Agenda item

Purpose of Report:

To seek approval for, and makes recommendations to the County Council regarding:

·          The Revenue Budget for 2022/23;

·          The Medium Term Financial Strategy (MTFS) for 2023/24 to 2024/25;

·          Council Tax for 2022/23;

·          The Capital Five Year Spending Plan;

·          An updated Annual Treasury Management Strategy for the financial year 2022/23

 

Considered – A joint report of the Chief Executive and the Corporate Director for Strategic Resources, asking the Executive to make recommendations to the County Council regarding the Revenue Budget for 2022/23, the Medium Term Financial Strategy (MTFS) for 2023/24 to 2024/25, Council Tax for 2022/23, the Capital Five Year Spending Plan, and an updated Annual Treasury Management Strategy for the financial year 2022/23

 

County Councillor Gareth Dadd introduced the report and thanked Gary Fielding and his team for their work on the budget, and for the production of the detailed report, recognising the difficult circumstances under which it had been produced i.e. the variabilities, the challenges and the unpredictability of inflation/Covid etc.

 

Revenue Budget for 2022/23, the Medium Term Financial Strategy (MTFS) for 2023/24 to 2024/25, & Council Tax for 2022/23

Gary Fielding- Corporate Director for Strategic Resources drew specific attention to:

·            It being the last budget for the County Council setting out a plan that would support three principals areas i.e. to enable the Council to continue to delivery essential services next year, to be able to respond to Covid and its consequences, and to provide the best possible start for the new Council;

·            The summary position as set out in the table at paragraph 2.9 of the report based on Council Tax for 2022/23 being set at 2.99%;

·            The impact of Covid and the need to undertake LGR transitioning;

·            The four Council Tax options set out in Appendix G of the report and what each would mean in regard to the use of Reserves and the recurring shortfall per annum;

·            His Section 25 opinion as detailed in paragraphs 9.12 – 9.13 of the report;

·            The new Council would inherit a structural deficit and would need to deliver a savings plan;

·            The new high inflation environment;

·            The ongoing demand led pressures across Adult Social Care and Children’s’ services;

·            The related risks detailed in Section 10 and appendices L & M of the report;

·            The revised Pay Policy and Pensions Discretion Policy;

·            The Equalities Impact and Environmental Impact Assessment;

·            The detailed public consultation undertaken as set out in Section 6 of the report

 

Other Executive Members echoed the thanks given to Gary Fielding and his team for their work on the budget, and in response to their questions, Gary Fielding confirmed:

·          Pressures on the Local Assistance Fund would be monitored through the quarterly Finance & performance reports;

·          The available 2.5% ASC precept element could not be carried forward into a future year therefore it would be lost if not used this time round;

·          The ASC reforms and potential implications on fees for the Council could be hugely significant;

 

County Councillor Gareth Dadd noted:

·          Whilst other Local Authorities had previously fallen into difficulty having taken short-term decisions in the interests of political popularity, NYCC had put the medium term interests of residents first, and taken difficult decisions throughout austerity to build up its reserves;

·          The one variable the County Council had control over was the level of Council Tax, and suggested the County Council should be proud of its record over the past 11 years, during which time Council Tax in North Yorkshire had only risen by 33%, whereas inflation had risen by 38% and there had been significant cuts in Government funding.

·          Delivering key services had to be balanced against residents’ propensity and willingness to pay.

·          Members had a moral duty to leave the Council in the best possible condition for LGR

 

Given the above, and having considered the table on page 27 of the report showing the effect on the Council’s reserves of the various Council Tax options, County Councillor Gareth Dadd proposed a rise in Council Tax of 3.99%.

 

Recognising all of the pressures and future uncertainties, other Executive Members and Councillors present at the meeting indicated their support for that proposal.

 

Resolved:  That it be recommended to the Chief Executive Officer that using his emergency delegated decision-making powers, he recommend to Full Council that:

a)     The Section 25 assurance statement provided by the Corporate Director, Strategic Resources regarding the robustness of the estimates and the adequacy of the reserves (paragraph 9.13) and the risk assessment of the MTFS detailed in Section 10 be noted;

b)     A combined council tax increase for 2022/23 of 3.99% be agreed;

c)      In the event that the level of overall external funding (including from the final Local Government Settlement) resulted in a variance of less than £5m in 2022/23, the difference be addressed by a transfer to / from the Strategic Capacity Unallocated Reserve in line with paragraph 4.2.6, with such changes being made to Appendix E as appropriate;

d)     The Corporate Director – Children and Young People’s Service, in consultation with the Corporate Director, Strategic Resources and the Executive Members for Schools and Finance, be authorised to take the final decision on the allocation of the Schools Budget including High Needs, Early Years and the Central Schools Services Block (paragraph 3.1.19);

e)     The Medium Term Financial Strategy for 2022/23 to 2024/25, and its caveats, as laid out in Section 3.0 and Appendix G, in line with the proposed council tax option be approved;

f)       The Corporate Director – Business & Environmental Services, in consultation with the Executive Members for BES, be authorised to carry out all necessary actions, including consultation where he considers it appropriate, to implement the range of savings as set out in Appendix B1 (BES 1 to 3);

g)     The Corporate Director – Health and Adult Services, in consultation with the Executive Members for HAS, be authorised to carry out all necessary actions, including consultation where he considers it appropriate, to implement the range of savings as set out in Appendix B1 (HAS 1 to 6);

h)     The Corporate Director – Children and Young People’s Services, in consultation with the Executive Members for CYPS, be authorised to carry out all necessary actions, including consultation where he considers it appropriate, to implement the range of savings as set out in Appendix B1 (CYPS 1 to 4);

i)       The Chief Executive, in consultation with the Executive Members for Central Services, carry out all necessary actions, including consultation where he considers it appropriate, to implement the range of savings as set out in Appendix B1 (CS 1 to 5);

j)       Any outcomes requiring changes following Recommendations f), g), h) and i) above be brought back to the Executive to consider and if necessary, where changes are required to the existing major policy framework, make recommendations to full Council;

k)      The existing policy target for the minimum level of the General Working Balance be retained and set at £28m in line with paragraphs 4.5.4 to 4.5.5 and Appendix F;

l)       The attached pay policy statement (Appendix I) covering the period 1 April 2022 to 31 March 2023 as set out in Section 7 be approved;

m)    The updated LGPS Employers Discretion Policy as described in paragraphs 7.6 to 7.8 and as set out in Appendix J be approved;

n)    The delegation arrangements referred to in Section 12 that authorise the Corporate Directors to implement the Budget proposals contained in the report for their respective service areas and for the Chief Executive in those areas where there are cross-Council proposals, be agreed;

o)    Regard be given to the Public Sector Equality Duty (identified in Section 8 and Appendix K) in approving the Budget proposals contained in the revenue budget section of the report.

 

Capital Five Year Spending Plan

County Councillor Gareth Dadd introduced the 5-year Capital Spending Plan and drew attention to a recently successful CO2 Carbon Reduction bid and the contingency fund to address the volatility in the construction sector.

 

Gary Fielding confirmed the Plan was based on the quarter 3 position and was a continuation of what had been seen at quarters 1 & 2.

 

All Executive Members voted in favour of the associated recommendations and it was 

 

Resolved: That it be recommended to the Chief Executive Officer that using his emergency delegated decision-making powers, he recommend to Full Council that:

a)      The refreshed Capital Plan summarised at paragraph 3.4 be approved;

b)      The proposal to carry forward £500k of the Property Rationalisation underspend at 31 March 2022 for a further two financial years (2022/23 to 2023/24) as set out at paragraph 3.18, be approved;

c)      Authority be delegated to the Corporate Director, Business & Environmental Services in consultation with the Corporate Director, Strategic Resources; the Executive Member for Open to Business; and the Executive Member for Finance to allocate the £3.5m of funding should it be required as a local contribution towards schemes for submission into the Levelling Up Fund as set out in the Table in paragraph 5.2;

d)      No action be taken at this stage to allocate any additional capital resources (paragraph 6.7)

 

Treasury Management

Gary Fielding highlighted the annual update and drew attention to the Capital and Treasury Prudential Indicators, a Borrowing Strategy, an Annual Investment Strategy, and a Capital Strategy.  He assured Executive Members there were no significant departures from previous Policies but there was one potential significant change to the MRP Policy on the horizon.

 

Finally, it was noted that all Councillors would have the opportunity to vote on the budget at full Council on 16 February 2022.

 

All Executive Members voted in favour of the recommendations In the Treasury Management section of the report and it was 

 

Resolved: That it be recommended to the Chief Executive Officer that using his emergency delegated decision-making powers, he recommend to Full Council that:

a)    The Treasury Management Strategy at Annex 1, including:

b)    The Capital Prudential Indicators (Appendix A), Borrowing Strategy and Treasury Prudential Indicators (Appendix B) and Annual Investment Strategy 2022/23 (Appendix C), and in particular;

              i.   an authorised limit for external debt of £566.3m in 2022/23;

             ii.   an operational boundary for external debt of £546.3m in 2022/23;

            iii.   the Prudential and Treasury Indicators based on the County Council’s current and indicative spending plans for 2022/23 to 2024/25 (noting the indicators for 2023/24 and 2024/25 will be subject to revision as part of the implementation of the new unitary council):

            iv.   a limit of £40m of the total cash sums available for investment (both in house and externally managed) to be invested in Non-Specified Investments over 365 days;

             v.   a 10% cap on capital financing costs as a proportion of the annual Net Revenue Budget;

            vi.   a Minimum Revenue Provision (MRP) policy for debt repayment to be charged to Revenue in 2022/23;

           vii.   the Corporate Director – Strategic Resources to report to the County Council if and when necessary during the year on any changes to this Strategy arising from the use of operational leasing, PFI or other innovative methods of funding not previously approved by the County Council;

c)    The Capital Strategy as attached at Appendix D;

d)    The Treasury Management Policy Statement as attached as Schedule 1; and

e)    That the Audit Committee be invited to review Annex 1 including Appendices A to D and Schedules 1 to 6 and submit any proposals to the Executive for consideration at the earliest opportunity.