Agenda item

To consider the Medium Term Financial Strategy and Budget Proposals 2020/21.

Councillor Hargreaves presented the report on the Medium Term Financial Strategy and Budget proposals for 2020/21. He said he had received no questions in advance of the meeting and there would be a recorded vote on the Council Tax Resolution, as required by law.

 

Councillor Hargreaves outlined the key issues stated in the report, the supporting strategies were as follows:

 

• Medium Term Financial Strategy
• Reserves Strategy
• Treasury Management Strategy
• Commercial Strategy
• Capital Strategy

 

He highlighted the following in his report:

 

·         Future years’ allocations for the New Home Bonus would be based on legacy payments only, with no payments from 2023/24.

·         Council Tax would be increased by £5 (per annum) in 2020/21 for a Band D property, with future years based on an uplift of 1.99%.

·         The General Fund – 5 year summary was outlined and Members were informed that the Commercial Strategy 2020-2024 would be key in addressing the deficit and maintaining the current level of council services.

·         The Treasury Management Strategy 2020/21 outlined borrowing, investments and risks. The Strategy increased authorised borrowing and recommended suitable counterparties from whom the Council could borrow, to mitigate against risks.

·         The Capital Strategy outlined capital expenditure and financing relating to assets that would be used for more than one year. For 2020/21, the Council was planning capital expenditure of £25million on General Fund projects (ICT development, asset maintenance and vehicle replacement), HRA (council housing) and Capital Investments. The Annual Minimum Revenue Provision statement, which stipulated the minimum provision the council was required to put to one side to repay debt in later years, stood at £4,212,000 for 2020/21.

·         The creation of the Uttlesford Norse Group was not a cost saving exercise but rather to future proof the Council’s maintenance service.

·         The New Homes’ Bonus scheme had received more money than originally budgeted.

 

Councillor Hargreaves thanked the Finance officers for their hard work in preparing the budget. He formally proposed the recommendations listed in the report.

 

Councillor Armstrong seconded the proposal.

 

Councillor Dean, who had given notice of an amendment to the recommendation relating to the Capital Strategy, Appendix F formally proposed the amendment as follows:

 

Council notes that in the Capital Strategy (page 103 and at Annexe F2 on page 119) the proposed capital expenditure on Council Housing in year 2021/22 and succeeding years will reduce from the current level. 

Council is therefore resolved to:

1. approve the 5 year Capital Programmesubject to raising the Portfolio Total in years 2022/23 and the following two years to £9,000,000 and that the increase be raised through sustainable borrowing to increase the delivery of much needed social housing in the district.
2. amend Annexes F2 & F3 accordingly.
3. recommend to the Portfolio Holder for Housing that the necessary internal capacity and external partnership arrangements are put in place as appropriate to achieve delivery of social housing on time during each year.

 

The proposed amendment was seconded by Councillor Caton.

 

Councillor Dean said Central Government had lifted restrictions that prevented local authorities from borrowing to build council housing, although there was no reference in the budget to the building of council houses. He said his amendment readdressed this and if the Council were to be ambitious, concrete proposals in the budget, not words, needed to be put in place.

 

Councillor Hargreaves said he was sympathetic to the purpose of the amendment but the amendment, in of itself, would achieve nothing. The real issue at hand related to a lack of land supply, not a lack of borrowing opportunities.

 

Councillor Foley said that the years of not building social housing had come to an end. He urged the Council to commit to an ambitious programme and said he would be supporting the amendment.

 

Councillor Lees said she was committed to council housing but the issue was about land supply, which the further amendment to the amendment acknowledged. She added that the Housing Revenue Account business plan would be renewed later this year.

 

Councillors, including Youth Councillor Widuch, spoke in support of council housing and social housing but there was disagreement as to the merits of the amendment.

 

The Chair moved to a vote on the amendment. The amendment was defeated.

 

The Leader had given notice of a further amendment as follows:

 

Council notes that in the Capital Strategy (page 103 and at Annexe F2 on page 119) the proposed capital expenditure on Council Housing in year 2021/22 and succeeding years will reduce from the current level. 

 

Council is therefore resolved to:

 

1. approve the 5 year Capital Programme
2. Note the administration’s ambition to build significantly more social housing than the previous administration and look forward to an increase in the capital programme as suitable sites are secured. All councillors are urged to identify potential sites in their wards.

 

 

The Leader said action was required to build council houses and that he was committed to building more social housing than the previous Administration.

 

Councillor Foley said he would support the amendment if there was a commitment to build 50% more social homes than the previous Administration.

 

Councillor Khan asked whether the Leader would make a commitment to the number of council houses that would be built.

 

Councillor Lees said she would commit to building 183 council houses over the next four years. She said the Administration would aspire to build more.

 

Councillor Light said there were over 1000 people on the council housing waiting list and the commitment to build 183 new units would not tackle this demand. She asked how this need would be met.

 

Councillor Lees said the commitment was only in relation to council housing, affordable housing units would also be sought from developer contributions.

 

The Chief Executive read the Leader’s amendment to Appendix F – Capital Strategy. The Chair moved to a vote.

 

The amendment was carried.

 

Councillor Caton, who had given notice of an amendment to the recommendation in relation to Appendix H – General Fund and Council Tax, said he would withdraw the amendment if the Leader confirmed that the £65,000 that remained unallocated was used in support of addressing the climate change emergency. 

 

The amendment was proposed as follows:

 

Council notes that paragraph 18 on page 141 identifies a £300,000 envelope for funding new priorities. Items totalling £235,000 are listed. £65,000 remains unallocated.

 

Council is resolved to:

 

1. approve the General Fund Council Tax requirement of £5,956,840
2. approve the schedule of fees and charges as set out in Annexe H6
3. call on Cabinet to use the remaining £65,000 as follows:

a)    £30,000 for the restoration of the Uttlesford Life magazine to support the Corporate Plan priority of Being a Council that listens to and acts for residents; in the immediate future to support communication about the Local Plan and the Climate Emergency.

b)    Raising the allocation in support of addressing the Climate Emergency by £35,000 to a new sum of £100,000.

 

Councillor Sell seconded the amendment.

 

The Leader said he was not willing to be tied down on the budget as there was an aspiration to spend more than £65,000 if additional money was available. He said the Council were in a tight financial position due to the stranglehold of central government but, if forthcoming investment opportunities were successful, the Council would have more income to spend on climate change initiatives. 

 

Councillor Pepper said she had been promised £100,000 to be put to one side for climate change measures. She said the Council would also look at creative ways to ensure as much funding as possible was dedicated to tackling climate change.

 

Councillor Caton said he was prepared to withdraw his amendment in light of Councillor Pepper’s comments.

 

Councillor Hargreaves said whilst the Administration planned to do as much as it could in regard to climate change, the budget could not be amended at this late stage.

 

The Leader proposed the amendment to the amendment as follows:

 

Council notes that paragraph 18 on page 141 identifies a £300,000 envelope for funding new priorities. Items totalling £235,000 are listed. £65,000 remains unallocated.

 

Council is resolved to:

 

1. approve the General Fund Council Tax requirement of £5,956,840
2. approve the schedule of fees and charges as set out in Annexe H6
3. Raise the allocation in support of addressing the Climate Emergency to the maximum amount possible under funding restrictions imposed by central government and the previous UDC Administration.

 

Councillor Lees seconded the amendment.

 

Youth Councillor Widuch said any measures brought in to tackle the climate emergency would be welcomed by the Youth Council.

 

Councillor Fairhurst said £65,000 would not go far in combating the climate change crisis and the Council could borrow to achieve more.

Councillor Hargreaves said borrowing money for purposes that would generate no income in return was unsustainable.

 

Councillor Sell said South Cambridgeshire had an ambitious programme to tackle climate change and he urged the Cabinet to secure as much funding as possible in this regard.

 

Councillor De Vries left the meeting at 10.45pm.

 

The Chief Executive read the Leader’s amendment for the benefit of Council.

 

The Chair proceeded to a vote on the Leader’s amendment. The amendment was carried.

 

In response to a question from Councillor Barker regarding the funding for the proposed Waste Depot project, Councillor Hargreaves said a written answer would be provided and circulated to all Members.

 

In response to a question from Councillor Criscione, Councillor Hargreaves said Air Quality equipment was not specifically included in the budget as it did not constitute capital equipment and was relatively inexpensive.

 

The Chief Executive explained the requirement to have a recorded vote on the Council Tax resolution and whether Members wished to take the budget recommendations en bloc, or individually.

 

Council gave its consent for the vote to be taken en bloc. The Chair read the budget proposals for the benefit of Council.

 

The recorded vote was as follows:

 

 

For	Against	Abstain
Cllr Armstrong		Cllr Barker
Cllr Caton		Cllr Criscione
Cllr Coote		Cllr Light
Cllr Day		Cllr Oliver
Cllr Dean
Cllr Driscoll
Cllr Eke
Cllr Evans
Cllr Fairhurst
Cllr Foley
Cllr Freeman
Cllr Gerard
Cllr Gregory
Cllr Hargreaves
Cllr Isham
Cllr Khan
Cllr Lavelle
Cllr LeCount
Cllr Lees
Cllr Lemon
Cllr Lodge
Cllr Loughlin
Cllr Luck
Cllr Merifield
Cllr Pavitt
Cllr Pepper
Cllr Sell
Cllr Storah
Cllr Sutton
Cllr Tayler
Total:
30		4

 

 

The proposal was carried.

 

Council is RESOLVED to:

 

A)   Section 25 Report – Robustness of Estimates and Adequacy of Reserves:

 

I.              Take account of the advice in the report when determining the 2020/21 General Fund budget and Council Tax

II.            Approve the risk assessment relating to the robustness of estimates as detailed in the report.

III.           Set the minimum safe contingency level for 2020/21 at £1.300 million for the General Fund and £0.463 million for the Housing Revenue Account.

IV.          Approve the Reserves Strategy set out in Annexe A1

V.           Agree that no transfers to or from the Working Balance should be built into the 2020/21 budget.

 

B)   Commercial Strategy

 

VI.          Approve the Commercial Strategy.

VII.         Approve the revised investment fund of £300 million.

 

C)   Medium Term Financial Strategy

 

VIII.       Approve The Medium Term Financial Strategy

 

D)   Treasury Management Strategy

 

IX.        Approve the Treasury Management Strategy

X.           Approve the amended maximum level of investment with Money Market Funds from £1 million per fund to £2 million. This means a total of £10 million investment over 5 Money Market Funds.

 

E)   Capital Strategy

 

XI.          Approve the Capital Strategy

XII.         Approve the Minimum Revenue Provision (MRP) as set out in Annexe E1.

 

F)   Capital Programme

 

XIII.     Approve the 5 year Capital Programme

(i)    Note the administration’s ambition to build significantly more social housing than the previous administration and look forward to an increase in the capital programme as suitable sites are secured. All councillors are urged to identify potential sites in their wards.

 

G)   Housing Revenue Account (HRA)

 

XIV.     Approve the Housing Revenue    Account

 

H)   General Fund Revenue and Council Tax

 

XV.     Approve the General Fund Council Tax requirement of                          £5,956,841

XVI.    Approve the schedule of fees and charges as set out in Annexe H6

(i)    Raise the allocation in support of addressing the Climate Emergency to the maximum amount possible under funding restrictions imposed by central government and the previous UDC Administration.

 

I)     Equalities Impact Assessment

 

XVII.   Note the outcome of the EQIA.