Agenda item

[To consider the proposals for the 2023-2024 Draft Budget and Medium Term Financial Strategy 2023-2024 to 2025-2026. A second report details the six Scrutiny Panels responses, when it was considered by each of the Panels.  The Draft Budget Book for 2023/2024 is also included]. 

 

[The two reports and the Draft Budget Book are marked: To Follow]. 

The Cabinet Member for Resources and Digital City introduced the report on the 2023-2024 Draft Budget and Medium Term Financial Strategy 2023-2024 to 2025-2026.  It had been a particularly difficult time to prepare a balanced budget due to the high levels of inflation impacting on the Council, residents and businesses.  In order to set a balanced budget they had to increase Council Tax. 

 

The Director for Finance commented that the report contained information on the feedback from the Scrutiny Panels, which over the Autumn period and into the New Year had looked at performance and budget information relating to their remit.  She gave a presentation summarising the main points of the report, a copy of which is attached to the signed minutes.  The presentation slides on the Draft Budget gave information on the following areas:- 

 

·       The Provisional Settlement.

 

·       Draft Inflation and Growth.

 

·       Information relating to the budget in Adult Social Care.

 

·       The Draft Net budget by Service.

 

·       Council Tax – It was necessary to increase the Council Tax by 4.99% in order to set a balanced budget.  The net forecast budget was £306.1 million.

 

·       Key Risks and uncertainties in 2023-2024 and MTFS, which included cost of living and rising inflation and an increase in demand for services such as in Adult Social Care.

 

·       Efficiency Targets – Wherever possible these targets would be distributed prior to the 1 April 2023 and would be monitored throughout the year through the quarterly monitoring reports. 

 

·       The Strategy to manage risks in 2023-2024.  The budget was based on prudent assumptions supported by detailed modelling and benchmarking with peers.  Corporate Contingencies were held to mitigate the impact of expected inflation and demand but where the probability and impact were not sufficiently known to build into service budgets.  Reserves were held to mitigate the impact of specific risks and also against unforeseen events. 

 

The Director of Finance presented slides on the future challenge for the Medium Term Financial Strategy (MTFS).  The Funding Settlement was for one-year only.  The Provisional Settlement was based on the Spending Review 2021 funding levels, updated for the 2022 Autumn Settlement.  There were high level assumptions for 2024-2025, the National figures had been published for some grants such as Social Care, but not for all the grants that the Council received. 

 

 

The Director of Finance stated that the following assumptions had been made in the MTFS on funding:-

 

·       Council Tax would increase by 2.99% - in line with the referendum threshold and 1.99% thereafter.

 

·       Adult Social Care precept levy – 2% for 2023-2024 and 1% for 2024-2025.

 

·       The Business Rates retention scheme would continue with no detrimental impact of a Business Rates reset or changes to the retention scheme.

 

·       Top Up grant would increase by inflation over the medium term.

 

The Director of Finance remarked the following medium term assumptions has been made:-

 

·       The draft forecast deficit was around £16.4 million in 2024-2025, rising to around £22.9 million by 2025-2026.

 

·       There continued to be uncertainty about future funding.

 

·       The MTFS projections were based on a number of assumptions and estimates and took a prudent view on the financial position.  Detailed work to continue to refine these assumptions would take place during 2023-2024.

 

·       The Council would continue to review emerging pressures and particularly in relation to Adult Social Care.

 

The Director of Finance remarked that in order to maintain a 5% reserve for next financial year it was proposed that £1.6 million be transferred from the Budget Strategy Reserve. 

 

The Vice-Chair praised the financial settlement from Government which he described as generous.  The Council was raising the Council Tax to the maximum they could without having to hold a public referendum.  He felt there were other ways which could be used to help prevent the increase.

 

A Member of the Panel asked about the Bert Williams Café.  He believed the café area at the Bert Williams Centre was now empty.  It was a large space which the Council owned.  He asked what the future plans were for the space and whether the area would be leased out.  He was aware that the Council had used the space for various events in recent times.  The Director of Finance responded that Officers would respond in writing to the Councillor.

 

Members asked questions about why some of the budget figures had increased.  Explanations were given by Officers.  It was confirmed that the budget pressure on street lighting would have been higher had the programme to introduce LED lighting not gone ahead.  The savings from the LED lighting had been factored into the budget.

 

A Panel Member asked for a breakdown of pay related growth in the Corporate Accounts and the extra costs due to inflation for utilities.  The Director of Finance confirmed she was happy to respond with the figures in writing.

 

A Panel Member praised the work that had been completed to put forward a balanced budget for the financial year ahead.

 

A Panel Member spoke on the changing national situation with three Prime Ministers in a short time.  A balanced budget was an achievement to be recognised.  He also spoke about the recent report from external auditors which had found no evidence of significant weaknesses in the Council’s arrangements for ensuring that it made informed decisions and properly managed risk. 

 

There was a debate about the role of external auditors and their remit.  The Chief Operating Officer stated that he would ask Grant Thornton to explain their role at the next Audit and Risk Committee. 

 

The Vice-Chair asked for the figures on what the income was for the financial year 2022- 2023 on markets and car parking before any topping up from the Council budget.  The Director of Finance responded she would write to Board Members with the information. 

 

A Panel Member spoke on the opportunity for change that a balanced budget brought, this enabled a plan for the future.  She spoke on the investment opportunities that the refurbished Civic Halls would bring to the City.  The Director of Regeneration responded that AEG were expecting 300,000 plus visitors per annum to the Halls and £10 million annually to come into the local economy per annum, from when it opened it June 2023.     

 

The Vice-Chair asked if in person public consultations would take place again in the future on the Budget and Medium-Term Financial Strategy.  The Director of Finance responded that attendance had been low in the past when they had been held a few years ago.  Ongoing conversations with local people about the budget linked to priorities was now the current methodology with a whole suite of engagement activity taking place over the year.  

 

Members debated how to engage members of the public and businesses using different methods to attract greater responses.  One of the ideas was to link consultation on the budget and Council priorities with other events of high local public interest.  

 

Resolved: That the 2023-2024 Draft Budget and Medium Term Financial Strategy 2023-2024 to 2025-2026 report be noted.