Agenda item

Report of the Director of Finance (DF/22/17) on the Council’s Budget and Service Budgets for 2022/2023, will follow, due to all the final figures not having yet been received.

 

The Cabinet will accordingly also consider:

 

·         Outcomes of the Budget Consultation Meetings with representatives of the Devon Business Community, Older People and the Voluntary Sector and Trade Unions (CSO/22/4), attached;

·         Overview and Scrutiny Budget Recommendations (CSO/22/5), attached; and

·         Minute 27 of the Devon Education (Schools) Forum, held on 19 January 2022, relating to the budget and the recommendation to Cabinet outlined in those minutes.

 

Cabinet is also asked to note the role of the Corporate Infrastructure and Regulatory Services Scrutiny Committee on 27 January 2022 (Minute *32) in reviewing and endorsing the Report of the Director of Finance (DF/22/05) on the Treasury Management and Investment Strategy for 2022/23 and commending it to the Cabinet.

Decision:

RESOLVED that Cabinet

 

(1) has given full regard 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 2022/23 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 its decision;

 

(2) has had regard to 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);

 

(3) notes the Provisional Settlement Funding of £103.2 million;

 

(4) approves the budgets (pages 40 to 87) within the targets set;

 

(5) recommends to Council the Net budget of £560.1 million as set out in Key Table 1 on page 8;

 

(6) recommends to Council that a 1% Adult Social Care Precept is set as set out in Key Table 2 page 9;

 

(7) recommend to Council that the Council Tax requirement be set at £462,193,800.97 as set out in Key Table 2 page 9;

 

(8) recommends to Council 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 9;

 

(9) note the new Fees & Charges proposed for 2022/23;

 

(10) note that in line with financial regulations, changes to existing charges will be agreed by the appropriate Cabinet Member and Chief Finance Officer via a Delegated Decision; 

 

(11) note the Medium Term Financial Strategy 2022/23 - 2025/26 as set out on pages 89 to 113; 

 

(12) takes account of the risks outlined on pages 167 to 189 in determining the final service budgets, levels of reserves and Council Tax figure to be recommended to the Council;

 

(13) notes the County Fund Balance and Earmarked Reserves 2022/23 as set out on pages 114 to 120;

 

(14) recommends to the Council the Capital Programme Overview 2022/23 - 2026/27, set out on pages 19 to 37;

 

(15) recommends to the Council the Capital Programme for 2022/23 of £165.2 million and its financing, as shown in Summary Table D on page 27;

 

(16) approves, for planning purposes, the indicative Capital Programmes for 2023/24, 2024/25, 2025/26 and 2026/27 shown in summary Table D on page 27, noting that the levels will be reviewed in the light of the overall level of revenue and capital resources available to the Council for each year;

 

(17) recommends to the Council that it adopts the Treasury Management Strategy 2022/23 - 2025/26, as set out on pages 121 to 154;

 

(18) recommends to the Council the Prudential Indicators for 2022/23 to 2026/27, contained on pages 121 to 154;

 

(19) gives delegated authority to the Director of Finance to effect movements between the separately agreed limits for borrowing and other long-term liabilities; and

 

(20) recommends to the Council the Capital Strategy 2022/23 - 2026/27, contained on pages 155 to 166.

Minutes:

(Councillors Biederman, Connett, Dewhirst, Hannaford and Hodgson attended in accordance with Standing Order 25(2) and spoke to this item).

 

The Cabinet considered and had regard to:

 

·         the Report of the Chief Executive (CSO/22/4) summarising the outcomes of and comments/observations made at consultation meetings with representatives of Devon’s Business Community, Trades Unions and Representatives of the Voluntary Sector;

 

·         the discussions of the Council’s Scrutiny Committees (CSO/22/5) held on 18th January, 20th January and 27th January 2022, the recommendations being summarised and attached to the agenda;

 

·         Minute 27 of the Devon Education (Schools) Forum, held on 19 January 2022, relating to the budget and the recommendation to Cabinet outlined in those minutes;

 

·         a revised 2022/23 Budget Impact Assessment, which had been circulated to all Members of the Council prior to the meeting and available at Budget 2022/2023 - Impact Assessment (devon.gov.uk) undertaken as part of the budget’s preparation; and

 

·         the Report of the Director of Finance (DF/22/17) on the Revenue Budget for 2022/23, Medium Term Financial Strategy to 2025/26 and Capital Strategy 2022/23 to 2026/27. This included an assessment of the adequacy of reserves, a range of prudential indicators concerning the financial implications of the capital programme and an assessment that identifies risks associated with the budget strategy, together with how the risks would be managed.

 

The Cabinet noted that the budget book contained details of the County Council’s revenue and capital budgets together with associated financial and operational information. The Council’s financial plans had been drawn up with reference to the County Council’s major policies and objectives, performance framework, demographic changes occurring within the county and consultation with local residents, businesses and other stakeholders.

 

The detail of the budget book included:

 

·         Revenue Budget Overview;

·         Statement on the Robustness of the Budget Estimates, the Adequacy of Reserves and Affordability of the Capital Strategy;

·         Capital Programme Overview 2022/23 - 2026/27;

·         Service Budgets;

·         Fees & Charges;

·         Medium Term Financial Strategy 2022/23 - 2025/26;

·         County Fund Balance and Earmarked Reserves 2022/23;

·         Treasury Management Strategy 2022/23 - 2025/26 and Prudential Indicators 2022/23 - 2026/27;

·         Capital Strategy 2022/23 - 2026/27;

·         Risk Analysis of Volatile Budgets; and

·         Abbreviations.

 

The Cabinet noted the role of the Corporate Infrastructure and Regulatory Services Scrutiny Committee on 27 January 2022 (Minute *32) in reviewing and endorsing the Report of the County Treasurer (CT/21/14) on the Treasury Management and Investment Strategy for 2022/23. The Treasury Management and Investment Strategy 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 2022/23 to the Cabinet.

 

At the time of publishing the agenda and Report, the final settlement had not yet been received. The 2022/23 local government finance settlement was for one year only and was based on the Spending Review 2021 (SR21) funding levels. This was the first time since 2015 that, in the context of a multi-year Spending Review, the Government had only provided local authorities with a single-year settlement.

 

The Chancellor had announced an additional £1.6 billion per annum (2022/23 to 2024/25) for local government as part of SR21 and the majority of this amount had been included in the Core Spending Power figures. Based on the figures in the Core Spending Power amounts, there had been a net increase in funding (excluding the multiplier adjustment and Adult Social Care reform funding) of £1.5 billion.

 

As previously announced at SR21, the council tax referendum limit would be 2% for local authorities, with social care authorities allowed an additional 1% social care precept.

 

The table on page 6 of the budget book set out the provisional settlement for Devon’s Core Funding of £103.2 million and showed the other grants announced so far.

 

The Director of Finance updated the Cabinet on the final settlement which had just been announced and there had been no change to the core funding. However, the Public Health grant had been announced at £815,000 (an increase of 2.8%), there had been a £1,000 increase to the Better Care Fund and supporting families was £213,000 more than previously reported. Savings and income initiatives of £38.7 million had been initially required to set a balanced budget, however, since that time additional income of £8 million from the NHS to support social care had been agreed, which had reduced the need of some of the proposed savings considered by Scrutiny in January.

 

Detailed budgets had been produced within the Targets set by Cabinet in January 2022 which were shown on pages 40 to 87. The targets set for each service area had been subject to different pressures and influences. The table on page 6 showed the 2022/23 Budget Targets by service area.

 

The risks associated with the delivery of the 2022/23 budget and the mitigating action needed to try to contain that risk was detailed on pages 167 to 189.

 

Key Table 1 on page 8 showed the estimated level of spending on services and other items such as Capital Financing and Interest on Balances. Capital Financing Charges were dependent on the authority's Capital Programme explained on pages 19 to 37.

 

Factors that influenced the income gained from balances were set out on pages 121 to 154 that 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. The proposal was for a rise of 2.99% which included a 1% social care precept.

 

Pages 114 to 120 explained the authority's strategy for its reserves

and balances and 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 89 to 113 and Key table 4 was the financial representation of the current MTFS.

 

The authority not only received Core Funding but also specific grants that related to particular activities and these were detailed in Key Table 5 on page 12 and 13. The most significant being the Dedicated Schools Grant.

 

The Cabinet Member thanked the Scrutiny Committee’s for their hard work in scrutinising the budget proposals and reinforced the value he placed on their comments and recommendations. As such, recommendation 11 relating to rethinking the reduction in community grant schemes had been acknowledged and the money returned to the budget, recommendation 12 relating to highways and the Cabinet Member announced an additional £1m for drains, safety and cyclical maintenance. Whilst recommendation 17 relating to means testing for disabled parking bays had to remain in the budget at present, the Cabinet Member committed to reviewing this further. 

 

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 2022/23 included significant investment in services but, in order to deliver the budget, pressures had to be contained, and planned savings achieved. The one-off use of reserves to support the budget would cause additional pressures in the following year and work must commence immediately on transforming services.

 

The matter having been debated and the options and/or alternatives and other relevant factors (e.g. financial, sustainability (including carbon impact), risk management, equality and legal considerations and Public Health impact) set out in the Director of Finance’s Report and/or referred to above having been considered:

 

it was MOVED by Councillor Twiss, SECONDED by Councillor Hart, and

 

RESOLVED that Cabinet

 

(1) has given full regard 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 2022/23 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 its decision;

 

(2) has had regard to 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);

 

(3) notes the Provisional Settlement Funding of £103.2 million;

 

(4) approves the budgets (pages 40 to 87) within the targets set;

 

(5) recommends to Council the Net budget of £560.1 million as set out in Key Table 1 on page 8;

 

(6) recommends to Council that a 1% Adult Social Care Precept is set as set out in Key Table 2 page 9;

 

(7) recommend to Council that the Council Tax requirement be set at £462,193,800.97 as set out in Key Table 2 page 9;

 

(8) recommends to Council 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 9;

 

(9) note the new Fees & Charges proposed for 2022/23;

 

(10) note that in line with financial regulations, changes to existing charges will be agreed by the appropriate Cabinet Member and Chief Finance Officer via a Delegated Decision; 

 

(11) note the Medium Term Financial Strategy 2022/23 - 2025/26 as set out on pages 89 to 113; 

 

(12) takes account of the risks outlined on pages 167 to 189 in determining the final service budgets, levels of reserves and Council Tax figure to be recommended to the Council;

 

(13) notes the County Fund Balance and Earmarked Reserves 2022/23 as set out on pages 114 to 120;

 

(14) recommends to the Council the Capital Programme Overview 2022/23 - 2026/27, set out on pages 19 to 37;

 

(15) recommends to the Council the Capital Programme for 2022/23 of £165.2 million and its financing, as shown in Summary Table D on page 27;

 

(16) approves, for planning purposes, the indicative Capital Programmes for 2023/24, 2024/25, 2025/26 and 2026/27 shown in summary Table D on page 27, noting that the levels will be reviewed in the light of the overall level of revenue and capital resources available to the Council for each year;

 

(17) recommends to the Council that it adopts the Treasury Management Strategy 2022/23 - 2025/26, as set out on pages 121 to 154;

 

(18) recommends to the Council the Prudential Indicators for 2022/23 to 2026/27, contained on pages 121 to 154;

 

(19) gives delegated authority to the Director of Finance to effect movements between the separately agreed limits for borrowing and other long-term liabilities; and

 

(20) recommends to the Council the Capital Strategy 2022/23 - 2026/27, contained on pages 155 to 166.

 

(NB: The Impact Assessment referred to above may be viewed alongside Minutes of this meeting and may also be available on the Impact Assessment Webpages).

 

Supporting documents: