Agenda item

Revenue Budget, Medium Term Financial Strategy 2023/2024 - 2026/2027 and the Capital Programme for 2023/2024 - 2027/2028

Report of the Director of Finance and Public Value (DF/23/18) on the Council’s Budget and Service Budgets for 2023/2024, will follow.

 

Cabinet is also asked to note the role of the Corporate Infrastructure and Regulatory Services Scrutiny Committee on 30th January 2023 (Minute *93) in reviewing and endorsing the Report of the Director of Finance and Public Value (DF/23/06) on the Treasury Management and Investment Strategy for 2023/24 and commending it to the Cabinet.

 

The Cabinet will accordingly also consider:

Decision:

RESOLVED

 

(1) that Cabinet has full regard to the responsibilities placed upon the

Authority in the exercise of its Public Sector Equality Duty under s149 of the

Equality Act 2010 (as set out in the ‘Budget 2023/24 Impact Assessment’ -

https://www.devon.gov.uk/impact/published/budget-impact-assessments/

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;

 

(2) that Cabinet regard the views of the Authority's Scrutiny Committees, the

Devon Education Forum, the Business Community, the Voluntary Sector, and

the Trades Unions and other consultees on the budget (as set out on the

agenda);

 

(3) that the Finance Settlement Core Funding of £107.2 million be noted;

 

(4) that the amended budget targets set out on page 7 be approved;

 

(5) that the budgets (pages 40 to 85) within the amended targets set be

approved;

 

(6) that the Net budget of £607.7 million as set out in Key Table 1 on page 9

be recommended to the Authority;

 

(7) that approval to a 2% increase to the Adult Social Care Precept as set out

in Key Table 2 page 10 be recommended to the Authority;

 

(8) that the Council Tax requirement be set at £491,805,166.53 as set out in

Key Table 2 page 10 be recommended to the Authority;

 

(9) 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 the Authority;

 

(10) that Members note there are no new Fees & Charges proposed for

2023/24;

 

(11) that Members note in line with the Authority's Financial Regulations,

changes to existing charges will be agreed by the appropriate Cabinet Member and Chief Finance Officer via a Delegated Decision;

 

(12) that the Medium Term Financial Strategy 2023/24 - 2026/27 as set out on

pages 87 to 113 be noted;

 

(13) that the risks outlined on pages 151 to 175 be taken account of in

determining the final service budgets, levels of reserves and Council Tax

figure to be recommended to the Authority;

 

(14) that the County Fund Balance and Earmarked Reserves 2023/24 as set

out on pages 114 to 119 be noted;

 

(15) that the Capital Programme Overview 2023/24 - 2027/28 set out on

pages 20 to 37 be recommended to the Authority;

 

(16) that the Capital Programme for 2023/24 of £172.5 million and how it is

financed as shown in Summary Table D on page 28 be recommended to the

Authority;

 

(17) that, for planning purposes, the indicative Capital Programmes for,

2024/25, 2025/26, 2026/27 and 2027/28 shown in summary Table D on page

28 be approved; and these levels will be reviewed in the light of the overall

level of revenue and capital resources available to the Authority for each year;

 

(18) that the Treasury Management Strategy 2023/24 - 2026/27 as set out on

pages 120 to 138 be recommended for adoption by the Authority;

 

(19) that the Prudential Indicators for 2023/24 to 2027/28 contained on pages

123 to 138 be recommended to the Authority;

 

(20) that authority to effect movements between the separately agreed limits

for borrowing and other long term liabilities be delegated to the Director of

Finance and Public Value; and

 

(21) that the Capital Strategy 2023/24 - 2027/28 contained on pages 139 to

150 be recommended to the Authority

Minutes:

(Councillors Brazil, Dewhirst, Hodgson and Whitton 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 (DLS/23/2) 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 (DLS/23/3) held on 20th January, 26th January and 30th January 2023, the recommendations being summarised and attached to the agenda;

·         Minute 79 of the Devon Education (Schools) Forum, held on 18 January 2023, relating to the budget and the recommendation to Cabinet outlined in those minutes ‘that the transfer of 0.5% between blocks for 2023-24 through a one-off transfer of the growth fund surplus be supported (following its reconsideration as requested by the DfE).

·         a 2023/24 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/budget-setting-2023-2024/  undertaken as part of the budget’s preparation; and

·         the Report of the Director of Finance and Public Value (DF/23/18) on the Revenue Budget for 2023/24, Medium Term Financial Strategy to 2026/27 and Capital Strategy 2023/24 to 2027/28. 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 2023/24 - 2027/28;

·         Service Budgets;

·         Fees & Charges;

·         Medium Term Financial Strategy 2023/24 - 2026/27;

·         County Fund Balance and Earmarked Reserves 2023/24;

·         Treasury Management Strategy 2023/24 - 2026/27 and Prudential Indicators 2023/24 - 2027/28;

·         Capital Strategy 2023/24 - 2027/28;

·         Risk Analysis of Volatile Budgets; and

·         Abbreviations.

 

The Cabinet noted the role of the Corporate Infrastructure and Regulatory

Services Scrutiny Committee on 30th January 2023 (Minute *93) in reviewing and endorsing the Report of the Director of Finance and Public Value (DF/23/06) on the Treasury Management and Investment Strategy for 2023/24. 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 2023/24 to the Cabinet.

 

The Autumn Statement of 17th November 2022 and the Local Government Finance Settlement that followed on 19th December, were relatively favourable compared to recent years and had contributed towards enabling the Authority to budget an unprecedented increase in funding for services of £114 million for 2023/24, to respond to pressures driven by high inflation and post pandemic demand for public services.

 

Whilst this was welcomed, it was not enough for the Authority to set a balanced budget for 2023/24 without making significant budget savings and therefore a cross organisational programme of transformation had identified £47.5 million of savings and new income for 2023/24 within service budgets.

 

The final Local Government Finance Settlement 2023/24 was published on 6th February 2023 and was a single year settlement.

 

When the Government's Autumn Statement was delivered on 17th November 2022, it had been more positive for Local Government than expected. It included a £1 billion national adult social care discharge fund, deferred the introduction of the adult social care charging reforms by 2 years, allowed an additional 1% above the normal referendum limit of 1.99% for Council tax rises (therefore allowing 2.99% increases) as well as being able to raise the Adult Social Care Precept by an additional 1% above the 1% already announced, meaning upper tier Councils could raise Council Tax by up to 4.99% in total for 2023/24.

 

The Chancellor also announced that the National Living Wage (NLW) would also increase by 9.7% in April 2023, which had a significant financial impact for the Authority as the increase was expected to add £22.5 million of additional cost across the Authority’s budgets.

 

Overall, the Local Government Finance Settlement produced a 9.8% increase in the Authority's Core Spending Power, but this had to be considered in the context of inflation.

 

The table on page 6 set out the final settlement for Devon’s Core Funding of £107.2 million and other grants such as the New Homes Bonus, Rural Services Delivery Grant, Social Care Grant, Improved Better Care Fund, Adult social care Market Sustainability and Improvement Fund, Adult Social Care Discharge Fund and Services Grant.

 

Detailed budgets had been produced within the Targets set by Cabinet in January 2023 which were shown on pages 40 to 85. The targets set for each service area had been subject to different pressures and influences. The table on page 7 showed the 2023/24 Budget Targets by service area.

 

Since the setting of budget targets, an opportunity to reduce the budget pressures in Integrated Adult Social Care services by £1.6 million had been identified. If this change to pressures targets was approved, the budget savings could also be reduced by the same amount. The detailed budgets on pages 40 to 85 complied with the Targets set by Cabinet on 11th January, adjusted by £1.6 million as just described. The net total remained at £696 million.

 

The risks associated with the delivery of the 2023/24 budget and the mitigating action needed to try to contain that risk was detailed on pages 151 to 175.

 

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. Capital Financing Charges were dependent on the authority's Capital Programme explained on pages 20 to 36.

 

Factors that influenced the income gained from balances were set out on pages 120 to 138 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 4.99% which included the social care precept.

 

Pages 114 to 119 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 87 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 pages 13 and 14. The most significant being the Dedicated Schools Grant.

 

The Cabinet Member highlighted to the Cabinet the current market difficulties with inflation and also the progress the Council had made with budget deficits. He outlined that Core Spending Power had increased by 9.8%, but that a lot of work still had to be done to make savings.

 

However, he added that since the service budgets had been approved an additional £2 million would be invested in drainage and cyclic maintenance, an increase of £100,000 in grants to Citizens Advice Bureaux and an extra £150,000 into the Growing Communities Together Programme.

 

The Leader and Cabinet Member 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.

 

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 and Public Value’s Report and/or referred to above having been considered:

 

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

 

RESOLVED

 

(1) that Cabinet has full regard to the responsibilities placed upon the Authority in the exercise of its Public Sector Equality Duty under s149 of the Equality Act 2010 (as set out in the ‘Budget 2023/24 Impact Assessment’ - https://www.devon.gov.uk/impact/published/budget-impact-assessments/   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;

 

(2) that Cabinet regard the views of the Authority's Scrutiny Committees, the Devon Education Forum, the Business Community, the Voluntary Sector, and the Trades Unions and other consultees on the budget (as set out on the agenda);

 

(3) that the Finance Settlement Core Funding of £107.2 million be noted;

 

(4) that the amended budget targets set out on page 7 be approved;

 

(5) that the budgets (pages 40 to 85) within the amended targets set be approved;

 

(6) that the Net budget of £607.7 million as set out in Key Table 1 on page 9 be recommended to the Authority;

 

(7) that approval to a 2% increase to the Adult Social Care Precept as set out in Key Table 2 page 10 be recommended to the Authority;

 

(8) that the Council Tax requirement be set at £491,805,166.53 as set out in Key Table 2 page 10 be recommended to the Authority;

 

(9) 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 the Authority;

 

(10) that Members note there are no new Fees & Charges proposed for

2023/24;

 

(11) that Members note in line with the Authority's Financial Regulations,

changes to existing charges will be agreed by the appropriate Cabinet

Member and Chief Finance Officer via a Delegated Decision;

 

(12) that the Medium Term Financial Strategy 2023/24 - 2026/27 as set out on pages 87 to 113 be noted;

 

(13) that the risks outlined on pages 151 to 175 be taken account of in determining the final service budgets, levels of reserves and Council Tax figure to be recommended to the Authority;

 

(14) that the County Fund Balance and Earmarked Reserves 2023/24 as set out on pages 114 to 119 be noted;

 

(15) that the Capital Programme Overview 2023/24 - 2027/28 set out on pages 20 to 37 be recommended to the Authority;

 

(16) that the Capital Programme for 2023/24 of £172.5 million and how it is financed as shown in Summary Table D on page 28 be recommended to the Authority;

 

(17) that, for planning purposes, the indicative Capital Programmes for, 2024/25, 2025/26, 2026/27 and 2027/28 shown in summary Table D on page

28 be approved; and these levels will be reviewed in the light of the overall level of revenue and capital resources available to the Authority for each year;

 

(18) that the Treasury Management Strategy 2023/24 - 2026/27 as set out on pages 120 to 138 be recommended for adoption by the Authority;

 

19) that the Prudential Indicators for 2023/24 to 2027/28 contained on pages 123 to 138 be recommended to the Authority;

 

20) that authority to effect movements between the separately agreed limits for borrowing and other long term liabilities be delegated to the Director of Finance and Public Value; and

 

21) that the Capital Strategy 2023/24 - 2027/28 contained on pages 139 to 150 be recommended to the Authority.

Supporting documents: