2022/23 Budget setting
- Meeting of Budget meeting, Cabinet, Monday 31 January 2022 6.30 pm (Item 82.)
- View the background to item 82.
To recommend to Council the proposed 2022/23 budget and associated medium term financial strategy and treasury management strategy for recommendation to Council 11 February.
The cabinet member finance, corporate services and planning introduced the report and explained the scale of the revenue budget and the services this provided. The financial position of local government nationally remained a concern with the longer term outlook uncertain. The council was fortunate not to have to rely on reserves to balance the budget and it was important to avoid that situation. The proposed budget had been subject to extensive consultations across a number of different formats and forums. All the responses had been closely considered by officers and cabinet members.
The proposals had been scrutinised by each of the council’s scrutiny committees. The response to the recommendations produced had been published as a supplementary document to the cabinet report.
In response to the recommendation that consideration be given to the use of 50% of the capital surplus for highways in 2023/24 and 2024/25 the cabinet noted that the council’s headroom for borrowing in future years needed careful consideration. A planned audit of the previous injection into the highway network would assess how effective that approach had been. The further involvement of scrutiny in shaping these ideas would be welcome.
In response to the recommendation that the council should aim to become more targeted and to give funding support to those most in need it was highlighted that additional revenue funding had been identified due to an increased estimate of business rate income. It was proposed to use £500k of this additional funding to triple the fund for the discretionary Housing Payment scheme budget, to support those most in housing related need. The remaining funds would be added to general reserves for unforeseen cost pressures during the coming year. It was proposed that the recommendations to Council be adjusted for this.
The scrutiny committee had recommended that consideration be given to the use of the existing earmarked reserves for Adult Services to offset the requirement for the 1% adult social care precept for 2022/23. A detailed response had been provided explaining the need for the earmarked reserves and concerns that using reserves in this way would mean the council entering future budgeting rounds with known unfunded pressures.
The cabinet member concluded her presentation by thanking officers for their work in compiling the budget proposals.
Cabinet members highlighted some of the cost pressures, developments and opportunities in their portfolio areas. It was noted that:
· It was a strategic choice to seek to close funding gaps in the economy and environment directorate by increasing income through charges rather than cut funding to services;
· No savings were being required for the children and young people directorate during this period of transformation, it was necessary to invest in this service area but this did have a knock on effect elsewhere;
· The council continued to make use of covid recovery funds as they became available;
· The proposed budget sought to spend the money available as wisely as possible but it was difficult to continually have to keep squeezing to keep to a balanced budget;
· Councillors needed to act prudently and consider the impact of their decisions on the taxpayers of the future.
The chairman of the general scrutiny committee noted the responses to the recommendations made by the committee in its review of the budget proposals and stressed it was important that the scrutiny process provided challenge. He requested that efforts be made to share figures with scrutiny earlier in the process, recognising that these might be rough figures that were subject to change.
Group leaders presented the view of their groups. Key points were noted from the discussion that:
· The rural sparsity delivery grant was being used to ensure services were delivered in rural areas but the council should press central government for additional funding given its rurality – sustainability plans for rural areas would help to understand the needs;
· The budget consultation had received very few responses so care should be taken in interpreting the results;
· It was queried whether there were some savings that could be delivered from the children and young people directorate while still protecting the social care element;
· The principle of charging householders for taking non-domestic waste to the recycling centres was challenged as a double charge, in response it was asserted that this waste should be disposed of by the person doing the work;
· Potential increases in interest rates and the rate of inflation had been considered but uncertainties remained which would need to be managed within reserves;
· The situation was not expected to be significantly better in the 23/24 so the council should take care in how reserves were used;
· All businesses would be considering increases in costs and the council was no different in having to take business-like decisions;
· Central government would need to address matters such as the rising cost of fuel.
It was resolved that:
a) That cabinet approve the responses to scrutiny committee recommendations set out in the supplementary paper; and
b) That the following be recommended to Council:
i. The council tax base of 70,252.52 Band D equivalents in 2022/23;
ii. an increase in core council tax in 2022/23 of 1.99%;
iii. an additional precept in respect of adult social care costs of 1% applied to council tax in 2022/23 resulting in a total council tax increase of 2.99%, increasing the band D charge from £1,652.30 to £1,701.70 for Herefordshire Council in 2022/23;
iv. the balanced 2022/23 revenue budget proposal totalling £175.1m, subject to any amendments approved at the meeting, specifically the net spending limits for each directorate as at appendix C amended to include the additional funding proposals of £500k to be added to the discretionary Housing Payment scheme budget and £296k to be added to general reserves;
v. the use of the new service grant one off funding in 2022/23 to support the economy and environment three year savings delivery plan;
vi. to use the one off collection fund surplus of £1.3m to fund property services budget costs in 2022/23;
vii. 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;
viii. the medium term financial strategy (MTFS) 2022-25 at appendix A;
ix. the treasury management strategy at appendix D be approved.
- 2022/23 Budget setting, item 82. PDF 330 KB
- Appendix A MTFS, item 82. PDF 1 MB
- Appendix B savings, item 82. PDF 391 KB
- Appendix C directorate base budget, item 82. PDF 135 KB
- Appendix D TMS, item 82. PDF 812 KB
- Appendix E Reserves, item 82. PDF 99 KB
- Appendix F Impact report, item 82. PDF 558 KB
- Appendix G Online budget consultation summary, item 82. PDF 1 MB
- Appendix H Public Health, item 82. PDF 219 KB
- Supplementary report to agenda item 8 - 2022-23 budget setting, item 82. PDF 19 KB
- Appendix 1 Summary of the General Scrutiny Committee recommendations and the executive responses, item 82. PDF 331 KB