To agree the draft 2020/21 budget and associated medium term financial strategy and treasury management strategy for recommendation to Council on 14 February.

The cabinet member finance and corporate services introduced the report. Key highlights were noted as:

·         The proposed budget took into account the local government financial settlement, revenue support grant funding of £0.6m and hew homes bonus grant of £2.2m;

·         It was proposed that the new homes bonus one off funding be used to assist in the delivery of housing, including addressing the phosphate issues that were holding back housing development;

·         Herefordshire had risen to the challenge of reducing central grants in recent years coupled with rising demands and costs in adult and children’s social care, which now comprised around 80% of the council’s total budget;

·         A balanced budget had been achieved with a proposed 2% council tax increase ring fenced for adult social care and a further 1.9% for other services;

·         The total council tax increase of 3.9% was reluctantly recommended in order to maintain the councils statutory services and continue non-statutory services which were valued, the increase would equate to £1.14 per week on a band D  property;

·         The council tax reduction scheme would support those households who were struggling and some residents such as care leavers would pay no council tax at all.

Cabinet members thanked officers for their work in preparing the budget documents. In discussion of the report it was noted that a more detailed breakdown of the budget by directorate at appendix 3 would be included in the report to council so that it could be more readily matched to the till receipt presentation.

The following amendments were proposed:

Allocation of £200k from the public health ring fenced grant as the council’s contribution towards the Hereford Cycling Circuit. Councillor Kenyon was commended for championing this project which would increase participation for cycle users including use of adaptive cycles and have benefits for both physical and mental health. With the addition of this funding, the project had only a small gap left to close to achieve full funding. The chief finance officer confirmed that he had discussed the allocation with the director of public health and the director for adults and wellbeing and that he was content with the proposed amendment. (Proposed by cabinet member health and adult wellbeing, seconded by cabinet member commissioning, procurement and assets.)

To create a new earmarked reserve for climate change action. It was noted that the action plan had not yet been published but was close to coming forward. It was recognised that having a reserve in place would allow the council to fund initiatives to take forward actions identified in the plan. The chief finance officer confirmed that he was content with this proposal. (Proposed by cabinet member finance and corporate services, seconded by cabinet member environment, economy and skills.)

Group leaders were invited to express the views of their group. Points noted included:

·         Additional funding for children’s services and for vulnerable adults was welcomed;

·         Concern that the additional income from the council tax increase would be used up in paying for the review of the transport packages and covering the cost of recoupment of fund by the LEP;

·         Concern that many care providers were experiencing difficulties and that future lack of accommodation capacity might increase the number of people being sent out of the county, investment in this areas was welcomed;

·         The allocation of funding to the cycle track development was welcomed as it was felt that the track would be of great benefit.

It was agreed that:

That:

(a)          the following be recommended to Council;

a.       the council tax base of 69,756.19 Band D equivalents;

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.       delegation to the section 151 officer of 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 be approved.

(b)          the responses to scrutiny committee’s recommendations as provided in paragraph 63 be approved;

(c)          up to £200k of the public health grant be ring fenced as the council contribution toward the provision of the Hereford City Cycle Track; and

(d)          a new earmarked reserve be created to support activities related to climate change.