Agenda item

Draft Revenue Budget 2020/21 and Medium Term Financial Plan (2020-2025) and Draft Capital Programme (2020-2025)

To consider a report from the Deputy Leader/Cabinet Member for Finance (copy enclosed)

 

 

Minutes:

The Deputy Leader presented the Revenue Budget 2020/21 and Medium Term Financial Plan 2020-2025 and Draft Capital Programme 2020 – 2025 which advised that on 30 January 2020, Cabinet had agreed the budget proposal for recommendation to Council after consideration of the budget consultation process and that Council was asked to agree the recommendations as set out in Section 1 of the Report.

 

A copy of the Constitution Part 5F - Procedure for Budget Debate at Council was circulated to all members of the Council. It was clarified that proposed amendments to the budget are called “objections” in law and the Constitution referred to the same.  However, the Chairman notified members that to keep things simple during the debate these would be referred to as ‘amendments’. 

 

The Deputy Leader said the budget proposal had been prepared against a backdrop of continued uncertainty with public finances.  Over the period 2011-2020 the Council had agreed savings of £272.2m.  This report sets out the requirement for 2020-2025 which amounted to a further £44.0m.

 

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.  However, the Deputy Leader reminded Council that the Spending Round announced in September by the Chancellor was a one year announcement for 2020/21 only, and that the 2019 Spending Review had been postponed until 2020. 

 

In addition, the Fair Funding Review and Business Rates Retention Reform both due to be implemented in 2020/21 had also been postponed until 2021/22.  It was expected that these changes to local government funding would change the level of funding received by county councils with Cumbria's share of the new level of government funding unlikely to be known until at least the summer of 2020.  The Deputy Leader said planning beyond 2021 was therefore, very challenging.

 

With the ever increasing pressures to support older people, adults and children with disabilities and vulnerable children and families the County Council continued to work to promote independence and support communities to flourish.  Central to this was enabling people to have independent lives, supporting families to stay together safely and ensuring resources were targeted to the most vulnerable members of communities. The plan for 2020 onwards would be to increase the focus on early help to individuals and communities and alongside partners to support real change and resilience in communities.

 

The Budget Proposal set out in this report secured a balanced revenue budget for 2020/21. The proposal assumed:-

 

·      Increase in General Council Tax of 1.99%;

·      An additional Precept of 2% on Council Tax for Adult Social Care purposes;

·      Increases in Fees and Charges as set out in the Fees and Charges Schedule (Appendix C);

·      New savings from 1st April 2020 which will reduce the Revenue Budget by £5.646m;

·      The Capital Programme is financed as set out in the report;

·      Business Rates are confirmed by District Councils and are consistent with planning assumptions; and

·      The Treasury Management Strategy is agreed as set out (Appendix D).

The Deputy Leader commented that the Government allowed those councils with Adult Social Care (ASC) responsibilities to introduce a 2% precept on Council Tax for the financial year 2016/17, which recognised the increasing cost pressures upon councils in relation to provision of adult social care. The Council implemented the 2% Adult Social Care precept for 2016/17, and this had continued in the intervening period.

 

The Spending Round 2019 assumed that councils would levy the precept in 2020/21. This proposal presented to Council included an ASC precept at 2%. Beyond 2021, in the absence of government announcements, no further ASC precept was assumed.

 

In considering the Revenue Budget for 2020/21 the formal consultation document was launched at the 14 November 2019 Cabinet and closed on the 6 January 2020. 

 

Appendix B of the report set out the feedback from the consultation. Members’ consideration of this feedback was required before agreeing the budget.  The Deputy Leader asked members to ensure that they had appraised themselves of the outcome of consultation. Copies of the full consultation responses had been made available to Members through their Group offices.

 

The Deputy Leader pointed out that the consultation was not designed to be a statistically representative sample of public opinion in Cumbria but a gauge of the opinions of those people and organisations that had chosen to participate in the process.  Overall 34% of respondents supported the 1.99% general Council Tax income increase.

 

The Council needed to continue to invest in infrastructure and assets to be able to deliver local services and support inclusive economic growth.  The draft Capital Programme for 2020/21, excluding Accountable Bodies, was £90.894m.  Included in the draft programme 2020/21 – 2024/25 was £38.415m of new schemes proposed in this report.  Alongside other proposed amendments and re-profiling of already approved schemes the overall Capital Programme was proposed at £286.379m over the five years 2020/21 – 2024/25.

 

The draft Net Revenue Budget for 2020/21 was £408.225m.  The Gross Budget for Cumbria County Council was £882.003m, which included the earmarked Dedicated Schools Grant to non-Academy Schools in Cumbria of £264.253m excluding the Schools Budget the forecast total expenditure on Council services in 2020/21 was £617.750m. This represented a continuing and significant investment in local public services.

 

An addendum had been issued to all members which gave an update on the recently published outcomes of consultation from the Department of Education (DfE), which clarified the ring-fenced status of the Dedicated Schools Grant, and in particular, deficits in relation to the high needs element of the grant. 

 

The Deputy Leader reported that to date there had been no further announcements of grant notifications from Central Government.  Final Council Tax estimates for 2020-21 had been received from all of the District Councils, and the budget had been revised to take account of this information, which had resulted in £0.112m additional income.

 

Final Business Rates estimates for 2020-21, had been received from some of the District Councils, but not all. Therefore the Budget had not been revised to take account of this information.

 

In determining the gross budget for the Council estimated income from specific grants and fees and charges were included. This supported expenditure on services.  The recommended fees and charges increases for 2020/21 were set out in this report at Appendix C. 

 

The Deputy Leader reminded members that schools expenditure was funded from a Dedicated Schools Grant (DSG).  The 2020/21 Schools’ Funding Settlement was announced on 19 December 2019 which gave a provisional figure for DSG of £382.632m for Cumbria for 2020/21.  Of this £264.253m was estimated to be for County Council maintained schools, with £118.380m estimated to fund academies directly, this compares to £251.248m for County Council schools and £105.141m for academies in 2019/20.  The grant allocation would be updated in July 2020 to reflect the January 2020 early years census.

 

Funding of the capital maintenance of schools was part funded through revenue contributions to capital from the Dedicated Schools Grant.  For 2020/21 this contribution was expected to be £0.500m with an additional £0.500m revenue contribution allocated from Property.

 

The Deputy Leader referred members to the approval of a Treasury Management Strategy, which was a statutory requirement for every Council. Councils were required to demonstrate that capital investment plans are affordable, prudent and sustainable.

 

The Treasury Management Strategy at Appendix D of the report met this requirement and was developed in accordance with the Prudential Code and the Treasury Management Code published by CIPFA.   The development of the Treasury Management Strategy 2020/21 was considered comprehensively by the Audit and Assurance Committee at its meeting on the 9th December 2019.

 

Appendix F of the report set out the Council’s Pay Policy Statement for 2020/21. The purpose of the statement was to provide transparency with regard to the Council’s approach to setting the pay of its employees (excluding teaching staff working in local authority schools) by identifying.

 

The Deputy Leader commended the budget to Council.

 

The Leader seconded the report and reserved his right to speak. 

 

The Leader of the Oppositions rose to say he did not support this budget.  He felt the County Council needed to develop a much more robust invest to save initiative.  He had raised concerns last year about the County Council’s failure to deliver the Blue Light Hub Project, which had still not been delivered.

 

The Leader of the Opposition was disappointed to see that Cabinet had proposed that £4.5m, rising to £22m over the next 4 years, be set aside for the Brexit potential inflation pressures.   The Leader of the Opposition felt this money could be better used, in a more positive way, to provide services for the residents of Cumbria.

 

He therefore proposed an amendment to the budget proposals, which was one amendment with three parts.  These three parts related to transport, highways and children’s services. 

 

The proposals set out to support parish, town and community groups to enhance the highways service by employing lengthsmen to work proactively on the ground, additional monies for local committees to support local transport solutions including much greener, cleaner ways to travel, and monies allocated to help recognise the contribution made by third sector organisations who can provide valuable support for families, reducing the need for intervention by social workers.

 

He had asked the Deputy Leader of the Opposition to outline the details of the amendments, and he commended the amendment to Council.

 

The Deputy Leader of the Opposition rose to second the amendment, and detailed the proposal to members.

 

The Conservative Group was proposing a more proactive approach to addressing those council responsibilities that were the key priorities of the people that members represented.  Transport and accessibility were key themes across Local Committee area plans, although the needs were very different in each area, reflecting the different senses of place.

 

Effective local transport systems were essential to help residents to access the employment, training and leisure opportunities available to enhance their quality of life and fulfil their ambitions, as well as accessing vital services such as healthcare.  Transport solutions could also play an important role in reducing social isolation and maintaining social connections between communities.  The Conservative proposal was to invest £1.2m via our Local Committees to give them the flexibility to develop a wider range of innovative, cost effective, demand led transport solutions to sit alongside the current community transport options and support and complement the possibilities opened up by the Government’s recently announced additional £380,000 for Cumbria.

 

The second part of the Conservative proposed amendment, was related to highways.  The current administration had already recognised the valuable role played by local communities in looking after their local environments by carrying out a diverse range of minor highways functions, but it was recognised at the time that any such work would need to be carried out under legally binding agreements for mutual protection. 

 

The Conservatives wholeheartedly agree with this and recognised and valued the energy and enthusiasm of local communities and their appetite for carrying out local improvements in support of our highways teams.  Now that the Working Together team was established, the amendment proposed to invest £600k via Local Committees to empower Town and Parish Councils and other constituted community groups to do exactly that, with the full backing of the council through the Working Together agreements.

 

The third element of the proposed amendment presented different and fresh approaches to managing demand within Children’s Services.  The council could not do this on its own, but there were a number of established, local, third sector organisations with the expertise and experience to deliver effective home based, wrap around support for families, importantly outside of, but alongside and in addition to the statutory services.  The amendment proposed an investment of £500k in the development of a countywide accredited volunteer support service to help vulnerable families in exactly this way. 

 

This amendment had been designed to ensure the council fulfilled its obligations to localism by working in partnership with its communities.  It would enable the council to become outward looking in its problem solving, harnessing the strengths of already established resources to deliver common outcomes in a truly collaborative and integrated way.   The Deputy Leader commended the amendments to Council.

 

The amendments were circulated and the meeting was adjourned for Groups to consider the proposals.

 

Meeting adjourned at 11.30am, and then broke for lunch at 12.30pm.  The meeting reconvened at 13.10pm.

 

Mr H Graham did not return to the meeting after the lunch break.

 

The Monitoring Officer informed members that a query had been raised in respect of the amendment moved today and, in particular, whether it complied with the respective roles and responsibilities of Council and Cabinet.

 

Agreement between the three main political groups had been reached that the amendment as moved could stand.  However, the Monitoring Officer clarified for members exactly what the amendment would mean.  The amendment as moved would allocate extra resources to local committees and the people directorate budget.  These amendments were set out in Appendix 1 of the amendment and dealt with the ‘top line budgets’.

 

It would be for Cabinet to agree the allocations to individual local committees therefore please note that whilst Appendix 3 sets out the reasoning for the Conservatives proposal, if the amendment was successful, Cabinet would determine the specific allocations as part of their responsibilities for implementing the budget. 

 

Mr Betton commented to say that two thirds of the public - 65% had responded with a strong message that they had clearly had enough of year on year rises in Council tax.  He was against the proposal of a 2% levy for Adult Social Care.  Last year he had submitted a motion to Council about this and his views on this had not changed. He would therefore be voting against the budget proposals. 

 

Mr Lamb was supporting the amendment from the Conservative Group, especially the proposals for local community transport schemes, and the re-introduction of the lengthsman scheme, which he felt would empower local communities to look for innovative ways to deliver much needed front line services.

 

Mr Markley commented that the demise of the bus services for rural areas was a big issue for Cumbria, but it would be very difficult to establish a commercially driven and effective solution to this.  The proposed budget amendment would empower local communities to look at innovative solutions to this, but it would also require funding from Government to allow this to happen.

 

Mr S Collins left the meeting at this point.

 

Mr Connell agreed that the issues for local transport schemes and ways of resolving the problems were required, but this needed to be done in a holistic way across the whole of Cumbria.  He did not think that allocating funding for a single year only would address the issue.

 

Lord Liddle said councils were living through a period of uncertainty, and he felt that the introduction of a 5 year budget plan was good practice.  There was also a further period of uncertainty about Brexit and the effect this may have on the British economy.  Lord Liddle felt the most significant element of Brexit would be the end of free movement in the labour market.

 

Mr Dew supported the amendment and he questioned why cabinet, on page 91 of the papers, was so against taking commercial activities as a way to raise additional funding.

 

Mr Ellis commented that although Cabinet had chosen to set aside £4.5m of money, for the Brexit potential inflation pressures, and the assumption of high levels of inflation, this was not supported by the Bank of England.  He also felt the setting aside of money for pooled business rates and retained business rates was over cautious. 

 

Mr Hughes said there was not enough detail in the amendment about the proposal for transport, and the additional funds for local committees.  He did not feel giving the same amount of money to all local committees would be the answer, as the needs in each area were all different.  Therefore, he would not support the proposed amendment.

 

Mr Little made reference to the proposals in the budget amendment to re-establish the lengthsman scheme.  Recently, the Working Together Project team had been in contact with over 300 parish councils to talk to them about partnership working and the possibility of the parish and town councils undertaking simple work on behalf of the County Council.  However, he reminded members that highways maintenance was not a parish council function.

 

Mr T Allison left the meeting at this point.

 

Mrs Burns rose in support of the substantive budget proposal.  She reminded members that the parts of England with the highest levels of deprivation had suffered the biggest austerity cuts.  There was an ever increasing number of children living in poverty in the UK, and in many of these places the parents were actually in employment, but could still not afford to live. 

 

Mr Young exercised his right of reply, saying he welcomed the fact that the conservatives supported the budget, apart from the three elements on the amendment. 

 

Mr Young did not feel the figure set aside to deal with the Brexit potential inflation pressures was an unreasonable amount.  Although the withdrawal agreement had been signed Britain did not have an agreed deal, which could mean a rise in inflation.  The basis of the substantive motion was prudent and careful budget management.

 

Mr Young commented that he did not think any of the suggested amendments in the proposed amendment were new ideas.  The County Council had devolved an additional £3m to local committees this year, and the additional £500,000 in the proposed amendment would not address the issues with highways maintenance.

 

With reference to the transport proposal in the amendment Mr Young said the County Council would make use of additional funding allocated from Government.  However, the proposal in the amendment for one year funding only would have little effect on the bus services in Cumbria.  It would need to be longer term funding to make any real difference.

 

The Deputy Leader then exercised his right of reply. 

 

He challenged Mr Betton about his lack of support for either budget proposal, which he felt to be unjust.

 

With reference to the question from Mr Dew about the possibility of the County Council branching into commercialism, he felt this was not without risk and had concerns that this could go drastically wrong.

 

Mr Thornton then challenged all opposition members to lobby their Government for additional funding for Cumbria.

 

The amendment was put to the vote and, as required by the regulations, a recorded vote was taken.  Members voted as follows:

 

For

Against

Abstain

Absent

Mr J Airey

Mr A Barry

 

Mr T Allison

Mr M Barbour

Mr J Bell

 

Mr S Collins

Mr B Berry

Mrs P Bell

 

Miss H Fearon

Mr R Bingham

Mr R Betton

 

Mr H Graham

Mr J Bland

Mrs C Bowditch

 

Mr W Graham

Mr A Bowness

Mrs A Burns

 

Mrs E Mallinson

Mr M Brereton

Mr F Cassidy

 

Mr J Mallinson

Mrs H Carrick

Mr W Clark

 

Mr S Stoddart

Mr P Dew

Mr A Connell

 

Mr T Wentworth Waites

Mr G Ellis

Mr G Cook

 

Mr R Worthington

Mr D English

Mr N Cotton

 

 

Mr L Fisher

Mrs C Driver

 

 

Mr D Gawne

Ms D Earl

 

 

Dr S Haraldsen

Mrs S Evans

 

 

Mr K Hitchen

Mrs B Gray

 

 

Mr M Johnson

Mr K Hamilton

 

 

Mr A Kennon

Mrs R Hanson

 

 

Mr A Lamb

Mr M Hawkins

 

 

Mr J Lister

Mr C Hogg

 

 

Mr A Markley

Mr J Holliday

 

 

Mr N Marriner

Mr N Hughes

 

 

Mr G Roberts

Lord R Liddle

 

 

Mr B Shirley

Mr K Little

 

 

Mrs V Tarbitt

Dr K Lockney

 

 

Mr P Turner

Mr T Lywood

 

 

Mr W Wearing

Mrs C McCarron- Holmes

 

 

Mr D Whipp

Mr W McEwan

 

 

Mr C Whiteside

Mr A McGuckin

 

 

Mr S Wielkopolski

Mr P McSweeney

 

 

Mr D Wilson

Mr F Morgan

 

 

Mr A Wonnacott

Mrs M Rae

 

 

 

Mrs S Sanderson

 

 

 

Mr D Southard

 

 

 

Mr P Thornton

 

 

 

Mrs C Tibble

 

 

 

Mrs H Wall

 

 

 

Mr R Watson

 

 

 

Mr C Weber

 

 

 

Mrs E Williamson

 

 

 

Mrs J Willis

 

 

 

Mr M Wilson

 

 

 

Mr  M Worth

 

 

 

Mr S Young

 

 

 

 

 

 

Total - 31

Total - 43

Total - 0

Total - 10

 

With 31 in favour, 43 against, no abstentions and 10 absent, the Chairman declared the amendment LOST.

 

The meeting then adjourned at 3.20pm, and reconvened at 3.20pm.

 

Following the adjournment a vote was then undertaken on the Substantive Motion and as required, a recorded vote was undertaken with members voting as follows:

 

For

Against

Abstain

Absent

Mr A Barry

Mr J Airey

 

Mr T Allison

Mr J Bell

Mr M Barbour

 

Mr S Collins

Mrs P Bell

Mr B Berry

 

Miss H Fearon

Mrs C Bowditch

Mr R Betton

 

Mr H Graham

Mrs A Burns

Mr R Bingham

 

Mr W Graham

Mr F Cassidy

Mr J Bland

 

Mrs E Mallinson

Mr W Clark

Mr A Bowness

 

Mr J Mallinson

Mr A Connell

Mr M Brereton

 

Mr S Stoddart

Mr G Cook

Mrs H Carrick

 

Mr T Wentworth Waites

Mr N Cotton

Mr P Dew

 

Mr R Worthington

Mrs C Driver

Mr G Ellis

 

 

Ms D Earl

Mr D English

 

 

Mrs S Evans

Mr L Fisher

 

 

Mrs B Gray

Mr D Gawne

 

 

Mr K Hamilton

Dr S Haraldsen

 

 

Mrs R Hanson

Mr K Hitchen

 

 

Mr M Hawkins

Mr M Johnson

 

 

Mr C Hogg

Mr A Kennon

 

 

Mr J Holliday

Mr A Lamb

 

 

Mr N Hughes

Mr J Lister

 

 

Lord R Liddle

Mr A Markley

 

 

Mr K Little

Mr N Marriner

 

 

Dr K Lockney

Mr G Roberts

 

 

Mr T Lywood

Mr B Shirley

 

 

Mrs C McCarron- Holmes

Mrs V Tarbitt

 

 

Mr W McEwan

Mr P Turner

 

 

Mr A McGuckin

Mr WJ Wearing

 

 

Mr P McSweeney

Mr D Whipp

 

 

Mr F Morgan

Mr C Whiteside

 

 

Mrs M Rae

Mr S Wielkopolski

 

 

Mrs S Sanderson

Mr D Wilson

 

 

Mr D Southard

Mr A Wonnacott

 

 

Mr P Thornton

 

 

 

Mrs C Tibble

 

 

 

Mrs H Wall

 

 

 

Mr R Watson

 

 

 

Mr C Weber

 

 

 

Mrs E Williamson

 

 

 

Mrs J Willis

 

 

 

Mr M Wilson

 

 

 

Mr M Worth

 

 

 

Mr S Young

 

 

 

 

 

 

 

Total - 42

Total - 32

Total - 0

Total - 10

 

With 42 members voting in favour, 32 against and 10 absent, the Chairman declared the motion CARRIED, and it was

 

RESOLVED that

 

(1)      Council agrees to a general increase of Council Tax by 1.99% for 2020/21.  Council agrees to the additional increase to the precept for Adult Social Care of 2.00% for 2020/21; which would result in:-

a)      The net revenue budget requirement for 2020/21 of £408.225m.

b)      The Council Tax Requirement for 2020/21 of £248.347m which results in the precepts on the Districts as set out below:-

 

Table 1 : Precepts

£

Allerdale

44,520,838

Barrow

28,423,459

Carlisle

49,654,101

Copeland

30,018,404

Eden

29,879,303

South Lakeland

65,851,066

Total

248,347,171

 

c)      The following levels of Council Tax for each property band as set out overleaf:-

 

Table 2a :

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 (£88,001 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 (£160,001 to £320,000)

2,308.80

2,400.93

92.13

Band H (£320,001 and over)

2,770.56

2,881.12

110.56

 

Representing

 

2019/20

2020/21

Table 2b : Council Tax Levels

Total £

Core Spending 1.99% Increase £

Adult Social Care Precept 2.00 % increase

Total £

Band A (up to £40,000)

923.52

18.38

18.47

960.37

Band B (£40,001 to £52,000)

1,077.44

21.45

21.55

1,120.44

Band C (£52,001 to £68,000)

1,231.36

24.51

24.62

1,280.49

Band D (£68,001 to £88,000)

1,385.28

27.57

27.71

1,440.56

Band E (£88,001 to £120,000)

1,693.12

33.69

33.87

1,760.68

Band F (£120,001 to £160,000)

2,000.96

39.83

40.02

2,080.81

Band G (£160,001 to £320,000)

2,308.80

45.95

46.18

2,400.93

Band H (£320,001 and over)

2,770.56

55.14

55.42

2,881.12

 

(3)     Council agrees the budget proposals as set out in the report and detailed in the Medium Term Financial Plan 2020-2025 (Appendix A) resulting in the 2020/21 Revenue Budget which includes the following:-

 

a)      The 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.

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)

 

(4)     Council agrees the budget proposals as set out in the report and detailed in the Medium Term Financial Plan 2020-2025 (Appendix A) resulting in the Capital Budget which includes the following:-

 

a)      A virement of £0.952m within 2019/20 from Enterprise Schemes to the Co-located Emergency Response Centre – Ulverston as detailed in paragraph 7.17

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

 

(5)     Council agrees the Capital Strategy as set out in Appendix G;

 

(6)     Council agrees the Treasury Management Strategy for 2020/21 which is 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).

 

(7)     Council approves the transfer of net increases / decreases to Sources of Finance confirmed after the 4th February 2020 to the Council’s Volatility Reserve.

 

Supporting documents: