Agenda item

Members gave consideration to a report which presented the Executive Business Plan and Medium Term Financial Plan 2018/19 – 2022/23.

 

The purpose of the Executive Business Plan was to set out the actions to be taken by the Executive to deliver the Corporate Plan over the next three years.

 

The purpose of the Medium Term Financial Plan (MTFP) was to set a robust overall framework for the Council’s spending plans over the next five years in supporting the delivery of the Corporate Plan and underpinned by the delivery of the Financial Strategy.  The report therefore outlined the Council’s revised financial plans, having taken into account, in the Financial Analysis, for changes in Government funding, the economic environment, local engagement and the priorities for the Council.  The plan reflected the revisions to the previous estimates and detailed the Revenue Budget 2018/19 and estimates up to 2022/23. 

 

The report also covered the setting of Council Tax for 2018/19, Fees and Charges for 2018/19, the Capital Programme 2018/19 to 2022/23 and the Treasury Management Strategy.

 

The Executive Director for Resources presented the report and in doing so placed on record his thanks to Tracey Bircumshaw and the finance team for their work in preparing the documents presented to Members.

 

It was also noted that 2 Parish Councils had made late changes to their precept requirements, resulting in amendments having to be made to Appendices H, I J, K, and L.  These had been circulated to Members, however, additional copies had been placed on Members’ desks for ease of reference. 

 

It was noted that the Executive Business Plan provided an overview of activities that would deliver the Corporate Plan and the capital investment programme as detailed at Appendix F of the report.

 

Despite the continued reduction of Grant from the Government, Officers were pleased to be able to present a balanced budget for 2 years but it was noted there remained a challenging funding gap which would reach £673k in 2022/23 Page 35 of the report referred.  In agreeing the budget, Members were also agreeing the fees and charges, these were set out in appendix C & D

 

Members noted that the budget presented did include the gain from the 100% business rate pilot that Greater Lincolnshire had been successful in bidding for in 2017. This had been recognised as a one-off gain of approximately £1.2m in the report presented.

 

The headline assumptions were captured on Page 16 of the report.

 

In light of the service cluster structure having been removed from the establishment, the budgeted expenditure reflected the approach of people, places and policies.

 

The impact on reserves of the plan were shown at Page 42/43 of the report – 86/87 of the pack and showed an expected balance in 2022/23 of over £12m.

 

Members were also asked to agree the Capital Investment Strategy, The Capital Programme and Treasury Management strategy in appendices E, F and G.

 

All of these strategies had been amended to comply with the revised CIPFA code for prudential borrowing and the Ministry for Housing, Communities and Local Governments recently revised guidance on MRP and non-treasury investments.

 

Included at Appendix N was a benchmarking report which showed how well the Authority were performing when compared with other Districts.  A summary of the benchmarking was provided in section 2.4 of the Financial Strategy (page 25 of the report 69 of the pack)

 

The Executive Director for Resources reiterated that the MHCLG were currently holding a consultation on Fairer Funding which was the first of three consultations that would be undertaken between now and the Autumn of 2019. The Government had committed to re-basing the funding of Local Authorities by 2021 and no account had been taken of this in the estimates

 

Finally Members’ attention was drawn to the Chief Finance Officer statement on the robustness of estimates, the adequacy of reserves and affordability of Capital Investments, detailed on Page 43 of the report.

 

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

 

“Thank you Chairman, and thank you Mr Knowles for presenting this very detailed five-year financial strategy and business plan containing 13 appendices. This sets out a very detailed financial strategy to take our Council forward.

 

The Government‘s austerity program was obviously designed to sort out local government finances by forcing efficiencies upon Local Government and increasing accountability.  I believe we have been successful as a result of their initiative. 

 

I believe Westminster have decided the time is right for some pay back and that is coming in the form of NNDR retention.

 

As you know Lincolnshire has been successful in securing a pilot for this new opportunity.

 

I believe our strategy to not charge for green waste collection five years ago was sensible. Alright you can say we have lost five years of revenue but I say we applied five years of physical and financial scrutiny which has put us in the strong position we enjoy today.

 

Yes we are charging for green waste collection as have the rest of Lincolnshire authorities for some years.

 

We are applying a 3% increase in council tax 11.59p per week for band D properties. This amounts to just over five fluid ounces of beer or 160ml, or 8g of cheese, less than half a cigarette or 77 mL of diesel for your car.

 

Personally I think we are delivering for our residents, we provide just over 100 different strands of service. Take waste collection as one of those strands. 

A fleet of 12 lorries costing £160,000 each, plus running costs and crews. 

We Collect waste from every house every week for the same level of council tax charged by Lincolnshire Police.

 

Take green waste, if we reach our bin sales target, it will cost approximately £2 pounds for collection per household. If you fly tip and we catch you with our new portable cameras it would cost you a very large fine.

 

This is my sales pitch for green waste collection, you can buy a lot of cheese and diesel for the cost of a fine and have your green waste collected for 14 years.

 

This is the reality of the times in which we live.  Over the last six years we have made £4,314,022 of savings, we know from our position we will save £718,347 over the next two years, and we envisage saving a further £1,622,900 over the following three years.

 

When we can no longer find efficiencies and savings it will have to be generated via commercial gain.

 

Here again we can clearly demonstrate we have a working financial strategy. Our current financial position has been given high assurance. 

 

With our Executive Business Plan and the Medium Term Financial Plan spanning the next five years, we can easily plot our progress against plan and react accordingly.

 

We can demonstrate through our revenue budget and capital investment strategy and programme, how delivery will be financed.  Supported by a commercial strategy we have a good very sound financial platform upon which we can take this council forward physically financially and socially - PFS is my motto

 

Thank you to, Mr Knowles, Mrs Bircumshaw and their teams.”

 

The Leader concluded his budget speech by moving the recommendations.

 

Debate ensued with a number of Members speaking in support of the proposed budget, acknowledging that Local Government finances had been difficult for a number of years, and indicating the fairer funding arrangement promised, needed to be realised.  The Rates Retention Policy and adjustment to the rural support grant had also been of assistance in balancing budget this year. The need to invest reserves wisely was crucially important, in order to avoid having to cut services, as this approach was not sustainable. 

 

The recommendations within the report were seconded.

 

The Leader of the Opposition addressed the Chamber, and made particular reference to the Council’s Commercial Strategy. Whilst acknowledging some of the successes the Council had delivered during times of austerity, he indicated he could not support a Strategy which saw huge amounts of local taxpayers monies, invested in projects and properties outside of the District.

 

He therefore moved an addition to the recommendations contained within the report, namely: - “That the Commercial Strategy be adopted on the condition that the funds are invested solely in the District”.

 

He cited examples of other companies and countries who had invested heavily in areas outside of their core business and had paid heavily for doing do.  Investments should be made for the benefit of the District and its residents.  It was suggested recent significant investments of this nature had been made, yet were silent in the report presented to Members.

 

The additional recommendation was duly seconded, along with the call for a recorded vote against the amendment.

 

Further debate ensued with Members of the Administration challenging the views expressed by Opposition Members, indicating the Commercial Strategy was a well thought out strategy, around which much due diligence had been undertaken.  The investment would see money come back to the District which in turn would be invested into services for the District’s residents.  The investment referred to was considered to be sound in its nature, with many contractual obligations, in favour of the Council.

 

Furthermore, it was noted the Commercial Strategy was supported by a list of 14 agreed criteria by which all potential purchases were assessed.   The Leader outlined in detail and at length the process which had been adopted, offering assurance that such decisions were carefully considered.  The Leader acknowledged the Opposition’s sentiments, however stressed that no commercial properties, currently for sale across West Lindsey, met the criteria which had been established, and thus they were not considered good investments or likely to achieve the levels of returns required.  Despite investments being made outside of the District, the Administration were steadfast in their view that these were wise investments and this was a managed business function.

It was suggested that there needed to be greater transparency around such investments.

 

In response to the comments expressed by the Opposition and their concerns regarding the Commercial Strategy and associated investments, Members of the Administration sought indication as to how those Members would fund the budget gap which had been identified, as currently the hotel purchase was generating around £150,000 pa, suggesting that considerable Council Tax rises would not be palatable.

 

Opposition Members reminded fellow Members, in the Chamber, that following a recent Audit, Commercial investments had received only a “low assurance” rating, hence the call for greater transparency and scrutiny of such decisions.

 

In response to comments made throughout the debate and at the request of the Chamber, the Executive Director of Resources, clarified a number points regarding the Travel Lodge investment in Keighley.

 

The lease acquired was a 224 year lease on the property, including a 23 year sub-lease with Travel lodge.  That lease currently generated £157k pa and should the Authority borrow in the future, it would generate circa £90k pa thereafter, which would be used to support the budget going forward.

 

Before moving to the vote, the Executive Director of Resources addressed the Chamber and outlined the financial implications to the Authority should investments outside of the District be prohibited, as had been proposed by the additional recommendation put forward.  The budget presented relied on said investments up to the tune of £600k of income.  If the Authority was to change its stance, it would put this £600k income at risk and result in a budget deficit of £1.12m by 2022/23.

 

The additional recommendation, moved and seconded earlier in the meeting, namely “That the Commercial Strategy be adopted on the condition that the funds are invested solely in the District”, was then put to a recorded vote.

 

Votes were cast as set out below:

 

For: - Cllrs Boles, Cotton, Darcel, Rainsforth, Rollings, Shore, Young

 

Against: - Cllrs, Allison, Bibb, Bierley, Bond, Brockway, Devine, England, Fleetwood, Howitt-Cowan, Kinch, Lawrence, G McNeill, J McNeill, Mewis, Oaks, Palmer, Parish, Patterson, Regis, Smith, Strange, Summers, Waller

 

Abstain: - Rodgers, White

 

With the majority of Councillors voting against the additional recommendation the motion was declared LOST.

 

The recommendations, as set out in the report and having being moved and seconded earlier in the meeting, were then 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: -  Cllrs Allison, Bibb, Bierley, Brockway, Devine, England, Fleetwood, Howitt-Cowan, Kinch, Lawrence, G McNeill, J McNeill, Mewis, Oaks, Palmer, Parish, Patterson, Regis, Smith, Strange, Summers, Waller, White

 

Against: - Cllrs, Boles, Cotton, Darcel, Rainsforth, Rollings, Shore, Young

 

Abstain: - Bond, Rodgers

 

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 2018/19 to 2022/23 (Appendix 2) and are aware of the associated Risks included  at Appendix B, be approved;

 

(d)          a Mid-Year Review of the Medium Term Financial Plan be presented to Members during 2018/19.

 

(e)          the Revenue Budget 2018/19 (Appendix A) be set;

 

(f)           the Fees and Charges Policy be approved and the Fees and Charges 2018/19 (as amended) be set (Appendix C&D);

 

(g)          the Capital Investment Strategy (Appendix E) be adopted;

 

(h)         the Capital Programme 2018/19 to 2022/23 and Financing (Appendix F) be approved.

 

(i)           the Treasury Management Strategy 2018/19 be approved and the Treasury Investment Strategy, the detailed Counter Party criteria, and the Treasury and Borrowing Prudential Indicators (Appendix G) be adopted;

 

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

 

(k)          a 3% increase in the Council Tax (Appendix H-L) be approved; and

 

(l)           the 2018/19 Pay Policy Statement and establishment numbers (Appendix M) be approved.