Issue - meetings

This report sets out Cabinet’s proposals for the capital and revenue budgets for 2021/22. In accordance with the Constitution, Council is required to approve the capital and revenue budgets, rent increases and council tax for 2021/22.

Background:

This report provided details of the revenue and capital budget proposals for 2021/22.

The Cabinet had considered initial budget proposals on 17 November 2020, which had been developed in accordance with the principles set out in the Medium Term Financial Strategy (MTFS) 2021-2023.

In accordance with the budget and policy framework rules within the Constitution, the Overview and Scrutiny Committees had then considered the Cabinet’s proposals prior to Cabinet’s consideration of the draft budget on 2 February 2021.

It was noted that an overarching Diversity Impact Assessment, as set out in Appendix 8 to the report, summarised the results of Diversity Impact Assessments. These had been completed for each of the services affected by the proposed budget changes.

The Leader of the Council, Councillor Jarrett, supported by the Deputy Leader and Portfolio Holder for Housing and Community Services, Councillor Doe, proposed the following recommendations, as amended from those set out in section 24 of the report:

“Council are recommended to:

a)  Approve the recommendations of Employment Matters Committee on 26 January 2021 that £903,914 is allocated for pay awards. In addition, a one-off sum of £450,000 be approved to be funded from reserves, and that the authority to agree how the 2021/22 pay award for colleagues is allocated will be delegated to the Head of Paid Service.

b)  Approve the general fund gross, income and net revenue estimates as summarised in Appendix 1 to the report in the sum of £350.009million, with the £3.155million deficit being met from revenue reserves. In addition, add the following sums:

1)  £1,002,990 for the Holiday Activities and Food Programme, to be met from specific Government grant;

2)  £400,000 for the Modern Medway Fund to be met on a non-recurring basis from revenue reserves;

3)  A one-off additional £450,000 for the staff pay award to be met from revenue reserves.

c)  Approve the additions to the capital programme set out in Table 9 of the report, subject to the addition of £582,000, using the capital receipts flexibility, to continue work on the Children’s Improvement Programme.

d)  Note the Kent Police and Crime Commissioner’s precept requirement, as set out in paragraph 15.2 of the report.

e)  Note the proposed Kent Fire and Rescue Service precept requirement, as set out in paragraph 15.3 of the report.

f)    Note the parish council precept requirements of £523,658 as detailed in paragraph 15.4 of the report and at Appendix 4 to the report.

g)  Approve the basic rate of Council Tax at band D for 2021/22, before adding the police, fire and parish precepts, at £1,545.47, an increase of 4.994% as set out in paragraph 16.1 of the report.

h)  As part of the budget proposals, approve fees and charges, as recommended by Cabinet and set out in the booklet 'Medway Council - Fees and Charges April 2021' as set out in Appendix 6 to the report and subject to the following changes, which have a negligible impact on the budget:

1)  No uplift on vehicle licence fees;  ...  view the full minutes text for item 749

Background:

This report presented proposals for the capital and revenue budgets for 2021/2022. It was noted that the Cabinet had considered initial budget proposals on 17 November 2020, which had been developed in accordance with the principles set out in the Medium Term Financial Strategy (MTFS). The MTFS had identified a potential revenue shortfall of £11.710million in 2021/2022.

The report stated that at time of writing, there was still a deficit of £2.393 million to resolve. Options were being considered to address this prior to the Council’s budget setting meeting on 18 February 2021.

The report highlighted the impact of Covid-19 on the budget, with the provisional settlement confirming the principle that the Government would continue to support local authority spending and income pressures arising from the Covid-19 pandemic, as had been assumed in the MTFS and Draft Budget. The Draft Budget therefore did not reflect any Covid-19 related pressures or income since it was not possible to forecast either with any reasonable accuracy. During the development of the MTFS, a total of £13.009million of general fund Covid-19 related pressures had been identified. These were not included in the forecast gap of £11.710million but were instead reflected in a section called Risk: the Ongoing Financial Impact of Covid-19. Work was ongoing to refine these pressures and replace those reflected in the MTFS with updated forecasts.

The current capital programme for 2021/2022 was £443.134 million, with a further £55.523million estimated for proposed additions to the programme for the next financial year, as detailed at section 13 of the report.

It was noted that budget proposals had been referred to all the Overview and Scrutiny Committees for consideration. The Overview and Scrutiny Committees’ views together with the recommendations of the Business Support Overview and Scrutiny Committee (28 January 2021) were set out for Cabinet in an addendum report.

The report set out the requirements under equality legislation and it was noted that an overarching Diversity Impact Assessment would be included in the budget report to Full Council on 18 February 2021.

Background:

This report presented the Council’s draft capital and revenue budgets for 2021/2022. The report noted that the draft budget was based on the principles contained in the Medium Term Financial Strategy (MTFS) 2021-2023, which was due to be considered by the Cabinet elsewhere on the agenda [the Cabinet considered the MTFS and agreed its underlying aims, decision no 138/2020 refers]. Draft budget requirements for the directorates in 2021/2022 were set out in Appendices 1 – 3 to the report.

The report explained that there was a £11.710m revenue budget deficit for 2021/2022, increasing to £20.403m by 2022/2023, which would need to be addressed through the budget setting process. Officers would continue to work with Portfolio Holders to formulate savings proposals to address the projected revenue budget deficit and would discuss options with the Leader and Cabinet Members through the normal budget setting process.

The report noted that in accordance with the Constitution, this report was the first stage of the budget consultation process leading to further consideration by Cabinet on 2 February 2021 and formal budget and council tax setting by Council on 18 February 2021. Budget proposals would now be submitted to the Council’s overview and scrutiny committees.

Reasons:

It is the responsibility of Cabinet to develop draft budget proposals for consideration by overview and scrutiny committees. These draft proposals are the first stage of the budget consultation process leading to further consideration by Cabinet on 2 February 2021 and formal council tax setting by Council on 18 February 2021.

The timetable for consideration by overview and scrutiny is as follows:

Background:

This report introduced the Council’s Medium Term Financial Strategy (MTFS) for 2020 – 2023 and made forward projections concerning the Council’s budget requirement and the resources available to deliver its corporate priorities and objectives included in the Council Plan. Most importantly, the report articulated the Council’s strategy for delivering a balanced budget.

The report stated that the Council faced a forecast deficit in 2021/22 of £11,710 million and it would seek to address this through the accompanying MTFS, as set out in Appendix 1 to the report. Notwithstanding the ongoing impact of Covid-19, service pressures impacting on the Council’s budget requirement and the significant financial constraints imposed through Government grant reductions, the report stated that it must remain the Council’s main strategic aim to achieve a sustainable budget without recourse to reserves.

The report explained that the MTFS had in previous years been presented to the Cabinet in September, with the Government having published a technical consultation paper in advance of the Provisional Local Government Finance Settlement. The impact of the changes proposed in the consultation modelled for Medway were then reflected, alongside the ongoing work to deliver a balanced budget, in the Draft Budget presented to the Cabinet at its November meeting. Due to the disruption caused by the ongoing Covid-19 pandemic, the Government had not issued any consultation on the Settlement, and as such the Council’s MTFS had been delayed in anticipation of an announcement around funding for local authorities for 2021/22. Since then, the Chancellor of the Exchequer had decided that a one-year Spending Review would be conducted on 25 November 2020.

The report also set out the timetable for the Medium Term Financial Strategy and budget setting and it was noted that business and service planning would run concurrently. Diversity Impact Assessments would be undertaken and reported to Members as part of the budget and service planning process.

Reasons:

The Medium Term Financial Strategy is important in providing the framework underpinning the budget setting process and is presented to Cabinet in accordance with the timetable set out within the Constitution.