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 2023/24 to 2025/6 and 2022/23 Budget for recommendation to Council.

Cabinet is recommended to:

1.     consider the outcome of the public consultation;

2.     agree the amendments to the Consultation Budget; and

3.     recommend that Council resolves to approve the 2022-23 General Fund and Housing Revenue Account budgets and the General Fund and Housing Revenue Account Medium Term Financial Strategy as set out in Appendices 1-9, noting:

a)  the Council’s General Fund Budget Requirement of £22.382 million for   2022/23 and an increase in the Band D Council Tax of 1.99% or £6.37 per annum representing a Band D Council Tax of £326.54 per annum;

b)  the Housing Revenue Account budget for 2022/23 of £47.882 million and an increase of 4.10% (£4.51 per week) in social dwelling rents from 1 April 2022 giving a revised weekly average social rent of £112.00 as set out in Appendix 5;

c)  the increase in shared ownership rental in accordance with the lease as shown in paragraph 44 and the discretion used by the Head of Housing in setting the initial rent for the unsold share of 2% and giving delegated approval to the Head of Housing to set this for future shared ownership rents up to 2.75%;

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

e)   the fees and charges shown in Appendix 7;

f)    the delegation to the Section 151 Officer in consultation with the Cabinet Member for Finance and Asset Management 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 of the report;

g) the payment into the County Council Pension Fund of £5 million in 2023-24 as referred to in paragraph 20 of the report;

h)  the appropriation of Alice Smith House from the Housing Revenue Account to the General Fund in accordance with paragraph 44 subject to any consents which are required;

i)   the disposal of 4 Housing Revenue Account properties in accordance with paragraph 44 subject to any necessary consents that are required;

j)   the increase in the ‘multiplier’ for the use in Furnished Tenancy charges in accordance with paragraph 44;

k) the change in the Cabinet decision made in December 2021 and reinstatement of the £25k funding which was reduced by that decision (paragraph 21 relates).

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 2023/24 to 2025/26 and 2022/23 Budget for recommendation to Council.

Councillor Ed Turner, Deputy Leader (Statutory) – Finance and Asset Management introduced the report and thanked scrutiny for a clear, helpful and rigorous review.  The scrutiny challenge had highlighted important points and had provided a useful independent sense check.  Cabinet accepted the recommendation relating to advice centres, and a change had now been proposed.  The recommendation which cautioned against double-counting was also accepted.  The comments of scrutiny relating to the increase in risk to the Council (for example, through non-delivery of projects) were also accepted and agreed.

Councillor Turner commented that it had been pleasing to note that the responses to the budget consultation had been broadly supportive of key policies: in particular the ‘Oxford model’ of generating income from companies and other sources in order to avoid cutting services.  Support had also been expressed for the proposed Council Tax increase of 1.99% in order to increase revenue and prevent service cuts.  The Local Government Finance Settlement had been slightly better than anticipated; however, it was a one year settlement which would be partially off-set by a future reduction in the Council Tax base.  The Council had needed to take £11m out of reserves to fund the impact of Covid: a level of expenditure which was not adequately compensated by the Government.

Councillor Turner drew attention to the ‘steady state’ elements of the budget, particularly discretionary services, which often drew little attention in budget discussions but which reflected Cabinet’s priorities.  These included youth ambition; providing a full network of community centres; rebuilding three community centres; leisure work such as free swimming sessions; support for the voluntary and cultural sectors; and supporting an inclusive economy.

Councillor Turner also highlighted how Local Government funding arrangements had changed over the years.  Ten or fifteen years ago the Council’s income had largely comprised a mix of commercial property income, car parks income, council tax income and government grants.  Whilst it was exciting and appropriate that the Council was now more innovative in generating income, this did necessitate more complex arrangements and an associated increase in the risk profile.

Nigel Kennedy, Head of Financial Services, reported that the impacts of the pandemic were still being felt on the commercial revenue stream (for example commercial rents and car parking).  The Finance Settlement had been confirmed a few days ago, and largely reflected what had been included in the consultation budget around business rates.  A one year settlement had been provided, rather than the three years which had been hoped for.  The settlement had also confirmed the referendum levels for council tax: 1.99% was the maximum increase, above which a referendum would be needed.

Councillor Alex Hollingsworth, Cabinet Member for Planning and Housing Delivery, commented that in terms of how the budget was presented it could be difficult to convey exactly how services were funded, the importance of income streams from commercial activity, and the link between net budgets and the larger gross budgets which operated underneath.  It was suggested that changes might be made to the presentation in order to show how reliant the Council was on other revenue streams.  The Deputy Leader (Statutory) – Finance and Asset Management and the Head of Financial Services undertook to give consideration to this for future budget reports.  The Head of Financial Services clarified that of the £65 million gross income for 2022/23, circa 57% would derive from fees and charges and from companies.

The Chair thanked the Head of Financial Services and his team, as well as the Deputy Leader (Statutory) – Finance and Asset Management, for all their work in achieving a balanced budget which also protected services.

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

1.    Approve the 2022-23 General Fund and Housing Revenue Account budgets and the General Fund and Housing Revenue Account Medium Term Financial Strategy as set out in appendices 1-10, noting:

a)  the Council’s General Fund Budget Requirement of £22.382 million for   2022/23 and an increase in the Band D Council Tax of 1.99% or £6.37 per annum representing a Band D Council Tax of £326.54 per annum;

b)  the Housing Revenue Account budget for 2022/23 of £47.882 million and an increase of 4.10% (£4.51 per week) in social dwelling rents from 1 April 2022 giving a revised weekly average social rent of £112.00 as set out in Appendix 5;

c)  the increase in shared ownership rental in accordance with the lease as shown in paragraph 44 and the discretion used by the Head of Housing in setting the initial rent for the unsold share of 2% and giving delegated approval to the Head of Housing to set this for future shared ownership rents up to 2.75%;

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

e)   the fees and charges shown in Appendix 7;

f)    the delegation to the Section 151 Officer in consultation with the Cabinet Member for Finance and Asset Management 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 of the report;

g) the payment into the County Council Pension Fund of £5 million in 2023-24 as referred to in paragraph 20 of the report;

i)   the disposal of 4 Housing Revenue Account properties in accordance with paragraph 44 subject to any necessary consents that are required;

j)   the increase in the ‘multiplier’ for the use in Furnished Tenancy charges in accordance with paragraph 44;

k) the change in the Cabinet decision made in December 2021 and reinstatement of the £25k funding which was reduced by that decision.

2.   Approve the appropriation of Alice Smith House from the Housing Revenue Account to the General Fund, subject to any consents which are required.