Agenda item

Report of Councillor P Kerry, Deputy Leader of the Council and Portfolio Holder for Strategic Leadership and Finance

The report to Council sought approval for the current budget for 2023/24 and original budget for 2024/25 for the General Fund, Housing Revenue Account and Capital Programme as part of the Council’s Medium Term Financial Plan covering the years 2023/24 to 2027/28.

 

Members were informed that Cabinet considered and endorsed the proposals at its meeting on 25 January 2024 following on from scrutiny at the Joint Scrutiny Committee on 18 January. The recommendations 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).

 

Members received an update on the Revised Budget which had been considered by Cabinet at its meeting on 23 November 2023. They heard that there was a budget shortfall of £331,000. The final position of this budget would be dependent on the actual financial performance out-turning in line with the revised budgets. Further budget changes may be required as the year progresses.

 

Council were informed of the projected budget shortfall for the 2024/25 financial year and the reasons for this. They heard that there would be a shortfall of £303,000 ahead of any decisions made by Council on Council Tax levels. Members heard that if the proposed Council Tax increases were approved then this shortfall would reduce to £8000.

 

Members heard that RHL were experiencing similar budgetary pressures and an increase in HRA rents was proposed in order for the HRA to achieve a balanced budget and provide financial resilience for any potential cost of regulation.

 

The Deputy Leader, Councillor P Kerry, explained that there were no major changes to the budget and that the Council was still on track to identify the remaining savings of £303,000. Any progress would be reported to Cabinet and Scrutiny.

 

Councillors P Kerry and N Barker moved and seconded a Motion that Council approve recommendations 1-7 of the report. Cllr N Barker reserved his right to speak.

 

Councillor A Dale highlighted the fact that the current Administration had inherited a healthy budget from the previous Administration. He criticised the current Administration for their lack of proposed efficiencies and money saving ideas. He argued that due to the Government’s recent announcement of further funding for local authorities and the healthy position of the reserves that the Council did not need to raise Council Tax as much as proposed.

 

Councillor A Dale and Councillor C Cupit proposed and seconded a Motion to amend the recommendations so that there would only be a Council Tax increase of 1.99%.

 

The Leader of the Council, Councillor N Barker, agreed that they had inherited a healthy budget but argued that Government announcement would have little effect on District Council’s as a majority of the funds would go to County Council’s. He argued that the proposed rise had been fully costed, was necessary and would provide a base for future years.

 

Councillors D Hancock, K Gillott and F Adlington-Stringer spoke against the Motion. They argued that it was not practical and that the proposed rise of 2% was necessary to provide the Council with financial resilience.

 

Councillors R Shipman and N Baker raised concerns that more proposals and information, such as on cost saving measures, should be provided to Council.

 

Councillor A Dale used his right of reply to explain that due to the healthy reserves and the announced funding from Government, it was likely that the Council would be able to balance the budget without the need for a increase of 2%. He also agreed that there was a lack of information provided with budgetary proposals and that this should be considered in the future.

 

At the conclusion of the debate, the amendment was put to the vote. As required by law this was taken as a recorded vote. The amendment failed.

 

For: 15

Councillors N Baker, S Clough, C Cupit, A Dale, L Deighton, P Elliott, P Jones, W Jones, H Liggett, S Reed, M Roe, R Spooner, K Tait, M Thacker MBE and R Welton.

 

Against: 30

Councillors F Adlington-Stringer, N Barker, J Barry, G Baxter, R Beech, D Cheetham, K Clegg, A Cooper, S Cornwell, M Durrant, C Fletcher, C Gare, K Gillott, D Hancock, L Hartshorne, D Higgon, P Kerry, C Lacey, T Lacey, N Morley, F Petersen, S Pickering, K Rouse, R Shipman, D Skinner, Caroline Smith, Christine Smith, M Smith, L Stone, H Wetherall, P Windley

 

Abstentions: 0

 

Councillor D Hancock suggested that he would not be able to support the budget as it stands as the issue of finding cost-savings was being delayed. He argued that it was important to identify savings now in order to balance the budget in the Medium Term.

 

Councillor S Cornwell praised the Administration’s collaborative way of working which was highlighted when the Joint Scrutiny Committee was given the opportunity to scrutinise the proposed budget. She informed Council that no objections to the budget had been raised at that meeting.

 

Councillor N Barker echoed what was said by Councillor S Cornwell. He reminded Members that the Joint Scrutiny Committee was a cross-party meeting during which no objections to the budget had been raised.

 

Councillor R Shipman informed Members that he had raised questions when the budget was presented to Services Scrutiny Committee. His questions were around income streams and projections and he did not receive a satisfactory answer.

 

Councillor P Kerry used his right of reply to express that the funding from the Government announcement was not yet in the Council’s possession and would only be a one off payment. The proposed increase in Council Tax would provide the Council with a base to build on a yearly basis. He drew Members attention to potential upcoming issues such as the budgetary issues at DCC. It would therefore be important to increase the reserves.

 

At the conclusion of the debate, the Motion was put to the vote. As required by law, this was taken as a recorded vote. The Motion was approved.

 

For: 29

Councillors F Adlington-Stringer, N Barker, J Barry, G Baxter, R Beech, J Birkin, D Cheetham, K Clegg, A Cooper, S Cornwell, M Durrant, C Fletcher, C Gare, K Gillott, L Hartshorne, D Higgon, P Kerry, C Lacey, T Lacey, G Morley, N Morley, F Petersen, S Pickering, K Rouse, D Skinner, Caroline Smith, Christine Smith, M Smith, L Stone, and H Wetherall

 

Against: 3

Councillors D Hancock, R Shipman and P Windley

 

Abstentions: 15

Councillors N Baker, S Clough, C Cupit, A Dale, L Deighton, P Elliott, P Jones, W Jones, H Liggett, S Reed, M Roe, R Spooner, K Tait, M Thacker MBE, and R Welton

 

RESOLVED – That:

1.       The view of the Director of Finance & Resources; that the estimates included in the Medium-Term Financial Plan 2023/24 to 2027/28 were robust and that the level of financial reserves were adequate at this time be accepted.

2.       Officers report back to Cabinet and the Services Scrutiny Committee on a quarterly basis regarding the overall position in respect of the Council’s budgets.

3.       A Council Tax increase of £6.11 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 to the report) be approved as the Current Budget 2023/24, as the Original Budget 2024/25, and as the financial projections in respect of 2025/26 to 2027/28.

5.       That the shortfall in the General Fund budget for 2024/25 as set out in Appendix 1 to the report be met from the resilience reserve.

6.       That the General Fund Capital Programme be approved as the Current Budget in respect of 2023/24, and as the Approved Programme for 2024/25 to 2027/28.

7.       That any under spend in respect of 2023/24 be transferred to the Resilience Reserve to provide increased financial resilience for future years of the plan.

 

The Chairman and Vice Chairman of the Council indicated that, having declared a disclosable pecuniary interest, they intended to leave the meeting for the remainder of the item dealing with the Housing Revenue Account. By acclamation Councillor L Hartshorne took the Chair.

 

Councillors K Clegg and K Gillott left the meeting for the remainder of the item dealing with the Housing Revenue Account as they had disclosable pecuniary interest.

 

The Deputy Leader, Councillor P Kerry, emphasised the pressure placed on RHL as a result of the increased demand and impact of the new regulations and the increased costs of delivery. He informed Members that a rents increase of 6% would help to combat and deal with these issues.

 

Councillors P Kerry and N Barker moved and seconded a Motion that Council approve recommendations 8-13 of the report.

 

Councillor A Dale expressed mixed views on the proposed rents increase as he understood the need to invest in the housing stock but that there were ongoing pressures on household budgets. He indicated that his Group would be abstaining on the vote and that it would be for the Labour Group to prove that they had taken the correct approach.

 

Councillor N Baker enquired as to the reason rental income flatlined after 2024/25 and asked for further information on the depreciation figure. He heard that rents increases were not built into projections as this was a decision for Members to take in the Chamber. It was also explained that depreciation was used to fund major repairs works.

 

Councillor R Shipman raised concerns over where the funding was being used and explained there was not enough information provided with the figures. He suggested that the relationship between the Council and RHL should be under constant review. He indicated that he would not be supporting the motion.

 

Councillor H Wetherall enquired as to whether the apprenticeship levy could be used to fund the high level qualifications required for executive housing staff. She heard that this levy was used where possible but could not be used for certain aspects of the qualifications.

 

Councillor P Kerry used his right of reply to reiterate that the proposed rise of 6% was below the 7.7% Government limit. He stressed that it was important to balance the impact on tenants against the need to generate additional revenue due to budget pressures caused by increased demand and regulation.

 

At the end of the discussion, the Motion was put to the vote. As required by law this was taken as a recorded vote. The Motion was approved.

 

For: 26

Councillors F Adlington-Stringer, N Barker, J Barry, G Baxter, R Beech, J Birkin, D Cheetham, A Cooper, S Cornwell, M Durrant, C Fletcher, C Gare, L Hartshorne, D Higgon, P Kerry, C Lacey, T Lacey, H Liggett, N Morley, F Petersen, S Pickering, M Roe, K Rouse, Caroline Smith, Christine Smith, M Smith, L Stone

 

Against: 2

Councillors D Hancock and R Shipman

 

Abstentions: 13

Councillors N Baker, S Clough, C Cupit, A Dale, L Deighton, P Elliott, P Jones, W Jones, S Reed, R Spooner, K Tait, R Welton, H Wetherall

 

RESOLVED – That:

1.       Council sets its rent levels for 2024/25 by increasing rents by 6% from 1st April 2024.

2.       The Medium-Term Financial Plan in respect of the Housing Revenue Account as set out in the report to Cabinet (Appendix 1 to the report) be approved as the Current Budget in respect of 2023/24, as the Original Budget in respect of 2024/25, and the financial projection in respect of 2025/26 to 2027/28.

3.       The HRA Capital Programme be approved as the Current Budget in respect of 2023/24, and as the Approved Programme for 2024/25 to 2027/28.

4.       The Management Fee for undertaking housing services at £12.05m and the Management Fee for undertaking Capital Works at £1.1m to Rykneld Homes in respect of 2024/25 be approved.

5.       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.

6.       Members note the requirement 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 Leader of the Council to agree the contents of that letter.