Report of the County Treasurer (CT/21/16) on the Council’s Budget and Cabinet Service Budgets for 2021/2022, will follow, due to the final settlement not yet having been received.
The Cabinet will accordingly also consider the outcome of the Budget Consultation Meetings with representatives of the Devon Business Community, Older People and the Voluntary Sector and Trade Unions (CSO/21/5) and the Overview and Scrutiny Budget Recommendations (CSO/21/6).
Cabinet are also asked to note the role of the Corporate Infrastructure and Regulatory Services Scrutiny Committee on 28 January 2021 (Minute 215) in reviewing and endorsing the Report of the County Treasurer (CT/21/14) on the Treasury Management and Investment Strategy for 2021/22.
(Councillors Biederman, Connett, Dewhirst, Greenslade and Hannaford attended remotely in accordance with Standing Order 25(2) and the Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority and Police and Crime Panel Meetings) (England and Wales) Regulations 2020 and spoke to this item).
The Cabinet considered and had regard to:
(i) the Report of the Chief Executive (CSO/21/5) summarising the outcomes of and comments/observations made at consultation meetings with representatives of Devon’s Business Community, Trades Unions, representatives of Older People and the Voluntary Sector;
(ii) the discussions of the Council’s Scrutiny Committees (CSO/21/6) held on 25th January, 26th January and 28th January 2021, the recommendations being summarised and attached to the agenda;
(iii) a revised 2021/22 Budget Impact Assessment, which had been circulated to all Members of the Council prior to the meeting and available at https://www.devon.gov.uk/impact/budget21-22/ undertaken as part of the budget’s preparation;
(iv) the Report of the County Treasurer (CT/21/16) (also circulated prior to the meeting in line with Regulation 7(4) of the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012)) on the Revenue Budget for 2021/22, Medium Term Financial Strategy to 2024/25 and Capital Strategy 2021/22 to 2025/26, including an assessment of the adequacy of reserves, a range of prudential indicators concerning the financial implications of the capital programme and an assessment that identified risks associated with the budget strategy, together with how the risks would be managed. The budget book contained details of the Council’s revenue and capital budgets together with associated financial and operational information.
The Cabinet noted that the Council’s financial plans had been drawn up with reference to the Council’s major policies and objectives, its performance framework, demographic changes and consultation with local residents, businesses and other stakeholders.
The Cabinet noted the role of the Corporate Infrastructure and Regulatory Services Scrutiny Committee on 28 January 2021 (Minute 215) in reviewing and endorsing the Report of the County Treasurer (CT/21/14) on the Treasury Management and Investment Strategy for 2021/22, which had been prepared in accordance with the revised Treasury Management Policy Statement and revised CIPFA Code of Practice for Treasury Management. The Treasury Management and Investment Strategy set out the minimum revenue provision (MRP) policy, capital expenditure funding, prudential indicators, the current treasury position, debt and investments; prospects for interest rates; the borrowing strategy; and the investment strategy.
The Corporate Infrastructure and Regulatory Services Scrutiny Committee had endorsed and commended the Treasury Management and Investment Strategy 2021/22 to the Cabinet.
The final Local Government financial settlement (Settlement Funding Assessment) for 2021/22 had been announced and was £103.2 millions which was the same as 2020/21. The settlement was for one year only and was based on the Spending Round 2020 (SR20). The main points of the SR20 being set out below:
· Council Tax –the council tax referendum limit would be 2% for local authorities with social care authorities allowed a 3% social care precept. The settlement confirmed districts would be allowed to apply the higher of the referendum limit or £5;
· Business Rates Retention – the business rates multiplier had been frozen for 2021/22;
· Revenue Support Grant – increased by 0.55%;
· Social Care Funding –there had been an increase to the Social Care Support Grant of £300 millions nationally, allocated on Adult Social Care relative need (£60 millions) and the ability to raise resources through the social care precept (£240 millions). There had been no change to the Improved Better Care Fund Grant;
· Rural Services Delivery Grant – There had been an increase of £4 millions nationally (£85 millions in 2021/22), the methodology for distribution remained unchanged;
· Covid-19 Funding – £2.2 billions of funding had been announced to support Local Government in 2021/22, alongside support for local tax income and the spreading of deficits; and
· Local Government Funding Reform – no papers had been published relating to the Fair Funding Review or the Business Rates Reset.
The Budget Book circulated with the agenda contained;
· Revenue Budget Overview;
· Statement on the Robustness of the Budget Estimates, the Adequacy of Reserves and Affordability of the Capital Strategy;
· Capital Strategy and Programme Overview 2021/22 - 2025/26;
· Service Budgets;
· Fees & Charges;
· Medium Term Financial Strategy 2021/22 - 2024/25;
· County Fund Balance and Earmarked Reserves 2021/22;
· Treasury Management Strategy 2021/22 - 2024/25 and Prudential Indicators 2021/22 - 2025/26;
· Capital Strategy; and
· Risk Analysis of Volatile Budgets; and Abbreviations.
The targets set for each service area had been subject to different pressures and influences.
The table on page 7 showed the 2021/22 Budget Targets by service area.
Revenue Expenditure Detailed budgets had been produced within the Targets set by Cabinet (as above) in January 2021 and were shown on pages 39 to 89. The risks associated with the delivery of the 2021/22 budget and the mitigating action needed was detailed on pages 150 to 166.
Key Table 1 on page 9 showed the estimated level of spending on services and other items such as Capital Financing and interest on Balances. The Authority's Capital Programme was explained on pages 19 to 39. Factors that influenced the income gained from balances were set out on pages 122 to 138 which also explained the Authority's Treasury Management Strategy.
Key Table 2 set out the Council Tax Requirement, Tax Base, Council Tax by band and individual District Precepts. Pages 114 to 121 explained the Authority's strategy for its reserves and balances. Key Table 3 summarised the Authority's Reserves and Balances. The Authority's approach to the Medium Term Financial Strategy (MTFS) was detailed on pages 91 to 113.
The Authority had not only received Core Funding but also specific grants that related to particular activities and these were detailed in Key Table 5 on page 13 and 14, the most significant specific grant was the Dedicated Schools Grant. For 2021/22 the Dedicated Schools Grant had increased to £589.1 millions from £539.9 millions in 2020/21.
The Leader thanked the Scrutiny Committee’s for their hard work in scrutinising the budget proposals and added that an additional sum of money (£1.3 millions) had been put into the Budget. This included £600,000 for highways, specifically potholes and drainage works, £600,000 for District Council’s to support emergency funds and crisis funding and a £100,000 fund for Town and Parish Councils to bid from for cyclical maintenance works (match funded). The Leader also said the budget had been based on a Council Tax increase of 4.99%.
The Leader also joined with other Members speaking under Standing Orders and paid tribute to the hard work of the Finance Team in putting together a budget, with added complexity in these challenging times.
In summary, the Budget for 2021/22 included significant investment in core services to support the most vulnerable people in Devon. It was noted however that the Council was in unprecedented times and the Authority faced significant risk of increased demand for services, increased costs and reducing funding.
It was MOVED by Councillor Hart, SECONDED by Councillor McInnes and
(a) that full regard is given to the responsibilities placed upon the Council in the exercise of its Public Sector Equality Duty under s149 of the Equality Act 2010 (as set out in the ‘Budget 2021/22 Impact Assessment’ circulated previously for the purposes of this meeting, and specific impact assessments undertaken as part of the budget’s preparation) in considering the proposals and their impact, before making a decision;
(b) that the views of the Council's Scrutiny Committees, the Devon Education Forum, the Business Community, the Voluntary Sector, and the Trades Unions and other consultees on the budget (set out elsewhere on the agenda) be noted;
(c) that the Final Settlement Funding of £103.2 millions be noted;
(d) that the budgets (pages 42 to 89) within the targets set be approved;
(e) that the Net budget of £545.505 millions as set out in Key Table 1 on page 9 be recommended to the Council;
(f) that Council be recommended to set a 3% Adult Social Care Precept, as set out in Key Table 2 page 10;
(g) that the Council Tax requirement be set at £440,441,821.24 as set out in Key Table 2 page 10 be recommended to Council;
(h) that the precepts required from each District Council and the levels of County Council Tax for each of the eight property valuation bands consequent upon the budget as amended by adjustments in collection in the current year, as set out in Key Table 2 on page 10 be recommended to Council;
(i) that it be noted there are no new Fees & Charges proposed for 2021/22;
(j) that in line with financial regulations, the changes to existing charges to be agreed by the appropriate Cabinet Member and Chief Finance Officer via a Delegated Decision be noted;
(k) that the Medium Term Financial Strategy 2021/22 - 2024/25 as set out on pages 91 to 113 be noted;
(l) that the final service budgets, levels of reserves and Council Tax figure, taking account of the risks outlined on pages 150 to 166 be recommended to the Council;
(m) that the County Fund Balance and Earmarked Reserves 2021/22 as set out on pages 114 to 121 be noted;
(n) that the Capital Programme Overview 2021/22 - 2025/26 set out on pages 19 to 37 be recommended to the Council;
(o) that the Capital Programme for 2021/22 of £147.355 millions and its financing as shown in Summary Table D on page 27 be recommended to the Council;
(p) that for planning purposes, the indicative Capital Programmes for 2022/23, 2023/24, 2024/25 and 2025/26 shown in summary Table D on page 27 be approved and it be noted that these levels will be reviewed in the light of the overall level of revenue and capital resources available to the Council for each year;
(q) that the Treasury Management Strategy 2021/22 - 2024/25, as set out on pages 122 to 138, be recommended to the Council for adoption;
(r) that the Prudential Indicators for 2021/22 to 2025/2026 contained in pages 122 to 138 be recommended to the Council;
(s) that delegated authority be given to the County Treasurer to effect movements between the separately agreed limits for borrowing and other long-term liabilities; and
(t) that the Capital Strategy 2021/22 - 2025/26 contained on pages 139 to 149 be recommended to the Council.