Agenda item

Draft Revenue Budget 2020/21 and Medium Term Financial Plan 2020/21 – 2024/25 and Draft Capital Programme 2020-2023

To consider a report from the Director of Finance (Section 151 Officer) (copy to follow)

 

 

Minutes:

The Deputy Leader presented a report from the Director of Finance which presented to Cabinet the Budget Proposal for 2020/21.

 

Cabinet was asked to consider the recommendations in making its Budget Proposal (Revenue and Capital) for Council to consider at its meeting on 13 February 2020.

 

The Budget Proposal had been prepared against a backdrop of continued uncertainty in public finances, increasing demand for key local services, and a lack of clarity from national government as to the future model for local government finance after 2020/21.

 

The Medium Term Financial Plan (MTFP) and the Council Plan demonstrated how the Council would align resources and priorities to deliver for the people of Cumbria.

 

The expected final year’s reduction to the Revenue Support Grant (RSG) was not included in the draft Local Government Finance Settlement with RSG continuing into 2020/21, or its equivalent it was assumed would continue throughout the period of the Medium Term Financial Plan.  The Council’s Revenue Support Grant in 2011/12 was £148million and in the 2020/21 Draft Settlement was £18.1million, a reduction of £129.9million. 

 

Cumbria County Council had so far saved £272million but based on current assumptions, there was still a further £44million to deliver over the next 3 years.  The Medium Term Financial Plan at Appendix A of the report, very clearly set out the financial environment within which the Council had to work and detailed how the £5.6million savings for 2020/21 would be made.

 

In the face of this sustained uncertainty Cumbria County Council was moving to a five year Medium Term Financial Plan as it was believed that this would bring a level of certainty and stability to the planning.  This five year plan starkly illustrated the challenges to be faced in the future and Cumbria County Council would join with all County Councils, of all political parties, in calling for government to push through a number of delayed reforms, including the Fair Funding Review, in order to secure a sustainable future.

 

It was thought that last year was the final year the Council could raise an Adult Social Care precept but this year the government had assumed that all Councils would again use the ‘flexibility’ to raise Council Tax by an additional 2% to be used on Adult Social Care. 

 

The Deputy Leader asked Cabinet to note that every 1% increase in Council Tax raised £2.3million so nowhere near enough to keep the Council funded in the future.  Cumbria County Council had therefore consulted on a General Council Tax rise of 1.99% and the 2% Adult Social Care Precept.  He asked Cabinet to consider carefully the 361 consultation responses received at Appendix B of the report.  Although this was a small number of respondents in relation to the population, only one third of respondents supported the proposed increase in Council Tax by 1.99%. The Deputy Leader asked Cabinet to be mindful of this when considering the budget to recommend to Council for Council to consider when it met on 13 February. 

 

Cumbria County Council had a significant, bold and ambitious Capital Programme of almost £286million from 2020 to 2025, with nearly £91million of that earmarked for year one. 

 

RESOLVED, that Cabinet

 

(1) Note the response to the Budget consultation set out in Appendix B and the advice of the Chief Executive;

(2) RECOMMEND to Council the general increase of Council Tax by 1.99% for 2020/21 as assumed in the current MTFP;

(3) RECOMMEND to Council the additional precept for Adult Social Care of 2.00% for 2020/21 as assumed in the current MTFP;

(4) Cabinet RECOMMEND the following to Council:-

 

a)       The draft Net Revenue Budget Requirement for 2020/21 of £408.113m;

b)       The Council Tax Requirement for 2020/21 of £248.146m which results in the precepts on the Districts as set out in Table 2.

 

Table 2: Precept (estimates)

£

Allerdale

44,568,665

Barrow

28,373,169

Carlisle

49,202,701

Copeland

29,881,133

Eden

29,965,550

South Lakeland

66,154,980

TOTAL

248,146,198

 

(c)   The following levels of Council tax for each property band as set out below

 

Table 3a – Council Tax Levels

2019/20

£

2020/21

£

Increase PA

£

Band A (up to £40,000)

923.52

960.37

36.85

 

Band B (£40,001 to £52,000)

1,077.44

 

 

1,120.44

43.00

Band C (£52,001 to £68,000

1,231.36

 

 

1,280.49

49.13

Band D (£68,001 to £88,000)

1,385.28

 

1,440.56

55.28

Band E (£88,0001 to £120,000)

1,693.12

 

1,760.68

 

67.56

Band F (£120,001 to £160,000)

2,000.96

 

 

2,080.81

79.85

Band G (£160,0001 to £320,000)

2,308.80

2,400.93

92.13

 

Band H (£320,0001 and over)

2,770.56

2,881.12

 

110.56

 

Representing

 

Table 3b – Council Tax Levels

2019/20

Total £

2020/21

Core Spending 1.99% Increase

£

2020/21

Adult Social Care Precept

2.00% Increase

£

2020/221

Total

£

Band A (up to £40,000)

923.52

18.38

18.47

960.37

Band B (£40,001 to £52,000)

1077.44

21.45

21.55

1120.44

Band C (£52,001 to £68,000

1231.36

24.51

24.62

1280.49

Band D (£68,001 to £88,000)

1385.28

27.57

27.71

1440.56

Band E (£88,0001 to £120,000)

1693.12

33.69

33.87

176.68

Band F (£120,001 to £160,000)

2000.96

39.83

40.02

2080.81

Band G (£160,0001 to £320,000)

2308.80

45.95

46.18

2400.93

Band H (£320,0001 and over)

2770.56

55.14

55.42

2881.12

 

(5) RECOMMEND to Council in respect of the Revenue budget:-

 

a) The draft Medium Term Financial Plan 2020-2025 (Appendix A).

b) The School’s Budget for 2020/21 of £264.253m.

c) The use of reserves and levels of forecast reserves contained in the MTFP (Appendix A).

d) The fees and charges schedule for 2020/21 as set out in Appendix C.

e) The adoption and publication of the statutory Pay Policy Statement 2020/21 set out in Appendix F. This includes setting the minimum hourly rate at the UK Living Wage (as set by the Living Wage Foundation).

 

(6) RECOMMEND to Council in respect of the capital budget:-

 

a) A virement of £0.952m within 2019/20 from Enterprise Schemes to the Co-located Emergency Response Centre – Ulverston as detailed in paragraph 117.

b) The draft Capital Budget for 2020/21 of £90.894m, set within the rolling programme of £286.379m (2020 - 2025) as set out in Appendix A.

c) The capital strategy as set out in Appendix G.

 

(7) RECOMMEND to Council the approval of the Treasury Management Strategy 2020/21 as set out in Appendix D, specifically the:-

 

a) Treasury Management Strategy (Section 2) (including the borrowing strategy is set out in Section 2.4).

b) Annual Investment Strategy Statement (Section 3).

c) Prudential Indicators (Section 4).

d) Minimum Revenue Provision (MRP) Policy Statement (Section 5).

 

(8)  Final Business Rates figures are still to be received and it is proposed that any necessary revisions to the Draft Budget and Medium Term Financial Plan (2020-2025) and Capital Programme (2020-2025) between the Cabinet meeting at which this report is considered and the Council meeting of 13th February 2020 will be delegated to the Director of Finance (Section 151 Officer) in consultation with the Leader and Deputy Leader of the Council.

 

Supporting documents: