Agenda item

A report to the Executive outlining the current position regarding the 2021-22 outline general fund budget and the business planning assumptions for 2021-22 to 2024-25 was before the Joint EAB for consideration.  The report invited the Executive to note the situation, including areas of uncertainty that would influence the final position, and agree the proposed strategy for savings and efficiencies to be implemented over the period 2021-22 to 2024-25 in order to achieve a balanced budget over the medium term.  The report contained the following five recommendations to the Executive to assist it with the preparation of the General Fund estimates for 2021-22:

1.           Approve the budget assumptions used in the preparation of the 2021-22 outline budget and three year forward projections.

2.           Note the current position on the outline budget for 2021-22 and the budget shortfall anticipated over the 3 years to 2024-25.

3.           Approve the savings strategy for 2021-22 through to 2024-25 (Section 13 & Appendix 3).

4.           Agree to 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 2021.

5.           Agree the use of the Council’s earmarked reserves as set out in section 10 to fund the cost of the COVID-19 Pandemic, in line with the supplementary estimate agreed by Council in May 2020.

The Director of Resources gave an introductory presentation which explained the difficulties associated with 2021-22 financial predictions, the core assumptions, the best estimate of the budget gap based on core assumptions and the budget gap sensitivity analysis.

The financial prediction difficulties arose owing to a number of uncertainties including the Government funding settlement, the Fair Funding Review, possible devolution, the ongoing financial implications of COVID-19 and subsequent pace of economic recovery, the impact of the increase in Local Council Tax Support Scheme claims and the future of the Leisure Management contract.  Known factors affecting the budget were the overspend in the current year and possible mitigations, Council Tax and Business Rates collection rates and ability to spread the collection fund deficit over three years, the current level of reserves, interest rates and the cost of servicing debt, and savings resulting from the Future Guildford transformation programme. 

Core assumptions upon which the 2021-22 budget was based consisted of the general inflation rate; staff pay award, pay increments and vacancy factor; increases in fees and charges; income reduction due to COVID-19; Council Tax base and proposed increase; housing rents; and Government Settlement Funding Assessment.

The best estimate of the Council’s budget gap based on core assumptions was £2.692million in 2021-22 rising to £4.417million in 2024-25.

The budget gap sensitivity analysis explored estimates of surplus or deficit in relation to staff pay inflation, capital programme slippage, various income streams, Fair Funding Review reduction in base line spend, changes in investment income and interest rate rise.

The Lead Councillor for Resources and the Leader of the Council highlighted the challenges associated with balancing the budget for 2021-22, which would include a public consultation exercise regarding priorities for Council services, and acknowledged budget reductions achieved to date and the extraordinary work undertaken by officers to support vulnerable residents in the Borough during the Coronavirus pandemic.

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

·             Essential services to support the most vulnerable in local communities should be continued as a priority.

·             It was proposed that the budget consultation would be undertaken by a polling company which would target a representative sample of all Borough residents to gain views to inform subsequent decisions by the Council.

The Joint EAB

RESOLVED

That, under Section 100A(4) of the Local Government Act 1972, the public and press be excluded from the meeting for the consideration of information contained within Appendix 3 to the report on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A to the Act; namely, information relating to the financial or business affairs of any particular person (including the authority holding that information).

Accordingly, the Board moved to a second (Part 2) meeting for the duration of its discussion regarding the exempt information in Appendix 3.  The meeting received and considered a presentation in respect of the Savings Strategy which described the approach to the identification of savings target areas providing related spend lines, normalised net expenditure and proposed actions and savings for each portfolio.

Following the EAB’s consideration of the exempt information the public was readmitted to the meeting.

Having indicated its support for the five recommendations to the Executive as set out above, the EAB agreed the following points for submission to the Executive:

·             Notwithstanding the outcome of the public consultation exercise associated with the outline budget, services provided to the most vulnerable residents should be protected.

·             There may be merit in exploring the work undertaken by an Older People’s Services task group established by Surrey County Council to inform service needs and provision in this area.

·             Whilst the Joint EAB was not equipped to discuss or consider suggested budget reductions in any detail or advise on the extent and prioritisation of savings due to a lack of supporting information, it was aware where possible and likely inevitable reductions would fall.

·             Owing to uncertainty, it was not currently possible for the Joint EAB to form a view in respect of budget and business planning scenarios associated with the possibility of the Council forming part of a new unitary authority in the future.