Burns, and Crooks

 

Abstentions:

Councillors Nettleton and Robbins 

 

It was therefore

 

RESOLVED: That

 

(1)     Having taken into account the information received by Cabinet on 9 February 2016 (Report No: CAB/SE/16/005) including the Report by the Head of Resources and Performance (S151 Officer) set out in Attachment C, together with the up to date information and advice contained in this report, the level of Band D Council Tax for 2016/2017 be set at £178.65.

 

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

 

(i)      the revenue and capital budget for 2016/2017 attached at Attachment A, as amended, to Report No: COU/SE/16/003, and as detailed in Attachment D, Appendices 1-5 and Attachment E, be approved;

 

(ii)     the Medium Term Financial Strategy (MTFS) projected budget position for 2017/2018 to 2019/2020, as detailed in Attachment D Appendix 1, be noted;

 

(iii)    a general fund balance of £3 million be agreed to be maintained, as detailed in paragraph 1.9.2 of Report No: COU/SE/16/003;

 

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

 

(v)     the Suffolk County Council and Suffolk Police Authority precepts issued to St Edmundsbury Borough Council, in accordance with Section 40 of the Local Government Finance Act 1992 and outlined at paragraphs 2.5 and 2.6 of Report No: COU/SE/16/003, be noted; and

 

(vi)    in accordance with Section 30(2) of the Local Government Finance Act 1992, the amounts shown in Schedule D of Attachment F be agreed as the amount of Council Tax for the year 2016/2017 for each of the categories of dwellings shown.

 

(3)     The Head of Resources and Performance, in consultation with the Portfolio Holder for Resources and Performance, be authorised to transfer any surplus on the 2015/2016 revenue budget to the Invest to Save Reserve as detailed in paragraph 1.9.4 of Report No: COU/SE/16/003, and to vire funds between existing Earmarked Reserves (as set out at Attachment D, Appendix 3) as deemed appropriate throughout the year.

 

(4)    The revised Minimum Revenue Provision (MRP) policy, as set out in section 1.8 of Report No: COU/SE/16/003 and Attachment D Appendix 4, be adopted.

 

(5)    Where the Council has usable capital receipts that are not needed for other purposes, delegated authority be given for the section 151 Officer to apply, where prudent to do so, some or all of it to meet capital expenditure incurred in the current year or previous years under paragraph 23 of the 2003 Regulations to reduce or eliminate any MRP that might need to be set aside, as detailed in Attachment D, Appendix 4.