Agenda item

To note and approve draft budget proposals for Service and Financial Planning 2023/24.

The Deputy Leader and Executive Member for Finance and Governance, Councillor Schofield, introduced a report setting out the service and financial planning proposals for 2023/24.

Councillor Schofield explained that preparation for the proposals had settled since the COVID pandemic and the implementation of the Council’s Financial Sustainability Programme, which allowed Executive Members and officers to carry out full reviews of spending plans and sources of income earlier in the budget cycle.

This exercise identified opportunities to adjust the existing budgets to reflect forecast income levels, including an increase in parking income after the pandemic downturn. The proposed increases were therefore included in the budget report, both to ensure greater transparency and to ensure that the additional income was taken into account during budget-setting. The supporting Fees & Charges Policy was also included for approval.

The draft budget supported the continuation of high-quality services within modest budget growth requirements, mainly reflecting unavoidable cost increases. Despite the present economic challenges, the proposals sought to find savings which would have a limited direct impact on service delivery.

Councillor Schofield commended the efforts of officers and Executive members to balance the service and central budgets for 2023/24, however it was noted that the final budget position would depend on the outcome of the Spending Review and the Provisional Local Government Settlement.

The budget report also highlighted several potential risks and issues that could require the Council to draw on the reserves which had been earmarked to address those risks, such as –

·         reduced housing benefit subsidy and grants;

·         empty commercial properties;

·         the increasing cost of energy bills; and

·         uncertainty about the extent of Government support.

Despite economic uncertainty, the underlying revenue budget was balanced, and the Council’s finances were considered to be relatively robust due to its healthy reserves, the efficient use of its resources driven by the Financial Sustainability Plan, and the generation of new sources of income with the Council’s Commercial Strategy.

Medium term financial plan

The report included updates to the Council’s five-year medium-term forecasts, reflecting efforts to map the potential impacts of increasing costs and reductions in Government funding over the next five years. While the forecast gap remained potentially significant if action was not taken to address it, the Medium-Term Financial Plan and supporting strategies provided a solid framework for future financial planning.

Reserves

Revenue reserves were sufficient to support the budget and mitigate potential risks whilst the Council focussed on developing new income streams and reducing costs through the Financial Sustainability Programme.  Approval was sought to adopt the supporting Reserves Policy. 

Council tax

The Council Tax proposals sought to increase the Reigate & Banstead element of the average Band D charge by less than 10 pence per week, resulting in an overall increase of £5, subject to confirmation of the Government’s referendum limit in the Provisional Local Government Settlement in December and approval by the Council at its budget meeting in February.

The report also committed the Council to reviewing the Local Council Tax Support scheme for 2023/24.

Capital Programme

There were no significant changes proposed to the current Capital Programme, as the Council was focussed on delivering the existing capital schemes and rolling programmes within it.

The draft budget would be considered by the Budget Scrutiny Panel and Overview and Scrutiny Panel before a final budget would be put to the Executive in January.

The Leader of the Council and Deputy Leader commended the recommendations for approval by the Executive and upon a vote it was –

RESOLVED:

      i.        That the national and local policy context (Annex 1) and significant financial uncertainties at this stage in the budget-setting process be noted.

    ii.        That the service proposals set out in this report which seek to respond to this context and deliver our corporate priorities, be endorsed.

   iii.        That the draft service business plans for 2023/24 to 2025/26 be approved, and that Heads of Service be authorised to finalise the plans for their service areas in consultation with the relevant Portfolio Holders.

   iv.        That the following be approved for consultation under the Council’s budget and policy framework:

a.    Medium Term Financial Plan Forecasts and proposed actions to address the forecast Revenue Budget gap (Annex 2);

b.    Service Revenue Budget growth proposals totalling £0.442 million, savings of (£0.828) million and additional income of (£1.186) million (Annex 3);

c.    Central Revenue Budget Savings proposals totalling (£0.897) million (Annex 3);

d.    Revenue Issues, Risks and Opportunities totalling £2.407 million, to be funded from earmarked Reserves as necessary;

e.    Revenue Reserve Balances at 1 April 2022 of £45.596 million (Annex 6.1);

f.     A forecast balanced Revenue budget for 2023/24, subject to final confirmation of the outstanding items; and

g.    Capital Programme Growth proposals totalling £7.683 million (Annex 4).

    v.        That the Fees & Charges Policy (Annex 5) be approved.

   vi.        That the Reserves Policy (Annex 6.2) be approved.

  vii.        That the Local Council Tax Support Scheme be reviewed during 2023/24 and the outcome reported as part of Service & Financial Planning for 2024/25.