Agenda item - Revenue Budget and Medium Term Financial Strategy 2022/23 - 2025/26 and Capital Programme 2022/23

In the exercise of its Public Sector Equality Duty, as set out below, the County Council must have full regard to and consider the impact of any proposals in relation to equalities prior to making any decisions and any identified significant risks and mitigating action required. The overview of the impact assessments for all service areas entitled ‘2022/23 Budget Impact Assessment’ has been circulated separately and is available to all Members of the Council for consideration under this item (alongside any specific equality impact assessments undertaken as part of the budget’s preparation) at https://www.devon.gov.uk/impact/published/budget-impact-assessments/.

To receive and approve the Report of the Director of Finance (DF/22/18) together with the Minutes of the Cabinet held on 11th February 2022 relating to the budget.

Minutes from the recent Scrutiny Budget meetings (Children’s Scrutiny, Health and Adult Care and Corporate Infrastructure and Regulatory Services) are also attached for the information of Members which contain the Scrutiny Budget Resolutions, attached.

The Report of the County Treasurer will follow.

The Cabinet Minutes will be available to view at https://democracy.devon.gov.uk/ieListDocuments.aspx?CId=133&MId=4179&Ver=4 shortly.

(Councillors Connett and Dewhirst declared personal interests by virtue of being Members of Teignbridge District Council (and intending to refer to this in debate) and Councillor Hall by virtue of being a Member of East Devon District Council)

The Chair of the Council MOVED that the Minutes of the Children’s Scrutiny Committee, Health and Adult Care Scrutiny and Corporate Infrastructure and Regulatory Services Budget Scrutiny Committee meetings held on 18^th, 20^th and 27^th January 2022 relating to the annual estimates be approved.

The MOTION was subsequently put to the vote and declared CARRIED.

The Chair of the Council MOVED and it was duly SECONDED that in accordance with Standing Order 30, Standing Order 14(4) be suspended to permit more than one motion or amendment to be debated at the same time.

The MOTION was put to the vote and declared CARRIED.

Councillor Hart MOVED and Councillor Twiss SECONDED that Cabinet Minute 113 (1-20) setting out the proposed revenue and capital budgets as detailed in Report (DF/22/18) be approved.

The MOTION in the name of Councillor Hart was then put to the vote and declared CARRIED

All Members of the Council had been granted a dispensation to allow them to speak and vote in any debate on the setting of the Council Tax or Precept or any fees and charges arising therefrom as a consequence of simply being a resident of or a land, business or property owner in the administrative County of Devon or by being a County Council representative on a local authority company or joint venture or by being a parent or guardian of a child in a school on any matter relating to school meals and school transport, or in relation to being an approved foster parent, providing placements for the Council’s Children in Care or in relation to the setting of members’ allowances or the receipt of allowances from another Authority or as a parent or a guardian of a child in care or in receipt of statutory sick pay or a pension.

(Councillors Connett and Dewhirst declared personal interests by virtue of being Members of Teignbridge District Council (and intending to refer to this in debate) and Councillor Hall by virtue of being a Member of East Devon District Council)

The Council considered the Minutes of the Cabinet meeting (Minute 113 (1-20) of 11th February 2022), together with the Report of the Director of Finance on the Revenue Budget and Medium Term Financial Strategy 2022/23 - 2025/26 and Capital Programme 2022/23 - 2026/27 (DF/22/18). 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 identified risks associated with the budget strategy, together with how the risks would be managed.

The budget book contained details of the County Council’s revenue and capital budgets together with associated financial and operational information.

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 Chair of the Council MOVED that the Minutes of the Children’s Scrutiny Committee, Health and Adult Care Scrutiny and Corporate Infrastructure and Regulatory Services Budget Scrutiny Committee meetings held on 18^th, 20^th and 27^th January 2022 relating to the annual estimates be approved.

The MOTION was subsequently put to the vote and declared CARRIED.

The Council noted that the Corporate Infrastructure and Regulatory Services Scrutiny Committee had, at that meeting on 27th January 2022, considered and endorsed the proposed Treasury Management Strategy for 2022/23, prior to determination of the budget for that year.

The Council further noted that the Council’s financial plans had been drawn up with reference to the County Council’s major policies and objectives, the County Council’s performance framework, demographic changes occurring within the County; and consultation with local residents, businesses and other stakeholders.

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.

The table on page 6 of the budget book set out the provisional settlement for Devon’s Core Funding of £103.2 million. The Director of Finance, at the Cabinet meeting of 11 February had reported on the recently announced settlement 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.

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 settlement had set the Council Tax increase that would trigger the need for a referendum at 2% for 2022/23, with social care authorities allowed a 1% social care precept. A Band D Council Tax would, if the proposed budget was approved, increase by 2.99% to £1,556.46. The Council Tax requirement for the Council was £467,147,301.48.

The Council acknowledged that a Budget 2022/23 Impact Assessment had been prepared previously and taken into account by Scrutiny Committees as part of their earlier deliberations together with those specific impact assessments undertaken as part of the budget’s preparation or in relation to service reviews arising therefrom: to ensure all Members had all relevant information in having regard to the responsibilities placed upon the Council to exercise its Public Sector Equality Duty under s149 of the Equality Act 2010 when considering the proposed budget, its impact and any mitigating action required, prior to making a decision. The preparation of Impact Assessments was necessarily a dynamic process and that individual assessments for specific proposals may necessarily have to be developed and updated with time.

The Impact Assessment had been made available to all Members of the Council for the purpose of the Scrutiny meetings, the Cabinet meeting on 11th February 2021 and this County Council meeting. The final revised version had been circulated to all Members on 14 January 2022 and was available at https://www.devon.gov.uk/impact/published/budget-impact-assessments/

The Chair of the Council MOVED and it was duly SECONDED that in accordance with Standing Order 30, Standing Order 14(4) be suspended to permit more than one motion or amendment to be debated at the same time.

The MOTION was put to the vote and declared CARRIED.

The Chair then indicated that he would exercise his discretion to enable the Leaders and budget spokespersons of the political groups to speak for longer than 7 minutes, if desired.

Councillor Hart MOVED and Councillor Twiss SECONDED that Cabinet Minute 113 (1-20) setting out the proposed revenue and capital budgets as detailed in Report (DF/22/18) be approved.

In commending the proposed budget to the Council, the Leader commented on the pressures and inflation in both Adult’s and Children’s Services which meant increased expenditure and therefore savings having to be made in the region of £30m. The budget had increased by 10.5% in adults and 10.8% in Children’s. The Leader highlighted the joint partnership work of Team Devon and all that had been achieved as well as residents and communities and the roles they had played in supporting each other through very difficult times. He furthermore paid tribute to care staff who had worked tirelessly throughout the pandemic.

The Cabinet Member for Finance explained the detail of the budget and thanked the Scrutiny Committee’s for their hard work in scrutinising the budget proposals and added that an additional £1m would be invested in Highways for drains, safety defects and cyclic maintenance. The Council would not be seeking to save £329,000 from community grant schemes and it wasn’t planned to charge an admin and processing fee for disabled parking bay markings, although this had to remain in the budget book in order to present a balanced budget.

He covered the SEND deficit, reserves, staffing numbers, long term debt and the capital programme and that the budget had been approved by the Section 151 officer.

Both the Leader of the Council and Cabinet Member for Finance paid tribute to and expressed gratitude to the Director of Finance, her staff and all those Officers involved in the preparation, management and monitoring of budgets over previous years and recognised also the exceptionally difficult circumstances of preparing a budget for 2022/23. Group Leaders also echoed the words of the Leader in thanking the Director of Finance for their exceptional work in bringing the budget together.

Members then formally moved, each duly seconded, the amendments as shown below which were subsequently the subject of one debate as agreed above.

Councillor Connett MOVED and Councillor Brazil SECONDED that

Cabinet Minute (113) (1-20) (Revenue Budget and Medium Term Financial Strategy 2022/23 - 2025/26 and Capital Programme 2022/23 - 2026/27) be amended by the addition of the following and all necessary changes be made to the detailed budgets.

1. AXE THE TAX

Council Tax is a regressive tax which takes little account of ability to pay and is increasingly aggressive as a cause of poverty.

Council Tax places an unfair burden on the people of Devon who are already short-changed by Government.

Residents of Westminster in London pay £827.56 this year for a Band D property.

By comparison, for Devon County Council alone, the Band D Council Tax, is £1,511.28 – rising to over £2,000 when adding the Police, Fire, and local council services.

Council also notes the problems caused through high numbers of second and holiday homes. Devon County Council calls for Government to change Regulations so that Planning Permission is needed to convert from a domestic residence to holiday or second home use.

The time has come to AXE the TAX and replace it with a nationally fair and affordable scheme, including the ability to charge extra for second homes.

Devon County Council recognises the gross unfairness of the Council Tax and calls on Government to urgently replace it with a fair system to fund local services.

2. Note the burdens carried in Devon:

- SEND deficit budget estimated at £88.1m

- Highways budget cuts totally £500m nationally

- Challenges of Social Care Provision

3. Liberal Democrats budget amendment:

a. Additional funding of £3.6m for ‘care and safety’ of pavements, cycle lanes and roads, including potholes and white-lining.

b. An additional £400,000 provided to support 20mph limits and zones for communities which want them

c. £1m for Public Health Service mental health support in 2022/23

d. Launch a new £1m County-Wide fund to encourage and support local ‘green’ initiatives that enhance communities and contribute towards tackling climate change

e. Scrap the £100,000 charge for Disabled Parking bays

f. Restore the £120,000 to be cut from the Councillors’ Locality Budget which provides support to very local organisations, community groups and events.

(Total invested is £6.22 million)

We will pay for these priorities by:

Cutting the council’s pay budget by £4m to provide £3.6m to fund better and safer pavements, cycle lanes and roads, including remarking white lines and fixing more potholes and an extra £400,000 for 20mph zones and limits for local communities which want them. Savings to be achieved through improved vacancy management and, if necessary, voluntary redundancy.

Drawing down £1million from the Public Health Reserve to fund better mental health.

Funding the £1m local ‘green’ and climate change initiatives through the council’s existing reserves of £1.4m for this purpose

Funding the £100,000 ‘admin’ cost of new Disabled Parking Bays and the £120,000 reinstatement for the Locality Budgets from savings made from the £9.6million spent on agency and temporary staff.

Councillor Hannaford MOVED and Councillor Whitton SECONDED that

Cabinet Minute (113) (1-20) (Revenue Budget and Medium Term Financial Strategy 2022/23 - 2025/26 and Capital Programme 2022/23 - 2026/27) be amended by the addition of the following and all necessary changes be made to the detailed budgets.

a. maintain £120,000 to support the retention of the £10,000 per elected member Locality Funding to ensure that local members can fulfil their local leadership roles.

b. support £750,000 to ensure that our local voluntary and community sector is sufficiently resilient and robust post pandemic and during the cost of living crisis.

c. support £100,000 to develop and enhance community resilience around older people and loneliness.

d. support £750,000 to provide a mental health training programme for teachers, teaching assistants, among many others, to address the child and young peoples mental health crisis in Devon.

e. invest £50,000 to develop a Child Friendly Devon Strategy.

f. allocate £100,000 to Domestic Abuse and Sexual Violence prevention work, with a specific focus on supporting children and young people.

g. invest £100,000 into Youth Work to promote and secure more community led projects, activities and initiatives across Devon.

h. allocate £500,000 for public health protection work.

i. invest £400,000 over two years to enhance and increase Devon’s biodiversity working with charities and local communities.

j. Invest £70,000 to provide extra capacity in the Traffic Regulation Order Team for two years to help clear the current backlog of outstanding work for local members.

k. allocate £600,000 over three years into movable a Vehicle Activated Signage (VAS) Bank, to reduce speeding, that all elected members can access.

l. allocate £400,000 to develop and roll out more community led 20mph road schemes.

m. allocate £900,000 to fund sustainable transport capital projects within Exeter and its travel to work area, with particular emphasis on improving bus journeys, including park and ride sites, to further reduce commuter car journeys, pollution and congestion.

n. invest 3 million into the highway maintenance capital backlog for local roads, flood prevention work and address general drainage issues.

o. invest 2 million capital funding to further develop Devon’s safe cycle routes.

p. invest £400,000 over four years into capital expenditure for better pavements and dropped kerbs, with special regard to those with mobility issues, visual impairments, and other disabilities.

q. invest 7 million into developing affordable Key Worker Housing in response to Devon’s Housing Crisis working with District Councils, and other key stakeholders, including the NHS. This is in recognition that Devon County Council must show strong leadership and upfront investment now, to effectively deal with the immediate shortage of key workers across our county.

Items (a) to (l) is funded from the Council’s Budget Management Reserve.

Item (m) and (p) to be funded by long term internal borrowing within the Councils capital programme.

Item (q) to be funded by strategic long term internal borrowing over the lifetime of the assets, with lease income coming back into the county council.

Councillor Gent MOVED and Councillor Bailey SECONDED that

Cabinet Minute (113) (1-20) (Revenue Budget and Medium Term Financial Strategy 2022/23 - 2025/26 and Capital Programme 2022/23 - 2026/27) be amended by the addition of the following and all necessary changes be made to the detailed budgets.

‘We welcome the budget and especially the investment in Children’s Services & Adult Care & Health, we hope this investment will bring positive outcomes for all coming into contact with service. The £18m savings target built into the Adult Health & Care Budget, does concern us and what the impact on our most vulnerable residents will be.

We believe that if we are going to get more people walking and cycling we need to improve road safety, especially near local amenities like Schools, Parks, Shops, workplaces & other public buildings.

So, we propose that the £100,000 budget proposed in the capital program, for the installation of 20mph schemes is increased to £500,000 to enable more schemes to be included and sent out for consultation. £100,000 is simply too little and estimates are that it will only deliver 6-7 schemes across the county.

This will be funded from our reserves, as once in, it will be there for good with little resource needed.

We believe that the introduction of a £200 charge for disability parking bays are scrapped, it is unfair that only those with the means can get one put in.

We believe that reducing locality budgets by £2,000 a year will have a severe negative impact on our communities, as they try to recover from the impacts of Covid.

So, we propose that they are kept but that any unspent monies at the end of each year is not rolled forward unless there Is already an identified project that is being saved for. The £100,000 - £120,000 needed for this to be found by reducing the Organisational Development Budget by £100,000, it is our opinion that managers in each service area can challenge, innovate & improve their service area and don’t need others to do it’.

The AMENDMENT in the name of Councillor Gent was then put to the vote and declared LOST

(NOTE: In accordance with Standing Order 32(5) and any vote relating to the setting of the Council Tax or level of precept, Councillors voted as for, against or in abstention to the aforementioned Amendment as follows):

For the amendment; Councillors Adams, Asvachin, Atkinson, Aves, Bailey, Barnes, Bradford, Brazil, Connett, Cox, Dewhirst, Gent, Hannaford, Leavers, Letch, Roome, Thomas, Whitton and Wrigley: (Total: 19)

Against the amendment; Councillors Berry, Brook, Channon, Chesterton, Chubb, Crabb, Croad, Davis, Gilbert, Hall, Hart, Hartnell, Hawkins, Hellyer, Henderson, Hughes, Leadbetter, Maskell, McGeough, McInnes, Morrish, Peart, Prowse, Radford, Randall-Johnson, Samuel, Sanders, Saywell, Scott, Sellis, Slade, Squires, Twiss, Wilton-Love and Yabsley: (Total: 35)

Abstained from Voting; (Total: 0)

The AMENDMENT in the name of Councillor Hannaford was then put to the vote and declared LOST

(NOTE: In accordance with Standing Order 32(5) and any vote relating to the setting of the Council Tax or level of precept, Councillors voted as for, against or in abstention to the aforementioned Amendment as follows):

For the amendment; Councillors Adams, Asvachin, Atkinson, Aves, Bailey, Barnes, Bradford, Brazil, Connett, Cox, Dewhirst, Gent, Hannaford, Leavers, Letch, Roome, Thomas, Whitton and Wrigley: (Total: 19)

Against the amendment; Councillors Berry, Brook, Channon, Chesterton, Chubb, Crabb, Croad, Davis, Gilbert, Hall, Hart, Hartnell, Hawkins, Hellyer, Henderson, Hughes, Leadbetter, Maskell, McGeough, McInnes, Morrish, Peart, Prowse, Radford, Randall-Johnson, Samuel, Sanders, Saywell, Scott, Sellis, Slade, Squires, Twiss, Wilton-Love and Yabsley: (Total: 35)

Abstained from Voting: (Total: 0)

The AMENDMENT in the name of Councillor Connett was then put to the vote and declared LOST

(NOTE: In accordance with Standing Order 32(5) and any vote relating to the setting of the Council Tax or level of precept, Councillors voted as for, against or in abstention to the aforementioned Amendment as follows):

For the amendment; Councillors: Councillors Bailey, Bradford, Brazil, Connett, Cox, Dewhirst, Gent, Leavers, Letch, Roome, Thomas and Wrigley

(Total: 12)

Against the amendment; Councillors Adams, Asvachin, Atkinson, Aves, Barnes, Berry, Brook, Channon, Chesterton, Chubb, Crabb, Croad, Davis, Gilbert, Hall, Hannaford, Hart, Hartnell, Hawkins, Hellyer, Henderson, Hughes, Leadbetter, Maskell, McGeough, McInnes, Morrish, Peart, Prowse, Radford, Randall-Johnson, Samuel, Sanders, Saywell, Scott, Sellis, Slade, Squires, Twiss, Whitton, Wilton-Love and Yabsley: (Total: 42)

Abstained from Voting; (Total: 0)

The MOTION in the name of Councillor Hart was then put to the vote and declared CARRIED

(NOTE: In accordance with Standing Order 32(5) and any vote relating to the setting of the Council Tax or level of precept, Councillors voted as for, against or in abstention to the aforementioned Motion as follows):

For the Motion; Councillors Berry, Brook, Channon, Chesterton, Chubb, Crabb, Croad, Davis, Gilbert, Hall, Hart, Hartnell, Hawkins, Hellyer, Henderson, Hughes, Leadbetter, Maskell, McGeough, McInnes, Morrish, Peart, Prowse, Radford, Randall-Johnson, Samuel, Sanders, Saywell, Scott, Sellis, Slade, Squires, Twiss, Wilton-Love and Yabsley: (Total: 35)

Against the Motion; Councillors Bailey, Bradford, Brazil, Connett, Cox, Dewhirst, Gent, Leavers, Letch, Roome, Thomas and Wrigley: (Total: 12)

Abstained from Voting; Councillors Adams, Asvachin, Atkinson, Aves, Barnes, Hannaford and Whitton: (Total: 7)