Agenda item

This report presents the Council’s draft capital and revenue budgets for 2022/23. In accordance with the Constitution, Cabinet is required to develop ‘initial budget proposals’ approximately three months before finalising the budget and setting council tax levels at the end of February 2022.

The draft budget is based on the principles set out in the Financial Outlook 2022/23 reported to Cabinet on 28 September 2021.

Discussion:

Members considered a report regarding the Council’s draft capital and revenue budgets for 2022/23.

The following issues were raised:

·       Transfer of £2m children’s social care pressure to adult social care – in response to a query, Members were advised that historically most of the growth in learning disabilities placements in adult social care came from transitions from children’s social care. Having looked at the expected cohort transitioning from children’s social care the needs were now known and were lower than originally forecast. There would be no impact on services from this transfer.

·       2022/23 budget gap – noting that the projected budget gap of £18.176m at this stage was unprecedented the point was made that difficult decisions would be needed at the February budget Council meeting.

·       New homes bonus – the point was made that the Government were instructing councils to build more houses but this scheme which helped councils encourage housing growth was being wound down. The Head of Finance Strategy advised that the government may be moving from decentralised schemes like this to schemes which better reflected local needs.

·       Health and Social Care Levy – a point was made that this was unlikely to benefit the Council. The Head of Finance Strategy agreed this was unlikely to have a significant positive impact on the Council’s budget and there was a concern that providers would charge councils more.

·       Charging revenue costs to capital schemes - referring to a comment that this is something that the Council should not do, the Head of Finance Strategy commented this was also something the Council’s external auditors focussed on. There could be some confusion in terms of what matters the government classed as capital (i.e. potholes capital grant) and it could sometimes be possible to spend capital receipts on what were revenue items under temporary flexibilities in place.  The Council would seek to charge appropriate items to capital where possible. A point was also made that care should be exercised in how S106 contributions were used.

·       Pay award – noting that 1% had been set aside for pay, the point was made that due to inflation running at more than 4% this meant a pay cut in real terms. The Head of Finance Strategy commented this was still subject to negotiations with the Trade Unions.

·       Financial Settlement – in terms of the impact on the Council of the Government’s levelling up agenda and also the timing of the settlement, the Head of Finance Strategy was hopeful that some of the grant announcements had been underplayed. The Council’s senior leadership were focused on reducing the gap further.

·       Personal care costs cap – referring to the cap of £86k, whether this would lead to a cultural shift where people started to release equity from their homes or move to cheaper properties was queried and what the impact might be for the Council. The Head of Finance Strategy commented this sort of shift might be possible and the impact of the cap was still being modelled.  

Decision:

The Committee:

a)      noted that Cabinet has instructed officers to continue to work with Portfolio Holders in formulating robust proposals to balance the budget for 2022/23 and beyond.

b)      noted the proposals outlined in the draft capital and revenue budgets and agreed to forward the proposals to the individual overview and scrutiny committees.