Report of Councillor J Kenyon, Portfolio Holder for Economy, Transformation and Climate Change.
The report to Council that sought approval for the current budget for 2022/23 and original budget for 2023/24 for the General Fund, Housing Revenue Account and Capital Programme, as part of the Council’s Medium Term Financial Plan covering the years 2022/23 to 2026/27.
Members were informed that Cabinet considered and endorsed the proposals at its meeting on 26 January 2023. The recommendations from Cabinet were now referred to Council for consideration and approval.
The Chair agreed to consider the report recommendations in two parts. Council would consider recommendations 1-7 (relating to the General Fund) followed by recommendations 8-13 (relating to the Housing Revenue Account).
Council was informed of the projected budget shortfall for the 2023-24 financial year and the reasons for this. Members also heard how it would be addressed by drawing on its Resilience Reserve, which would be replenished through savings to be identified and achieved during the year. The report also explained that current projections suggested that the further use of the Resilience Reserve would not be required in the future years covered by the MTFP.
The Portfolio Holder for Economy, Transformation and Climate Change, Councillor J Kenyon, explained that through effective financial management the Council was in a better position than many other local authorities, despite the impact of Inflation, the Covid Pandemic and the energy crisis. Members heard that because of this effective financial management the Council would not need to make large cuts to its budgets over the life of the Plan. Councillor J Kenyon the Director of Finance and Resources and her team for their contribution to this.
Councillor J Kenyon and Councillor A Dale moved and seconded a Motion that Council approve recommendations 1-8 of the report. Councillor A Dale reserved his right to speak.
Councillors N Barker and J Funnell gave thanks to the Director of Finance & Resources and their team for their work on this during a difficult period.
Councillors N Barker, R Shipman and J Funnell spoke against the Motion. They queried the use of the Resilience Reserve to meet the projected shortfall and contended that the Plan did not identify the permanent financial reductions required to balance the budget. In this context Councillor J Funnell highlighted the cost to the Council of Planning Appeals. Concerns were also raised that Rykneld Homes Ltd (RHL) had not been given the option to make additional budget savings rather than have to impose higher rent increases on tenants. The Leader of the Council, Councillor A Dale contested this.
The Leader of the Council, Councillor A Dale, highlighted the Council’s successful financial management which had enabled it to protect services and to minimise the impact on residents. In this context he reminded Members that the proposed increase in the Council Tax of 2.99% would be well below the level of inflation.
Councillor A Dale explained how the Resilience Reserve had been established to help the Council to meet such financial shortfalls. He highlighted the ways in which it differed from other reserves held by the Council.
Councillor A Dale signified his support for the Council’s Planning Committee and believed it was vital that if Committee made a decision to oppose an application, the Council should be prepared to support this.
Councillor J Barry raised concerns over terms used by the Leader of the Council in his comments.
The Portfolio Holder for Economy, Transformation and Climate Change, Councillor J Kenyon emphasised the fact that a 2.99% rise would equate to a 5% cut in real terms. He also drew Members attention to the various cost cutting measures which the Council had taken such as; a reduction in energy use, team restructuring and, procurement. He reminded Members that the use of the Resilience Reserve in this way would not have to be repeated in future years
At the conclusion of the discussion the motion to approve recommendations 1-7 of the report was put to the vote. As required by law this was taken as a recorded vote. The motion was approved.
Councillors P Wright, R Welton, M Thacker MBE JP, K Tait, B Strafford-Stephenson, D Ruff, M Roe, C Renwick, A Powell, M Potts, A Platts, H Liggett, B Lewis, J Kenyon, A Hutchinson, R Hall, M Foster, A Foster, M Emmens, P Elliott, D Drabble, L Deighton, A Dale, C Cupit, S Clough, W Armitage
Councillors R Shipman, K Rouse, D Hancock, J Funnell, A Cooper
Councillors B Wright, T Reader, S Pickering, G Morley, J Lilley, T Lacey, P R Kerry, M Jones, L Hartshorne, K Gillott, S Cornwell, J Birkin, J Barry, N Barker
RESOLVED – That:
(1) The view of the Director of Finance & Resources, that the estimates included in the Medium Term Financial Plan 2022/23 to 2026/27 are robust and that the level of financial reserves are adequate at this time, be accepted.
(2) Officers report back to Cabinet and the Audit and Corporate Governance Scrutiny Committee on a quarterly basis regarding the overall position in respect of the Council’s budgets.
(3) A Council Tax increase of £5.93 will be levied in respect of a notional Band D property (2.99%).
(4) The Medium Term Financial Plan in respect of the General Fund as set out in the report to Cabinet (Appendix 1) be approved as the Current Budget 2022/23, as the Original Budget 2023/24, and as the financial projections in respect of 2024/25 to 2026/27.
(5) The shortfall in the General Fund budget for 2023/24 as set out in Appendix 1 be met from the resilience reserve.
(6) The General Fund Capital Programme be approved as the Current Budget in respect of 2022/23, and as the Approved Programme for 2023/24 to 2026/27.
(7) Any under spend in respect of 2022/23 be transferred to the Resilience Reserve to provide increased financial resilience for future years of the plan.
The Chair of the Council indicated that she intended to leave the meeting for the remainder of the item dealing with the Housing Revenue Account as she had a Disclosable Pecuniary Interest. By acclamation Councillor B Lewis took the Chair.
Councillors D Ruff, M E Thacker MBE, S Clough, R Welton left the room for the remainder of the discussion on Item 6; Medium Term Financial Plan, as they were Board Members for RHL.
The Portfolio Holder for Economy, Transformation and Climate Change, Councillor J Kenyon reminded Members that the proposed rise of 5% for Council rents was below the 7% Government limit, which would help to limit the additional burden on tenants. It would also enable much needed investment to help improve the housing stock and to make it more energy efficient. He also highlighted that the rents charged would remain well below to those charged by other landlords.
Councillors D Hancock, N Barker and R Shipman spoke against the recommendations, they suggested that a rise of 5% on rents would hit residents at a time when other bills were also increasing. They indicated that a 4% increase might be more appropriate
Councillors B Lewis and A Dale spoke in favour of the recommendations, stating that the 5% rise in rents was necessary in order to provide resilience and allow for contingency. Councillor J Kenyon, reiterated that the proposed 5% increase was already a massive real term cut and that any less than this would equate to £1.6 million lost per administration.
Councillor J Kenyon and Councillor A Dale moved and seconded a motion to approve recommendations eight to 13 as set out in the report. The motion was put to the vote. As required by law this was taken as a recorded vote. The motion was tied. On the Temporary Chair’s Casting Vote the motion was passed.
Councillors P Wright, K Tait, B Strafford Stephenson, M Roe, C Renwick, A Powell, A Platts, H Liggett, B Lewis, J Kenyon, A Hutchinson, M Foster, A Foster, M Emmens, P Elliott, D Drabble, L Deighton, A Dale, C Cupit, W Armitage
Councillors B Wright, R Shipman, K Rouse, T Reader, M Potts, S Pickering, G Morley, J Lilley, T Lacey, P R Kerry, M Jones, L Hartshorne, D Hancock, K Gillott, J Funnell, S Cornwell, A Cooper, J Birkin, J Barry, N Barker
Councillor R Hall
RESOLVED – That:
(1) Council sets its rents levels for 2023/24 by increasing rents by 5% from 1st April 2023.
(2) All other charges be implemented in line with the table shown in Appendix 1 with effect from 1 April 2023.
(3) The Medium Term Financial Plan in respect of the Housing Revenue Account as set out in the report to Cabinet (Appendix 1) be approved as the Current Budget in respect of 2022/23, as the Original Budget in respect of 2023/24, and the financial projection in respect of 2024/25 to 2026/27.
(4) The HRA Capital Programme be approved as the Current Budget in respect of 2022/23, and as the Approved Programme for 2023/24 to 2026/27.
(5) The Management Fee for undertaking housing services at £10.612m and the Management Fee for undertaking capital works at £1.1m to Rykneld Homes in respect of 2023/24 be approved.
(6) Members endorse the section in the current Financial protocol which enables the Council to pay temporary cash advances to Rykneld Homes in excess of the management Fee in order to help meet the cash flow requirements of the company should unforeseen circumstances arise in any particular month.
(7) Members note the requirements to provide Rykneld Homes with a ‘letter of comfort’ to the company’s auditors and grant delegated authority to the Council’s Assistant Director – Finance & Resources in consultation with the Portfolio Member for Finance to agree the contents of that letter.