Agenda item

The Leader’s Portfolio

To consider report FIN/596 of the Head of Corporate Finance, which was referred to the meeting of the Overview and Scrutiny Commission on 21 November 2022.

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RESOLVED

That the Full Council be recommended to approve the Budget Strategy Mid-Year Review 2022 and to:

a)        agree the growth items for both the General Fund and Housing Revenue Account as outlined in sections 5.17 and 8.1 of report  FIN/596

b)        agree the inclusion of new capital schemes in future budgets with the value of £165,000 as identified in section 9.2 of report  FIN/596

c)        agree an increase in the capital programme for Park Tennis by £111,390 funded from Lawn Tennis Grant as outlined in paragraph 9.3 of report  FIN/596.

d)        approve the revised Crawley Homes capital investment plan as outlined in Appendix B to report  FIN/596 which includes the financial year 2025/26 and the garage repairs which was transferred to the General Fund.

e)        note the following highlights of the Budget Strategy Mid-Year Review 2022:

i       Note the 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.

ii      Note, for the purpose of projections, the current budget deficit of £201,792 for 2023/24 before use of reserves, on the basis of a Council tax increase of 2.31% which is £4.95 on a Band D in property 2022/23.  Future years gaps are shown in section 4.2 of report  FIN/596.

iii     Note that the Gap from 2024/25 will need to be addressed once the finance settlement is announced as there will be insufficient reserves in the long term to fund future gaps.  The methodology of approaching the gap is outlined in section 7 of report  FIN/596.

iv     Note 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 spend to save or spend to earn but that such prioritisation should not preclude the initial consideration of capital projects that could deliver social value.

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

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 agree the revised Crawley Homes capital investment plan for inclusion within the capital budget.

To agree growth items and capital schemes outlined in the report.

To note that until the Local Government Finance Settlement is known in December 2022 these projections are highly likely to change. 

The Leader presented report FIN/596 of the Head of Corporate Finance.  The report provided an update on the Council’s Budget Strategy, it was immediately explained that it was very difficult to predict because of the national picture. Since the previous budget report in October there had been some changes including that there was an expected deficit of £202k for next financial year (met by reserves), which then increases £398k in the following year. Other changes included increase provision for a pay award based on rising inflation, expected increase in income over garages rents, and expected cost of homelessness support which will be increased for next year to £1.4mil. Water neutrality has played a factor with loses of £291k as it affected with the expected planning fees down by £120k, and the Council also missing out on new homes bonus and Council Tax income from new properties. 

On the HRA, with the Autumn settlement set social rents increases to 7%, which would relate to lost income to the Council of just under £169mil over the 30year HRA business plan, as it assumes increase by CPI inflation plus 1%. That would affect the Crawley Homes’ ability to build more new homes and to implement some of the planned climate change initiatives.

In terms of Council Tax it proposed to increase a Band D property by £4.95.

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 21 November 2022.

Councillor C Mullins spoke as part of the discussion on the report.

RESOLVED

That the Full Council be recommended to approve the Budget Strategy Mid-Year Review 2022 and to:

a)        Agree the growth items for both the General Fund and Housing Revenue Account as outlined in sections 5.17 and 8.1 of report FIN/596

b)        Agree the inclusion of new capital schemes in future budgets with the value of £165,000 as identified in section 9.2 of report FIN/596

c)        Agree an increase in the capital programme for Park Tennis by £111,390 funded from Lawn Tennis Grant as outlined in paragraph 9.3 of report FIN/596.

d)        Approve the revised Crawley Homes capital investment plan as outlined in Appendix B to report FIN/596 which includes the financial year 2025/26 and the garage repairs which was transferred to the General Fund.

e)        Notes the following highlights of the Budget Strategy Mid-Year Review 2022:

i       Note the 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.

ii      Note, for the purpose of projections, the current budget deficit of £201,792 for 2023/24 before use of reserves, on the basis of a Council tax increase of 2.31% which is £4.95 on a Band D in property 2022/23.  Future years gaps are shown in section 4.2 of report  FIN/596.

iii     Note that the Gap from 2024/25 will need to be addressed once the finance settlement is announced as there will be insufficient reserves in the long term to fund future gaps.  The methodology of approaching the gap is outlined in section 7 of report  FIN/596.

iv     Note 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 spend to save or spend to earn but that such prioritisation should not preclude the initial consideration of capital projects that could deliver social value.

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

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 agree the revised Crawley Homes capital investment plan for inclusion within the capital budget.

To agree growth items and capital schemes outlined in the report.

To note that until the Local Government Finance Settlement is known in December 2022 these projections are highly likely to change.