Agenda item

Budget Strategy 2021/22 – 2025/26

The Leader’s Portfolio

 

To consider report FIN/508 of the Head of Corporate Finance, which was referred to the meeting of the Overview and Scrutiny Commission held on 23 November 2020.

 

Decision:

RESOLVED

 

 

The Cabinet recommends to Full Council the approval of the Budget Strategy 2021/22 to 2025/26 and to:

 

a)            Note the outlook for Government funding for the period 2021/22 and future years as explained in the report and in particular the delay in Local Government Funding reforms and a one year only spending review.

 

b)            Note the creation of a Covid-19 Support Reserve to provide resource cover for any ongoing impact of Covid-19 on the Council’s medium term financial position, should no further support from Government be received in future years.  This is from reviewing existing earmarked reserves.

 

c)            Note, for the purpose of projections, the current budget deficit of £2.250m for 2021/22 before use of reserves, on the basis of a Council tax increase of 2.37% which is £4.95 on a Band D in property 2021/22.  This is before any savings are identified.

 

d)            Work towards balancing this over a four year period, including putting back into reserves when the Budget is in surplus.  There may be a need to use reserves over the next 3 years to balance the budget together with ongoing savings.

 

e)            Agree that savings, efficiencies and increased income identified by officers are approved in order to reduce the budget gap.

 

f)             Note that savings agreed to be taken forward will be worked up and included in the Budget and Council tax report to Cabinet in February 2021.

 

g)            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. That due to the pandemic new capital schemes will be standalone and will reported separately to Cabinet meetings.

 

h)            Approved the revised Crawley Homes capital investment plan in Appendix E which includes the financial year 2023/24.

 

i)              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 projected due to

the impact of the pandemic on future Council tax and Business rates income projections.

 

 

Minutes:

The Leader presented report FIN/508of the Head of Corporate Finance, which set out the projected financial position for 2021/22 to 2025/26 for the General Fund, Housing Revenue Account, capital programme and the underlying assumptions.  The report also set the policy framework for the budget process, recognising that there were a range of options for capital investment, income generation, savings and Council Tax levels; none of which can be considered in isolation. The overall objective was to work towards a balanced General Fund budget over a four year period, rather than previously three year period as a result of the impact of the pandemic.

 

The Leader commented that currently there was a current budget deficit of £2.250m for 2021/22 before use of reserves and before any savings are identified, on the basis of a Council tax increase of 2.37% which is £4.95 on a Band D in property 2021/22.

 

In presenting the report the Leader explained that there has been a great deal of communication over the Council’s current financial position as a result of the Covid pandemic, and its impact on the Council’s ability to generate income. As such there was the need, for the first time under his leadership of the Council, to make cuts to services to ensure that the Council had a balance budget. He commented that the Council had already been consulting with residents over potential savings and service changes and consideration of those findings were currently happening. He also explained where possible those and other savings and efficiencies would be taken as early as possible. That was because to reduce the need of the Council using its reserves as they were reducing and were not nearly the size that they previously were. It was also noted that there was a proposal to form a Covid 19 reserve, to deal with any further expenditures as a result of the pandemic.

 

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 23 November 2020. The Commission received clarification on a number of points during the discussion included that

·         whilst the town centre would require additional support post-Covid, the newly formed Town Centre BID intended to have a positive impact on all aspects of the Town Centre

·         that the recommendation of working towards balancing over a four year period, rather than over three year period was solely due to the impact of the pandemic on the Council’s finances.

·         it was confirmed that table 4 within section 6.2 should commence with years 2021/2022.

·         in response to concern being raised that an earmarked reserved for the town centre market had transferring to a Covid support reserve, it was noted that the nature of the town centre as a result of the pandemic would be undergoing rapid change and this included the market.

 

Councillor Crow was invited to speak on the item. He confirmed that he and his party would be supporting the Budget Strategy at Full Council, acknowledging the difficult financial position the Council and Local Government generally due to the pandemic, whilst highlighting recommendations 2.2 e and f as being important.

 

Councillor Lamb in response to a question raised by Councillor Crow over the Council’s ability to purchase property quickly for revenue purposes, should the opportunity arise, confirmed that the processes within the current procedures and delegations, were in place to enable that to happen. However it was unlikely and there was more of a concern over the potentially losing current tenants in our assets, than gaining new ones, but officers were always keeping an eye out for a good investment opportunity. 

 

Councillors Mullins, and P Smith spoke as part of the discussion on the report both supporting the approach recommended in the report. 

 

A recorded vote was taken on the recommendations in accordance with the Council’s Virtual Committee Procedure Rules.  The names of the Councillors voting for and against the recommendations, along with any abstentions, are recorded as set out below:

 

For the recommendations:

Councillors Irvine, Jhans, Lamb, Mullins, and P Smith. (5)

 

Against the recommendations:

None.

 

Abstentions:

None.

 

 

RESOLVED

 

The Cabinet recommends to Full Council the approval of the Budget Strategy 2021/22 to 2025/26 and to:

 

a)            Note the outlook for Government funding for the period 2021/22 and future years as explained in the report and in particular the delay in Local Government Funding reforms and a one year only spending review.

 

b)            Note the creation of a Covid-19 Support Reserve to provide resource cover for any ongoing impact of Covid-19 on the Council’s medium term financial position, should no further support from Government be received in future years.  This is from reviewing existing earmarked reserves.

 

c)            Note, for the purpose of projections, the current budget deficit of £2.250m for 2021/22 before use of reserves, on the basis of a Council tax increase of 2.37% which is £4.95 on a Band D in property 2021/22.  This is before any savings are identified.

 

d)            Work towards balancing this over a four year period, including putting back into reserves when the Budget is in surplus.  There may be a need to use reserves over the next 3 years to balance the budget together with ongoing savings.

 

e)            Agree that savings, efficiencies and increased income identified by officers are approved in order to reduce the budget gap.

 

f)             Note that savings agreed to be taken forward will be worked up and included in the Budget and Council tax report to Cabinet in February 2021.

 

g)            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. That due to the pandemic new capital schemes will be standalone and will reported separately to Cabinet meetings.

 

h)            Approved the revised Crawley Homes capital investment plan in Appendix E which includes the financial year 2023/24.

 

i)              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 projected due to

the impact of the pandemic on future Council tax and Business rates income projections.

 

 

Supporting documents: