Agenda item

The Executive Member for Finance and Governance.

The Deputy Leader and Portfolio Holder for Finance and Governance, Councillor Schofield, presented the final revenue and capital budget proposals for 2023/24 onwards as set out in the published report and annexes of the agenda pack. This recommended the net revenue budget requirement of £23.194m (£3.214m higher than the budget for 2022/23). A recommended council tax increase of 2.99% (equivalent to £7.25 a year) for the average Band D property was proposed.

The increased budget reflected higher energy cost pressures, potential property voids and planned investment in IT. These pressures had been offset by identifying £828k of savings and additional income of £1.186m.

Central budgets were also set to rise by £2.943m to fund staff pay increases, pension contributions and shortfalls in housing benefits subsidies. These pressures were offset from savings in other central budgets, with the balance being funded from increased income from council tax, business rates and government grants.

In total, it was proposed that council tax income rise by just over £1m in 2023/24.  The Council’s share of business rates will increase to £2.2m compared to recent years. There had been a more favourable government settlement and net increased in government grants than in recent years.

Councillor Schofield noted that the additional 1% allowable increase in Council Tax to 2.99%, announced just before Christmas, had not been anticipated when drafting the budget in the autumn. The increasing economic pressures on residents over the coming year was recognised; an economic pressures reserve of £150k (equivalent to 1%) would provide additional discretionary support as and when needed.

The Financial Sustainability Programme was continuing to look at how the Council’s assets were performing, explore opportunities to generate new sources of income and ensure all services deliver value for money.

The Reserve budgets were healthy to help manage future budget risks and opportunities. The General Fund Balance at £3.5m remained more than adequate to cover financial risks. Capital growth for 2023 to 2028 was set at £7.7m, primarily to continue the programme of investment in the Council’s land, property and vehicle assets over the five-year period.

The budget proposals had been subject to thorough review by Members of the Budget Scrutiny Panel in November and by the Overview and Scrutiny Committee in December. Their findings and recommendations were reported separately to Executive on 15 December. An update to the budget had been considered by Overview and Scrutiny Committee at its meeting on 19 January. The proposed Budget will go to Full Council on 9 February.

Councillor Harrison, Chair of Overview and Scrutiny Committee, noted the proposed budget changes from December These included: the proposed updates to council tax, increased business rates and an increase in core spending to meet secondary pension contributions. Increased government grants meant that that there was less need to draw on earmarked reserves which was a positive net change from December to January. There were no specific recommendations from the Committee. 

Visiting Members made comments and asked questions on the following points:

·        Pay award 2023/24 – It was confirmed that an increase of £1500 for all staff (with the exception of the most senior managers taking a pay freeze) had been offered and accepted by the unions. A one-off payment was considered a sensible and fair approach to reflect the cost of living pressures and high inflation.

·        Government grants – Members asked questions about the government settlement which had been announced just before Christmas. This had been more generous than in previous years including a proposed council tax uplift to 2.99%. Members asked how residents would benefit from the additional grants and council tax income. Councillor Schofield confirmed that the economic pressures reserve had been set up to assist residents affected by the cost of living crisis and allow it to be distributed to service areas where residents were most in need.  Pat Main, Chief Finance Officer, confirmed that the overall net change between November and January was £1.78m which comprised the additional council tax, final share of business rates and increased government grants.

·        Fees and charges – Members raised concerns about proposals to increase waste charges leading to increased cost to clear up fly-tipping waste. It was confirmed that garden waste subscriptions paid by residents would increase from £65 to £68 to cover increased costs such as fuel charges.

·        Voluntary and charitable sector – Members asked about the impact in reduction of grants to voluntary and charitable organisations. Portfolio Holder for Community Partnerships, Councillor Ashford, said that discussions had been held with seven voluntary organisations providing services as part of the budget consultation to better understand how they might manage a funding grant reduction. (More information was set out in the summary of the Equality Impact Assessment 2023/24 budget proposals summary (Annex 1 p116). It was noted that this would increase the pressure on fundraising. However, the community partnerships team were working closely with the voluntary organisations throughout the year; money set aside in the economic pressures reserve could be used to support funding requests in the coming year to those areas in particular need.

It had been suggested that one potential option to be explored was to set up a community-based lottery, such as that run by other councils, to support this area of work. Members asked about the suitability and potentially negative impact of this tactic. It was agreed that all aspects of any such proposals would be well considered before a decision was made to proceed.
Leader, Councillor Mark Brunt, recognised the continued pressures on voluntary sector partners and an uncertain 18 months ahead. It was important that the additional 1% from council tax revenues was put aside to support voluntary sector partners and people at risk of homelessness.
He thanked Officers and Executive Members as well as the Budget Scrutiny Panel and Overview and Scrutiny Committee for their work on the 2023/24 Budget and Capital Programme.

RESOLVED:

That Executive RECOMMEND to Council:

(i)               The latest Medium-Term Financial Plan forecast at Annex 1.

(ii)             An increase in Reigate & Banstead’s Band D Council Tax of £7.25 (2.99%) and a final tax base of £63,495.31 Band D equivalents;

(iii)           A Revenue budget requirement of £23.194 million for 2023/24, as set out in this report and at Annex 2, which reflects:

• Service budget growth proposals totalling £0.442 million, savings of (£0.828) million; additional income of (£1.186) million and forecast issues, risks and opportunities totalling £1.843 million;

• Central Revenue Budget net growth proposals totalling £2.379 million and forecast issues and risks totalling £0.564 million;

(iv)           The forecast for Revenue Reserves (Annex 3) and the recommended use of £0.977 million from Reserves in 2023/24 comprising:

·        £0.493 million from the IT Strategy Reserve to fund implementation of the approved IT Strategy; and

·        Up to £0.484 million from the Government Funding Risks Reserve, where necessary, to fund the forecast reduction in housing benefit subsidy;

(v)             A Capital Programme of £59.899 million for 2023/24 to 2027/28 as set out in this report and including net Capital Programme Growth Proposals of £7.672 million;

(vi)           The updated Fees & Charges Policy (Annex 7)

(vii)         The Chief Finance Officer’s report on the robustness of the Budget estimates and adequacy of Reserves.

The Executive AGREED to authorise:

(viii)       The Chief Finance Officer to make any necessary final technical adjustments to the Budget and Council Tax arising from final budget refinements or changes to Government funding.