Agenda item

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 assessment of the capital programme with a view to reporting back to full Council in July.

There was criticism of the persistent delays to the Government’s Fair Funding Review for Councils and lack of long-term budget information from central sources. Officers were commended for their work on the budget papers.

The Executive agreed there was no appetite to see any reduction in the Council’s services and given energy prices were already falling and so greater optimism about inflationary pressures going forward the proposals set out in the report were acceptable. In addition, the structural benefits of the collaboration with Waverley Borough Council were yet to be realised. Consequently, the Executive,

RESOLVED:

To recommend 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 was a major decision for the Council and setting a balanced budget is a statutory requirement.