Minutes:
The Full Council considered report FIN/583 of the Head of Corporate Finance. The Leader of the Council presented the report which set out the projected financial position for 2023/43 to 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 highlighted 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, as mentioned in the quarterly reporting, there was an officer pay award pending which was expected to be £800,000 more than budgeted for. This would be addressed in the mid-year strategy.
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.
The item had been previously considered at the Overview and Scrutiny Commission and Cabinet meetings on 3 October 2022 and 5 October 2022 respectively. Councillor Jones moved the recommendation which was seconded and supported by Councillor C Mullins.
Councillors Crow, Jhans, Irvine, Lanzer and Lamb also spoke on the item and the recommendation.
The Mayor then called for the vote on the recommendation, which was carried unanimously.
RESOLVED
That the Full Council approves the Budget Strategy 2023/24 to 2027/28 and:
a) approves the process for meeting the gap as outlined in section 8 of report FIN/583.
b) approves 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) notes 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 report FIN/583. 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 23rd November 2022, this will include capital bids and the revised Crawley Homes capital investment plan.