Agenda item

To consider the Medium Term Financial Strategy and Budget Proposals for 2023/24.

Councillor Hargreaves presented the report regarding the Medium Term Financial Strategy (MTFS) and Budget proposals 2023/24. He commended the comprehensive documentation of “unvarnished detail” and thanked the Assistant Director of Finance for his work. He said that all current services would be maintained and no cuts were required, although he advised caution going forward into future years. He said there was uncertainty regarding the Fair Funding Review from central government, Business Rates, inflation rates and the war in Ukraine, as demonstrated by the best and worst case forecasts found in the MTFS papers.  

 

He highlighted the following:

 

• Planning fees in the Council’s control would be increased to ensure the service was in line with other authorities. There had also been more PINS applications determined by the Council, leading to greater income than forecast in the previous year.
• A Council Tax rise of 3%, equating to a £5.00 rise for Band D properties, providing an additional £195,000 income per annum.

·        The Cost of Living Support Fund had been established with this additional income, to assist those who did not qualify for other measures of support but were still struggling in the economic climate, as per discussions at a member workshop.

·        To note the balanced budget, including the use of £1.8million from reserves for planned purposes and £2.7million from the MTFS reserves. He said if an asset was sold from the investment portfolio, the shortfall could be covered. 

·        Existing council rents had been increased by 7% in line with Government policy. A 11% rise would be applied when a property was to be re-let. These measures had been accepted by the Housing Board.

·        In regards to the Treasury Management Strategy, he said the fair funding review had not been completed by central Government and all councils were affected by the uncertainty this created.

 

He said the proposals had been through both Scrutiny Committee and Cabinet.

He proposed approval of the recommendations setout in the report.

 

Councillor Reeve seconded the proposal.

 

Councillor Khan spoke to his amendment. He said the Cost of Living Crisis had led to a cohort of people who were just about managing, and who did not qualify for other measures of support. He asked members to support the amendment to help residents who were struggling but not applicable for other levels of assistance. He proposed the following:

 

“In light of the Office for Budget Responsibility forecast that real household disposable income will fall by 7.1% between 2021/22 and 2023/24, worsening the existing Cost Of Living Crisis and further squeezing the low to middle income families, this Council resolves to: 1. rebate the proposed 3% increase in the Council precept in 2023/24 financial year to households in Bands A-C to help the "just about managing households" in the district at an estimated cost of £44k and; 2. fund this cost from General Fund Reserves as the Council did with the similar targeted “cost of living” payments in the 2022/23 budget.”

 

Councillor Caton duly seconded.

 

Councillor Hargreaves spoke in response to the amendment and said that there was no evidence that this would support those that needed help. This was “too little, too late” and asked why this proposal was not raised during the member workshop.

 

Councillor Jones said the amendment would not support those that needed financial help. He said the Cost of Living Fund Policy would provide targeted support.

 

Councillor Lees said she had asked members to work together and a workshop was held to support residents with the cost of living crisis. She thanked the Liberal Democrats for their constructive input but asked why they had not raised their amendment proposal at this stage in the process.

 

Councillor Barker said it was disappointing that the administration would not consider proposals that had originated with an opposition group.

 

Councillor Caton said the amendment would provide additional support to residents on top of the Cost of Living Support Fund and said it should not be rejected for the sake of it. He said the administration did not provide opportunities to collaborate.

 

Councillor Khan said the amendment would work in tandem with the Cost of Living Support Fund. He urged members to support the amendment.

 

The Chair moved to a vote. A recorded vote was requested.

 

Councillor:	For, Against or Abstain
Armstrong	Against
Bagnall	Against
Barker	Abstain
Caton	For
Coote	Against
Criscione	Against
Driscoll	Abstain
Eke	Against
Emanuel	Against
Evans	Against
Freeman	Against
Hargreaves	Against
Isham	For
Jones	Against
Khan	For
LeCount	Against
Lees	Against
Lemon	Abstain
Light	For
Lodge	Against
Loughlin	For
Loveday	Abstain
Luck	Against
Merifield	Against
Oliver	Abstain
Pavitt	Against
Pepper	Against
Reeve	Against
Sell	For
Smith	Against
Sutton	Against
Tayler	Against

 

 

The amendment fell with 6 votes for, 21 against and 5 abstentions.

 

The Chair returned the debate to the substantive motion.

 

Councillor Lodge said local authorities across the country were suffering financially but the Council would be far worse off if it were not for the sound investments made by the administration.

 

Councillor Barker asked for clarification regarding the status of the MOOG investment and the figures relating to the Livingstone and Chorley investments.

 

Councillor LeCount said the Council’s investment portfolio was impressive and thanked the Director of Finance and Corporate Services and his team for their hard-work.

 

Councillor Light spoke on Councillor Fairhurst’s behalf and said the purpose of the budget was to ensure public money was managed. She said in principle the council had failed as important details on opportunity costs had been left out of the budget papers, such as the costs related to the Local Plan and staff turnover. Furthermore, reserves were being used to balance the budget.

 

Councillor Coote said the Council was in a much better position than other local authorities. This budget would ensure that services would continue and he urged members to support it.

 

Councillor Isham said he had concerns that there was no mention of the fact that the Council’s accounts had not been signed off by the auditor for the entirety of the administration. This had resulted in additional costs and the council should not have been put into this position due to a governance issue by the administration.

 

Councillor Caton said this was a pre-election “make believe” budget. He said officers had warned of an emergency budget in the summer.

 

The Chief Executive said there would most likely by an additional mid-year budget following the election, along with a new Corporate Plan, but this would not be an emergency or crisis budget.

 

Councillor Caton said that was a question of semantics. He said the Council should not pretend all was well with the finances and highlighted the impact of the Stansted Airport appeal on the council’s reserves, as well as the use of reserves to balance the budget over the next eighteen months. He said borrowing on loans was higher than needed and that the investment assets were worth less now than when purchased. He said the public should not be bamboozled as the council was not in a good place financially.

 

Councillor Smith thanked officers for producing the budget papers. He said in previous years the MTFS had shown “gaps” in the finances, which had been mitigated by the council’s investment portfolio, and further spending controls could have been put in place. He said the budget showed the council was not in a robust position and reserves would be depleted by 2025.

 

The Chair sought Council’s consent to extend the meeting by one hour.

 

Council gave its consent.

 

Councillor Sell said the council was operating in a difficult financial environment but highlighted the issue of borrowing rates. He said borrowing costs would continue to rise and the council was paying the price for not fixing costs when interest rates were at a historical low.

 

Councillor Khan asked how many staff would be made redundant and which services would be reduced.

 

Councillor Bagnall said investment assets were accruing funds and said yields ranged from 4 to 7.5%. Overall, the investments had grown in capital value.

 

Councillor Jones said the budget was the most important decision of the year as it established the necessary funds to provide services to residents. He said the finances had been managed soundly during this administration and this was a balanced budget. He urged members to support the proposals.

 

Councillor Luck said the budget had been debated at Scrutiny and Cabinet and he was disappointed with the level of political point scoring taking place.

 

Councillor Lees said there had not been an increase in staff vacancies under the administration. She also refuted the comments regarding the need for an emergency budget in the summer.

 

Councillor Reeve said the council was doing well compared to other local authorities in these difficult economic times. He thanked the officers for putting together the budget under challenging circumstances and said it was not a crisis budget; amendments to the budget mid-year would be entirely appropriate, given that an election was due in May. He said assets were purchased to generate revenue income and that was “locked-in”. He seconded the proposals.

 

In response to questions asked, Councillor Hargreaves said the following:

 

• In regards to the MOOG asset, £16million had been spent from a commitment of £40million.
• In regards to the transposition on page 65, he said this was transposed between Waitrose and the veterinary hospital.   
• It was common practice to use reserves to balance a budget.
• The administration had continued to invest in Chesterford Research Park, which showed the greatest return as it was the oldest asset.
• The Council had been prevented from fixing borrowing rates by Government when interest rates were historically low.
• He said staff redundancies in the next 5 years could not be ruled out but they were not a certainty, either. He said vacancies could be managed and there was some great staff working at the Council.

 

Councillor Barker requested answers to her questions in writing.

 

The Chair requested a recorded vote on the budget proposals for the purposes of the Council Tax Resolution.

 

Councillor:	For, Against or Abstain
Armstrong	For
Bagnall	For
Barker	Against
Caton	Against
Coote	For
Criscione	Against
Driscoll	Abstain
Eke	For
Emanuel	For
Evans	For
Freeman	For
Hargreaves	For
Isham	Against
Jones	For
Khan	Against
LeCount	For
Lees	For
Lemon	Against
Light	Against
Lodge	For
Loughlin	Against
Loveday	Against
Luck	For
Merifield	For
Oliver	Against
Pavitt	Abstain
Pepper	For
Reeve	For
Sell	Against
Smith	Against
Sutton	For
Tayler	For

 

The vote was carried with 18 votes for, 12 against and 2 abstentions.

 

            RESOLVED to:

 

i.                 note and have regard to the Section 25 report when considering the budgets for 2023/24;

ii.                note the risk assessment relating to the robustness of estimates as set out at paragraph 9 of the Section 25 report;

iii.               set the working balances for 2023/24 at £1.782 million for the General Fund and £581,000 for the Housing Revenue Account

iv.              approve the Commercial Strategy 2023-28;

v.                note the key risks and assumptions set out at paragraph 29 of the Medium Term Financial Strategy 2023-2028;

vi.              approve the Medium Term Financial Strategy 2023- 2028; 

vii.             approve the changes to investment counterparty limits set out at paragraphs 52-54 of the Treasury Management Strategy, to apply with immediate effect;

viii.           set the treasury management prudential indicators as set out at paragraphs 66-74 of the Treasury Management Strategy 2023/24;

ix.              approve the Treasury Management Strategy 2023/24

x.                set the capital prudential indicators as summarised at Annexe E2;

xi.              approve the Minimum Revenue Provision Statement 2023/24 as set out at Annexe E1;

xii.             approve the Capital Strategy 2023/24;

xiii.           approve the Capital Programme 2023/24 - 2027/28, including the planned application of capital financing set out at Annexe F4

xiv.           approve the increases in HRA rents as follows:-

.         General needs and supported accommodation - a 7% increase for existing tenants in accordance with the cap set by government, with formula rents to increase by the maximum permitted amount of 11.1% (to be applied only when properties are relet).

.         Temporary accommodation – rents to be increased in line with formula rents as in previous years (11.1%).

.         Garage rents – to be increased in line with September 2022 CPI (10.1%)

xv.             approve the increases in HRA support and service charges as set out at paragraphs 21-27 of the Housing Revenue Account budget report;

xvi.           note the Equality & Health Impact Assessment at Annexe G4;

xvii.          approve the Housing Revenue Account Budget 2023/24

xviii.        approve the Council Tax Requirement for 2023/24 of £6,694,027, equivalent to £171.61 for a band D property, representing a £5.00 increase on the 2022/23 amount;

xix.           approve placing £195,036 (the equivalent of the 2023/24 band D council tax increase) into a Cost of Living Support Fund to support households in hardship through additional council tax discounts, as proposed by officers;

xx.             approve the planned use of General Fund reserves during 2023/24 as set out at paragraph 47 of the General Fund budget report, including the use of £2.667 million from the Medium Term Financial Strategy reserve to balance the General Fund budget

xxi.           approve the reprofiling of spend on the Local Plan, and associated drawdown of reserves, as set out at paragraphs 29-34 of the General Fund budget report;

xxii.          approve the schedule of fees and charges for 2023/24 as set out at Annexe H5;

xxiii.        delegate authority to the Director of Finance and Corporate Services (Section 151 Officer) to set and/or amend fees and charges in relation to services which are operating in competition with commercial providers, for example trade waste;

xxiv.        note the Equality & Health Impact Assessment at Annexe H6

xxv.         approve the General Fund budget for 2023/24;

xxvi.        note the contents of the Budget Consultation Report 2023/24

xxvii.       approve the Council Tax Resolution 2023/24 report;

xxviii.     adopt the formal council tax resolution as set out at Annexe J1

 

The Chair adjourned the meeting at 9.15pm. The meeting was reconvened at 9.21pm.