Agenda item

(To receive a report from the Executive Director - Resources which asks the Executive to propose to the full Council the Council's budget and council tax, in light of the provisional local government settlement and consultation comments on its initial proposals)

That the Executive:

1. Considers the effect of the updated funding available and revenue expenditure as noted in paragraphs 1.4 and 1.5, Appendix A and Appendix B of the report;

2. Considers the Equality Impact Analysis at Appendix C and the consultation comments as shown in Appendix I of the report and presented at the meeting.

3. Subject to recommendation 4 below approves for recommendation to full council:

a) The revenue budget for 2020/21 shown in Appendix d of the report;

b) The capital programme for 2020/21 shown in table E and Appendix E of the report;

c) The levels of council tax proposed in table B of the report including the increase of council tax in 2020/21 by 3.50%;

d) The prudential indicators for 2020/21 shown in Appendix G of the report;

e) The Flexible Use of Capital Receipts Strategy for 2020/21 attached as Appendix H to the report; and

f) The Medium Term Financial Strategy attached at Appendix J to the report.

4. Requests the Leader to review and amend the Executive's budget recommendations to the County Council, as appropriate, in light of the National Living wage cost pressure outlined in paragraphs 1.14 and 1.15 of the report, and the final Local Government Finance Settlement and the council tax, and business rates information from the Lincolnshire District Councils if received between the Executive meeting and the County Council on 21 February 2020.

5. Requests the Leader to review and amend the figures within the Medium Term Financial Strategy to be recommended to the County Council as appropriate, to ensure consistency with final budget recommendations made to the County Council meeting on 21 February 2020.

Consideration was given to a report from the Executive Director – Resources, which invited the Executive to consider its final proposals for the Council's budget and council tax in light of the provisional local government settlement and consultation comments on its initial proposals. The Executive was also asked to consider prudential targets in relation to capital financing and other treasury management matters.

The Assistant Director – Strategic Finance introduced the report to the Executive and guided them through a further update to the Council Budget 2020/21, tabled at the meeting, which set out a revised Budget position following confirmation from the district councils of the Council Tax bases; Council Tax Collection Fund surpluses; Business Rates Collection Fund surpluses; and the Business Rates Section 31 grant funding.

An updated Appendix I to the report was also circulated to the meeting, which included budget consultation feedback from scrutiny committees; members of the public; and the notes from the consultation meeting with external stakeholders.

The Assistant Director – Strategic Finance advised that the report presented gave the updated position following the meeting of the Executive on 7 January 2020. The budget requirement was expected to be £489m with a surplus of £1.447m which would be added to the Development Fund. District councils had had until 31 January 2020 to submit their Council Tax Base and surplus/deficit position on the Council Tax element of the Collection Fund. The update on the position had been circulated to the Executive, and showed that the variances from the district councils on council tax and business rates created a further surplus of £1.165m not previously included in the budget. It was noted that the Council was yet to receive its budget settlement from Government.

The Executive was also advised of a late announcement on 7 January 2020 from Government regarding the increase to the National Living Wage which was greater than forecasted at 6.2%. This would create a budget pressure of £0.552m, and this had been reported back to Government.

It was highlighted that there had been no changes to Appendix D – Revenue Budgets 2019/20 and 2020/21 since January 2020. The Capital Programme also remained unchanged, although there were a small number of changes made to the phasing of some schemes.

It was proposed to increase Council Tax by 3.5%, which would be an increase for a Band D property of £45.18 per year. It was also proposed to not continue with the flexible use of capital receipts to fund revenue transformation projects, but instead use them to repay loans or fund new capital expenditure. Consultation feedback had indicated that the budget proposals for 2020/21 were broadly supported.

The Chairman of the Overview and Scrutiny Management Board (OSMB) advised that OSMB had considered the Executive report containing the Council Budget 2020/21 proposals and the Medium Term Financial Strategy at its meeting on 30 January 2020, and had supported the Budget proposals put forward. The Chairman highlighted that he had abstained from voting on this item.

The Chairman of OSMB also highlighted the cost pressure for the Customer Service Centre of £2.25m which was due to increases in the cost of the contract with Serco as well as the volume of calls being received. The contract had been renegotiated to better reflect the actual cost of delivery being incurred by Serco. He also highlighted the need to align the budget with the Corporate Plan, and that OSMB supported the in-depth reviews of a number of service areas, as well as the creation of the development fund as a new earmarked reserve. The Executive Director – Commercial advised that the Customer Service Centre was also in the process of a channel shift, and the new website would assist with more transactional activity. This would provide a different way for residents and businesses to contact the Council. This was a developing picture and was part of the transformation plan.

The Executive Director – Resources provided an update in relation to fair funding, and advised that the technical working group which had been set up to examine the best way to deliver the review was in the process of being reconstituted. The next stage of the consultation was expected in the spring of 2020. It was also noted that there had been some consideration of whether the paper from government in relation to adult social care funding arrangements should be a white paper rather than green paper and there were indications that the government was considering long term funding arrangements.

RESOLVED