Issue - meetings

The Leader’s Portfolio

To consider report FIN/583 of the Head of Corporate Finance, which was referred to the meeting of the Overview and Scrutiny Commission held on 3 October 2022.

RESOLVED

That the Full Council be recommended to approve the Budget Strategy 2023/24 to 2027/28 and to:

a)        Approve the process for meeting the gap as outlined in section 8 of report FIN/583.

b)        Approve to continue with the policy of balancing the budget over a four-year period, including putting back into reserves when the Budget is in surplus.  This is due to the current economic climate.

c)        Note the following highlights of the Budget Strategy:

          i.            that the Budget is aligned to the Council’s Corporate Priorities.

         ii.            that the current budget deficit of £204,109 for 2023/24 is based on a Council tax increase of 2.21% which is £4.95 and increases in fees and charges of 5% on average.  However table 9 highlights that the gap could be higher when looking at sensitivity analysis.

        iii.            that the outline 5 year forecast as shown in table 3 of report FIN/583.

       iv.            that the savings identified by the Corporate Management Team challenge of budgets of £413,080 have been included within the budget projections.

         v.            that there are uncertainties around Government funding prior to the settlement in December and the delay in Local Government Funding reforms such as business rates retention and the future of New Homes Bonus.

       vi.            that despite having a £5.26m General Fund reserve that the budgeted use of this reserve was £451,730 at the beginning of the current financial year, however there is a projected overspend in year due to the cost-of-living crisis and its impacts and with so many financial uncertainties the reserve must remain between £3m and £5m. The Council cannot rely on using reserves in the long term to balance the budget.

      vii.            that no additional revenue budgets have been budgeted towards the costs of the Climate Change commitment at this stage.  Table 10 within report FIN/583 shows existing capital commitments to Climate Change.

     viii.            that items for the Capital Programme are driven by the need for the upkeep of council assets and environmental obligations and schemes will also be considered that are spent to save or spend to earn but that such prioritisation should not preclude the initial consideration of capital projects that could deliver social value.

       ix.            that costs associated with splitting upper floors for the New Town Hall were not included within the original budget.  Any costs will be added to the capital programme but will be funded from rental income.

         x.            that an update on this strategy will be presented to Cabinet on 23^rd November 2022, this will include capital bids and the revised Crawley Homes capital investment plan.

Reasons for the Recommendations

To continue with the implementation of the Council’s budget strategy and to deal with the Council’s projected budget deficit which is higher than previously anticipated due to the impact of increasing inflation, increased homelessness costs, future Council tax and Business rates income projections and impact of the cost-of-living crisis on other income sources such as fees and charges.

To reaffirm the criteria for capital programme bids.  ...  view the full decision text for item 6

The Leader presented report FIN/583 of the Head of Corporate Finance.  The report set out financial projections with particular reference to the period 2023/24 – 2027/28 for the General Fund, Housing Revenue Account, capital programme and the underlying assumptions. The report set out the policy framework for improving financial efficiency and meeting the long-term investment needs of the Town, as well as proposals for the annual budget process.

It was noted that the proposed budget would be formed under the background of high inflation and the cost-of-living crisis as such assumptions were changing on a daily basis. Also, which was mentioned in the quarterly reporting, there was a pay award pending and was expected to be £800k more than budgeted for and this would be addressed in the mid-year strategy would be before the Cabinet later this year.

It was noted that currently there was a budget deficit of £204,109 for 2023/24, before use of reserves and before any savings were identified and based on a Council tax increase of 2.21% which was £4.95 on a Band D in property and an increase of fees and charges of 5%, (which was lower than inflation) for 2023/4.

Councillor T Belben presented the Overview and Scrutiny Commission’s comments on the report to the Cabinet following consideration of the matter at its meeting on 3 October 2022, which included:

·         Acknowledgement that the Council’s projected budget deficit was higher than previously anticipated due to the impact of increasing inflation, increased homelessness costs, future Council tax and Business rates income projections and impact of the cost-of-living crisis on other income sources such as fees and charges.

·         Members of the Commission commended officers from the Finance Team for their work in producing finance reports and dealing with challenging issues.

Councillor Crow was invited to speak on the item, including accepting that it was a moving feast in terms of the budget setting process. Also that it was hoped that the Council would be able to maximise the rental income of the office space within the new Town Hall going forward despite the delays in the opening and the move to the new building.

Councillors C Mullins, Jhans and S Mullins spoke as part of the discussion on the report. 

RESOLVED

That the Full Council be recommended to approve the Budget Strategy 2023/24 to 2027/28 and to:

a)        Approve the process for meeting the gap as outlined in section 8 of report FIN/583.

b)        Approve to continue with the policy of balancing the budget over a four-year period, including putting back into reserves when the Budget is in surplus.  This is due to the current economic climate.

c)        Note the following highlights of the Budget Strategy:

          i.            that the Budget is aligned to the Council’s Corporate Priorities.

         ii.            that the current budget deficit of £204,109 for 2023/24 is based on a Council tax increase of 2.21% which is £4.95 and increases in fees and charges of 5% on average.  However table 9 in  ...  view the full minutes text for item 6

To consider report FIN/583 of the Head of Corporate Finance.

The Commission considered report FIN/583 of the Head of Corporate Finance.  The report set out financial projections with particular reference to the period 2023/24 – 2027/28. The report set out the policy framework for improving financial efficiency and meeting the long-term investment needs of the Town, as well as proposals for the annual budget process.

The Commission received clarification on a number of points within the report during the discussion with the Leader of the Council, Head of Corporate Finance and Chief Executive.  Councillors made the following comments:

·         Acknowledgement that the Council’s projected budget deficit was higher than previously anticipated due to the impact of increasing inflation, increased homelessness costs, future Council tax and Business rates income projections and impact of the cost-of-living crisis on other income sources such as fees and charges.

·         Recognition that the financial pressures were extensive and that the Corporate Management Team had undertaken a series of budget challenges that had resulted in savings both in year and future years to help mitigate these pressures.  Acknowledgement that there was a need to strike a balance between competing priorities. Whilst the Council was currently benefiting from interest rates, there was a need to factor in other areas such as the reduction in national insurance. 

·         Concern expressed that the biggest demand for support was homelessness as there was a projected overspend on temporary accommodation in the current financial year, with the total annual budget spent in the first quarter. The current year budget was £900,000 with an estimated year end spend of £2.8m.  It was anticipated that the situation would remain or increase as a result of the cost-of-living crisis.  The Council had many forms of advice, support and signposting on offer. It was felt that these, along with the ‘duty to refer’ needed to be monitored in order to gauge future projections.

·         Recognition that the budget for the 2022/23 pay award had an allowance for 2%, the projected overspend was at least £800,000.

·         Clarification sought and obtained on the valuation of Telford Place car park.

·         It was noted the costs of the Council’s commitment to Climate Change had not been factored into future budget projections as some of the work had yet to be scoped.

·         Confirmation that assumptions for the new Town Hall would be updated.

·         Acknowledgement that budget modelling for future years was difficult and whilst individuals’ household income had been affected, the Council’s income streams were likely to continue to be impacted by any longer-term downturn in the economy and any future outbreaks. The cash flow and budgetary impact on the Council would be significant. There continued to be a growing gap between funding and service pressures, driven by demographic change and placing additional pressure on Council services.

·         Members of the Commission commended officers from the Finance Team for their work in producing finance reports and dealing with challenging issues.

RESOLVED

That the Commission noted the report and requested that the views expressed during the debate, were fed back to the Cabinet  ...  view the full minutes text for item 5