Issue - meetings

The Council considered a report which outlined the draft General Fund Budget for 2023/24 and Medium-Term Financial Plan (MTFP) ending 2026/27. The MTFP had set out the key work streams for the Council to focus on over this period which, collectively, aimed to address the projected significant shortfall in the General Fund budget.

The proposed budget for 2023-24, which included a Council Tax requirement for Guildford Borough Council of £11,392,760 excluding parish preceptsand a Council Tax increase of £5.59 per year (2.99%), resulting in a Band D charge of £192.41.  As set out in the report, the Council was required to set a balanced budget for 2023-24. 

Parish Councils had requested precepts totalling £2,174,116 meaning the overall council tax requirement for the borough, including parish precepts would be £13,566,876.

The General Fund Budget Summary had shown a budget deficit of £3.1million to be resolved in 2023-24.  There were no proposed cuts to services included in the draft 2023-24 General Fund budget.  The budget strategy outlined in the report had identified a framework that would deliver savings from the asset management, business transformation, commercial and collaboration programmes to address the financial challenges and help protect funding for front line services.

It was anticipated that cost pressures would reduce over the MTFP period and reserves would be utilised in the short term whilst longer term base budget cost pressures would be resolved through the budget strategy. 

The Joint Executive Advisory Board (JEAB) had considered this report at its meeting held on 24 January 2023.  At its meeting held on 26 January 2023, the Executive had also considered this report, including the comments of the JEAB and had endorsed the recommendation therein. 

Under The Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014 and Council Procedure Rule 19 (d), the Council was reminded that a recorded vote would be conducted on the proposed budget and Council tax resolution as set out in the report, and the Order Paper circulated at the meeting which contained details of the respective precepts set by Surrey County Council and the Police and Crime Commissioner for Surrey, neither of which were deemed to be excessive.

Upon the motion of the Deputy Leader of the Council and Lead Councillor for Finance and Planning Policy, Councillor Joss Bigmore, seconded by the Leader of the Council, and Lead Councillor for Housing and Community, Councillor Julia McShane, the Council:

RESOLVED:

(1)    That the budget be approved, and specifically that the Council Tax requirement for 2023-24 be set at £11,392,760 excluding parish precepts and £13,566,876 to include parish precepts.

(2)    That the Band D Council Tax for 2023-24 (excluding parish precepts) be set at £192.41, an increase of £5.59 (2.99%).

(3)     That the Band D Council Tax for 2023-24 (including parish precepts) be set at £229.12.

(4)     That the Council approves the following, as considered by the Executive on 26 January 2023:

(i)     the General Fund revenue estimates for 2023-24 including proposed  ...  view the full minutes text for item 120

Decision:

Recommended to Council (8 February 2023):

(1)  To approve a 2.99% increase in Guildford’s Band D Council Tax Charge for 2023/24 with resultant increases to the other council tax bands.

(2)  To approve the General Fund Budget for 2023/24, as summarised in Appendix 2.

(3)  To continue the Council’s existing Council Tax Support Scheme at the current levels.

(4)  To approve the General Fund Fees and Charges for 2023/24 proposed in Appendix 4.

(5)  To utilise the full amount of the New Homes Bonus received for 2023/24 for the purpose of contributing to identified one-off General Fund revenue cost pressures.

(6)  To agree that the Joint Management Team undertakes a comprehensive service challenge and present a revised budget and Medium-Term Financial Plan to Full Council in July 2023 as described in this report.

Reason(s):

To enable the Council to set the Budget and Council Tax for the 2023-24 financial year.  The General Fund Budget is a major decision for the Council and setting a balanced budget is a statutory requirement.

Other options considered and rejected by the Executive:

None.

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None.

The Chairman advised that this report had also been considered by the Joint Executive Advisory Board on 24 January 2023. The comments arising from that meeting were set out in the Supplementary Information Sheet.

The Deputy Leader of the Council and Lead Councillor for Finance and Planning Policy introduced the report.

The report proposed to raise the Council Tax levy for the forthcoming year to the maximum, which was 2.99%. This would produce a net income increase for the Council of just over £330,000. Due to real cuts in the Council’s spending power and inflationary pressures, although regrettable, this option was necessary. It was noted that the Borough Council retained just 9% of the Council Tax collected which translated to just over £250 on a Band E property for which the average resident received around £500 of services.

The Council Tax Support Scheme would be retained to support residents who found themselves in financial difficulty. Given the Scheme had been previously unsubscribed it was felt existing budget levels should be sufficient, but this would be kept under review.

It was noted that the current economic climate provided a challenging backdrop to setting the General Fund budget. Global and domestic financial pressures sat alongside diminishing Government funding resulted in significant reductions to the Council’s spending power. There was also uncertainty on how the cost-of-living crisis would impact on revenue streams. However, the Council had taken financial decisions in previous years resulting in healthy reserves.

There was an increased budgeted spend of £7.7 million in comparison to last years’ spending. The major increases were caused by the inflationary pressures on utilities and wages. The increased interest rates meant the Council would gain from its treasury activity; however, this advantage might be short term as the Council developed its capital programme.

Below inflation interest rate increases had been applied to fees and charges, albeit this would see an increase in income of £1 million. There would be no automatic transfer to reserves this year as it was calculated that the reserves were sufficiently funded.

The Council had received £1.3 million in New Homes Bonus (NHB) from the Government, and it was proposed that this income be used to fund wage increases that were currently being discussed with the union. The NHB was scheduled to be withdrawn by Government and could not be written into future budgets.

The General Fund budget was £3.3 million in deficit. This might be funded from the Council’s reserves or from additional savings. There was £32 million in reserves able to support the Medium-Term Financial Plan to underwrite the deficit if necessary. This was described as unusual, but due to the economic climate and with no desire to unnecessarily cut essential services, the lead councillor was content.

There needed to be a clear understanding of the structural deficit and the impact of the cyclical effects before more work could be undertaken to reduce the shortfall. The Joint Management Team were tasked with undertaking extensive service reviews and a full  ...  view the full minutes text for item 80

Report is to follow.

The Joint Executive Advisory Board (JEAB) was invited to consider a report in respect of the Council’s General Fund Budget 2023-24 and Medium-Term Financial Plan 2024-25 to 2026-27.  The report was introduced by the Lead Councillor for Finance and Planning Policy who sought councillors’ views thereon.

The JEAB was advised that the report set out the draft General Fund Budget for 2023/24 and Medium-Term Financial Plan (MTFP) ending 2026/27.  The MTFP set out a four year view and highlighted the key issues and work streams that the Council must focus on over this period to address the projected significant shortfall in the General Fund budget.  The report also requested that the Council approve the budget and Council Tax for 2023/24.

The Board’s attention was drawn to the first column in Appendix 1 to the report in particular, which indicated the changes in various elements from the 2022/23 base budget in terms of inflationary pressures and contractual changes.  However, there were some off-setting factors and it was noted that the budget deficit of approximately £3 million would be met from reserves.  The JEAB’s views regarding the position were sought.

The following points arose from related discussion, comments and questions for forwarding to the Executive:

1.           The JEAB was reassured that the Council’s financial position was sound and it had not over extended its borrowing capability in order to fund capital projects.  In terms of projects, the Weyside Urban Village scheme represented the greatest risk.  A governance audit of the scheme had been undertaken and resulted in some recommendations to strengthen the governance arrangements.  There was an intention to keep councillors informed of the financial projections relating to the scheme.

2.           During the last year, the Council’s asset base had been revalued and found to have increased in value by £60 million.  During the same timeframe, debt in the region of £40 million had been repaid, increasing the value of the authority’s asset position by £100 million to reach a total of £750 million.  This was a strong asset base compared to many other local authorities.

3.           The majority of assets held by the Council were revenue generating and if sold would reduce income to the revenue account, therefore there was no intention to sell such properties.  There was a need to identify the correct balance to be achieved between selling assets to release cash and incurring the cost of borrowing funds.

4.           There were opportunities to consolidate services and operational buildings to free properties for sale and the Assets Team was undertaking a review to identify under utilised or surplus property or land which could be sold to generate income.

5.           There was no guarantee that the New Homes Bonus would be paid to the Council by the Government in future years and the Medium-Term Financial Plan made an assumption that this funding would not be received.  In the absence of the Bonus, it was felt that the Government should identify an alternative incentive to encourage the delivery of housing.  The  ...  view the full minutes text for item 62

The Council considered a report which outlined the proposed budget for 2022-23, which included a Council Tax requirement for Guildford Borough Council of £10,898,314and a Council Tax increase of £5 per year (2.75%), resulting in a Band D charge of £186.82.  As set out in the report, the Council was required to set a balanced budget for 2022-23. 

Parish Councils had requested precepts totalling £2,029,250 meaning the overall council tax requirement for the borough, including parish precepts would be £12,927,564.

The provisional Local Government Finance Settlement (LGFS) for 2022-23 was received on 16 December 2021 and the figures included in the budget presented reflected the information contained in the settlement. The Settlement Funding Assessment (SFA) comprised the local share of business rates, and revenue support grant and was set out in the provisional LGFS.  The settlement enabled the Council to retain £2.929 million of business rates in 2022-23 - the same amount that was retained in 2021-22 and 2020-21.  Core Spending Power had increased to £15million, within the core spending power calculation, the Government had assumed that the Council Tax would be raised by the maximum amount (£5 or 2% whichever was the higher). 

Overall, the LGFS had been positive for the Council as it included additional funding of:

·       £240,000 grant to compensate the Council for the Business Rates Multiplier not increasing in line with inflation

·       £131,000 lower tier services grant (this grant had been £237,000 in 2021-22 but was meant to have been a one-off grant)

·       £202,000 services grant which was a one-off grant for 2022-23 (to partly offset the National Insurance increase)

·       £766,000 New Homes Bonus grant for 2022-23 only

·       The ability to raise council tax by a maximum of £5 (2.75%) rather than 2.0%, this additional increase would generate a further £86,000 in council tax income

The Chief Finance Officer (CFO) presented her statutory report to the Council, a copy of which was appended to the main report. The CFO’s report provided information about the strategic context within which the budget had been prepared, the medium-term financial plan, the robustness of the estimates, adequacy of reserves and budget risks.  Councillors noted that the Council had a budget gap of £1.6million in 2023-24, which would rise to £3.8million by 2025-26.  Appendix 4 showed the budget movement summary of growth and savings which had been included in the General Fund Summary.  Appendix 5 detailed progress made against the Council’s Savings Strategy.  In considering the financial risk register in Appendix 6, the Council noted that the level of reserves was currently sufficient to meet the Council’s risks.

The financial monitoring report for the first eight months of 2021-22 had been reported to the Corporate Governance and Standards Committee on 20 January 2022.  The projected net expenditure on the General Fund for the current financial year had been estimated to be £0.2million less than the original estimate due mainly to actions undertaken as part of the voluntary non-essential expenditure freeze which had been implemented as part of a previously  ...  view the full minutes text for item 99

Decision:

1.     That the transfers to/from reserves, as set out in Section 8 and Appendix 2 of the report submitted to the Executive be approved.

2.     That the growth and savings items included in the General Fund Summary at Appendix 2 and set out in detail in Appendix 3 to the report be approved.

3.     That the savings identified in the updated savings strategy at Appendix 4 to the report, to be delivered over the medium-term plan period, be approved.

4.     That the financial risk register set out in Appendix 5 to the report be approved, and that the Executive notes that level of reserves are currently sufficient to meet the Council’s risks.

The Executive made the following recommendations to Council (9 February 2022):

1.     That the budget, as set out in the General Fund Summary in Appendix 2 to the report be approved, and specifically that the Council Tax requirement for 2022-23 be set at £10,898,310.

2.     That the proposed fees and charges for 2022-23 relating to General Fund services and attached at Appendix 6 to the report be adopted with effect from 1 April 2022.

3.     That the Band D Council Tax for 2022-23 be set at £186.82, an increase of £5 (2.75%)

Reason:

To enable the Council to set the Council Tax requirement and council tax for the 2022-23 financial year.

Other options considered and rejected by the Executive:

None.

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None.

The Executive considered a report that set out the overall financial position of the Council and outlined the proposed budget for 2022-23, which included a Council Tax requirement of £10,898,310and a Council Tax increase of £5 per year (2.75%), resulting in a Band D charge of £186.82.  The Council was required to set a balanced budget for 2022-23 and the report would be considered by Full Council on 9 February 2022.

The Lead Councillor for Resources introduced the report which built upon the draft budget put before the Executive on 23 November 2021 where a budget gap for the coming financial year of £1.2 million was identified. The Council had continued to act to address the shortfall by progressing its medium-term financial strategy (previously known as the ‘savings strategy’) that was agreed in June 2021. Since November, the Council had received the provisional Local Government Finance Settlement (LGFS) for 2021-22 on 16 December 2021.  The figures included in the budget presented reflected the information contained in the settlement. Overall, the LGFS had been positive for the Council as it included additional funding in a number of areas set out in the report.

The report had set out the up-to-date budget figures since November and including those arising from the parking business plan and the debt cost in terms of the Minimum Revenue Provision and interest set out in the capital investment strategy considered earlier on the agenda. The budget movement summary of growth and savings had been included in the General Fund Summary. The fees and charges proposed for 2022-23 would increase by 3% from 2021-22 where the market allowed; however, as identified in the budget movement summary and the parking business plan, some fees would increase by more than 3%. 

The Chief Financial Officer’s report was included as an appendix and set out in detail the strategic economic framework in which the Council was operating, an overview of local government funding, the challenges faced by the Council and the long-term financial plan. Whilst a balanced budget was expected for 2022-23, overall the Council faced a budget gap over the medium term of £3.3 million.

The Executive

RESOLVED:

(1)    That the transfers to and from reserves, as set out in Section 8 and Appendix 2 of the report submitted to the Executive be approved.

(2)    That the growth and savings items included in the General Fund Summary at Appendix 2 and set out in detail in Appendix 3 to the report be approved.

(3)    That the savings identified in the updated savings strategy at Appendix 4 to the report, to be delivered over the medium-term plan period, be approved.

(4)    That the financial risk register set out in Appendix 5 to the report be approved, and that the Executive notes that level of reserves are currently sufficient to meet the Council’s risks.

The Executive also made the following recommendations to Council (9 February 2022):

(1)    That the budget, as set out in the General Fund Summary in Appendix  ...  view the full minutes text for item 67

Decision:

(1)   That the budget assumptions used in the preparation of the 2022-23 draft budget and three year forward projections be approved.

(2)   That the current position on the draft budget for 2022-23 and the budget shortfall anticipated over the three years to 2024-25, be noted.

(3)   That the savings identified as part of the savings strategy for 2022-23 through to 2025-26 (Sections 11,12,13 of, and Appendix 3 to, the report submitted to the Executive) which have been included in the draft budget, be approved.

(4)   That the in-year savings of £46,750 arising from the review of classical music, book festival, voluntary and CAB grants for 2021-22, which were not included as part of the 2021-22 budget, be approved.

(5)   That the additional growth items identified in section 11 and Appendix 3 which have been included in the draft budget, be approved.

(6)   That the proposal to Council to make the contributions to/from the Council’s various earmarked reserves for specific purposes as set out in section 9 of the report as part of the budget report in February 2022, be approved.

Reason:

To assist the Executive in the preparation of the General Fund estimates for 2022-23.

Other options considered and rejected by the Executive:

None.

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None.

The report before the Executive outlined the position of the 2022-23 draft general fund budget and the business planning assumptions for 2022-23 to 2025-26. The final budget position would be submitted to Full Council on 9 February 2022. The Savings Strategy for 2022-23 to 2025-26, which the Executive had approved on 22 June 2021, had set out the assumptions used in calculating the budget gap and therefore the quantity of savings required over the medium term.  The core assumptions underpinning the draft budget had been reviewed and the revised assumptions were set out in the report.

In the absence of the Lead Councillor for Resources, the Leader of the Council introduced the report.  The Joint Executive Advisory Board had considered the outline budget report at its meeting on 11 November 2021 and a summary of their comments were set out on the Supplementary Information Sheet. 

The Leader highlighted the overview table in the executive summary of the report and described the inflationary underlying assumptions in the report as optimistic, pay as a result of inflation was realistic and any increase in fees and charge as under-ambitious. It was noted the assumptions for Council Tax income was accurate as Council Tax charges were constrained at below a 2% increase unless the Council called a referendum. The report included the best assumptions about the level of government funding that would be available. Anticipated rental income rises were modest. The Bank of England forecast was that inflation would fall in the coming year. The meeting heard that a 1% rise in inflation would mean a loss of £300,000 to the Council. Based on the assumptions in the report it was currently estimated there would be a budget shortfall for the forthcoming year of £1.7m and a cumulative shortfall of £5m up to 2026 but with a variance in the budget gap for the longer-term period of between minus £3m to minus £11m.

Because it was still early in the budget process, the report was clear that there were areas of uncertainty that would influence the final position.

Until the local government finance settlement was announced it was uncertain if the Government would proceed with recompensing local authorities for the planned rise in National Insurance contributions as had been stated. The cost of the increase would amount to a figure in the region of £300,000 and had been included in the assumptions until the offset was confirmed.

The report and the work of finance officers was commended and the Executive,

RESOLVED:

(1)   That the budget assumptions used in the preparation of the 2022-23 draft budget and three year forward projections be approved.

(2)   That the current position on the draft budget for 2022-23 and the budget shortfall anticipated over the three years to 2024-25, be noted.

(3)   That the savings identified as part of the savings strategy for 2022-23 through to 2025-26 (Sections 11,12,13 of, and Appendix 3 to, the report submitted to the Executive) which have been included in the draft budget, be  ...  view the full minutes text for item 46

Having received an introductory presentation from the Resources Director and supporting comments from the Lead Councillor for Resources and the Leader of the Council at its meeting held on 11 November 2021, the Joint Executive Advisory Board (EAB) considered the General Fund Draft Budget 2022-23 and Medium Term Plan 2022-23 to 2025-26 report.

The following points arose from related questions, comments and discussion:

1.           The Resources Director was familiar with the draft budget of Waverley Borough Council (WBC) and regularly liaised with her equivalent colleague at that Council.  The main differences between the budgets of this Council and WBC were that the latter outsourced many of its services, resulting in high non-staff contract costs, whilst Guildford provided more in-house services, leading to greater direct employee salary costs.  Guildford also provided more community and cultural services and its budget reflected this.  A specific budgeting difference between the Councils was that Guildford did not show the percentage of Benefit Subsidies received from the Government to fund benefits paid to claimants as this was passported to claimants and not retained by the Council.  However, the Council did receive a benefit administration grant of approximately £230,000 from the Government.

2.           Although the pre-planning application advice service had been suspended owing to staffing pressures resulting from a significant increase in the number of householder planning applications received, the Planning Team had now been strengthened and consideration was being given to resuming the service as it provided an income stream and led to an improvement in the quality of applications submitted.  In common with other district and borough councils across the country, Guildford found that the planning service did not cover its costs and needed to be subsidised by other services.  Government lobbying on a national scale was taking place with a view to securing reform to allow councils greater freedom and flexibility to raise fees to recoup costs.

3.           The pay claim received by the Council from Unison requesting a 10% increase in pay over a 3 year period to address the pay restraint in the public sector over the last decade was supported to overcome recruitment issues, particularly in the light of the Future Guildford programme.

4.           With regard to G Live and the Spectrum, both venues had re-opened fully in line with the Government’s Covid-19 roadmap.  The contract in respect of G Live had been extended for a further three years and a reduction of approximately £300,000 in the management fee paid by the Council had been negotiated.  At the expiry of the contract in 2024, when the market was expected to have recovered, a full tendering process would be pursued with a view to improving the Council’s financial return.  The Spectrum contract, which expired this year, had been extended for two years to October 2023 resulting in a reduction in the Council’s management fee income in the region of £260,000.  A range of future delivery models, including a possible joint procurement with WBC or the establishment of a Guildford leisure management trust,  ...  view the full minutes text for item 43