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 2021/22.

 

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 and Resources on the Strategic Plan and Medium Term Financial Strategy (MTFS) 20021/26 and 2021/22 Budget and Council Tax proposals.

 

Cllr 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.

 

In introducing the report, Cllr 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 set out a clear vision for Staffordshire: “a county where big ambitions, great connections and greener living give everyone the opportunity to prosper, be healthy and happy. And where the people of Staffordshire will:

 

•       Have access to more good jobs and share the benefits of economic growth

•       Be healthier and more independent for longer

•       Feel safer, happier and more supported in their community”

 

Cllr Sutherland referred to the profound impact the Covid-19 pandemic had had on the work of the Council and also its finances, including the delivery of proposed savings.  He added that there was a high level of uncertainty in the MTFS due to a number of factors including the on-going impact of the pandemic, and the demand for the provision of care services.

 

He informed the Council that Staffordshire continued to have one of the lowest levels of Council Tax amongst the Shire Counties in England.  He added that the proposals   before the Council provided for the general council tax increase (i.e. in line with the principle of taking the tax increase allowed by government up to the referendum limit) of 1.99% for 2021/22 and thereafter. In addition, the Spending Review announced that the government would again permit social care authorities to raise council tax by a further 3% to help with funding pressures in social care.  This would result in a council tax at Band D of £1,360.62 for 2021/22, which was an increase of 4.99% when compared with 2020/21.

 

Members noted that the capital programme in 2021/22 was over £100m and that the main projects included in the programme were:

 

•       Expansion of three secondary schools in the Lichfield and Stafford areas;

•       Expansion of a number of primary schools across the county, plus two new schools;

•       Development of Greenwood House, Burntwood in partnership with the NHS to deliver a modern doctors’ surgery and pharmacy;

•       Continued construction of Stafford Western Access Route and the i54 Western Extension;

•       Expansion of business parks in Cannock and Newcastle;

•       Regeneration of the Eastgate quarter of Stafford.

 

Cllr Sutherland also informed the Council that, in February 2020, a balanced budget was reported for 2021/22 with headroom in the future years. Since then, the pandemic had had an impact across all services and its impact would continue to be felt for a number of years to come.  The position for 2021/22 was a balanced one but the headroom which was part of the period in February 2020 had now been used to part fund cost pressures and there remained significant budget gaps in years two and three of the period. These gaps reflected the level of financial uncertainty in the future and also the longer term impact of the pandemic.

 

Cllr Charlotte Atkins expressed the view that the Covid-19 pandemic had highlighted inequalities in society; that the proposed 4.99% increase in Council Tax was a regressive Tax and came despite proposals for £47.7m in cuts by 2024.  She also stated that Central Government had failed to deliver on its pledge to solve the crisis in social care; that the promised Green Paper was still to see the light of day; and that Public Sector workers (outside the NHS) faced a proposed Government imposed pay freeze.

 

Cllr Parry and Cllr McMahon spoke about the role of the MTFS in ensuring that the Council was able to meet the needs of its residents.  They also referred to how the Council had responded to the Covid-19 pandemic including the support it had made available to local businesses and the local economy; and measures it had taken to strengthen domiciliary care.  They also referred to the Council’s proposed £43m increase in the budget for social care.  Cllr McMahon added that the Council was in discussions with the Clinical Commissioning Groups regarding how they and the Council could work more closely together.

 

Cllr Brookes stated that he recognised the difficulties the Council was facing and he expressed his support for the MTFS proposals.  He also paid tribute to the Cabinet for keeping the level of council tax amongst the lowest for Shire Councils.

 

Cllr Sutton referred to the priorities contained within the Council’s Strategic Plan and the support the Council gave to children and families.  He also referred to how services for children and families were being transformed.

 

Cllr Philip Atkins referred to the priorities contained within the Strategic Plan and, in particular, how residents and communities were encouraged to help themselves and one another and thus enable the Council to focus its resources on those who were the most vulnerable.  He also stated that he supported the comments made by Cllr Charlotte Atkins in relation to the need for Central Government to find a long-term solution to the funding of social care.

 

Cllr Woodward expressed the view that the Council had been let down by Central Government during the pandemic, for example, through having to supply personal protective equipment (PPE), support for care homes and the provision of additional testing and thus placing additional burdens on Council Tax payers.  She also referred to savings the Council was proposing to make in its MTFS which would impact upon mental health services and also the rural county. Cllr Woodward also expressed concern at the level of debt owed to the Council.  In response, Cllr McMahon indicated that there was a task and finish group looking into the level of debt owed to the Council and how this may be reduced.  Cllr Deaville added that the Council would continue to deal with the challenges it faced, and he commended the Council’s decision to supply PPE to care homes etc. Cllr Edgeller referred to Cllr Woodward’s comments in respect of mental health services and indicated that, in Stafford, Members were in discussions with the local MP regarding lobbying Central Government for additional funding for mental health services.

 

Cllr Robinson referred to the aging population in the County and how this contributed to pressures on the health and care system and indicated that the current method of funding was unsustainable and that a long-term solution was needed.  He expressed the view that the Council had not been fully reimbursed by Central Government for its additional costs and loss of income arising from the Covid pandemic.  He also referred to the vital contribution made by volunteers in the County and expressed his disappointment at the Government’s proposal to freeze the pay of public sector workers who were often at the forefront of dealing with the pandemic.

 

Cllr Philip White spoke about the Council’s continuing response to the pandemic, both by officers and Members; and the need for the Authority to create the right conditions for economic growth/recovery through working with partners.

 

Cllr Alan White and Cllr Sutherland concluded the debate by indicating that the Council provided value for money and spent the Council Tax it received effectively.  Cllr Sutherland also referred to how the Council had responded positively to the pressures placed upon it during the Covid pandemic.

 

Cllr Alan White moved, and Cllr Price seconded, the recommendations contained in the report before the Council.

 

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 Janet Eagland Ann Edgeller Helen Fisher Keith Flunder Richard Ford John Francis Colin Greatorex Gill Heath Phil Hewitt

Keith James Julia Jessel Bryan Jones Ian Lawson Alastair Little Johnny McMahon Paul Northcott Jeremy Oates Ian Parry Kath Perry MBE Jeremy Pert Bernard Peters Jonathan Price Natasha Pullen David Smith Paul Snape

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:

 

Charlotte Atkins Ann Beech Ron Clarke Derek Davis OBE

Alan Dudson Jill Hood Syed Hussain

Dave Jones Kyle Robinson Susan Woodward

Those Members abstaining from voting: Nil

 

RESOLVED – (a) That the following be approved:

 

(i) the adoption of the Strategic Plan as set out in Appendix 2 to the report;

 

(ii) a net revenue budget of £530.296m for 2021/22 as set out in Appendix 14 to the report;

 

(iii) planning forecasts for 2022/23 to 2025/26 as set out in Appendix 14 to the report;

 

(iv) a contingency provision of £5.000m for 2021/22;

 

(v) a net contribution from reserves and general balances of £6.255m plus a contribution to the Local Taxation Fund of £5.204m for 2021/22;

 

(vi) a budget requirement of £529.245m for 2021/22;

 

(vii) a council tax requirement of £388.150m for 2021/22;

 

(viii) a council tax at Band D of £1,360.62 for 2021/22 which is an increase of 4.99% when compared with 2020/21. 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	907.08
Band B	1,058.26
Band C	1,209.44
Band D	1,360.62
Band E	1,662.98
Band F	1,965.34
Band G	2,267.70
Band H	2,721.24

 

(ix) 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;

 

(x) the Financial Health Indicators set out in Appendix 13 to the report.

 

(b) That the following recommendations which are included within the Capital and Minimum Revenue Provision Strategy 2021/22, the Treasury Management Strategy 2021/22 and the Commercial Investment Strategy 2021/22 (Appendices 12a to 12c to the report) be approved:

 

(i) the Minimum Revenue Policy for 2021/22 as contained within the Capital and Minimum Revenue Provision Strategy 2021/22 in Appendix 12a to the report;

 

(ii) the Prudential Indicators as set out within the Capital and Minimum Revenue Provision Strategy 2021/22 in Appendix 12a to the report;

 

(iii) the 2021/22 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);

 

(iv) to adopt the Annual Investment Strategy (AIS) 2021/22 as detailed in paragraphs 60 to 107 and Annex A and Annex B of the Treasury Management Strategy 2021/22 (Appendix 12b to the report);

 

(v) the policies on reviewing the strategy, the use of external advisors, investment management training and the use of financial derivatives as described in paragraphs 109 to 119 of the Treasury Management Strategy 2021/22 (Appendix 12b to the report);

 

(vi) the proposed borrowing strategy for the 2021/22 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;

 

(vii) that the Treasury Management Strategy recommendations operate within the prudential limits set out in Annex C of the Treasury Management Strategy 2021/22 (Appendix 12b to the report) and 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;

 

(viii) the Commercial Investment Strategy for 2021/22 (Appendix 12c to the report) and the circumstances under which commercial investments can be made;

 

(ix) the governance arrangements that are in place for proposing and approving commercial investments;

 

(x) a maximum quantum for commercial investments of a further £20 million in 2021/22;

 

(xi) a maximum limit for an individual service investment loan of £10 million in 2021/22;

 

(xii) that any upwards change in the amounts of the limits specified in recommendations (x) and (xi) 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 and local taxation changes announced in the final 2021/22 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.