The Head of Financial Services has submitted a report to present the outcome of the budget consultation and agree the Council’s Medium Term Financial Strategy for 2022-23 to 2024-25 and 2021-22 Budget for recommendation to Council.

Recommendations:

Cabinet is asked to consider the outcome of the public consultation, agree the amendments to the Consultation Budget and recommend that Council resolves to:

Approve the 2021-22 General Fund and Housing Revenue Account budgets and the General Fund and Housing Revenue Account Medium Term Financial Plan as set out in Appendices 1-10, noting:

(a)      the Council’s General Fund Budget Requirement of £23.648 million for 2021/22 and an increase in the Band D Council Tax of 1.99% or £6.25 per annum representing a Band D Council Tax of £320.17 per annum 

(b)      the Housing Revenue Account budget for 2021/22 of £46.649 million and an increase of 1.50% (£1.57 per week) in social dwelling rents from 1 April 2021 giving a revised weekly average social rent of £105.32 as set out in Appendix 5

(c)      the intention to consult Council house tenants on the setting of the initial rent on all new social housing at 5% above the formula rent whilst applying formula rent to any new builds let prior to the end of the consultation period as indicated in paragraph (paragraphs 38- 45).  

(d)      the General Fund and Housing Revenue Account Capital Programme as shown in Appendix 6.

(e)        the changes to fees and charges shown in Appendix 7

(f)         the delegation to the Section 151 Officer in consultation with the Cabinet Member  for Finance and Assets the decision to determine whether it is financially advantageous for the Council to enter into a Business Rates Distribution Agreement as referred to in paragraphs 13-15 below.

(g)        the payment into the County Council Pension Fund of £5 million as referred to in the Consultation Budget and paragraph 20

(h)      the inclusion of an additional loan facility of up to £1million on terms to be  agreed by the Head of Financial Services, subject to the consideration and agreement of the Shareholder and Joint Venture Panel (SHJVP) and Cabinet of report to Cabinet in March 2021 as referred to in paragraph 55.

The Head of Financial Services had submitted a report to present the outcome of the budget consultation and agree the Council’s Medium Term Financial Strategy for 2022-23 to 2024-25 and 2021-22 Budget for recommendation to Council.

Councillor Ed Turner, Cabinet Member for Finance & Asset Management, introduced the report by thanking all those who had contributed to the budget consultation and to the officers for pulling together the proposals now before Cabinet. While there were, inevitably, some unwelcome proposals, the people of Oxford should not  experience too much pain as a result of this budget, despite the very great pain felt by so many as a result of the current pandemic and the considerable consequences of it for the Council. This position is mostly attributable to having drawn heavily on the Council’s reserves. It was a matter of very deep disappointment that the Government was failing to deliver on its promise of financial support for the consequences of the pandemic, to the tune of over £10m. Despite this, it had been possible, with the use of reserves, by working as efficiently as possible and making some difficult decisions, to assemble a balanced budget. It should also be noted that a one off non-consolidated pay deal for was very helpful in the present climate and illustrated the positive partnership approach with staff colleagues. He drew attention to an addendum which had been published in relation to fees for Café pavement licences, noting that it would be important to monitor the position in September when the more generous temporary Government scheme for pavement licences was due to come to an end.

Tom Bridgman, Executive Director for Development, drew attention to recommendation h) of the report, which sought an additional loan facility to OxWED. He requested that this recommendation be amended to allow for a further £150k of revenue, from reserves, to be allocated in the 21/22 budget, to support a review of OxWED's company structure. As with the loan facility, this new allocation would be subject to a further Cabinet decision, expected in March.

Nigel Kennedy, Head of Financial Services, reaffirmed the particularly challenging nature of this year’s budget setting process. Action taken over the last several  months to reset this year’s  budget had contributed to the ability to propose a balanced budget for next year. The absence of promised Government support had presented the biggest challenge.  The use of £11m of reserves represented a 30% reduction of available reserves and balances. There may be subsequent consequences for work which had been relying on earmarked reserves. Taken together the, Council’s financial resilience had inevitably been compromised.

The Chair expressed great dismay at the wholly inadequate financial support from Government and paid tribute to all those involved in preparing such a particularly challenging budget.

Cabinet resolved to agree the amendments to the Consultation Budget and recommend that Council resolves to:

Approve the 2021-22 General Fund and Housing Revenue Account budgets and the General Fund and Housing Revenue Account Medium Term Financial Plan as set out in Appendices 1-10, noting:

(a)      the Council’s General Fund Budget Requirement of £23.648 million for 2021/22 and an increase in the Band D Council Tax of 1.99% or £6.25 per annum representing a Band D Council Tax of £320.17 per annum 

(b)      the Housing Revenue Account budget for 2021/22 of £46.649 million and an increase of 1.50% (£1.57 per week) in social dwelling rents from 1 April 2021 giving a revised weekly average social rent of £105.32 as set out in Appendix 5

(c)      the intention to consult Council house tenants on the setting of the initial rent on all new social housing at 5% above the formula rent whilst applying formula rent to any new builds let prior to the end of the consultation period as indicated in paragraph (paragraphs 38- 45).  

(d)      the General Fund and Housing Revenue Account Capital Programme as shown in Appendix 6.

(e)        the changes to fees and charges shown in Appendix 7

(f)         the delegation to the Section 151 Officer in consultation with the Cabinet Member  for Finance and Assets the decision to determine whether it is financially advantageous for the Council to enter into a Business Rates Distribution Agreement as referred to in paragraphs 13-15 below.

(g)        the payment into the County Council Pension Fund of £5 million as referred to in the Consultation Budget and paragraph 20

(h)      the inclusion of an additional loan facility of up to £1million on terms to be  agreed by the Head of Financial Services, subject to the consideration and agreement of the Shareholder and Joint Venture Group (SHJVG) and Cabinet of report to Cabinet in March 2021 as referred to in paragraph 55 and a further £150k of revenue, from reserves, to be allocated in the 21/22 budget.