Agenda item

Report of Councillor P Parkin, Portfolio Holder for Finance.

RESOLVED

That Council be recommended at its meeting on 1 February 2021:

(1) That the view of the Chief Financial Officer, that the estimates included in the Medium Term Financial Plan 2020/21 to 2024/25 are robust and that the level of financial reserves whilst at minimum levels are adequate, be accepted.

(2) That 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. These reports to include updates on achieving the savings and efficiencies necessary to secure a balanced budget over the life of the medium term financial plan.

GENERAL FUND

(3) A Council Tax increase of £3.70 will be levied in respect of a notional Band D property (1.95%).

(4) The Medium Term Financial Plan in respect of the General Fund, as set out in Appendix 1 to the report, be approved as the Current Budget 2020/21, as the Original Budget 2021/22, and as the financial projections in respect of 2022/23 to 2024/25.

(5) That any under spend in respect of 2020/21 be transferred to the Resilience Reserves, to provide increased financial resilience for future years of the plan.

HOUSING REVENUE ACCOUNT

(6) That Council sets its rent levels for 2021/22 in line with the Social Housing Rent Standard increasing rents by 1.5% from 1^st April 2021.

(7) That all other charges be implemented in line with the table shown at 1.38 in the report above with effect from 1 April 2021.

(8) The Medium Term Financial Plan in respect of the Housing Revenue Account as set out in Appendix 3 to the report be approved as the Current Budget in respect of 2020/21, as the Original Budget in respect of 2021/22, and the financial projection in respect of 2022/23 to 2024/25.

(9) That the Management Fee for undertaking housing services at£9.692m and the Management Fee for undertaking capital works at£1.1m to Rykneld Homes in respect of 2021/22 be approved.

(10) That 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.

(11) That 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 Chief Financial Officer in consultation with the Portfolio Member for Finance to agree the contents of that letter.

CAPITAL PROGRAMME

(12) That the Capital Programme as set out in Appendix 4 to the report be approved as the Current Budget in respect of 2020/21, and as the Approved Programme for 2022/23 to 2024/25.

REASONS FOR DECISION - To recommend budgets to Council in respect of the General Fund, the Housing Revenue Account and the Capital Programme.

OTHER OPTIONS CONSIDERED AND REJECTED - The alternative options that were considered and rejected were specified in the report.

This is a Key Decision. The call-in period for the decision will run until Monday 8 February 2021.

As part of the Council’s Medium Term Financial Plan, Cabinet considered the Current Budget for the 2020-21 financial year. It also considered the proposed Original Budget for the 2021-22 financial year, covering the General Fund, Housing Revenue Account and Capital Programme. Cabinet was asked to endorse and recommend them to Council for approval, at its meeting on 1 February 2021

Members were reminded that the Council had faced significant financial challenges as a result of the Coronavirus (Covid-19) outbreak. The report explained that because of the outbreak the Council had received far less income than expected from leisure facilities and other services, such as Commercial Waste Collection. It also explained that income growth from Business Rates during the year would be considerably lower than projected.

Members heard that the Council had received substantial support from Central Government during the year to offset the financial impact of the virus outbreak. This support had helped to stabilise its financial position. In particular, Members heard that the Council had received a grant of£1.44m, to assist with the costs of delivering services during the outbreak. Cabinet also learned how the Government’s Income Compensation Scheme would compensate for a proportion of the income lost from fees and charges.

Cabinet welcomed the Government’s support and the contribution which it had made to maintaining services. Members also noted how this assistance had helped the Council to support the wider community and local economy.

Members discussed the proposed Council Tax increase of £3.70 (1.95%), to be levied in respect of a notional Band D property. Cabinet felt that an increase at this level would help maintain services, but would not place an unnecessary financial pressure on householders.

Cabinet noted that the Original Budget for 2021-22 included a shortfall of £0.133m that would have to be saved as a matter of priority. Cabinet emphasised that these savings should be secured either by permanent reductions in expenditure, or through sustained increases in the amount of income received. In this context, Members discussed the significant financial challenges that would face the Council during the remaining period of the Medium Term Financial Plan.

Cabinet discussed the proposed Housing Revenue Account. Members noted the 1.5% increase in housing rents recommended for 2021/22. Members reflected on how the increase would be in line with Social Housing Rent Standard, set by the Government. This Standard allowed all registered providers of social housing, including local authorities, to apply annual rent increases of up to the Consumer Price Index (CPI) plus 1%.