Agenda item

Joint report of the Leader of the Council and the Cabinet Member for Finance outlining how the Council will finance its operations over the next five years and recommending a budget to the Council for 2020/21.

 

NOTE: Members are reminded that, under Section 106 of the Local Government Finance Act 1992, if they are two months or more in arrears with their Council Tax it is an offence for them to vote on the budget. Members are also required to disclose at the meeting the fact that this Section applies to them.

The Council received a joint report by the Leader of the Council and the Cabinet Member for Finance on the Strategic Plan and Medium Term Financial Strategy (MTFS) 20020/25 and 2020/21 Budget and Council Tax proposals.

 

Mr Sutherland expressed his thanks to the County Treasurer and those other members of staff who had assisted in the development of the MTFS, the Chairman and Members of the Corporate Review Committee’s Medium Term Financial Strategy Working Group for the robust manner in which they had challenged and questioned Cabinet Members during their scrutiny of the MTFS/budget proposals, and also to his Cabinet colleagues and Members of the Senior Leadership Team.

 

Introducing the report, Mr Sutherland explained that the Strategic Plan was the primary document that shaped the financial plans and the Corporate Delivery Plan. Developed and delivered in tandem, they were supported by a range of directorate, service and team plans across the council.  The Plan had been refreshed and contained the following five priority areas:

 

·         Help Staffordshire’s Economy to grow and generate more good jobs.

·         Invest in Infrastructure for growing communities.

·         Improve education and training so that life-long learning offers everyone the opportunity to succeed.

·         Inspire healthy, independent living.

·         Support more families and children to look after themselves, stay safe and well.

 

Mr Sutherland indicated that these were unprecedented times with the Council having to meet the huge and increasing financial pressures from adult social care and children’s services, with reduced funding from Central Government.  He added that, in 2019/20 the Council had managed to balance its budget for 2019/20 and the MTFS overall by closing an initial gap of around £35m each year. The cost reduction options included in this balanced position were not without risk and the achievement of them had been monitored closely throughout this year.

 

Members noted that in order to continue to provide social care to the most vulnerable people in our communities, as well as continuing to provide a range of services that residents and businesses demand albeit on a reduced basis, the Council had to make some extremely difficult decisions about what it could continue to fund. Mr Sutherland added that it was interesting to note that 10 years ago the council spent around £200m on adults and children care services. For 2020/21 this figure exceeds £320m.  The Council was continuing to lobby Government on the critical need for more money for social care and for the sector to return to the arrangements of financial settlements covering a 3 or 4 year period to aid in financial planning.

 

Mr Sutherland explained that Cabinet proposed a net revenue budget of £479.595 million for 2020/21 giving a Council Tax requirement of £370.977million.  With regard to Council tax, Members were informed that Staffordshire County Council had the third lowest council tax level amongst counties in England. This position demonstrated the careful consideration that the council had taken regarding the level of tax demand placed on residents. However, this did restrict the level of funding required to pay for essential services and, clearly, a careful balance needed to be struck between these two factors.  The current assumptions in the financial plans were that the general council tax increase (aligned with the referendum limits published by government) was 1.99% for 2020/21 and thereafter. In addition, the Spending Round announced that the government would again permit social care authorities to raise council tax by a further 2% to help with funding pressures in social care. This additional increase was also included in the financial plans and were assumed for future years.  The recommended proposed council tax at Band D was £1,295.95 which was an increase of less than £1 per week for the average taxpayer.

 

Mr Sutherland moved, and Mr Atkins seconded, the recommendations contained in the report before the Council.

 

Mrs Atkins indicated that the budget proposals contained cuts amounting to a further £62 to be made over the next five years.  She expressed concern that due to the Local Government Financial Settlement only being for one year, this made it impossible for the County Council to plan its service provision in the longer term.  She also expressed her disappointment that the Government had failed to deliver its long-await Green Paper on the future funding of Social Care; but welcomed the County Council’s proposal to publish its own Green Paper on the funding of Social Care in Staffordshire.

 

Mr Robinson referred to the significant risks contained in the budget if the proposed savings were not achieved.  He also expressed the view that Central Government had turned its back on Staffordshire through its decision to cease the business rates retention pilot.  Mr Robinson added that he shared Mrs Atkins view that the government’s decision to issue a one-year financial settlement created uncertainty and an inability to plan for the longer-term. He also expressed the view that the proposed budget failed to tackle the poor condition of the County’s roads and footways, and was inadequate for addressing the issue of Climate Change.

 

In responding to Mrs Atkins and Mr Robinson, Mr Winnington indicated that the budget was about planning for the future and that, by working with partners like the Local Enterprise Partnership, the County Council was able to grow the local economy.  He also stated that, through initiatives like the roll-out of Superfast Broadband/Fibre to Premise, steps were being taken to “future-proof” Staffordshire and support local businesses.  Mr Winnington also indicated his support for the Council’s commitment to the environment.

 

Mr Alan White stated that the budget proposals were evidence of effective planning by the Council and were clear and transparent.  He added that the budget also reflected changes in demand and provided for the effective delivery of services.

 

Mrs Woodward indicated that there was no reference in Mr Sutherland’s statement about the need for improvements in the Council’s Special Educational Needs (SEND) provision and that, although this budget provided for the highest percentage of spend on Social Care in recent years, this was not necessarily the highest spend in monetary terms.  She added the Council had increased the level of Council Tax near to the maximum permitted, year on year.

 

Mr Parry stated that, in his opinion, this was a well thought out budget which did the right thing in that it protected the most vulnerable members of the community.  He also referred to the savings which had achieved to date whilst continuing to protect the provision of essential services.  He added that he shared Members concerns in respect of the need to find a long-term solution for the funding of social care and also for Councils to receive a financial settlement covering a number of years to enable them to plan more effectively.

 

Mr Spencer referred to the excellent work carried out by the SEND Hubs in addressing issues faced by children and young people with Special Educational Needs and their families.  Mr Price added that since November 2018, good progress had been made in addressing the issues highlighted in the written statement of action including improved engagement with schools, the provision of additional SEND workers and the development of KPI’s (key performance indicators).  Mr Sutton also added that this work was being overseen by a cross-party working group and that further proposals would be coming forward shortly.  He also referred to the £8.1m additional investment in Children’s services contained in the MTFS and the proposals for how this would be utilised.

 

Mr Wileman referred to the level of investment proposed by the Council over the next few years in tackling issues around climate change.  He also referred to the work undertaken to date on this issue, the development of an action plan and the proposal to hold a Staffordshire 100 event on sustainability.

 

Mr Deaville stated that Staffordshire was a great place in which to live, with new schools being built, low unemployment levels, and plenty of green spaces.  He added that there were a number of challenges facing the Council including funding for highway maintenance; the impact of HS2; and demand for, and cost of, adult social care.  Mr Deaville concluded that the Council would continue to spend taxpayer’s money wisely and support the most vulnerable members of the community.

 

Mr Bryan Jones indicated that he welcomed the budget and MTFS proposals submitted by Mr Sutherland.  Mr Greatorex added that there was a lot of detail contained in the report and that he also supported the proposals.

 

Mr Philip White added that it had been a difficult budget to set, compounded by the Government only giving a financial settlement for one year.

 

Mr Sutherland thanked Members for their comments.  He added that the County Council was ambitious; ready to face the challenges before it; and would continue to support the most vulnerable members in the community.

 

The Chairman reminded Members that, under Section 106 of the Local Government Finance Act 1992, if they were two months or more in arrears with their Council Tax it was an offence for them to vote on the budget. Members were also required to disclose at the meeting the fact that this Section applied to them.

 

In accordance with statutory requirements, the Chairman called for a named vote to be taken in relation to the approval of the recommendations contained in the report, the result of which was as follows:

 

Those Members voting in support of the recommendations:

 

Ben Adams Philip Atkins, OBE David Brookes Gill Burnett Tina Clements John Cooper Mike Davies Mark Deaville Ann Edgeller Keith Flunder Richard Ford John Francis Colin Greatorex Gill Heath Phil Hewitt

Jill Hood Keith James Trevor Johnson Bryan Jones Ian Lawson Alastair Little Johnny McMahon Paul Northcott Ian Parry Kath Perry MBE Jeremy Pert Bernard Peters Jonathan Price David Smith Robert Spencer

Mike Sutherland Mark Sutton Stephen Sweeney Simon Tagg Martyn Tittley Carolyn Trowbridge Ross Ward Alan White Philip White Conor Wileman Bernard Williams David Williams Victoria Wilson Mark Winnington Mike Worthington

Those Members voting against the recommendations: Nil

 

Those Members abstaining from voting:

 

Charlotte Atkins Ann Beech Ron Clarke

Maureen Compton Alan Dudson Syed Hussain

Dave Jones Kyle Robinson Susan Woodward

 

RESOLVED – (a) That the following be approved:

 

·           The adoption of the Strategic Plan (as set out in Appendix 16 to the report)

·           a net revenue budget of £479.595m for 2020/21 (as set out in Appendix 13 to the report);

·           planning forecasts for 2021/22 to 2024/25 as set out in Appendix 13 to the report;

·           a contingency provision of £4.000m for 2020/21;

·           a net contribution to reserves and general balances of £14.671m for 2020/21;

·           a budget requirement of £494.266m for 2020/21;

·           a council tax requirement of £370.977m for 2020/21;

·           a council tax at Band D of £1,295.95 for 2020/21 which is an increase of 3.99% when compared with 2019/20.  This results in council tax for each category of dwelling as set out in the table below:

 

Category of dwelling	Council Tax rate £
Band A	863.97
Band B	1,007.96
Band C	1,151.96
Band D	1,295.95
Band E	1,583.94
Band F	1,871.93
Band G	2,159.92
Band H	2,591.90

 

·               that the County Treasurer be authorised to sign precept notices on the billing authorities respectively liable for the total precept payable and that each notice states the total precept payable and the council tax in relation to each category of dwelling as calculated in accordance with statutory requirements;

·               the Financial Health Indicators set out in Appendix 12 to the report;

 

(b) That the following recommendations which are included within the Capital and Minimum Revenue Provision Strategy 2020/21, the Treasury Management Strategy 2020/21 and the Commercial Investment Strategy 2020/21 (as set out in Appendices 11a to 11c to the report) be approved:

 

·               Approve the Minimum Revenue Policy for 2020/21 as contained within the Capital and Minimum Revenue Provision Strategy 2020/21 in Appendix 11a to the report;

·               Approve the Prudential Indicators as set out within the Capital and Minimum Revenue Provision Strategy 2020/21 at Appendix 11a to the report;

·               Approve the 2020/21 Treasury Management Strategy, based on the 2017 CIPFA Codes (Prudential Code and Treasury Management Code), and 2018 MHCLG Guidance (on Local Government Investments and on Minimum Revenue Provision);

·               Adopt the Annual Investment Strategy (AIS) 2020/21 detailed in paragraphs 66 to 114 and Annex A and Annex B of the Treasury Management Strategy 2020/21 (as set out in Appendix 11b to the report);

·               Approve the policies on reviewing the strategy, the use of external advisors, investment management training and the use of financial derivatives as described in paragraphs 115 to 124 of the Treasury Management Strategy 2020/21 (as set out in Appendix 11b to the report);

·               Approve the proposed borrowing strategy for the 2020/21 financial year comprising maximising the use of cash in lieu of borrowing as far as is practical; the ability to borrow new long-term loans, where deemed appropriate; the use of cash to repay loans early, subject to market conditions and a loan rescheduling strategy that is unlimited where this re-balances risk;

·               The Treasury Management Strategy recommendations will operate within the prudential limits set out in Annex C of the Treasury Management Strategy 2020/21 (as set out in Appendix 11b to the report) and will be reported to the Cabinet Member for Finance, with respect to decisions made for raising new long-term loans, early loan repayments and loan rescheduling;

·               Approve the Commercial Investment Strategy for 2020/21 (as set out in Appendix 11c to the report) and note the circumstances under which commercial investments can be made;

·               Approve the governance arrangements that are in place for proposing and approving commercial investments;

·               Approve a maximum quantum for commercial investments of a further £20 million in 2020/21;

·               Approve a maximum limit for an individual service investment loan of £10 million in 2020/21;

·               Any upwards change in the amounts of the limits specified in the recommendations above relating to the maximum quantum for commercial investments and the maximum limit for an individual service investment loan be delegated to the County Treasurer in consultation with the Cabinet Member for Finance.

 

(c) That the County Treasurer be authorised to adjust centrally held budgets or contributions to or from reserves as appropriate to reflect any grant changes announced in the final 2020/21 Local Government Finance Settlement;

 

(d) That the Cabinet Member for Finance and the County Treasurer be authorised to challenge Cabinet, the Senior Leadership Team and services to manage and deliver the current five-year plans and to identify further cost reductions and income generation opportunities, as appropriate.

 

(e) That the Leader of the Council and Chief Executive be authorised to finalise the details of the Strategic Plan 2020/21 prior to final publication to ensure that it reflects any changes to the management and accountability structures of the County Council as part of the organisation’s transformation.