Agenda item

Report of the Portfolio Holder for Finance and Resources

Resolution 4b is not subject to call in because the Chair of Overview and Scrutiny agreed that the decision is reasonable in all circumstances and should be treated as a matter of urgency. This is due to the timing of Executive Board and the Housing Act 1985 which requires tenants to receive 28 days’ notice of any proposed rent increase.

The Portfolio Holder for Finance and Resources presented the report on the Medium Term Financial Plan 2022/23 to 2025/26. The following points were discussed:

a)  The budget process began with a funding gap of £38m for 2022/23, largely as a result of increased demand and cost in Children and Adults, decreased government funding and inflation. These are challenges faced by all councils and difficult choices were required to produce a balanced budget.

b)  A consultation was undertaken and in response to the feedback received as part of that process the following changes were made to proposals:

·  Children’s Centres - Officers are developing a detailed proposal for a new Children’s Centre model based on retaining four centres under direct Council operation rather than the three in the original proposals.

·  Play & Youth services - proposal around staffing reductions, however, has been reconsidered and an additional 3 FTE staff will be retained, ensuring there are 15 youth workers plus a manager providing city-wide outreach.

·  Greyhound Street toilets would remain a free of charge service facility.

c)  The report proposes an overall Housing Revenue Account (HRA) of

·  A forecast 2021/22 outturn surplus of £0.1m

·  Total HRA expenditure budget for 2022/23 of £111.1 million

·  An increase in rents of 4.1%

·  A proposed increase in general service charges of 4.1% in line with CPI

·  Closing working balance of £9.3 million in 2022/23

75% of tenants’ will have the rent increases covered by housing benefit and measures are being taken to support recipients of Universal Credit and keep them out of technical arrears. Costs have increased due to the pay award, increasing energy costs, and fire safety regulations.

d)  Transformation forms a key part of balancing the MTFP with services being redesigned to ensure they are high quality and offer the best value for money. The approach supports the council in moving away from year on year cuts.

e)  A sustainable capital programme also forms a key part of the balanced MTFP. The Council has been successful in bidding for capital funding and in its asset management programme. The Council is adhering to the borrowing cap and voluntary debt reduction policy. Capital projects include the fit out of the new Central Library, new housing, a vehicle replacement scheme and school improvements. Schemes do not begin until the funding is secured.

f)  The following additional recommendation was submitted at the meeting for recommending to Council in response the governments’ requirements relating to the Council Tax support scheme:

To approve the retention of the Council Tax Support Scheme currently in operation, amended to disregard the Government’s £150 Energy Rebate Scheme payments for the financial year 2022/23, as required by The Council Tax (Demand Notices and Reduction Schemes) (England) (Amendment) Regulations 2022.

The Board extended its thanks to all Councillors and Colleagues involved in the delivery of a very challenging balanced budget.

Resolved to

(1)  2021/22 Forecast Outturn (Annex 1):

a)  note the current forecast outturn for 2021/22

b)  approve budget virements of £3.4 million and a net use of reserves of £0.3 million as set out in Appendices B and C

c)  approve the principle that any underspends achieved in 2021/22 are to be used to replenish reserves through the creation of a financial sustainability reserve.

(2)  Revenue Medium Term Financial Plan 2022/23 to 2025/26 (Annex 2)

a)  recommend to City Council approval of the proposed General Fund revenue budget for 2022/23 with a net budget requirement of £227.6 million

b)  endorse proposals to set a Council Tax level (Band D) of £1,955.32

c)  recommend to City Council approval of the retention of the Council Tax Support Scheme currently in operation, amended to disregard the Government’s £150 Energy Rebate Scheme payments for the financial year 2022/23, as required by The Council Tax (Demand Notices and Reduction Schemes) (England) (Amendment) Regulations 2022.

(3)  Capital Programme 2021/22 to 2026/27 Element (Annex 3)

a)  recommend to City Council approval of the proposed Capital Programme for 2021/22 – 2026/27.

(4)  HRA budget 2022/23 (Annex 4)

a)  recommend to City Council approval of the proposed HRA budget for 2022/23 as set out in Annex 4.

b)  approve the:

i)  Proposed rent increase of 4.1% for 2022/23;

ii)  Continuation of the tenant incentive scheme in 2022/23 of up to £0.5million per annum;

iii)  Proposed increase in general service charges of 4.1%.

iv)  Proposed increase to garage rents of 3.1%.

v)  Delegation of authority to Nottingham City Homes (NCH) to award capital contracts up to the value of the scheme/programme as set out in Annex 3.

(5)  Robustness of the Medium Term Financial Plan (Annex 5)

a)  To note the report of the Council’s Section 151 Officer in respect of the robustness of the estimates within the budget and the adequacy of reserves.

(6)  Budget Consultation (Annex 6)

a)  To note the outcomes of the budget consultation and the Council’s response.

(7)  Schools Budget (Annex 7)

a)  To approve the in-year budget transfers and payments associated with the grant funding and the use of the reserve included in this report. This will not exceed the grant value.

b)  To delegate the authority to the Portfolio Holder for Finance & Resources and the S151 Officer to approve any final budget adjustments in conjunction with the Portfolio holder for Leisure, Culture & Schools and the Corporate Director (People).

(8)  Transformation Programme (Annex 8)

a)  To approve the strategies being applied to the transformation programmes identified in Waves 1 & 2.

b)  To note and endorse the wave 3 outline proposals for transformation subject to the approval of individual business cases.

c)  To note that proposals are subject to consultation where appropriate.

d)  To note that as these strategies are adopted, the outcomes and impacts will form part of further consultation and appropriate approval.

e)  To note that the reduction in Full Time Equivalent posts is currently estimated and at this stage it is not possible to identify which posts are vacant. Clarity of this will form part of resolution 8b).

f)  To note that the costs associated with delivery for Childrens service redesign is contained within a separate report presented to this board. If this proposal is not approved, this will impact on these budget proposals and the Council may not meet its legal requirement to set a legal budget for 2022/23 nor a balanced 4 year Medium Term Financial Strategy.

·  Reasons for decisions

The council must set a balanced budget each year, these proposals allow the Executive Board to recommend this budget to Council for approval at its March meeting. It also allows approval of the HRA and Schools Budget elements of the budget process.

·  Other options considered

Throughout the budget process a range of different options have been considered including various levels of council tax, investment and cost reductions. This is a complex process with many iterations and possibilities too numerous and detailed to present as discrete options here. This report presents the overall set of current draft proposals which together seek to balance levels of investment, income, cost reductions and an appropriate level of council tax.