Agenda item

To consider the report on the budget proposals for 2019/20.

The Portfolio Holder for Finance and Administration presented the report. The Council was required to prepare detailed reports to enable the annual budgets for the General Fund and Council Tax, Housing Revenue Account and the Capital Programme to be set. The Section 151 Officer was also required to provide Members with a Section 25 report giving advice and assurance on the reserves position. The Council also had to provide a number of supporting strategies. All of these documents were presented in the report.

 

He had been asked by Councillor Dean, the Chairman of the Scrutiny Committee, to clarify that there was no vote at Scrutiny Committee on the budget, and the report to Council was wrong to state that it had endorsed the budget.

 

He reflected upon the last four years as a Council. The very significant challenge of a one third cut in government funding had been navigated, and the Council had protected services, continued to invest in additional priority services, undertaken a significant programme of capital investments and some important strategic investments, built up a sinking fund to the relocation of the Dunmow Depot, funded the Local Plan, and put in place the Local Council Tax Support Scheme, which was by far the most generous in Essex. This had been done by a combination of efficiencies and identifying an additional source of income.

 

A 2.99% increase in Council Tax was proposed for the coming year. Over the last ten years, Uttlesford Council Tax had only increased by 2.8%, and Uttlesford continued to have the lowest rate of Council Tax than any other district in Essex.

 

The Council faced significant financial challenges in the future. Government funding was likely to decline by over 50% in the next five years, from £6.6 million to £3.1 million. There was likely to be a growing deficit going forwards, though the reserves would likely smooth the process. There was scope for efficiencies and increasing council tax, but this would not plug the funding gap. It was therefore proposed to add another aspect to the Investment Strategy. The Council’s investment in Chesterford Research Park was forecast to bring in £1.7 million in 2019/20, and had been a valuable first step. There was capacity to expand the park, but it would not grow fast enough to meet the challenge. A resolution to agree in principle further expansion of the investment strategy was therefore proposed.

 

An item regarding the governance structure for a significant increase in investment would come to the following Council meeting. It was important for Council to be the decision-making body, but a new structure would ensure early engagement from a wide-range of councillors, non-executive and professional advisors. It was important that decisions on investment must be taken in standalone meetings, or at the beginning of meetings. It was important to see beyond the next election.

 

Some Members expressed support for the view that decisions on investment should not take place at the end of meetings, and should have standalone meetings. These decisions were so important that a wrong decision could put the Council in jeopardy.

 

Councillor Dean said as Leader of the Liberal Democrat group, the group was satisfied with the broad proposals, and recognised the likely need to bridge a looming funding gap. He asked whether the Council could now openly lobby for fair funding from central government. The Liberal Democrats were concerned about lack of controls and accountability regarding investment and would therefore abstain on the Medium Term Financial Strategy and the Investment Strategy. He asked for separate votes on these items.

 

Some Members expressed the view that it was a shame that councils had been put in a position where they were being encouraged to invest in order to generate income, although a solution to the funding gap was needed.

 

Councillor Fairhurst said the difficult situation the Council was being put in should not be a licence to speculate. There was a need for prudent investment and the current Investment Strategy did not meet the standards necessary for such a strategy. An investment committee was needed to assess important issues. He was happy to hear the Council was going to discuss this.

 

Some Members criticised the lack of detail in the Investment Strategy, and expressed concern about the governance of current and further commercial investments. A means of exercising better governance over the Council’s investments was needed, for instance by a panel with a specific role to monitor this. Matters such as commercial investment had to be considered carefully, and should include input from a selection of experts, as any investment had to be a risk the Council could manage. Councillors could not turn themselves into entrepreneurs, and it was dangerous to speculate with public money.

 

Councillor R Freeman said scientific input on a proposed investment panel would be useful.

 

The Leader of the Council said Councillor Howell had been outstanding over his four years as Portfolio Holder for Finance and Administration, and would be stepping down in May. Members seemed to respect the budget and the need for investment. Most local councils had been investing commercially for longer than Uttlesford and so were more experienced. There seemed to be cross-party support for a panel to manage governance in investment, and officers would do work on what this panel would look like. It could be possible to add a new member to the Aspire board who had knowledge of scientific research. The Council was continually lobbying for fair financial support from central government, and the government in turn was looking seriously into district council financing and health and social care.

 

Councillor Sell proposed the following amendment:

 

This Council resolves to withdraw financial support from the establishment of a running track at Carver Barracks, Debden. It therefore resolves to transfer the allocated financial support of £500,000 which is currently earmarked within the Strategic Initiatives Fund (SIF) to a new reserve for community infrastructure including sport provision.

 

He said he had not supported the original decision to dedicate funding to the running track at Carver Barracks. There were many examples within the district where funding for sport was required, and allocating so much money to one athletics track was not putting it to good use. It was important to think about what was best for the residents of the entire district.

 

Some Members supported the view that prudent to allocate the money to a new reserve for community infrastructure. It would be wrong just to allocate all funding to the same place. Other clubs across the district were in need of investment.

 

Other Members said they would be opposing the motion. The planned running track would be a great facility in a great place. It would be wrong to back down from the decision and it was a good opportunity to get an expensive project completed at a reduced cost.

 

Councillor Knight summarised how the progress with the running track had proceeded over the past four years. The most contentious issue had been a clawback clause which would have allowed the Council to claim back a certain amount of the funding if the Barracks closed before 2030, and nobody had been prepared to guarantee that it would not close by that date. Now it had been confirmed to stay open until 2032. Plans were that 90% of the time the new track facility would be used by residents of the public. It was a great opportunity to spend only £500,000 on a £12 million project.

 

Councillor Felton left the meeting at this point.

 

In response to a question from Councillor Dean, the Chief Executive it had now been clarified that the Barracks would not close until 2032, and in fact its usage might intensify. This had just been through email exchange and so was still subject to proper due diligence by the Council and the defence establishment.

 

Councillor Knight said money had been ring-fenced due to the clawback clause so that the Army could afford to pay back the Council if the Barracks closed before 2031. Only by removing this clause could construction go ahead, because otherwise the funds would have to stay ring-fenced.

 

A majority of members voted against Councillor Sell’s amendment, which was defeated.

 

Councillor Howell said it appeared Members were almost all in agreement. He had heard Members’ comments about risk, but the Investment Strategy had to be the solution to the challenge. There would be a debate about governance in April, and for the time being, Members would only be voting on the principle of investing additional money.

 

 

Councillor Chambers had left the meeting by this point and took no part in the vote.

 

RESOLVED

 

1.    To approve the Section 25 Report - Robustness of Estimates and Adequacy of Reserves

 

2.    To approve the Investment Strategy

 

A recorded vote was taken on the Investment Strategy recommendation as follows:

 

For the recommendation: Councillors G Barker, S Barker, Davey, Davies, Farthing, J Freeman, R Freeman, Gordon, Hargreaves, Hicks, Howell, Jones, Knight, Lees, Lemon, Oliver, Ranger, Redfern, Rolfe, Ryles, Wells

 

Against the recommendation: Councillors Fairhurst, Foley, Gerard, LeCount, Light, Lodge, Morris

 

Abstain: Councillors Dean, Loughlin and Sell

 

 

3.    To approve the Medium Term Financial Strategy

 

A recorded vote was taken on the Medium Term Financial Strategy recommendation as follows:

 

For the recommendations: Councillors G Barker, S Barker, Davey, Davies, Farthing, J Freeman, Gordon, Hargreaves, Hicks, Howell, Jones, Knight, Lemon, Oliver, Ranger, Redfern, Rolfe, Ryles, Wells

 

Against the recommendations: Councillors Fairhurst, R Freeman, Gerard, LeCount, Lees, Light, Lodge, Morris

 

Abstain: Councillors Dean, Foley, Loughlin and Sell

 

 

4.    To approve the Treasury Management Strategy

 

5.    To approve the Capital Strategy

 

6.    To approve the Capital Programme

 

7.    To approve the Housing Revenue Account proposals

 

8.    To approve the General Fund Revenue and Council Tax proposals

 

9.    To approve the Council Tax Resolution as follows:

 

9.1. To note that on 11 December 2018 the Director of Finance and Corporate Services, acting under delegated authority, calculated the Council Tax Base for 2019/20:

 

(a)          Taxbase for the whole Council area is 39,185.91 Band D equivalents, before adjusting for Local Council Tax Support discounts

 

(b)          For the whole Council area, the estimated value of Local Council Tax Support discounts is a taxbase reduction of 1872.76 Band D equivalents

 

(c)           Taxbase for the whole Council area, after adjusting for Local Council Tax Support discounts is 37,313.15 Band D equivalents. This being the figure to be used for precept calculation purposes

 

(d)          For dwellings in those parts of its area to which a Parish precept relates as shown in Annex 1.

 

9.2.        To determine that the Council Tax requirement for the Council’s own purposes for 2019/20 (excluding town/parish precepts) is £5,657,106.

 

9.3.        That the following amounts be calculated for the year 2019/20 in accordance with Sections 31 to 36 of the Local Government Finance Act 1992, as amended (the Act):

 

(a)          £76,382,726     Being the aggregate of the amounts which the Council estimates for the items set out in Section 31A (2) of the Act taking into account all precepts issued to it by town/parish councils.

 

(b)          £67,311,642    Being the aggregate of the amounts which the Council estimates for the items set out in Section 31A (3) of the Act.

 

(c)          £9,071,084  Being the amount by which the aggregate of 3(a) above exceeds the aggregate at 3(b) above, calculated by the Council in accordance with Section 31A(4) of the Act as its Council Tax requirement for the year (including town/parish precepts).

 

(d)          £243.11  Being the amount at 3(c) above, divided by the Council Tax Base shown  at 1(c) above, as the basic amount of its Council Tax for the year (including town/parish precepts),

 

(e)          £3,413,978  Being the aggregate amount of all special items (town/parish precepts) referred to in Section 34(1) of the Act (as per the attached Annex 1),

 

(f)           £151.61  Being the amount at 3(d) above less the result given by dividing the amount at 3(e) above by the Council Tax Base shown at 1(c) above, calculated by the Council, in accordance with Section 34(2) of the Act, as the basic amount of its Council Tax for the year for dwellings in those parts of its area to which no Town/Parish precept relates.

 

9.4.        To note that Essex County Council and the Office of Police, Fire and Crime Commissioner have issued precepts to the Council in accordance with Section 40 of the Act for each category of dwellings in the Council’s area and these are shown in the table in point 5 below.

 

9.5.        That the Council, in accordance with Sections 30 and 36 of the Act, hereby sets the aggregate amounts shown in the table below as the amounts of Council Tax for 2019/20 for each part of its area and for each of the categories of dwellings.

 

 

 

 

9.6.        Determines that the Council’s basic amount of Council Tax for 2019/20 is not excessive in accordance with the principles approved under Section 52ZD(1) of the Act, and as shown in the calculation below.

 

(a)          Percentage increase defined by the Secretary of State as constituting an excessive increase for 2019/20: maximum increase of £5 or 3%

 

(b)          Percentage change in the Council’s basic amount of Council Tax:

 

        2018/19 amount                      £147.21

2019/20 amount                      £151.61

 

Percentage increase:              2.99%

 

The figure at 6(b) is less than the allowed increase at 6(a) above and therefore the Council’s basic amount of Council Tax for 2018/19 is not excessive and no referendum is required.

 

9.7.        Amounts payable in each town/parish at each band, comprising aggregate sums derived from all precepts are set out in Annex 2.

 

A recorded vote was taken on the Council Tax recommendations as follows:

 

For the recommendations: Councillors G Barker, S Barker, Davey, Davies, Dean, Fairhurst, Farthing, J Freeman, R Freeman, Foley, Gerard, Gordon, Hargreaves, Hicks, Howell, Jones, Knight, LeCount, Lees, Lemon, Lodge, Loughlin, Morris, Oliver, Ranger, Redfern, Rolfe, Ryles, Sell, Wells

 

Abstain: Councillor Light

 

 

Councillor Farthing left the meeting at this point.