To approve the 2021/22 budget and associated medium term financial strategy and treasury management strategy.

Council considered a report from the Leader to set the 2021/22 budget.

 

The cabinet member finance and corporate services introduced and moved the budget and explained that the budget reflected the challenges presented by the COVID pandemic. The budget needed to plan for an uplift in service delivery and a reduction in income; it proposed the largest savings programme to be undertaken at the council. Pressures involved in the delivery of adults social care services had informed the decision to propose a precept of 4.99% including 3% in respect of adult social care. A wide-ranging consultation had been undertaken and support had been expressed to increase council tax to support the provision of local services.

 

The Leader seconded the budget and explained the significant increases to the base budgets for adults’ and children’s services. The council tax increase was proposed reluctantly at what was a difficult time but the increase would allow for: the expansion of the tax base; an increase in support for people unable to pay council tax; and the council to take advantage of government grants. The budget that was proposed was a balance between savings, the preservation of services and a council tax increase.

 

Councillor Jonathan Lester expressed concern regarding the deliverability of the savings proposals and acknowledged the strain on resources due to the COVID pandemic. The precept increase was not supported and an amendment would be considered to reduce the level of the adult social care precept by using the New Homes Bonus.

 

Councillor John Hardwick explained that the budget supported the County Plan and if the precept of 4.99% was not agreed it would be difficult to access additional funding from government. The consultation had engaged with stakeholders, parish councils and the scrutiny committees.

 

Councillor Alan Seldon explained that the savings proposed were part of a high level of savings across the public sector and the additional pressures posed by adults’ and children’s services were significant and could impact upon the delivery of other core services.

 

Councillor Terry James explained that the proposed increase in the rate of council tax was too high and would have an adverse impact upon local residents who were just outside the thresholds for the council tax reduction scheme. Reserves should be used in place of the proposed increase to the precept.

 

Councillor Ellie Chowns explained that the council was facing significant increase in the level of demand for services. Savings and the precept increase would meet the cost of this demand whilst support for people who were struggling and unable to afford the council tax was in place.

 

Councillor Bob Matthews explained that the precept increase would affect rural communities with greater levels of poverty. Parish councils were expected to provide more services and there was concern about reduced street lighting levels.

 

In the discussion that followed the principal points below were raised:

 

·         The precept would impact on local residents who were financially insecure;

·         The increasing cost of adult social care;

·         The work of the Adults’ and Communities directorate and the Talk Community programme;

·         Income from the rural sparsity grant and the pressures of providing services in a rural area;

·         The loss of income for local residents and redundancies;

·         A typographical error under paragraph 5 of the medium term financial strategy which stated the current financial year: 2020/21;

·         The requirement for efficiency savings in the budget;

·         Community support for priorities including the construction of affordable housing and the provision of care for vulnerable residents;

·         The increase in costs to deliver children’s services and the improvement programmes currently in progress;

·         The reductions in grants from central government to local government;

·         Alternative methods to fund services which could be considered in preference to an increase in the precept.

 

Amendment 1 – Proposed by Councillor Nigel Shaw and seconded by Councillor Jonathan Lester

 

Replace word(s) in paragraph c of the Recommendations (the Motion) with the following’:-

 

c)         an additional precept in respect of adult social care costs of 2%          applied to council tax in 2021/22 resulting in a total council tax      increase of 3.99%, increasing the band D charge from £1,573.77 to   £1,636.57 for Herefordshire Council in 2021/22;   deferring a 1%           increase until 2022/23 in line with government policy.

 

Councillor Shaw proposed the budget amendment and explained that despite the council tax reduction scheme a number of local residents would have to economise to pay the proposed precept of 4.99%. The decrease of 1% would help local residents who were struggling to meet their council tax obligations. By reducing the precept to 3.99% and deferring 1% until 2022/23 the council would send a signal to local residents that it was listening and responding to difficulties encountered by local communities due to the COVID pandemic.

 

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

 

·         Extra investment had been dedicated to help local residents who were struggling to pay council tax;

·         During the consultation there had been support for the proposed precept of 4.99%;

·         The proposals to reduce the adult social care precept should have been considered at scrutiny;

·         Central government should be funding the council to meet the cost of the response to COVID;

·         The impact of the proposal on sustainable transport plans;

·         The potential hardship caused to local residents and the reduction in their spending power of a precept of 4.99%.

 

Councillor Lester seconded the amendment and explained that the amendment proposed a balanced approach that used existing funds to cushion local residents against the greatest precept increase whilst ensuring a balanced budget.

 

Councillor Harvey, as the mover of the original motion, responded to the amendment and explained that the New Homes Bonus funds identified in the amendments was to be allocated in part to sustainable transport measures to address traffic problems and also to the council tax reduction scheme to help people struggling to pay council tax. There was disappointment regarding the late amendments to the budget as opportunities for engagement with the budget process had existed at an earlier stage.

 

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

 

For (17): Councillors Bolderson, Durkin, Gandy, Guthrie, I’Anson, Johnson, Mike Jones, Lester, Matthews, Millmore, Phillips, Price, Rone, Shaw, Stone, Swinglehurst and Tillett.

 

Against (28): Councillors Graham Andrews, Paul Andrews, Bartlett, Bartrum, Boulter, Bowes, Chowns, Crockett, Davies, Fagan, Foxton, Hardwick, Harrington, Harvey, Hewitt, Hey, Hitchiner, Jinman, Kenyon, Marsh, Milln, Norman, Seldon, Summers, Toynbee, Tyler, Watson and Wilding.

 

Abstain (7): Councillors Polly Andrews, Bowen, Howells, James, Graham Jones, Stark and Symonds.

 

Amendment 2 – Proposed by Councillor Nigel Shaw and seconded by Councillor Jonathan Lester

 

‘Add an additional recommendation with the following at paragraph i’:-

 

i)          Defer delivery of proposed £200k savings for waste recycling, Saving            S13 (appendix B, page 252). Funding the recommendation through           £200k from the New Homes Bonus Funding.

 

Councillor Shaw proposed the budget amendment and explained that the proposal to reduce the opening hours of the household waste recycling centres (HWRCs) was inconsistent with a priority to encourage waste minimisation. A reduction in the opening hours was likely to increase the level of fly tipping therefore the amendment proposed the use of the New Homes Bonus to defer the proposed savings.

 

In discussion the following principal points were raised on amendment 2:

 

·         The amendment proposed reallocating money from sustainable travel measures which had been supported strongly by the general scrutiny committee;

·         The reduction in opening hours would only be considered after other savings options, including the continuation of the booking system, had been explored;

·         Concern that a reduction in opening hours would encourage fly tipping;

·         The triaging of waste taken to the HWRCs should be considered to increase recycling rates and support potential income generation;

·         A lack of evidence that any increase in fly tipping was linked to the introduction of the booking system over the period of the COVID pandemic.

 

Councillor Lester seconded the amendment and explained that the amendment was an attempt to ensure that savings did not need to be made and that the service at the HWRCs was protected.

 

Councillor Harvey, as the mover of the original motion, responded to the amendment and explained that the changing of the opening hours to achieve savings would only be considered after other preferable options, such as income generation and the booking system, were explored. The proposed saving was a small but important element of the savings programme; potential savings needed to be identified wherever they were possible.

 

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

 

For (22): Councillors Bartrum, Bolderson, Durkin, Gandy, Guthrie, I’Anson, James,  Johnson, Graham Jones, Mike Jones, Kenyon, Lester, Matthews, Millmore, Phillips, Price, Rone, Shaw, Stone, Swinglehurst, Symonds and Tillett.

 

Against (29): Councillors Graham Andrews, Paul Andrews, Polly Andrews, Bartlett, Boulter, Bowes, Chowns, Crockett, Davies, Fagan, Foxton, Hardwick, Harrington, Harvey, Hewitt, Hey, Hitchiner, Howells, Jinman, Marsh, Milln, Norman, Seldon, Stark, Summers, Toynbee, Tyler, Watson and Wilding.

 

Abstain (1): Councillor Bowen.

 

Amendment 3 – Proposed by Councillor Nigel Shaw and seconded by Councillor Jonathan Lester

 

‘Add an additional recommendation with the following at paragraph j’:-

 

j)          introduction of grant scheme to fund an offer to parish councils to bid          for schemes to alleviate and prevent flooding to be funded from            341k of New Homes Bonus funding.

 

 

Councillor Shaw proposed the budget amendment and explained that parish councils and lengthsmen were often frustrated that they were unable to resolve local flooding issues. The amendment sought to provide funds to local parish and town councils to address perennial flooding problems.

 

In discussion the following principal points were raised on amendment 3:

 

·         Parish councils had been very active and creative in seeking to address flooding problems but they required assistance;

·         The fund was only a small sum of money and could help local residents affected by persistent flooding problems;

·         The amendment would reallocate money dedicated to sustainable transport projects;

·         The proposed fund represented only a small sum per parish council and flood alleviation schemes required significant funding;

·         A system-wide approach to flooding issues needed to be undertaken and funding from central government was not sufficient to meet the need of local communities;

·         Works to address local flooding problems should be undertaken through the public realm contract with Balfour Beatty Living Places (BBLP).

 

Councillor Lester seconded the amendment and explained flooding was a significant problems and much could be achieved with only a small sum of money.

 

Councillor Harvey, as the mover of the original motion, responded to the amendment and explained that flooding alleviation works were being undertaken in consultation with community groups and through the BBLP contract which ensured a multiagency approach.

 

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

 

For (20): Councillors Polly Andrews, Bartrum, Bolderson, Durkin, Gandy, Guthrie, I’Anson, James, Johnson, Graham Jones, Mike Jones, Lester, Matthews, Millmore, Price, Rone, Shaw, Stone, Symonds and Tillett.

 

Against (28): Councillors Graham Andrews, Paul Andrews, Bartlett, Boulter, Bowes, Chowns, Crockett, Davies, Fagan, Foxton, Hardwick, Harrington, Harvey, Hewitt, Hey, Hitchiner, Howells, Jinman, Kenyon, Marsh, Milln, Norman, Seldon, Summers, Toynbee, Tyler, Watson and Wilding.

 

Abstain (2): Councillors Bowen and Stark.

 

Amendment 4 – Proposed by Councillor Terry James and seconded by Councillor Kevin Tillett

 

This council is aware of the exceptional economic circumstances that households find themselves in, nationally and locally, and the financial hardships that are to be placed on council tax payers this year and next year. It is therefore proposed that the 2021/22 Council Tax increase is set at 3% instead of the proposed 4.99%.

 

Therefore, we amend item B as follows –

 

            b. (Remove an and replace with Zero)increase in core council tax in 2021/22 (delete “of 1.99%”);

 

            to read –

 

            b. Zero increase in core council tax in 2021/22

 

The £1.4 million shortfall can be recovered from the following sources:-

 

            1 - £700,000 from the New Home Bonus

            2 - £700,000 from the financial resilience reserves

 

The effect on section (f)

 

            f. the medium term financial strategy (MTFS) 2021-24 at appendix A; and

 

from changes to (b) will be solved by–

 

For the life of the medium term financial strategy (MTFS) the future impact of the zero increase of core council tax in 2021/22 is borne by the financial resilience reserve.

 

Councillor James proposed the budget amendment and explained that taxpayers in the middle band of income in the county and those just above the thresholds for the council tax reduction scheme would struggle to pay the proposed precept of 4.99%. The proposed amendment sought to assist local residents in financial difficulties by reducing the council tax increase.

 In discussion the following principal points were raised on amendment 4:

 

·         Local residents who were just about managing required support;

·         Concern was expressed regarding the use of reserves in the amendment;

·         The expansion of the council tax reduction scheme and the proposed precept increase to the maximum permissible amount without a referendum was questioned as illogical;

·         The amendment would reallocate money dedicated to sustainable transport measures;

·         The proposal outlined in the amendment should have been considered at scrutiny;

·         Local authorities in neighbouring areas had proposed lower precept increases than Herefordshire Council;

·         The budget consultation had produced support for the 4.99% precept increase.

 

Councillor Tillett seconded the amendment and explained the current financial difficulties experienced by a number of local residents. The amendment sought to support the budget and protect services whilst easing the burden on local residents.

 

Councillor Harvey, as the mover of the original motion, responded to the amendment and explained that it was not responsible to take money from reserves.

 

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

 

For (20): Councillors Polly Andrews, Bartrum, Durkin, Gandy, Guthrie, Howells, I’Anson, James, Johnson, Graham Jones, Mike Jones, Lester, Matthews, Millmore, Price, Shaw, Stark, Stone, Symonds and Tillett.

 

Against (27): Councillors Graham Andrews, Paul Andrews, Bartlett, Boulter, Bowes, Chowns, Crockett, Davies, Fagan, Foxton, Hardwick, Harrington, Harvey, Hewitt, Hey, Hitchiner, Jinman, Kenyon, Marsh, Milln, Norman, Seldon, Summers, Toynbee, Tyler, Watson and Wilding.

 

Abstain (1): Councillor Bowen.

 

Councillor Harvey, as the mover of the original motion, responded to the budget debate and thanked all involved in the setting of the budget. It was now important to deliver on the promises in the budget and meet the expectations of local residents.

 

The 2021/22 budget and associated medium term financial strategy and treasury management strategy as contained in the report was put to the recorded vote and was approved by a simple majority.

 

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

 

Against (18): Councillors Polly Andrews, Bartrum, Durkin, Gandy, Guthrie, Howells, I’Anson, James, Johnson, Mike Jones, Lester, Millmore, Price, Shaw, Stark, Stone, Symonds and Tillett.

 

Abstain (1): Councillor Matthews.

 

RESOLVED - That:

 

Council approves;

 

a.    the council tax base of 68,355.22 Band D equivalents in 2021/22;

b.    an increase in core council tax in 2021/22 of 1.99%;

c.    an additional precept in respect of adult social care costs of 3% applied to council tax in 2021/22 resulting in a total council tax increase of 4.99%, increasing the band D charge from £1,573.77 to £1,652.30 for Herefordshire Council in 2021/22;

d.    the balanced 2021/22 revenue budget proposal totalling £161.0m, subject to any amendments approved at the meeting, specifically the net spending limits for each directorate as at appendix C;

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) 2021-24 at appendix A; and

g.    the treasury management strategy at appendix D be approved.

h.    a growth bid to fund a Armed Forces Covenant Support Officer, attached at appendix J.