Decision Maker: Cabinet
Decision status: For Determination
Is Key decision?: Yes
Is subject to call in?: Yes
To consider the draft budget estimates for the
financial years 2020/21 to 2024/25 and approve their submission to
Council as the final budget report.
Note – Councillor John Holmes declared a non-pecuniary interest in this item of business by virtue of the fact that he was a Director on the Board of South Lakes Housing. Councillors John Holmes, Janette Jenkinson, Kevin Lancaster and Eric Morrell reserved their positions by virtue of the fact that they were Members of the Planning Committee which was due to consider a planning application relating to the Grange Lido. All remained in the Chamber during the discussion and voting on the item, although Councillors Holmes, Jenkinson and Lancaster having no voting rights as Members of the Shadow Cabinet.
The Finance Portfolio Holder presented the latest 2020/21 to 2024/25 Five Year Draft Budget. A balanced budget for 2020/21 was presented, including an increase in the Band D Council tax of 2%.
The completion of the Customer Connect Programme had substantially reduced future budget deficits. A one-year Local Government finance settlement had the potential for additional, one-off income in 2020/21. Options still needed to be developed to use this additional funding to mitigate the expected funding reductions from 2021.
The Council, at its meeting on 23 July 2019, had agreed to the proposed Budget Strategy for the current year’s budget process as part of the Medium Term Financial Plan. The Budget Strategy set out some broad principles which were being used in the preparation of the 2020/21 – 2024/25 Budget.
Final Local Government finance settlement figures had not yet been received. It was, therefore, being requested that any further necessary amendments be delegated to the Leader and the Finance and Resources Portfolio Holder, in consultation with the Section 151 Officer, prior to consideration of the report at the Council meeting on 25 February 2020.
The report included a summary position. The Medium Term Financial Plan provided a summary five year annual position which included a projection of the overall surplus or deficit on the General Fund Revenue Budget. The assumptions and financial implications were kept constantly under review as circumstances changed. A summary of the known changes at this stage was provided at Table 1 of the report, with a more detailed analysis of expenditure and income at Appendix 2a to the report. Table 1 set out the summarised estimated annual General Fund Budget requirement across the review period, including the projected surplus for 2020/21 and future year deficits. Appendix 3a to the report provided more detail and a reconciliation of the latest projected deficits compared to previous deficit projections.
The projections all included the full Customer Connect savings delivered to date. In addition, the one-off Local Government finance settlement and deferment of the new funding model until at least April 2021 left the Council with substantial additional one-off income of around £1.0m for 2020/21, turning a projected budget deficit into a budget surplus. The projected annual revenue surplus totalled circa £47,000 in 2020/21, but this was a one-year only surplus with a projected deficit for £0.9m in 2021/22 rising to circa £2.7m by 2024/25.
Work was underway to resolve the projected deficits. The future projections were based on information available at the time of preparation, along with the broad set of assumptions detailed in paragraph 4.6 of the report. The assumptions, proposals and calculations included in the report and on the attached appendices thereto would be subject to change as more information from internal and external sources as provided and as options were refined and decisions taken.
The Council had a statutory duty to set a balanced budget. Work was underway to resolve the projected deficits from April 2021 onwards. Future year estimates would be kept under review as part of the MTFP process to ensure that savings plans were sufficient to set balanced budgets. Any additional budget pressures or discretionary, fixed term growth items would need to be funded by savings in existing budgets.
Attention was drawn within the report to the consultation process carried out to date. It was pointed out that the Overview and Scrutiny Committee had considered the draft budgets on 17 January 2020. The Committee had discussed the impact of Government funding changes, including the potential impact on parish funding. The Committee had requested that updates be provided during the year on announcements from Government on funding and on commercialisation proposals. Assets had been discussed and the role of the Strategic Asset Board which was reviewing major assets. The delivery of Customer Connect savings had also been discussed. Finally, it had been agreed that an update would be provided on the Cumbria Business Rate pool. In addition, the Lake Administration Committee, the Planning Committee and the Licensing and Licensing Regulatory Committees had, during January 2020, considered draft budgets for their services. Further details in relation to the consultation process were included within the report, with the first draft of the 2020/21 Five Year Budget having been published for consultation following approval of the report by Cabinet on 20 December 2019.
In presenting the report, the Finance and Resources Portfolio Holder referred to Appendix 12 which provide the full draft fees and charges for 2020/21. He explained the need for two additions:-
· The delivery charges for bins and boxes to new homes agreed in the previous year; and
· Charges for the new Parkside Road Car Park at the standard tariff.
These would be included within the draft fees and charges to be presented to Council on 25 February 2020.
The Finance and Resources Portfolio Holder further informed Members that consideration had been given to an Equality Impact Assessment. No significant impact had been identified and attention was drawn to measures in place to help improve the effect on vulnerable people, such as the renewal of the Local Council Tax Reduction Scheme.
The Finance and Resources Portfolio Holder closed, saying that, whilst funding for 2020/21 now seemed secure, there could be major surprises in the longer-term. This draft budget offered a balance of providing improved services for residents whilst consolidating for the challenges ahead. He thanked officers, and in particular the Finance Team, for their work, particularly given the high levels of uncertainty.
The Health, Wellbeing and Financial Resilience Portfolio Holder sought inclusion of £25,000 within the Capital Programme for a Changing Places facility in Rothay Park following a recent proposal from Lakes Parish Council. This would be the fourth Changing Places facility in the Lakes and she hoped that Members agreed with the importance of the provision of accessible facilities. Members supported this proposal and, in response to a query, the Leader and Promoting South Lakeland Portfolio Holder explained that a detailed proposal would need to be submitted, emphasising the importance of encouraging local councils to move forward with such projects.
RESOLVED – That
(1) the proposals contained in the report to achieve a balanced budget in 2020/21 be noted;
(2) the Draft Budget 2020/21 to 2024/25 be recommended to Council for approval, subject to any amendments arising from the final settlement, including business rate income, as well as the inclusion of the amendments raised at the meeting and outlined above; and
(3) any further necessary amendments referred to at (2) above be delegated to the Leader and the Finance and Resources Portfolio Holder, in consultation with the Section 151 Officer, prior to consideration of the report at the Council meeting on 25 February 2020.
Reasons for Decision
The report sets out a first draft Budget that provides resources to implement the Council Plan. Setting a sound framework for budget preparation assists in the delivery of all corporate outcomes. This strategy has been developed within the context of the Medium Term Financial Plan.
The expected outcome is that Council will be in a position to deliver the priorities set out in the Council Plan within its resources. This will enable the statutory requirement to agree a balanced budget and to set the appropriate Council Tax level for 2019/20.
Alternative Options Considered and Rejected
The report presents alternative options in relation to potential budget pressures and savings, new Capital Programme bids, one off revenue growth bids and fees and charges. The proposals together aim to meet the Council’s statutory duty to set a balanced Budget for 2020/21. An alternative option would be to reject some of the proposals; this would then require further work to ensure a balanced budget was set.
Report author: Claire Read
Publication date: 07/02/2020
Date of decision: 05/02/2020
Decided at meeting: 05/02/2020 - Cabinet
Effective from: 17/02/2020