Agenda item

Revenue Budget 2021/2022 and MTFS 2021-2024

Decision:

1. The Cabinet agreed to note and take into account the statutory S25 report of the S151 officer at Appendix M to the report in determining:

(a) The proposed budget for 2021/22;

(b) The medium term financial plans for 2021/22 – 2023/24;

2. The Cabinet noted:

(a) The use of £5.106m of Capital Receipts to fund the Minimum Revenue Provision (MRP) in 2021/22 and £3.144m in 2022/23;

(b) In 2021/22, £12.200m of revenue spend would be capitalised in accordance with the Capitalisation Directive from MHCLG (see section 14 of the report);

(c) The Dedicated Schools Grant [DSG] settlement for 2021/22 (see Section 13 of the report) and the allocation of £193.905m as set out in Appendix L;

3. The Cabinet agreed to recommend to Council to approve:

(a) The Council Tax Support Scheme (CTSS) was not to be to varied or revised for 2021/22;

(b) With regard to the 2021/22 General Fund and Housing Revenue Account budgets, and the Medium Term Financial Strategy:

I. The General Fund Budget Requirement of £133.574m for 2021/22;

II. Proposed savings of £15.576m for 2021/22 and overall savings of £23.573m for the three years to 2023/24;

III. Growth and pressures of £12.593m for 2021/22 and overall pressures of £19.178m to 2023/24;

IV. The Housing Revenue Account budget for 2021/22 of £36.790m as set out in Appendix F;

V. The forecast reserves of £14.458m at the end of 2021/22 as set out in Appendix G;

(c) The strategy for the use of flexible capital receipts to deliver transformation and ongoing savings as set out in Appendix H to the report;

(d) The calculations for determining the Council tax requirement for the year 2021/22 in accordance with the Local Government Finance Act 1992 as set out in Appendix J to the report;

(e) The Council increase the Council tax for a band D property by £70.83 for 2021/22, giving a band D Council Tax of £1,490.30 per year, excluding the precepts from Police, Fire and parishes as set out below:

i. Its general band D Council Tax by 1.99%, the maximum permitted without a referendum as previously planned; and

ii. Its Adult Social Care Precept by 3.00% as confirmed by Government in the Final Local Government Settlement.

4. Noted the following Council tax increases and precepts as detailed in Appendix J to the report:

(a) Parish Precepts of £185,244;

(b) The Police and Crime Commissioner for Thames Valley has increased Council tax for a band D property to £231.28 per annum, a 6.9% increase on 2020/21, resulting in a precept of £9,442,862;

(c) The Royal Berkshire Fire Authority is expected to agree an increase of £1.35 for a band D property to £68.95 per annum, a 1.99% increase on 2020/21, resulting in a precept of £2,815,139;

(d) This gave a total Band D Council Tax of £1,790.53 plus any Parish precept where applicable set out in Appendix J to the report.

5. The Fees and Charges for 2021/22 as set out in Appendix K to the report.

6. That in the event of Capitalisation Directive not receiving Ministerial approval, the Cabinet would work to prepare an alternative proposal to present a balanced budget to Council, including the use of reserves and other means.

Minutes:

The Executive Director for Corporate Services gave a comprehensive overview on the following reports and sought Cabinet agreement to recommend approval to Council on 8^th March 2021:

· The proposed revenue budget for 2021/22 and Medium Term Financial Strategy (MTFS) 2021/22 to 2023/24;

· The Capital Strategy and Capital Programme 2021/22 to 2023/24; and

· The Treasury Management & Investment Strategy 2021/22.

The introduction to the reports at items 2, 3 and 4 of the agenda (Minutes 113, 114 and 115 refer) were taken together given the intrinsic links between revenue, capital and treasury management.

The Executive Director summarised the key budget proposals and set out the very challenging financial position facing local authorities, including Slough Borough Council, due to the Covid-19 pandemic and other one-off pressures. The impacts of Covid-19 would include lower rates of Council Tax and Business Rates income, rising demand for social care and other services, growth and cost pressures and reduce income from fees, charges and potentially commercial revenues. There would be a substantial budget gap which risked depleting reserves unless other action was taken.

Further to the decision taken by Cabinet in December 2020, the proposed budget included the use of a one-off capitalisation directive, which would allow the Council to capitalise up to £12.2m of revenue spend, to meet three one-off pressures – the 2019/20 Business Rates deficit, the Slough Children’s Services Trust historic deficit and the impact of Covid-19. Lead Members discussed the nature of the pressures and highlighted that the capitalisation directive was not being sought to fund day-to-day spending on services, but to deal with one-off pressures in way which protected services and maintained reserves at acceptable levels during uncertain times.

A capitalisation directive would require approval from the Ministry of Housing, Communities & Local Government and at the time of the Cabinet meeting no official ministerial decision had been confirmed, however, a positive outcome was expected on the basis of discussions between officials. The report fully set out the reasons for the one-off revenue pressures in 2021/22 and the approximately £100m worth of assets the Council had available from which to generate receipts in the future to fund the capitalisation.

The Cabinet noted that:

· The revenue budget proposed was £123m, which incorporated £12.6m of growth and pressures.

· There was a savings programme of £15.6m and the details were set out fully in the appendix to the report.

· A £6m ‘contingency fund’ would be in place to help mitigate the impacts of Covid-19 pressures and slippage in savings.

· The budget proposed an increase in Council Tax of 1.99% for the Council’s element and increase in the Adult Social Care precept of 3% as permitted by Government in the Local Government Finance Settlement.

· The MTFS set out a substantial budget gap in future years which would need to be closed.

· The position in relation to the Housing Revenue Account, Dedicated Schools Grant and police, fire and parish precepts.

· A General Fund Capital Programme of £148m and HRA capital programme of £162m to 2023/24.

· There would be a ‘root and branch’ review of the capital programme in the next year.

· A strategy was in place to strengthen reserves over the coming years.

The Cabinet highlighted that the pressures on local authorities were such that a very large number would be raising Council Tax by similar levels and several others were expected to use capitalisation directives. The report to Cabinet in January had reported a decrease in the Council Tax base of 4.7% whereas the previous MTFS had anticipated growth. A question was asked about the Equalities Impact Assessments and it was noted that the appendix setting out the savings proposals included a column summarising the position. Several savings items would need further development before coming separately to Cabinet for approval during the year. Lead Members discussed a number of specific issues including the transition to the new local authority controlled children’s services company; employment and skills initiatives; and further investment to bring forward affordable housing schemes and address the level and cost of temporary accommodation. In relation to environmental services the Council had also managed to protect local services such as the weekly bin collections, free green waste collection and zero landfill.

At the conclusion of the discussion, Lead Members recognised that the Council was operating in a financially challenging time for local government but was assured that a robust approach had been to develop the budget and MTFS. The Cabinet priority for 2021/22 had been to protect services, particularly for vulnerable residents and on preventative services, and the Our Futures programme provided the basis for achieving both service and financial benefits in 2021/22 and into future years.

The Cabinet agreed to recommend the revenue budget and MTFS to Council on 8^th March 2021, subject to an additional resolution that in the unexpected event that the capitalisation was not approved by MHCLG, the Cabinet would work to present an alternative balanced budget to Council.

Recommended –