Agenda item

The Portfolio Holder for Corporate Finance and Resources to submit a report on the Revenue Budget for 2020/21 including the proposed level of council tax for borough council purposes and the Medium Term Financial Strategy 2021/25.

Cabinet

 

1)    NOTED the year end forecast and financial position for the General Fund and Special Expenses for 2020/21;

 

2)    DELEGATED authority to the Director for Corporate Services to make any amendments necessary to the estimates prior to their submission to Council for approval, as a result of changes to the final finance settlement over the provisional and as a result of the final NNDR 1 form used to calculate retained business rates;

 

3)    RECOMMENDED to Council, subject to any amendment arising from the final finance settlement that:

                     i.        The proposals for General Expenses and Special Expenses Melton Mowbray be approved for inclusion in the 2021/22 budget resulting in the estimates;

                    ii.        Delegated authority be given to the Director for Corporate Services to release the funding for the growth items for town centre improvements, place survey and discretionary council tax support subject to conditions;

                   iii.        The revenue budget for 2021/22 for General and Special Expenses be approved, resulting in an overall council tax increase of £5;

                   iv.        Any increase or shortfall against the target working balance on General Expenses at 31 March 2021 be transferred to/from the Corporate Priorities Reserve and for Special Expenses Melton Mowbray any surplus/deficit be transferred to/from the Special Expenses Reserve, thereby bringing the actual balance back to the target;

                    v.        Members note the changes made to the risk categorisation of budgets.

Dawn Garton, Director for Corporate Services introduced the report on the Revenue Budget for 2020/21 including the proposed level of council tax for borough council purposes and the Medium Term Financial Strategy (MTFS) 2021/25.

 

Mrs. Garton highlighted that:

 

·         Estimated year end position 2020/21 - the finances for the current year had been extremely challenging due to the impact of the pandemic but had become easier to manage as clarity had emerged over the level of Government support.  However savings had to be made, particularly in the early party of the financial year, in order to avoid a draw on reserves.  A surplus of £206k for General Expenses and £4k for Special Expenses Melton Mowbray was forecasted and this underspend provided flexibility to deal with ongoing costs and resources for Covid-19 response and recovery and support needed in key areas where additional resources may now be required to maintain momentum and also deal with any backlog of work.

·         Finance Settlement - the final settlement had been published (for debate in Parliament tomorrow) and was in line with the provisional settlement.  No changes to the estimates were required as a result. The referendum limit remained at the higher of £5 or 2% and a £5 overall increase was proposed.  The settlement saw additional resources made available to deal with the ongoing impact of Covid-19  and these were welcomed.  However, there remained much uncertainty regarding the future funding of local government, which impacted on future financial forecasts.

·         Budget 2021/22 - The proposed budget was in line with the Corporate Strategy (approved in September 2020).  Assumptions had been made concerning the ongoing impact of Covid-19 on expenditure and on income streams, when they were likely to return to pre Covid-19 levels and the level of government support.  A contingency had been set aside to accommodate unexpected Covid-19 related expenditure and lost income not contained in the budget.

 

A number of growth and savings proposals for General Expenses were proposed at paragraph 4.4.3 of the report and these were further detailed in Appendix B and incorporated into the budget and MTFS, as detailed in Appendix A.

 

The MTFS had forecast deficits for the next 3 years but these could change significantly depending on the outstanding local authority funding review.  A Financial Sustainability Programme would be initiated following the budget to consider a range of areas where efficiencies could be made or income generated in sufficient time to inform the 2022/23 budget at an early stage.

 

The reserves position had stabilised with a balanced budget being set for 2020/21 and proposed for 2021/22.  On the basis of all available information, the robustness of the estimates and the adequacy of the reserves was satisfactory.

 

Councillor Joe Orson, Leader of the Council reiterated that it had been an extremely challenging year for the Council’s finances.  The Council had made much progress since the start of the pandemic and since its first draft budget in November 2020.  Through hard work, innovative thinking, the additional support the Government had provided through the spending review and the settlement, the Council had achieved a balanced budget, with some contingency for unforeseen Covid-19 costs. 

 

Councillor Orson highlighted that despite the need for caution, the Council had provided some growth in areas of priority (community support, town centre investment etc.)  This had been a tremendous achievement.  The Council’s financial future remained uncertain and the work on the financial sustainability programme would ensure adequate planning and preparation was undertaken.  Government support from 2022/23 onwards was unknown and businesses and the community would need support as Melton moved from response to recovery.  The necessary finances needed to be in place to provide this support.

 

During discussion the following points were noted:

 

·         Members thanked the Director for Corporate Services and her team for their considerable work.

·         Regard must be given to the comments of the Director for Corporate Services, as the Council’s Section 151 Officer.

·         Members noted the work undertaken by the Council to support the community during the pandemic.

·         The Council would consider how it could promote Melton’s recovery, encouraging use of its industrial units, the town centre and leisure centres etc.

 

DECISIONS (NON-KEY)

 

Cabinet:

 

1)    NOTED the year end forecast and financial position for the General Fund and Special Expenses for 2020/21;

 

2)    DELEGATED authority to the Director for Corporate Services to make any amendments necessary to the estimates prior to their submission to Council for approval, as a result of changes to the final finance settlement over the provisional and as a result of the final NNDR 1 form used to calculate retained business rates;

 

3)    RECOMMENDED to Council, subject to any amendment arising from the final finance settlement that:

                     i.        The proposals for General Expenses and Special Expenses Melton Mowbray be approved for inclusion in the 2021/22 budget resulting in the estimates;

                    ii.        Delegated authority be given to the Director for Corporate Services to release the funding for the growth items for town centre improvements, place survey and discretionary council tax support subject to conditions;

                   iii.        The revenue budget for 2021/22 for General and Special Expenses be approved, resulting in an overall council tax increase of £5;

                   iv.        Any increase or shortfall against the target working balance on General Expenses at 31 March 2021 be transferred to/from the Corporate Priorities Reserve and for Special Expenses Melton Mowbray any surplus/deficit be transferred to/from the Special Expenses Reserve, thereby bringing the actual balance back to the target;

                    v.        Members note the changes made to the risk categorisation of budgets.

 

Reason for the decisions

The Council, having set a Budget at the start of the financial year, needs to ensure the delivery of this Budget is achieved. Consequently, there is a requirement to regularly monitor progress so corrective action can be taken when required, which is enhanced with the regular reporting of the financial position.

 

To propose to Council a General Fund budget and level of council tax for the 2021/22 financial year which takes into account the proposals set out in the approved Corporate Strategy. The proposals take into account the net expenditure that the Council expects to spend in the next financial year to deliver services to our customers. The report also includes recognition of efficiencies secured and details of the funding and income received to support these services to ensure a balanced budget is proposed.

 

The Council also holds a number of reserves which can be drawn upon to fund future expenses. The level of reserves is considered within this report, as is the future outlook for spending in the years ahead in order for the Council’s future financial resilience to be considered as part of the proposals.

 

Cabinet and Council are required to consider and approve the General Fund Revenue Account budget proposals in order to set the budget and council tax for the forthcoming financial year.