Agenda item

(To receive a report from the Executive Director – Resources, which invites the Executive to make proposals to the full County Council on 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 funding available and revenue expenditure position as noted in paragraphs 1.21 and Table A of the report, supported by additional information in Appendix A to the report;

2. Considers the Equality Impact Analysis at Appendix B and the consultation and engagement comments as show in Appendix F 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 2022/23 proposed in Table A of the report, subject to the following amendments:

· An increase in the proposed 2022/23 Highways budget of £12,360,068

· A new transfer from Earmarked Reserves of £2,304,000, reflecting a reduction in the existing Coronavirus Reserve to a nil balance

· An increase in the County Precept line of £11,726,202 consisting of the proposed additional Council Tax increase of 1.99% referred to in recommendation 3c) below, which generates additional income of £6,463,462, the Collection Fund Surplus of £3,465,320, and increased Council Taxbase of £1,797,420

· A decrease in the Business Rates Retention Line of £1,670,134 to reflect reduced income and the Collection Fund deficit.

b) The capital programme for 2022/23 proposed in Table B and Appendix C of the report;

c) The levels of council tax proposed in Table C and shown in Appendix D of the report amended to show an increase of council tax in 2022/23 by 3.00% for Adult Social Care and 1.99% for general services;

d) The prudential indicators for 2022/23 shown in Appendix E to the report;

e) The Medium Term Financial Strategy attached at Appendix G to the report;

f) The Capital Strategy 2022/23 attached at Appendix H 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 final Local Government Finance Settlement and District Council business rates and final council tax information if received between the Executive meeting and the County Council on 18 February 2022.

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 18 February 2022.

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

The Assistant Director – Finance introduced the report to the Executive and guided them through a further update to the Council Budget 2022/23, which had been circulated prior to the meeting, which set out a revised Budget position following confirmation from the district councils of the Council Tax bases; Council Tax Collection Fund; Business Rates Collection Fund; and the Business Rates Section 31 Grant Funding, Business Rates Pooling Gain as well as implications of the latest information on the Budget position. The update presented a small surplus.

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

The Assistant Director – Finance advised that there were no changes proposed to the service budgets as presented at the meeting on 5 January 2022. At the time of publication of the report, the council tax figures from district councils had not been received. It was noted that a deficit from the Business Rates Collection was reported, however, the Council should be compensated for this by the Section 31 grant.

The Leader advised that the comments on the proposals had generally been positive. At the time of the meeting, the settlement from the DfT for the Highways budget had not been received. There may be a need to make a recommendation to Council if the £12.3m was not received from government. It was noted there was a strong message from residents that they wanted to see the same amount of money spent on the roads.

The Executive Director – Resources advised on how the budget could be balanced whilst maintaining the current level of the Highways Maintenance budget. It was also highlighted that the outcome of the fairer funding campaign was awaited. The Executive was also advised that there would also be gaps in the budget for coming years, which could not continue to be filled from reserves.

The Leader advised that the Council had already made over £300m of savings over the previous years. Although the Council was only able to set a one year budget, it was planning for the next three years.

The Leader reported that the current proposals were to freeze the general Council Tax precept and only take the Adult Social Care precept, however, he proposed that instead of the freeze, the Council should raise council tax by an additional 2%, this would generate an addition £6m. It was emphasised that even with this increase, Lincolnshire would still be the second lowest council tax authority in the country.

The Vice-Chairman of the Overview and Scrutiny Management Board (OSMB) presented the comments which had been made by the Board when considering the budget proposals. Reference was made to the impacts of the reduction of the Highways Maintenance Grant as well as the pressures on Adult Social Care. Questions were raised around Smarter Working and the possible savings which could be achieved.

A discussion took place around the reduction of £12.3m for the Highways Maintenance grant, and how the Council would be able to maintain current levels of funding, if the additional funds from government were not forthcoming. There was an acknowledgement that the only way to maintain funding levels was through an increase in council tax. It was noted that maintaining the roads was an important function due to the rural nature of the county, and many people were reliant on cars, and the county did not have the public transport networks that other larger cities had.

It was noted that while there was disappointment with the predicted reduction in funding for the Highways Maintenance Grant, and the lack of progress with the Fairer Funding campaign, the support received from government in other areas needed to be acknowledged, including the £100m of funding that Lincolnshire had received in relation to Covid-19, and it was also noted that the general settlement was better than expected.

In response to the issues raised during the debate, the Leader of the Council tabled an amendment to recommendation 3 of the report as follows:

3) Subject to recommendation 4 below approve for recommendation to full Council:

a) the revenue budget for 2022/23 proposed in Table A of the report, subject to the following amendments:

An increase in the proposed 2022/23 Highways budget of £12,360,068.

A new transfer from Earmarked Reserves of £2,304,000, reflecting a reduction in the existing Coronavirus Reserve to a nil balance.

An increase in the County Precept line of £11,726,202 consisting of the proposed additional Council Tax increase of 1.99% referred to in recommendation 3c) below, which generates additional income of £6,463,462, the Collection Fund surplus of £3,465,320, and increased Council Taxbase of £1,797,420.

A decrease in the Business Rates Retention line of £1,670,134 to reflect reduced income and the Collection Fund deficit.;

b) the capital programme for 2022/23 proposed in Table B and Appendix C of the report;

c) the levels of council tax proposed in Table C and shown in Appendix D of the report amended to show an increase of council tax in 2022/23 by 3.00% for Adult Social Care and 1.99% for general services;

Upon being put to the vote, the amendment was supported unanimously.

RESOLVED