To approve the 2020/21 budget and associated medium term financial strategy and treasury management strategy.

Council considered a report from the Leader to set the 2020/21 budget and update the medium term financial strategy and treasury management strategy.

 

The cabinet member finance and corporate services introduced and moved the budget and explained that the administration had inherited a sound financial position and it was possible to set a balanced budget. The council tax precept increase was at a lower rate than it had been in the previous two years and the budget supported the priorities contained in the new county plan. The budget contained support for local business and education, including NMiTE, and incorporated plans to address challenges including the rising cost of services. The budget contained investment in social care for children and adults and the Talk Community initiative. The budget had been shaped by the public with extensive consultation and had been presented to each of the scrutiny committees twice.

 

The Leader seconded the budget and explained that the precept increase was prudent to enlarge the council tax base but it was regrettable that it was at a rate higher than inflation. There was a pressure on the budget from the increasing cost of looked after children. Headroom existed in the budget to support projects such as the superhubs and to address the climate emergency. The new homes bonus was being utilised to address the phosphate levels and support house building.

 

Councillor Jonathan Lester expressed support for the provision in the budget for key services and in particular the investment in legal and children’s services to enhance safeguarding. He expressed concern at the precept level. The strong financial position of the council undermined the proposal for a precept above the level of inflation.

 

Councillor John Hardwick explained that there had been full and thorough consultation on the budget. The proposals in the budget demonstrated the effective working arrangements that had been established by the alliance and reflected the priorities expressed by the electorate.

 

Councillor Alan Seldon explained that the budget was the culmination of significant work by the executive and reflected the manifesto commitments of It’s Our County. The proposals in the budget responded to the climate emergency and contained modern day thinking to address issues such as congestion in Hereford.  

 

Councillor Polly Andrews explained that the comments of her political group would be outlined during the debate.

 

Councillor Ellie Chowns explained that the budget was set in the context of: a lack of central government funding; the pressure on adult social care services caused by the demography of Herefordshire; and the increased need of children’s services caused by a lack of funding. Long term investment in services was proposed in the budget and the council tax precept was how the public collectively funded local services to protect vulnerable residents.

 

Councillor Bernard Hunt explained that in considering the proposed precept increase the demands on the resources of the council needed to be considered.

 

In discussion the following principal points were raised on the Cabinet’s budget:

 

·         The lobbying of central government was raised and the need to work with government to gain commitments and access funding.

·         The level of reserves was raised and the potential utilisation of reserves to remedy road defects.

·         The level of reserves was inherited from the previous administration of the council.

·         There was sympathy with local residents with respect to the precept increase but it was necessary to avoid a reduction in the level of services. The council tax reduction scheme would help those vulnerable local residents to manage the precept increase. If the council tax reduction scheme required a change to provide assistance to a wider range of local residents this could be considered.

·         The level of the precept was high and Herefordshire residents had been required to pay increased precepts over a number of years. Some residents would struggle to pay the precept even with the council tax reduction scheme in place.

 

Amendment 1 – Proposed by Councillor Nigel Shaw and seconded by Councillor Jonathan Lester - The proposed increase in council tax is reduced by 1% to 2.9%. The annual cost of this will be approximately £1m, the new homes bonus allocated in the government settlement of £2m will fund the reduction for the next two years.

 

Councillor Shaw proposed the budget amendment and explained that the proposed reduction in the precept did not reduce services. The shortfall created by the reduction would be met from the new homes bonus. There was concern at the effect the tax increase would have upon local residents and the amendment was intended to reduce the burden on council taxpayers. The money allocated to the phosphate issue could be allocated from an alternative source.

 

In discussion the following principal points were raised on amendment 1:

 

·         It was important that there was a budget to ensure that resources were in place to address the phosphate issue.

·         The previous administration had consistently increased the council tax precept.

·         Some members felt that any amendment which withdrew the money allocated to the phosphate issue could not be supported. It was recognised that the phosphate issue was significant and urgent.

·         It was noted that even with the support provided by the council tax reduction scheme some local residents would struggle to pay the precept increase. Some members felt that the amendment offered the opportunity to reduce the financial burden of the precept on those local residents least able to afford it without affecting the overall budget.

·         The allocation of funding to address the phosphate issue had only occurred at the end of January.

·         A change to the council tax reduction scheme could be considered to change the thresholds.

·         There was disappointment that the 3.9% increase was the only model considered in the budget.

·         There was concern that the reduced precept would reduce the funding available to adult social care.

 

Councillor Lester seconded the amendment and explained that the proposal increased the precept but not to the level in the Cabinet’s budget. The 3.9% placed an excessive burden on council taxpayers to provide for services; the amendment did not alter the budget or withdraw money from services but reduced the burden on the tax payer.

 

Councillor Harvey, as the mover of the original motion, responded to the amendment and explained that it was not supported as the allocation of the new homes bonus to the phosphate issue sought to address an existential threat which put development in the county at risk and increased the potential for predatory development if housing targets were not met. The amendment could not be supported as it was essential that work was undertaken with partners to address the issue which the allocation from the new homes bonus supported.

 

The amendment was put to the recorded vote and was lost by a simple majority.

 

For (18): Councillors Polly Andrews, Bartrum, Bolderson, Durkin, Gandy, Guthrie, , I’Anson, Johnson, Graham Jones, Lester, Millmore, Phillips, Rone, Shaw, Stark, Stone, Symonds and Tillett.

 

Against (29): Councillors Paul Andrews, Bartlett, Boulter, Bowes, Chowns, Crockett, Davies, Fagan, Foxton, Hardwick, Harrington, Harvey, Hewitt, Hey, Hitchiner, Hunt, Jinman, Mike Jones, Kenyon, Marsh, Milln, Norman, Price, Seldon, Summers, Toynbee, Tyler, Watson and Wilding.

 

Abstain (3): Bowen, Howells and Swinglehurst.

 

Councillor Shaw withdrew his second proposed budget amendment.

 

The budget and updated medium term financial strategy and treasury management strategy was put to the recorded vote and was approved by a simple majority.

 

For (31): Councillors Paul Andrews, Bartlett, Boulter, Bowen, Bowes, Chowns, Crockett, Davies, Fagan, Foxton, Hardwick, Harrington, Harvey, Hewitt, Hey, Hitchiner, Hunt, Jinman, Graham Jones, Mike Jones, Kenyon, Marsh, Milln, Norman, Price, Seldon, Summers, Toynbee, Tyler, Watson and Wilding.

 

Against (9): Councillors Bolderson, Durkin, Guthrie, Johnson, Lester, Millmore, Rone, Shaw and Tillett.

 

Abstain (10): Councillors Polly Andrews, Bartrum, Gandy, Howells, I’Anson, Phillips, Stark, Stone, Swinglehurst and Symonds.

 

RESOLVED:

 

That:

(a)       Council approves;

a.    the council tax base of 69,756.19 Band D equivalents in 2020/21

 

b.    an increase in core council tax in 2020/21 of 1.9%

 

c.    an additional precept in respect of adult social care costs of 2% applied to council tax in 2020/21 resulting in a total council tax increase of 3.9%; increasing the band D charge from £1,514.70 to £1,573.77 for Herefordshire Council in 2020/21;

 

d.    the balanced 2020/21 revenue budget proposal totalling £157.1m, subject to any amendments approved at the meeting, specifically the net spending limits for each directorate as at appendix 3

 

e.    delegates to the section 151 officer the power to make necessary changes to the budget arising from any variations in central government funding allocations via general reserves;

 

f.     the medium term financial strategy (MTFS) 2020-24 at appendix 1 be approved; and

 

g.    the treasury management strategy at appendix 4.

 

As an amendment was made by Council to the capital programme the Leader was asked whether he, on behalf of the Cabinet, accepted the amendment.

 

The Leader requested an adjournment to consult with his Cabinet.

 

The meeting adjourned at 3.48 p.m. and reconvened at 4.01 p.m.

 

The Leader indicated on behalf of the Cabinet that he accepted the amendment to the budget.