Agenda item

Budget 2023-24 and Medium-Term Financial Plan 2023-27 for the Housing Revenue Account

 

The report seeks Council approval for the updated Budget 2023-24, Medium Term Financial Plan (MTFP) 2023-27 and 30-year Business plan for the Housing Revenue Account (HRA).

 

The Chair then advised that he was taking items 9 and 10 together. For ease of reference, officers had consolidated the recommendations from the original report and the update report, and these had been circulated in the Chamber. 

 

Budget 2023-24 and Medium-Term Financial Plan 2023-27 and Update to the Budget 2023-24 and Medium-Term Financial Plan 2023-27 Report

 

The report provided the Revenue Budget for 2023-24 and Revenue Medium-Term Financial Plan (MTFP) 2023-27 and the Capital Budget for 2023-24 and Capital MTFP 2023-27, following the Government’s Autumn Statement on 17 November 2022, and the publication of the provisional Local Government Finance Settlement on 19 December 2022. The update report updated members with matters relating to the Budget 2023-24 which had arisen following publication of the report which was presented to the all-Member Corporate Services and Economic Growth Overview and Scrutiny Committee on 13 February 2023 and then Cabinet on 14 February 2023.

 

The Leader thanked all staff throughout the Council for all of their work. The Administration had a big responsibility to do its best for residents and staff and to provide value for money. The budget priorities had been guided by the three key priorities. In the face of rising inflation, this budget had been difficult to manage and he was grateful to the S151 Officer and her staff for their help with this.

 

The key issue had been to protect frontline services so there would be no cuts in these areas, nor to the leisure centre programme or school building programme, or school support team to build on the improving Ofsted results. The care provided to older people would continue, and the budget contained additional support for this service. He detailed many other areas of support for services and highlighted the £3m pa for the next three years, (if needed) allocated to the strategic change programme which should deliver £17m per year savings on a recurrent basis. Tackling inequalities remained one the of the Administration’s key priorities and showed how seriously this was being taken with the signing of the Compact and investment overall of £2m to support various initiatives.

 

The proposed Council Tax rise of around 4% in a time of much higher inflation showed that the Administration was keen to get things working. The hardship fund and council tax support mechanism would help those who most needed it. He moved the report’s recommendations, which was seconded by Councillor Wearmouth.

 

A number of questions were asked which included:-

 

·       Councillor Kennedy asked how much the average Band D property council Tax would rise by. Councillor Wearmouth advised that this was set out on Page 17 of the report and was £87.91.

·       Councillor Morphet asked why there was nothing in the capital programme this year for U and C roads. He asked if the proposed cut to the member small schemes programme would be reinstated between now and 2025 and he asked if it was correct that £800,000 was being taken from the EV charger installation budget. The Leader responded that there was already a significant budget in the LTP for U and C roads and two years ago £15m extra had been put into the LTP, followed by £2.5m last year. This meant roads were in a much better condition than they had been for some time, but advice was taken from Highways Area Managers regarding where the priorities were.

·       Regarding the members small schemes funding, the situation was that if the pot was not spent, then it rolled over to the following year and at the end of an administration, reverted back to zero if not spent at the end of the four year period. The funding itself was not being removed. Regarding the EV chargers, he suspected the position was the same but would check that.

·       Councillor Dale asked if it was correct that taking recommendations 14 and 19 together meant the Council Tax rise was nearer 5% than 4%. She also asked if the adult social care rise increase last year was built into the base budget, and whether the current 4.99% rise would be built into the core budget. Councillor Wearmouth confirmed that the council tax rise and the adult social care precept rolled forward to become part of the tax base. Each year the Government identified the amount by which councils could raise the council tax and adult social care precept. The proposed rises would go into the tax base. However, councillors were also being asked to agree that a 1% discount be apportioned to council tax payers to ease the pressure on incomes so this meant the average rise for a Band D property would be 4%.

·       Councillor Hunter sought reassurances that the capital funding for the Berwick partnership would not be affected. The Leader confirmed that it would not.

·       Councillor Reid asked where the £350,000 saving in the concessionary travel scheme was coming from. Councillor Riddle advised that this came from an increase in the current charge for purchasing spare seats on buses. Councillor Reid commented that price increases were not the same as efficiencies. Councillor Riddle replied that this was an excess of payment to operators so the saving related to an underspend rather than a cut to service.

·       With regard to Appendix 10, the corporate equality impact assessment, Councillor Swinbank sought assurance that the budget would not result in an increase in inequality for women. The Leader felt sure this would have been taken into account in the formulation of the budget. The S151 Officer confirmed it was contained in Appendix 10.

·       Councillor Robinson asked for an assurance that in future, members would have a greater role in the formulation of the budget, which would produce a more holistic result. The Leader responded that when there was a level of trust between members which allowed highly confidential information to be shared then he would agree to that. In the meantime, he was content with the current level of dialogue with Group Leaders.

·       Councillor Dickinson commented that he had warned about the lack of engagement in the budget setting process at the end of last year and some of this had been outside officer control. Settlements were awaited from Government etc but officers had done their best to create a budget to meet the Administration’s priorities. The basic facts of the budget were that people were being asked to pay more and get less. Town and Parish Councils were being asked to pick up the slack and were increasing their precepts to meet this shortfall. He reminded members that there was a cost of living crisis and hard working families were being asked to pay more across the board whilst cutting the services they received. The proposed cut to adult social care worried him greatly as the elderly had suffered a lot as a result of covid and young people were not being invested in either. Regarding equalities measurements, many of the proposals came in at just one point above what shouldn’t be done, and this was of great concern. Regarding trust comments, he commented that there had been other discussions between Group Leaders in confidence and felt that the budget could also have been part of that.

·       Councillor Kennedy was disappointed with the Leader’s remarks on trust. He did not feel there had been a lack of trust between Group Leaders in meetings on other matters where confidences had been maintained. He acknowledged that setting the budget was a very difficult task, but the fact remained that £87.91 was a lot of money. The budget reflected the Administration’s priorities and he didn’t feel that the other groups had been properly engaged, but accepted that engaging the public could be problematic. Hexham Town Council had been successful in its market stall events and this could be something to consider.

·       Councillor Reid referred to the savings which had been identified which had nothing to do with Council efficiencies. The common theme this year seemed to be about various increases rather than reviews, as in previous years. He felt the Administration could have been more proactive and tried to engage all members more at an earlier stage. The budget didn’t feel like it belonged to all members. £9m had been taken out of the adult social care budget in three years but 2% had been put onto the adult social care precept. A national solution was needed to the adult social care crisis, it could not be put on the taxpayer. He would like to see a schedule of price increases in future years. 

·       Councillor Bawn commented that this was a sensible budget which members could not object to. The Administration was entitled to set its own budget. It met the Administration’s needs and worked for the County and he urged members to support it. There had been consultation, but people could not be forced to respond.

·       Councillor Oliver commented that the Government had put more money into Northumberland than he had ever seen before. This would make a real difference to people’s lives and should be acknowledged. He felt it was important to look at the bigger picture. £21m was being spent in adult social care, £17m in children’s services and there was a total increase in the budget of £53m. There was a really ambitious capital programme which was investing in communities - £650m in four years. The budget focussed on delivering a strong economy and he commended it to members.

·       Councillor Hill commented on her belief in robust, but responsible opposition and felt it was important to be fair and give credit where it was due. The current economic situation could not be ignored and whilst she did not agree with everything in it, it was the only budget on the table. She welcomed the support for Berwick.

·       Councillor Dale thanked the staff for their work on the budget. The Caller report has referred to the need for members to work together and there had been a lost opportunity to do this on the budget. The consultation had highlighted residents’ wish for more to be spent on local services. In Democratic Services, the members’ allowances budget should have been looked at, particularly for planning special responsibility allowances, which could free up resource for frontline services.

·       Councillor Renner Thompson commented that his gross budget in Children’s Services had increased by 11% thanks to the Government. Schools were being built all over the County and the Government was providing money for family hubs and for the college in Ashington. There was a lot for Children’s Services in the budget and he urged members to support it.

·       Councillor Ball agreed that more funding was coming into the County but it was still less per head than many other councils. More people were living in poverty, unable to heat their homes. There were no youth workers any more, only a reactive service when people were at crisis point. Leisure centre opening hours were reducing. She had a number of concerns about the budget.

·       Councillor Ezhilchelvan felt this was a common sense and compassionate budget. The increases were below inflation and there were no cuts proposed. He was disappointed that there was no constructive criticism from the opposition and no alternative suggestions. He was also disappointed that there seemed to be no appreciation of the hard work which had gone into producing the budget.

·       Councillor Scott expressed her concern about the travel distance in taxis for children with special needs to the new special school in Blyth . She asked how much the Council spent on this and suggested it could be better spent on support in the existing schools.

·       Councillor Wallace commented that the budget was doing nothing for the residents of Sleekburn. One of the schools in his area had been told they could not have grass for the pupils to play on because it cost too much. He pointed out that the Northumberland Line was not being fully funded by the Government as the County Council was contributing £30m.

·       Councillor Watson commented that Appendix 10 was the duty of the equality impact assessment and in September the Council had pledged to have an inequalities plan which undertook to carry out equality impact assessments and not just reference the duty to do them.

·       Councillor Ferguson welcomed the fact that inequalities was now on members’ radar. This would take a while to embed but it was wrong to say that the budget had not been looked at through the inequalities lens. The inequalities plan would not be delivered in six months but it was happening.

·       Councillor Dunn acknowledged that the budget process had been very difficult for officers this year and she thanked them for that. The budget contained some excellent external funding for various initiatives but this had had little or no impact on her ward. There had been two EV chargers installed recently but residents simply wanted to see improvements to front line services. Many of her residents couldn’t afford electric vehicles and just wanted more reliable and affordable public transport, better roads etc. The very basic services that residents should expect from the Council were all increasing in cost. She could not support the main part of the budget, which would directly affect her residents.

·       Councillor Swinburn remarked that every member would support an increase in expenditure on front line services and reduction in council tax. Some councils were having to declare themselves bankrupt but this Council was very responsible in how it handled its finances. The Council was subject to the same inflationary pressures as everyone else and this couldn’t be ignored.

·       Councillor Murphy reminded members that local government expenditure was controlled by national government. It was no accident that the Council didn’t have enough money to pay for its services, it was as a result of decisions at national level. She urged the Administration to challenge its Government on the settlement and the way local government was funded and asked about the Administration’s plans for income generation.

·       Councillor Towns commented that the efficiencies included increased costs to the Council, which had to be passed on. If the opposition gained control of the Council in two years’ time, he looked forward to his council tax being reduced and to listening to members defend a budget which would include efficiencies. This was a well considered budget and would be delivered in as fair a way as possible in the current situation. 

 

Councillor Wearmouth responded to some of the points made as follows:-

 

·       There would actually be an increase in adult social care spending of 16%.

·        A 1% reduction in council tax was proposed so this would reduce the £87.91 increase.

·       There would be a 12.3% increase in Local Services spend.

·       £45m was coming from the Government for Ashington College and there was money in the capital programme for Ashwood Business Park.

 

The Leader then summed up.

 

The Business Chair referred members to the consolidated recommendations1-42 circulated in the chamber and called for a named vote. On the recommendations being put to the vote, the votes were cast as follows:-

 

FOR: 32 as follows:

 

Bawn, D.	Jackson, P.A.
Beynon, J.	Jones, V.
Carr, D.	Mather, M.
Castle, G.	Oliver, N.
Chicken, E.	Pattison, W.
Daley, W.	Ploszaj, W.
Dodd, R.R.	Renner Thompson, G.
Dunbar, C.	Riddle, J.R.
Ezhilchelvan, P.	Sanderson, H.G.H.
Ferguson, D.	Seymour, C.
Flux, B.	Stewart, G.
Hardy, C.	Swinburn, M.
Hill, G.	Thorne, T.N.
Horncastle, C.W.	Towns, D.
Humphrey, C.	Watson, J.
Hutchinson, J.I.	Wearmouth, R.

 

AGAINST: 22 as follows:

 

Ball, C.	Murphy, M.
Bowman, L.	Nisbet, K.
Cartie, E.	Parry, K.
Clark, T.	Purvis, M.
Dickinson, S.	Richardson, M.
Dunn, L.	Scott, A.
Foster, J.	Taylor, C.
Gallacher, B.	Waddell, H.
Kennedy, D.	Wallace, A.
Lang, J.A.	Watson, A.
Lee, S.	Wilczek, R.

 

ABSTENTIONS: 8 as follows:

 

Dale, P.A.M.	Reid, J.
Fairless Aitken, S.	Robinson, M.
Hunter, E.I.	Sharp, A.
Morphet, N.	Swinbank, M.

 

It was therefore RESOLVED that Council:-

1.    Note that the figures contained within the Budget 2023-24 within Appendix 1 are based on the provisional Local Government Finance Settlement of 19 December 2022;

2.    Approve the revenue budget for 2023-24 including, the budget balancing target totalling £17.045 million contained within Appendix 1;

3.    Note the Revenue MTFP covering the period 2023-27 detailed within Appendix 1 and the requirement to deliver budget balancing measures of £9.564 million in 2024-25, £18.508 million in 2025-26, and £8.954 million in 2026-27;

4.    Note the estimated receipt of Revenue Support Grant of £12.430 million for 2023-24 contained within Appendix 1;

5.    Note the estimated retained Business Rates and the Top-Up grant funding to be received by the Council for 2023-24 of £94.805 million and £307.453 million over the remaining period of the MTFP contained within Appendix 1;

6.    Note the estimated deficit from prior years on Collection Fund Business Rates balances of £1.944 million in 2023-24 contained within Appendix 1;

7.    Note the estimated receipt of Rural Services Delivery Grant of £2.745 million for 2023-24 contained within Appendix 1;

8.    Note the estimated receipt of the New Homes Bonus of £0.961 million for 2023-24 contained within Appendix 1;

9.    Note the estimated receipt of Improved Better Care Funding Grant of £12.496 million for 2023-24 contained within Appendix 1;

10. Note the estimated receipt of Social Care grant funding of £22.056 million for 2023-24 contained within Appendix 1;

11. Note the estimated receipt of Adult Social Care Discharge Grant funding of £1.752 million in 2023-24 and £2.920 million in 2024-25 contained within Appendix 1;

12. Note the estimated receipt of Adult Social Care Market Sustainability and Improvement grant funding of £3.563 million in 2023-24 and £5.357 million in 2024-25 contained within Appendix 1;

13. Note the estimated receipt of the Services Grant of £2.787 million in 2023-24 contained within Appendix 1;

14. Approve a 2.99% increase in Council Tax for 2023-24, noting that this is in line with the Government’s assumptions regarding the Council’s Core Spending Power: and, within the Government’s referendum limit of 3.00%;

15. Note that the MTFP 2023-27 includes a 2.99% annual increase in Council Tax for 2024-25 and then 1.99% thereafter for the remaining years of the MTFP and, that an estimate of annual tax base growth has been included;

16. Note the non-collection rate for Council Tax purposes remains at 1.00% for 2023-24 (1.00% in 2022-23);

17. Note the estimated surplus of £2.737 million from prior years on the Collection Fund Council Tax balance for 2023-24 contained within Appendix 1;

18. Note the estimated receipt of Council Tax Support funding of £0.654 million in 2023-24 and note the intended use of the grant contained within Appendix 1;

19. Approve a 2.00% increase in Council Tax for 2023-24 for use on Adult Social Care services; raising an additional £4.530 million to support the Budget 2023-24, and note the assumed increase included in the MTFP of 2.00% for 2024-25 and zero thereafter;

20. Approve the Reserves Policy for 2023-24 detailed in Appendix 2;

21. Note the Schedule of Reserves and Provisions contained within Appendix 3;

22. Approve:

The net contributions from the Strategic Management Reserve of £12.739 million in 2023-24 and note the proposed contributions from reserves of £15.792 million in 2024-25, £6.335 million in 2025-26 and the proposed contribution to reserves of £1.032 million in 2026-27 contained within Appendix 1, comprising:

a)    non-recurrent pressures of £5.898 million for 2023-24, and note the non-recurrent pressures totalling £4.528 million in 2024-25; £0.935 million in 2025-26 and £0.159 million in 2026-27 (as detailed within Appendix 8; excluding the Adult Social Care Discharge Fund, Adult Social Care Market and Sustainability and Improvement Fund, Locality Coordinators, Council Tax Support Fund and Transformation Programme),

b)    the Active Northumberland Management fee of up to £1.000 million in 2023-24,

c)    delayed receipt of investment income from the airport of £0.957 million in 2023-24; and that interest of £0.161 million in 2024-25, and £1.191 million in 2025-26 and 2026-27 will be repaid into the reserve in this respect,

d)    revenue contribution to capital (RCCO) of £8.171 million in 2024-25 and £6.591 million in 2025-26 for investment in the Schools’ Development Programme, and,

e)    contribution from the reserve of £4.884 million in 2023-24 and note the subsequent proposed use of £3.254 million in 2024-25 in order to balance the budget;

23. Approve the use of the Public Health Revenue Grant Reserve of £0.199 million in 2023-24 and note the contribution for 2024-25, to fund five fixed term Locality Coordinator posts contained within Appendix 1;

24. Note the proposed use of the General Fund Reserve of £7.850 million in 2024-25, to be set aside as a voluntary Minimum Revenue Provision (MRP) to enable the Council to repay debt at an appropriate time in the future contained within Appendix 1;

25. Approve the use of the Council Transformation Fund Reserve of £3.000 million in 2023-24 and note the use of £3.000 million from this reserve in financial year 2024-25 contained within Appendix 1;

26. Approve the use of the Collection Fund Smoothing Reserve of £1.944 million in 2023-24, to part fund the 2022-23 forecast deficit of the Business Rates element of the Collection Fund, and prior year deficit on Business Rates contained within Appendix 1;

27. Note:

a)    the Schedule of Service Specific Grants of £250.400 million contained within Appendix 4, and

b)    the indicative 2023-24 Public Health Grant allocation of £17.366 million contained within Appendix 4, and its proposed usage.

28. Approve the Inflation Schedule for 2023-24 totalling £28.900 million detailed in Appendix 5;

29. Approve the Recurrent Growth and Pressures Schedules of £16.694 million and the additional revenue costs associated with the Capital Programme of £6.164 million for 2023-24; and note the growth and pressures of £2.422 million in 2024-25; £1.773 million in 2025-26; and, £0.392 million in 2026-27 and the additional revenue costs associated with the capital programme of £14.075 million in 2024-25; £10.098 million in 2025-26; and £6.000 million in 2026-27 included within Appendices 1, 6 and 7;

30. Approve the Non-Recurrent Pressures of £15.066 million for 2023-24 and note the non-recurrent pressures of £16.004 million for 2024-25; £0.935 million for 2025-26 and £0.159 million for 2026-27 included within Appendix 8;

31. Approve the Non-Recurrent Income of £0.157 million for 2023-24 and note the non-recurrent income of £5.601 million for 2024-25; £0.252 million for 2025-26 and £0.221 million for 2026-27 included within Appendix 8;

32. Approve the identified budget balancing measures contained within Appendix 9 of £17.045 million for 2023-24; and note those budget balancing measures totalling £10.295 million already identified for 2024-25 to 2025-26;

33. Note the Corporate Equality Impact Assessment at Appendix 10;

34. Note the Budgets by Service Area 2023-24 detailed in Appendix 11;

35. Note the receipt of Dedicated Schools Grant of £160.287 million in 2023-24; and note the revised allocation of £150.832 million for 2022-23.  This is following the conversion of three schools to academy status during 2022-23;

36. Approve the Capital Strategy 2023-24 to 2026-27 contained within Appendix 12;

37. Approve the revised Capital Programme as detailed within Appendix 13 and note the reduction in the Capital Programme 2023-27 of £37.599 million detailed in Appendix 14;

38. Approve the delegation of the detail of the final Local Transport Programme and any subsequent in-year amendments to the Executive Director responsible for Local Services in consultation with the Cabinet Member for Local Services;

39. Approve the delegation of the detail of the capital allocation for highways maintenance investment in U and C roads and footpaths to the Executive Director responsible for Local Services in consultation with the Cabinet Member for Local Services;

40. Approve the Prudential Indicators based on the proposed Capital Programme detailed within Appendix 15;

41. Approve the Annual Minimum Revenue Provision Policy detailed in Appendix 16; and

42. Approve the Treasury Management Strategy Statement 2023-24 detailed in Appendix 17.

The Business Chair then adjourned the meeting at 5.04 pm and reconvened it at 5.18 pm.