Agenda item

Report of the Corporate Director for Finance and Resources and Section 151 Officer

In accordance with section 12.47 of Article 12 Standing Orders and Committee Procedures of the Constitution, time limits were not applied for speakers on this motion.

 

Councillor Audra Wynter, Portfolio Holder for Finance and HR, proposed the report of the Corporate Director for Finance and Resources and Section 151 Officer enabling Council to approve a 2024/25 General Fund revenue budget and set the council tax, which was seconded by Councillor David Mellen.  In proposing the report, Councillor Wynter made an administrative alteration to recommendation 3 section h)iv to read “following completion of h(i), h(ii) and h(iii) above…”  She also highlighted the following points:

a)  The Council is facing exceptional financial pressures, which are primarily a combination of demographic, complexity of provision and inflationary pressures across a range of services and also the consequence of an ineffective local government funding system.

 

b)  Officers have developed savings proposals using a ‘duties and powers’ framework but that is insufficient to meet the scale of the growth required to provide adequate financial provision to deliver the Council’s service obligations. 

 

c)  The Council has been granted up to £41m exceptional financial support from Government, which enabled a balanced budget to be put forward for consideration by councillors at this meeting. 

 

d)  The draft budget was considered by Executive Board at its meeting on 13 February.  Executive Board had concerns about the impact on the City and its communities, and did not vote to recommend it to Council.  However, the Council has a legal duty to set a balanced budget and, in line with an Instruction from the Improvement and Assurance Board, it has been presented to Council for its consideration. 

Councillor Adele Williams submitted an amendment.

 

The meeting was adjourned at 5:53pm to enable the Lord Mayor to obtain advice on the validity of the amendment.

 

The meeting resumed at 6:20pm.

 

The Lord Mayor stated that, having consulted the Section 151 Officer and in consultation with the other Statutory Officers, the proposed amendment was not permitted because the Leaders of all political groups had been advised that any proposed amendments had to be put forward for consideration by 28 February; but not withstanding that the proposed amendment would not have received sign off from the Section 151 Officer as it would have cut across his professional view of robustness of estimates and adequacy of reserves as expressed in his Section 25 Statement under the Local Government Act 2023 and it was also contrary to the requirement of the two most recent Instructions issued by the Improvement and Assurance Board. 

 

Councillors debated the proposals including making the following points:

e)  The Council is in an extremely challenging financial position and one of the root causes of this is central government policy and decision making.  The local government funding system is not fit for purpose, there is no national plan for sustainably funding adult social care and the use of exceptional financial support, which is not additional funding and has to be paid for by selling assets, is not a sustainable solution.  The financial challenges have been made worse by inflationary pressures, which have, in large part, resulted from decisions made by central government.

 

f)  The savings proposals were developed by officers, and councillors feel that they had limited opportunity to shape proposals and put forward their own suggestions.  

 

g)  Many of the savings will have a detrimental impact on local communities and citizens, including the most vulnerable, and are therefore not supported by councillors.

 

h)  Some savings proposals, such as reductions to preventative and early intervention services and welfare rights advice, could end up costing the Council more in the longer term.

 

i)  Many of the grants to community groups lever in additional financial and non-financial benefit to communities and the city, so cutting relatively small amounts of money to, for example, lunch clubs will have a disproportionate impact.

 

j)  A public consultation was carried out and a large number of responses were received.  There had been very limited opportunities to make changes to proposals as a result of the feedback received and this may impact on peoples’ willingness to engage with consultation in the future.

 

k)  Some councillors raised uncertainty about the deliverability of some savings, for example the closure of Barkla Close.

 

l)  The Council has a legal duty to set a balanced budget and councillors have been advised that if the Council fails to do so the consequences are likely to be worse, with the Council unable to spend money to protect vulnerable citizens and pay staff.

 

m)  Councillors would like to work with officers and the commissioners to try and mitigate the worst impacts of savings during implementation.

 

n)  Many councillors feel that they are constrained by national government cuts and impositions and are obliged to vote for the budget that has been put forward by the Section 151 Officer in line with the Instruction from the Improvement and Assurance Board.

 

Councillors voted on the recommendations as follows:

	For	Against	Abstain
Councillor Saj Ahmad	ü
Councillor Liaqat Ali	ü
Councillor Leslie Ayoola	ü
Councillor Cheryl Barnard	ü
Councillor Steve Battlemuch	ü
Councillor Graham Chapman	ü
Councillor Kevin Clarke			ü
Councillor Michael Edwards	ü
Councillor Nadia Farhat			ü
Councillor Jay Hayes	ü
Councillor Patience Ifediora	ü
Councillor Imran Jalil	ü
Councillor Corall Jenkins	ü
Councillor Maria Joannou	ü
Councillor Kirsty L Jones	ü
Councillor Angela Kandola	ü
Councillor Anwar Khan	ü
Councillor Gul Khan	ü
Councillor Neghat Khan	ü
Councillor Pavlos Kotsonis	ü
Councillor Sam Lux	ü
Councillor Carole McCulloch	ü
Councillor Sulcan Mahmood	ü
Councillor AJ Matsiko	ü
Councillor David Mellen	ü
Councillor Sajid Mohammed	ü
Councillor Fozia Mubashar	ü
Councillor Nayab Patel	ü
Councillor Georgia Power	ü
Councillor Shuguftah Quddoos		ü
Councillor Ethan Radford	ü
Councillor Eunice Regan	ü
Councillor Samina Riaz	ü
Councillor Andrew Rule			ü
Councillor Naim Salim	ü
Councillor Michael Savage	ü
Councillor Matt Shannon	ü
Councillor Hayley Spain	ü
Councillor Adele Williams	ü
Councillor Linda Woodings	ü
Councillor Audra Wynter	ü

 

Resolved to:

1)  Robustness of Budget Estimates and Adequacy of Reserves

 

a.  Note the report in Appendix 1 to the report by the Section 151 Officer on the level of reserves and robustness of estimates in setting the budget as required by Section 25 of the Local Government Act 2003.

 

b.  Approve a one off contribution made into the General Fund balance of £9.560m as recommended by the Section 151 Officer, and in accordance with recommended guideline to transit the Council towards establishing a prudent balance commensurate to the revenue budget increase.

 

c.  Note the financial risks and pressures set out in the report under Section 17 and Appendix 1 and within the report to Executive Board on 13 February 2024.

 

d.  Note the policy on Financial Reserves adopted by Executive Board at its meeting on 13 February 2024 and the forecast General Fund balance and reserves for end of 31 March 2024 of:

·  General Fund balance £14.643m

·  Earmarked reserves £149.404m

 

2)  New Finance Instructions from the Improvement and Assurance Board with regards to the 2024/25 Budget

 

a.  Note the following additional statutory instructions from the Improvement and Assurance Board flowing directly from the existing instructions ‘2.1 Approval of wholly realistic plans and budgets’ and ‘2.2 Establish and maintain a sound and prudent reserves policy and practice’:

  i.  The Section 151 Officer, after consultation with the Chief Executive and fellow Corporate Directors, shall present his best professional view on a draft budget for 2024/25 in line with normally expected professional standards but which in particular maximises the level of savings options that Corporate Directors believe can be delivered and thus quantifies the minimum budget imbalance relying on the bid to Government for Exceptional Financial Support

  ii.  Subject only to any professionally required changes determined by the Section 151 Officer, the draft budget for 2024/25 as defined above, shall be presented and recommended to the Full budget setting Council meeting for its approval.

 

3)  General Fund Revenue Medium Term Financial Plan (MTFP) 2024/25 to 2027/28

 

a.  Approve total General Fund savings of £36.348m over the MTFP period 2024/25 to 2027/28, submitted as part of the 2024/25 budget review process.

 

b.  Note the ‘in principle’ confirmation from the Department of Levelling Up, Housing and Communities for awarding Exceptional Financial Support in the form of a capitalisation direction, up to £66.143m for 2023/24 and 2024/25.

 

c.  Approve the officer recommended budget with the 2024/25 budget gap of £41.024m to be funded from Exceptional Financial Support and with approval for officers to continue identifying savings throughout the year to reduce the in-year budget gap.

 

d.  Note that the Council has a budget gap of c£41m in 2024/25 and c£172m over the MTFP period.

 

e.  Approve the MTFP for 2024/25 to 2027/28 incorporating the revenue budget for 2024/25 with a net draft budget requirement of c£357m and the recommendations contained therein.

 

f.  Delegate authority to the Corporate Director for Finance and Resources (Section 151 Officer) and the Director of Finance (Deputy Section 151 Officer) to finalise the 2024/25 revenue budget.

 

g.  Note the delegated authority approved by Executive Board on 13 February 2024 to the Section 151 Officer to approve and make arrangements for processing of budget virements associated with allocation of expenditure and/or income included within the General Fund revenue budget for 2024/25.

 

h.  Authorise the Corporate Director and/or Director with responsibility for each proposal to:

  i.  carry out all steps required in relation to each proposal, including carrying out any further targeted consultations;

  ii.  consider any consultation outcomes and other detailed implications;

  iii.  complete and assess the implications of any updated equalities impact assessment required;

  iv.  following completion of h(i), h(ii) and h(iii) above:

1.  determine whether to amend any proposal prior to implementation;

2.  determine whether a further report needs to be considered by the Executive Board or the relevant officer or portfolio holder before a final decision is taken on implementation; and

3.  where a decision is taken not to proceed with any proposal then alternative proposal(s) will be brought forward for consideration.

 

i.  In relation to savings proposals that are significantly cross cutting across more than one service, authorise the Corporate Director or Director with primary responsibility for the savings proposal to complete any required equalities analysis assessments and to consider the outcome, and any other cross cutting implications, following consultation with the Corporate Directors or Directors of the other services significantly impacted by the proposals, prior to taking any decisions to implement such proposals.

 

j.  Note that in relation to 3h and 3i above, where appropriate, any key decisions will be brought back to Executive Board.

 

k.  Note the Fees and Charges Policy and Schedule, as approved by Executive Board on 13 February 2024.

 

l.  Note the planned expenditure of c£9m on transformation initiatives over the period 2024/25 and 2025/26 and c£43m associated delivery of transformation savings over the same period to be funded via application of capital receipts under the Council’s Flexible Use of Capital Receipts Policy.

 

4)  Capital Budget and Strategy

 

a.  Approve the Capital Strategy and its appendices, as set out in Appendix 6 of the report, including:

  i.  Voluntary Debt Reduction Policy;

  ii.  Flexible Use of Capital Receipt Policy;

  iii.  Non-Treasury Investment Strategy; and

  iv.  Updated prioritisation criteria for capital receipts

 

b.  Approve the Capital Programme of £832.532m and associated funding as set out in section 13 and Appendix 7 of the report, alongside the capital programme additions of £53.788m.

 

c.  Note the inclusion of Exceptional Financial Support of c£65m and associated funding within the capital budget.

 

d.  Delegate authority to the Corporate Director of Finance and Resources (Section 151 Officer) to finalise and amend (as necessary) the capital budget associated with the Exceptional Financial Support with overall budget to not exceed the value of Exceptional Financial Support award of £66.143m.

 

e.  Note the register of pipeline schemes and movements from Full Council in March 2023 as set out in Appendix 6.4.

 

5)  Treasury Management Strategy

 

a.  Approve the 2024/25 Treasury Management Strategy as set out in Appendix 8, including:

  i.  the approach to borrowing;

  ii.  Voluntary Debt Reduction Policy

  iii.  Treasury Investment Strategy; and

  iv.  Prudential indicators

 

b.  Approve the prudential indicators for the year 2024/25, in particular:

  i.  the authorised limit for borrowing of £940.2m which sets a statutory limit for borrowing that the Council cannot exceed in 2024/25; and

  ii.  the operational boundary for debt of £910.2m, a lower limit than the authorised boundary, which acts as an early warning mechanism for Council borrowing.

 

c.  Note the Council has repaid £58m of long term loans early during the year 2023/24, which has been authorised under the Section 151 Officer’s delegated treasury authority, and that details of this will be published in the Treasury Outturn 2023/24 report.

 

d.  Note the change to the scope of the Voluntary Debt Reduction Policy which has been broadened to allow for borrowing in exceptional financial circumstances for a short term period.

 

e.  Note that the Corporate Director of Finance and Resources (Section 151 Officer) will implement the Treasury Management Strategy and associated policies under existing officer delegated powers.

 

6)  2023/24 Annual Investment Strategy Revisions

 

a.  adopt the following revisions to the Annual Investment Strategy for 2023/24, as recommended by Executive Board on 21 November 2023:

  i.  increase to counterparty limits; and

  ii.  other technical changes.

 

7)  Council Tax Resolution

 

a.  Agree to the calculations as set out in tables 7a and 7b, paragraph 12.6 of the report for 2024/25 that have been prepared in accordance with Sections 31A and 31B of the amended Local Government Finance Act 1992 to determine the Council Tax Requirement and Council Tax for Band D.

 

b.  Note that the Corporate Director of Finance and Resources (Section 151 Officer) has calculated, under delegated authority, the amount of 69,075 as the Council Tax Base for 2024/25 in accordance with the Local Authorities (Calculation of Council Tax Base) (England) Regulations 2012.

 

c.  Approve an increase of 2% for the Social Care Precept and an increase of 2.99% of Council Tax in 2024/25.

 

d.  Approve a Council Tax requirement of £148,879,420 including the calculations required by Sections 30 to 36 of the Local Government Finance Act 1992 (“the Act”), as set out below:

 

  i.  £1,177,321,365 being the aggregate of the expenditure, allowances, reserves and amounts which the Council estimates for the items set out in Section 31A(2) (a) to (f) of the Act.

 

  ii.  £1,028,441,945 being the aggregate of the income and amounts which the Council estimates for the items set out in Section 31A(3) (a) to (d) of the Act.

 

  iii.  £148,879,420 being the amount by which the aggregate at 7d(i) above exceeds the aggregate at 7d(ii) above, calculated by the Council, in accordance with Section 31A(4) of the Act, as its council tax requirement for the year.

 

e.  Approve the Council’s element of the Band D basic amount of council tax for 2024/25 of £2,155.33, calculated by the Council, in accordance with Section 31B(1) of the Act, as the basic amount of its council tax for the year.

 

f.  Note a Nottinghamshire and City of Nottingham Fire and Rescue Authority precept at Band D for 2024/25 of £92.21.

 

g.  Note a Nottinghamshire Police and Crime Commissioner precept at Band D for 2024/25 of £282.15.

 

h.  Approve the setting of the amounts of council tax for 2024/25 at the levels below:

 

Band	City Council £	Police and Crime Commissioner £	Fire and Rescue Authority £	Aggregate Council Tax £
A	1,436.89	188.10	61.47	1,686.46
B	1,676.37	219.45	71.72	1,967.54
C	1,915.85	250.80	81.96	2,248.61
D	2,155.33	282.15	92.21	2,529.69
E	2,634.29	344.85	112.70	3,091.84
F	3,113.25	407.55	133.19	3,653.99
G	3,592.22	470.25	153.68	4,216.15
H	4,310.66	564.30	184.42	5,059.38

 

8)  Council Tax and Collection Fund

 

a.  Approve long term empty council tax premium charge to commence at 12 months ‘empty’ from 2024/25.

 

b.  Approve for the Council to levy a second home premium from 2025/26, as legislation requires it to be agreed one year in advance of implementation.

 

c.  Approve the continuation of the current Council Tax Support Scheme for 2024/25 and note a review of the Scheme is to be undertaken during 2024/25, with a view to implementing a new or revised scheme in 2025/26.

 

d.  Note the forecast Collection Fund position for 2023/24 as set out in Appendix 3.

 

9)  Budget Consultation

 

a.  Note the findings of the budget consultation and feedback from Corporate Scrutiny Committee in agreeing the 2024/25 Budget and Medium Term Financial Plan.

 

b.  Note that the insight and learning gained through the extensive consultation process will be used to inform the Equality Impact Assessments, design phase and/or mitigate impact where possible in the implementation of proposals.

 

c.  Note that additional and targeted consultation will be required on some of the proposals based on more detailed proposed delivery models.

 

10)Members Scheme for Allowances

 

a.  Approve continuation of the current Members’ Allowances Scheme for 2024/25 in the terms of the previously adopted and amended Scheme, except for any further adjustments required to mirror nationally determined rates for pay awards and travel and subsistence (as applicable to officers) and for carers allowances.