Agenda item

Members gave consideration to a report which presented the Executive Business Plan and the Medium Term Financial Plan (MTFP) 2021/22 – 2025/26.  These documents were central to the Council’s financial and strategic planning.

 

The Executive Business plan detailed the deliverables to supporting achievement of the Corporate Plan Objectives and provided a national and local context to the environment the Council was working within.

 

The Medium Term Financial plan included the financial strategies, principles and assumptions which had been applied in developing the medium term financial analysis which forecast the revenue budgets over a 5 year period.

 

The report proposed a balanced budget for 2021/22 with a budget requirement of £13,279,100.   The one year Local Government financial settlement was detailed within the report and had provided additional resources, to those previously forecast for 2021/22.

 

The General Fund working balance, which was forecast in excess of the £2.5m minimum balance, both provided the opportunity to create new Earmarked Reserves, and increase reserves for future investment.

 

The budget assumed approval of a Council Tax increase of £5, the maximum allowable within referendum limits, and in terms of future year’s, an assumption of a 3% increase in the Council Tax had been applied.

 

In accordance with the Spending Review announcement, no pay award had been included for the 2021/22 budget, although 2% had been assumed with future year’s budgets.

 

Members’ attention was drawn to the statement on the robustness of estimates and adequacy of reserves in setting the budget presented.  The Statement also provided the context in which the Capital Programme had been set,  mitigating future financial risks and its affordability . (Page 82 of the reports pack related).

 

The fees and charges, had been recommended by both Policy Committees and were included at appendix 3 for approval.

 

In respect of our Capital Investment Programme the current year budget was £9.4m rising to a total £20.7m over the Medium Term, this level of investment was deemed to be both affordable and sustainable in the long term.

 

The Treasury Management Strategy, policies and prudential indicators had been scrutinised by the Governance and Audit Committee and were presented for Council approval.

 

Also included for approval was the Statutory Pay Policy Statement along with the Human Resource numbers on which the employee budget had been based.

 

In conclusion, the S151 Officer was please to confirm that the MTFP met the requirements of the regulations;

 

*        the requirement for the local Authority to agree a balanced budget for each financial year, prior to the start of that year;

*        the requirement for the local Authority to establish the level of Council Tax for the coming year on the basis of that budget; and,

 

Furthermore, met best practice (supported by CIPFA) by setting out the coming year’s budget in addition to a 5 year MTFP

 

The Leader of the Council made the following speech in response: -

 

“The Executive Business Plan and Medium-Term Financial Plan 2021-22 to 2025-26 are the documents that form the Council’s Budget.

 

Firstly I would like to place on record my thanks and those of the Administration, to the officers involved in preparing these plans and strategies. This will have been a difficult year in terms of the demands on the Finance Team as a result of the Covid response and we therefore thank you accordingly.

 

These Plans, Strategies, budgets and fees and charges have been presented to our Policy Committees and the Treasury Management Strategy has received scrutiny from the Governance and Audit Committee and they are now presented here to Full Council this evening.

 

The Budget for 2021-22 will be £13,279,100 and is aligned to the Administration’s Corporate Plan priorities and recognises the good financial position the Council is in.

 

The Government’s one year financial settlement has provided us with the opportunity to set aside £1m to support the delivery of future strategies for Environment and Climate Change, Culture and Health and Wellbeing, in addition to earmarking £0.500m for investment in Growth and Regeneration, all of which will deliver long term outcomes for our residents and support of the Council’s vision for West Lindsey to be a great place to be where people, businesses and communities can thrive and reach their potential by continuing to deliver award winning services.

 

Whilst there remains considerable uncertainty around future funding for local government, we are well placed to mitigate the impact through the earmarking of £1m, which will provide resources over the medium term in balancing the budget, should it be required.

 

We will continue to support our communities, businesses and residents through the recovery from Covid-19 and we have therefore set aside £0.500m of our own resources to support additional costs and to help mitigate our own income losses.

 

We are committed to investing throughout the District and indeed, our Capital Investment Programme totals some £21m.  It will see investment in Caistor, Gainsborough, Market Rasen, Hemswell and Nettleham as well as in the new Central Depot at Glentham, which will open during the summer giving our Operational Services teams much needed facilities that are both environmentally sustainable and future proofed as our communities grow.  With these funds we can also invest in Council services and continue to deliver award-winning services, improving the experience of our residents and through investment in new technology continue to deliver efficiencies.  We will invest in growth and regeneration projects to support the creation of jobs, skills and housing whilst improving our infrastructure and the built environment.

 

In respect of Council tax a £5 increase (equivalent to 2.99% or 10p per week) is proposed. With future uncertainty and the expected longer term recovery of our income streams it is appropriate that we take the opportunity this year to maximise our Council Tax increase to the governments referendum limit.

 

West Lindsey is a district that has made significant progress in delivering on the commitments that we made to local residents. The Administration’s record is one that has not been about short-term opportunism, or quick fix solutions to the challenges we face; but the dedicated, deliberate and steady long-term approach to policies designed to make the Council’s financial position more resilient at a time when central government continues to reduce grant funding and consider limiting our ability to find innovative solutions to fund the frontline services that local people expect and rely on from this Council.

 

Chairman, this budget clearly sets out how we, as a Council, will maximise the leadership and support provided to businesses, communities and individuals in West Lindsey in recovering from the negative impacts of the coronavirus pandemic.  As such I commend it to Council and move the recommendations set out in the report.

 

Thank you Chairman.”

 

The Leader of the Opposition in responding, whilst accepting the Council had done well in setting its budget questioned whether the budget was as ambitious and aspirational as it needed to be, given the difficult years ahead and the recovery.  He questioned wider Member’s involvement in budget setting and other Members’ ability to effect its content in its preparation and considered this view had been accepted at the most recent Corporate Policy and Resources Committee.  He was of the view that both the consultation and engagement process around budget setting needed to be extended.

 

The Leader in responding was satisfied the budget was both ambitious and aspirational but more importantly achievable.  Comments around greater engagement had been taken on board, and the Leader was of the strong belief the Council was at it strongest when it worked collaboratively.

 

Debate ensued and the budget was welcomed but some questioned whether the monies put aside for climate and sustainability work were enough. In response to questions relating to new 5 bids detailed at 4.5, only 4 appeared to be listed, the fifth being food waste collection,  £531k had been allocated and it was expected LCC would fund the bulk of costs related to any change in waste collections. The Leader acknowledged that more monies would be needed in respect of climate and sustainability work.  The allocation set out a clear  intent to deliver against this programme, for it be a priority, and as the action plan developed, with costed schemes, further allocations would be made as appropriate and funding bids made where feasible.

 

Given the difficult unprecedented year, and the challenges Covid had brought, the budget should be seen as a good news story.  Members questioned how news of the budget was shared with residents, citing the importance of ensuring residents were clear about the percentage increases and which authorities were applying them. It was suggested an Executive summary aimed at residents should be produced ensuring the information was clear to residents.  Clarity was sought as to whether the increase was 2.99% or 2%.

 

In responding, the Chief Executive confirmed a press release would be issued as soon as the budget was agreed and would be very clear about the impact to residents. It was also confirmed that a “leaflet” was issued alongside the Council Tax Bill, including the revised Council Tax and level increase, but this was predominately in recent years an e-leaflet.   There was some concern that there was a presumption that all residents had access to on-line services.

 

Members welcomed the good spread of investments and the income this was generating for the Council to be used to fund its services.  Continued returns were even more welcome given the difficult year.  It was questioned how or if negative interest rates would affect the Council

 

This being the last year of new homes bonuses , some Members called for monies gained through the scheme to be re-invested back to those villages where the homes had been built.

 

In responding Officers advised the Council had received confirmation from its bank that they would not be charged a negative interest rate.  It was possible for money markets to go into negative equity which would mean the Council in effect would be charged for holding monies.  The Council was managing and moving its money as necessary to avoid any such charges where possible and had planned accordingly for reduced income from investments.

 

£13million had been generated from New Homes Bonuses and had been re-invested in regeneration schemes.  It was anticipated an alterative scheme would be introduced and the Government was looking at ways to incentivise Councils to deliver affordable housing and these were outlined to the Chamber.  Consultations through central Government were ongoing and the Council was fully engaging.

 

Referring to early comments regarding wider member involvement in budget setting, the newly appointed Deputy Leader, re-iterated her commitment to drive wider inclusivity across the Chamber and her hopes to re-establish the Member Forum, where Members could come together informally.  She spoke of previous successful initiatives which had been developed this way in years gone by.

 

Given the interest being offered by banks and alike some Members questioned why the Council’s investment Strategy and approach continued to be discredited, citing the building of the crem, the leisure centre contract, investment of property , all of which were contributing to sustaining services and plugging gaps in government funding.

 

By way of point of order Councillor Young questioned the accuracy of the previous speaker believing the leisure contract to not be cost neutral but at the cost of three quarters of a million pound.  The S151 Officer advised that Covid support monies had been applied and £180k funding bid had been applied for to offset such costs.

 

Responding to further criticism of the commercial approach, Members across the chamber again re-iterated the context in which the Council was operating, diminishing government grants, rising costs and the need to fill the gap. Alternative funding proposals where welcomed but had not been forthcoming from opposition Members. The planned investments were welcome, as was the return of the Members Forum which it was hoped would give all Members a forum in which they could share views.  Working remotely had resulted in some dis-jointedness.  The Strategic Away Day it was considered had the potential to allow members to engage on these wider strategic matters , and organisers were urged to consider the setting of the budget to be a future topic at such an event.

 

In responding to comments regarding changes to procurement potentially in the future the Chief Executive confirmed the Council already had procurement rules which sourced local first where appropriate.  For major contracts, to ensure value for money, framework arrangements were used.  Procurement rules were being revised in light of Brexit however it was noted that many of the EU rules were in fact set by the UK , so increased flexibility was not necessarily going to be gained.

Returning to comments about greater and wider engagement in budget setting, whilst the forums, away days and workshops were to be welcomed,  and would be referenced briefly in the annual review of the constitution, it was argued that budget setting was not a surprise.   Opposition Members were at liberty to propose their own alternative spending plan to be considered, something they had chosen not to do.

 

The lack of social return considerations and the treatment of some decisions as pure spreadsheet exercises was where Opposition concerns lay, citing examples including the leisure centre contract. Out of District investments did not provide the knock on social return that local investments would, and only looking at income and expenditure failed to address social issues and investment opportunities. 

 

Following a lengthy political exchange and having had the  recommendations, as set out in the report, moved and seconded, they were put to the vote. In accordance with required legislation for voting on the Council’s budget, a recorded vote was taken.

 

Votes were cast as set out below:

 

For: - Councillors Bierley, Boles, Bunney, Brockway, Clews Coulson, Davies, Devine, Ellis, England, Fleetwood, Grimble, Lawrence, McCartney, McNeill G, McNeill J, Milne, Panter, Patterson, Rodgers, Snee J, Summers, Waller, Welburn, White  (25)

 

Against: - Councillors Cotton, Darcel, Rollings, Young (4)

 

Abstain: - Councillors Dobbie, Rainsforth, Snee M (3)   

 

With the majority of Councillors voting for the proposals, the motion was declared CARRIED and on that basis it was:-

 

RESOLVED that: -

 

(a)     the external environment and the severity of the financial challenges being faced as detailed in the Financial Strategy be recognised;

 

(b)    the Statement of the Chief Finance Officer on the Robustness of Estimates and Adequacy of Reserves be accepted;

 

(c)     the Medium Term Financial Plan 2021/22 to 2025/26 (Appendix 1) be approved with an awareness of the associated risks included in Appendix 2.

 

(d)     a Mid Year Review of the Medium Term Financial Plan be received during 2021/2022;

 

(e)    the Revenue Budget 2021/22 (Appendix 2) be set;

 

(f)      the movement in reserves be approved;

 

(g)     the Fees and Charges 2021/2022(Appendix 3) be set;

 

(h)    the Capital Investment Strategy (Appendix 4) be adopted;

 

(i)      the Capital Programme 2021/2022 to 2025/2026 and the Financing and Expenditure on Business as Usual Schemes (Appendix 5 and 6) be approved; 

 

(j)      the Treasury Management Strategy 2021/2022 be approved and the Treasury Investment Strategy, the Borrowing Strategy and Treasury and Borrowing Prudential Indicators (Appendix 7) be adopted;

 

(k)     the Minimum Revenue Provision (MRP) Policy as contained in the Treasury Management Strategy (Appendix 7 ) be approved;

 

l)       a £5 increase in the Council Tax to £222.74 be approved (Appendix 8 – 12); and

 

m)     the 2021/2022 Pay Policy Statement (Appendix 13) and the Human Resources Statement 2021/2022 (Appendix 14) be approved.