Agenda item

Report of the Director of Finance, People & Estates (Treasurer) and the Chief Fire Officer (DSFRA/23/3) attached.

The Authority considered a joint report of the Director of Finance, People & Estates (Treasurer) and the Chief Fire Officer (DSFRA/23/3) on the draft 2023-24 revenue budget and associated Council Tax levels.

Two options were presented together with an accompanying budget book for each option:

Option A: that the level of council tax in 2023-24 for a Band D property be set at £91.79, as outlined in Option A, representing no increase over 2022-23 and representing a Net Revenue Budget Requirement for 2023-24 of £82.272m; or

Option B: that the level of council tax in 2023-24 for a Band D property be set at £96.79, as outlined in Option B, representing a £5 increase over 2022-23 and representing a Net Revenue Budget Requirement for 2023-24 of £85.413m.

A one-year Local Government Finance Settlement had been announced on 19 December 2022. This indicated a Settlement Funding Assessment for the Authority of £23.819m for 2023-24, a 1.268% increase on the settlement for 2022-23 but representing a 19.67% decrease on the settlement for 2015-16.

On 19 December 2022, the Department for Levelling Up, Housing and Communities (DLUCH) announced, as part of the provisional Local Government Settlement, the Council Tax limit to be applied in 2023-24. For the first time, the fire sector was given the option to increase Council Tax, for 2023-24 only, by up to £5 to assist with the pressures seen from inflation and pay awards. The Authority had also received a £0.445m share of the Rural Services Delivery Grant for 2023-24 together with £0.7m Section 31 grant funding to reduce the impact of the increase in social costs. These sums were included as income in the proposed revenue budget.

The Authority was advised that, should budget option A be selected, then the net spending requirement exceeded available funding by £3.141m. This shortfall could be met by a transfer from reserves in the short-term while a plan to implement spending reductions across all Service areas was developed. Option B, however, would not require any contribution from reserves.

The Medium-Term Financial Plan identified a requirement for further savings beyond 2023-24 to ensure that balanced budgets could be set in each year of the Spending Review period.

The strategic approach to deliver the required savings in future years was being developed following an efficiency review which had been initiated and would focus on the following priority areas:

·         How resources were being utilised; productivity of Service staff and assets;

·         Digitising and streamlining services to make them more efficient; and

·         Evidencing value for money in the delivery of services.

As required by Section 65 of the Local Government Finance Act 1992, non-domestic ratepayers had been consulted on proposals for expenditure. Members of the public had also been consulted. The consultation results indicated that:

·         67% of businesses agreed that it was reasonable for the Authority to consider increasing its Council Tax charge for 2023-24, while 15% disagreed that it is reasonable for them to do so, resulting in a net agreement of +52%.

·         78% of residents agreed that it was reasonable for the Authority to consider increasing its Council Tax charge for 2023-24, while 11% disagreed, giving a net agreement of +67%.

Of those respondents who agreed that a Council Tax increase would be reasonable, 38% of businesses and 47% residents indicated they would support an increase of £5.

Additionally, the consultation results indicated that:

·         54% of businesses and 56% of residents agreed strongly that the Service provided good value for money; and

·         80% of businesses and 81% of residents were either very or fairly satisfied with the service provided.

The report also indicated that the budget for the current (2022-23) financial year was set on the basis of a 5% pay award for operational staff. Similarly, an estimated pay award of 2% has been used in preparing the proposed budget for 2023-24. The pay settlement for 2022-23 was, however, still subject to negotiation and should the final settlement for this year and 2023-24 ultimately exceed the indicated amounts, then – to deliver a balanced budget for both financial years - it was proposed that the Treasurer be delegated authority to meet the amounts from reserves, subject to this being reported for information to the next appropriate meeting of the Resources Committee.

Appended to the report was a statement on the robustness of the budget estimates and the adequacy of the levels of reserves and balances, as required by Section 25 of the Local Government Act 2003.

The Resources Committee, at its budget meeting on 6 February 2023, had considered an earlier version of the report alongside revised figures (subsequently incorporated into this report) reflecting the updated position on National Non-Domestic Rates. The Committee had resolved to recommend that the Authority approve Option B (Minute RC/22/14 refers).

Councillor Hannaford MOVED (with Councillor Peart seconding) that the recommendations as set out in report DSFRA/23/3 be approved, subject to recommendation (b)(i) being amended to read:

“that the Treasurer be delegated authority to draw on reserves to a maximum of £2.8m to balance the budget in the event that the final pay award settlements for 2022-23 and 2023-24 exceed the budgeted amounts for those years (5% and 2% respectively).

The Motion was put to the vote and declared CARRIED, whereupon it was

RESOLVED

(i).    That, as recommended by the Resources Committee at its budget meeting on 6 February 2023, the level of council tax in 2023-24 for a Band D property be set at £96.79, as outlined in Option B of report DSFRA/22/3, and that accordingly a Net Revenue Budget Requirement for 2023-24 of £85,412,600 be approved;

(ii).   That, as a consequence of (i) above:

a.    The tax base for payment purposes required from each billing authority for payment of a total precept of £60,798,019 (Option B), as detailed on page 3 of the respective budget booklet (circulated separately with the agenda for the meeting) and reproduced in the following table, be approved

b.    The council tax for each of the property bands A to H associated with a total precept of £60,798,019 (Option B), as detailed on page 3 of the respective budget booklet and reproduced in the following table, be approved

(iii). That the Treasurer’s Statement on the Robustness of the Budget Estimates and the Adequacy of the Authority Reserves Balances, as set out in Appendix B to report DSFRA/22/3 and attached at Appendix A to these Minutes, be endorsed; and

(iv). That, as the budget is subject to variations in the pay for operational staff:

a.      The Treasurer be delegated authority to draw on reserves to a maximum of £2.8m to balance the budget in the event that the final pay award settlements for 2022-23 and 2023-24 exceed the budgeted amounts for those years (5% and 2% respectively);

b.      That any use of reserves so required be reported for information to the next appropriate meeting of the Resources Committee.

(See also Minutes DSFRA/22/28(d) and DSFRA/22/29 above and Minute DSFRA/22/34 below)