Agenda and minutes

To remind Members of the need to record the existence and nature of any personal, disclosable pecuniary or other registrable interests in items on the agenda, in accordance with the Members’ Code of Conduct.

The Deputy Monitoring Officer announced that in respect of Item 6 Capital Strategy, Financial Years 2022/23 to 2026/27 and Item 7 Revenue Budget 2022/23 all Members had previously completed an application for a grant of a dispensation in relation to ‘any beneficial interest’ in land within the Authority’s area. The Monitoring Officer had granted the dispensation to allow all Members to speak and vote on these items.

Councillor Lee Dillon declared an interest in Agenda Item 6 Capital Strategy, Financial Years 2022/23 to 2026/27 but reported that, as his interest was a personal or an other registrable interest but not a disclosable pecuniary interest, he determined to remain to take part in the debate and vote on the matter.

There were also a number of personal interests declared prior to the meeting in relation to agenda items, set out below and published on the Council’s website.

Members of the Executive to answer questions submitted by members of the public in accordance with the Council’s Constitution that relate only to the Council budget.

There were no public questions received.

Purpose: To consolidate the investments and borrowing strategy for the year ahead by detailing how and where the Council will invest and borrow in the forthcoming year, within a particular framework.

The report also has a statutory footing under the Local Government Act 2003.  The Council must have an approved (by Full Council) Investment and Borrowing Strategy (or similar) for the forthcoming financial year. The Council is also required to comply with other regulatory requirements as highlighted in this report. The Council must also detail its compliance with the relevant Treasury Management indicators (as highlighted in this report).

Council considered a report (Agenda Item 4) which sought to consolidate the investments and borrowing strategy for the year ahead, and detailed how and where the Council would invest and borrow in the forthcoming year within a particular framework. Council noted that the strategy was monitored throughout the year, with a mid-year report considered at the Government and Ethics Committee and an annual report presented to Members.

MOTION: Proposed by Councillor Ross Mackinnonand seconded by Councillor Howard Woollaston:

That Council agree and adopt the proposed Investment and Borrowing Strategy for 2022/23.

Councillor Mackinnon in introducing the report explained how the Strategy set out the approved institutions for treasury assets, the prudential limits for those investments, the accrued sources of borrowing, the recommended borrowing limits for the next three years, and also provided a long term forecast for the Council’s borrowing requirements. The Strategy authorised the Council to place deposits in UK Government bonds, UK Building Societies and banks with sound credit ratings, other local authorities, and triple rated money markets. The Council was also authorised to lend to registered charities, public sector bodies and Council-owned companies and joint ventures. He highlighted a change this year to the amount of funds the Council could invest with any one institution which had increased from £5m to £8m, noting that the £5m limit had been held over the past 25 years.

Councillor Mackinnon noted that it was not appropriate to change the Strategy to reflect inflationary changes without a significant change in risk. The Council had, in fact, been constrained in the past by putting funds in UK government bonds at very low rates of return. The Strategy proposed an increase in borrowing over the medium term to support the Council’s Capital Strategy, with the borrowing primarily undertaken through the Public Works Loans Board, and he explained how other options will be explored as well.The Strategy also included a subtle shift to hold more borrowing in the short term to take advantage of lower rates. This had already generated significant financial savings in the revenue budget and was forecast to continue to do so. It was a change of emphasis, but not one that would undermine the financial position of the Council.

The report also set out the Council’s commercial property portfolio and the investment returns made to the Council. Councillor Mackinnon highlighted how the portfolio had performed well with a consistent return on investment, and he expected this to continue in the future.               

Councillor Jeff Brooks noted the upwards trajectory of servicing debts, a figure that was due to increase and would end up at around £275 per household per annum. He agreed that borrowing had to be done in order to deliver the capital programme but argued that the Council’s borrowing could be too high in light of the current international situation (which was causing a fluid system for interest rates and increased risks).     

Councillor Steve Masters queried the £8m drop in the property portfolio value and asked  ...  view the full minutes text for item 82.

Purpose: To set out the financial planning assumptions for future years and align these with the Council Strategy to ensure that the Council Strategy will be delivered. The MTFS highlights the overarching key issues facing the Council’s finances as well as how there are many different scenarios and uncertainty concerning the future revenue streams for the Council in the future.

The Council is able to commence the next four years of the MTFS from a strong financial base and this position and future projections are highlighted in the report.

Council considered a report (Agenda Item 5) which set out the purpose of the Medium Term Financial Strategy (MTFS) to determine financial planning assumptions for future years, aligned with the delivery of the Council Strategy. The MTFS highlighted the overarching key issues faced by the Council, and the different scenarios and uncertainty concerning future revenue streams. The Council was able to commence the next four years of the MTFS from a strong financial base, and this position and future projections were highlighted in the report.

MOTION: Proposed by Councillor Ross Mackinnon and seconded by Councillor Lynne Doherty:

That Council approve the Medium Term Financial Strategy.

Councillor Ross Mackinnon in introducing the report stated that the Strategy was a rolling four year programme built to ensure that the Council had the financial resources to deliver the Council’s Strategy, and it included a number of assumptions and uncertainties around both income and expenditure. The Local Government Financial Settlement for 2023 was broadly similar to the previous year, but the outcome of the Local Government Fair Funding Review was still awaited for more long term certainty around business rates.

Councillor Mackinnon highlighted that the Council had to bridge a funding gap of around £14m over the next three years and these savings would be met by transformation, digitization, and income generation. He believed that the Council had an excellent track record in delivering required savings in recent years without any cuts to frontline services. He stated that it was crucial for the Council to have adequate reserves in place to smooth what was anticipated to be an irregular pattern of savings, and to protect the provision of services. Councillor Mackinnon highlighted how carrying out a medium term forecasting exercise helped to see the demands and challenges ahead, and ensured that the Council continued to meet the needs of its residents. He stated that the recently released Financial Resilience Index showed that the Council was well placed to face the future with sufficient reserves and healthy financial indicators, which demonstrated its overall robust financial health.

Councillor Jeff Brooks highlighted that he had previously asked for the Strategy to be published alongside the outturn. He called for there to be a comparison published between the initial forecast and the actual outcomes at future meetings so that an accurate review can be undertaken in public.

Councillor Adrian Abbs highlighted the principal of ‘Save Money And The Environment’ (SMATE), raised concerns about the approach to investing into environmental protection, and referred to projects that could save the Council both money and protect the environment.   

Councillor David Marsh queried why the decision had been taken to raise Council Tax by 1% rather than 2%, which had resulted in more than £1m being drawn from the Council’s reserves when previous proposals from other political groups to withdraw from the reserves had been rejected.

Councillor Graham Bridgman stated that funding was set aside into specified reserves to counter fluctuations in specific areas of the budgets such as adult social care.  ...  view the full minutes text for item 83.

Purpose: To outline the Capital Strategy covering financial years 2022/23 – 2026/27 and the supporting funding framework, providing a high-level overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of local public services along with an overview of how associated risk is managed and the implications for future financial sustainability.

(All Members had been granted a dispensation by the Monitoring Officer to speak and vote on this item).

(Councillor Lee Dillon declared a personal or an other registrable interest in Agenda Item 6 by virtue of his employment at Sovereign Housing. As he determined his interest was not a disclosable pecuniary interest he remained to take part in the debate and voted on the matter).

Council considered a report (Agenda Item 6) that outlined the Capital Strategy which covered financial years 2022/23 to 2026/27 and the supporting funding framework. The report provided a high-level overview of how capital expenditure, capital financing and treasury management activity contributed to the provision of local public services, and also an overview of how associated risk was managed and implications for future financial sustainability. As decisions made on capital and treasury management had financial consequences for the Council for many years into the future they were subject to both a national regulatory framework and to local policy framework.

MOTION: Proposed by Councillor Ross Mackinnon and seconded by Councillor Dominic Boeck:

That Council approve:

(a)   the Capital Strategy and supporting Capital Programme for the period 2022/23 – 2026/27;

(b)   the supporting Minimum Revenue Provision Policy for the period 2022/23 – 2026/27;

(c)    the Flexible Use of Capital Receipts Policy for the period 2022/23 – 2026/27, and;

(d)   the proposed Community Infrastructure Levy Bids for inclusion in the Capital programme 2022/23 – 2026/27.

Councillor Ross Mackinnon in introducing the report illustrated how the capital programme was split across the six priorities of the Council’s Strategy. He highlighted a number of budget allocations across the service areas and went in to detail regarding some of the specific projects which would receive this funding.

Councillor Mackinnon explained that the capital programme did not just maintain essential services, it also invested in new schemes across all of the Council’s Strategy priorities and was sustainable and affordable. He referred to the increase in Council borrowing but reminded Members that some of these enhancements would reduce service costs or provide funds back to the Council through income or greater efficiencies.

Councillor Mackinnon wished to provide reassurance that the capital repayment costs would be between 10 - 12% of the revenue budget, which compared favourably with other local authorities and was forecast to remain so in the future. He highlighted that the Council’s Section 151 Officer had confirmed that the programme was prudent, affordable and sustainable.

Councillor Mackinnon referred to how the Council could choose not to invest and this remained an option. However, the administration had opted for a positive approach, paying close attention to the need for affordability but also to enable the capital schemes proposed to be funded properly and have a positive impact for residents. He felt that overall the capital programme struck the right balance between new investment to support the Council’s priorities, continuing to fund core infrastructure, and affordability.

Councillor Graham Bridgman highlighted a project being delivered in conjunction with Stratfield Mortimer Parish Council and emphasised  ...  view the full minutes text for item 84.

Purpose: To consider and recommend to Council the 2022-23 Revenue Budget, which proposes a Council Tax requirement of £110.1m, requiring a Council Tax increase of 1% and an Adult Social Care precept of 3%. The Council Tax will raise £1.1m and the precept will raise a further £3.2m. At 4%, the budget is balanced, after using £4m of reserves that have been specifically set aside. The overall Council Tax increase is intended to balance the financial impact of the pandemic on residents, mitigating the financial pressures they face, as well as the cost pressures that the Council faces.

The budget details the investment for the year ahead to deliver the Council Strategy, the ambitions in the Capital Strategy and support core Council Services. The paper also includes savings proposals, other income sources and the use of specific reserves to ensure the Council has a sustainable financial footing. The budget also allocates revenue funding to deliver the Capital Strategy (separate paper) that has a substantial amount of investment in infrastructure for the year ahead.

This report also proposes the Fees and Charges for 2022-23 as set out in Appendix F and the Parish Expenses as set out in Appendix G and recommends the level of General Reserves as set out in Appendix E.

(All Members had been granted a dispensation by the Monitoring Officer to speak and vote on this item).

Council considered a report (Agenda Item 7) which recommended the 2022-23 Revenue Budget and proposed a Council Tax requirement of £110.1m which required a Council Tax increase of 1% and an Adult Social Care precept of 3%. The Council Tax would raise £1.1m and the precept would raise a further £3.2m. At 4%, the budget was balanced after £4m of reserves that had been specifically set aside had been used. The overall Council Tax increase was intended to balance the financial impact of the pandemic on residents, and mitigate the financial pressures being faced as well as the cost pressures that the Council faced.

The report set out how the Council was focussed on delivering services to residents and businesses that supported the overall Health and Wellbeing of the district, and assisted in the recovery from the Covid-19 pandemic, building on its recovery strategy and improving the quality of services provided. The revenue budget supported this through the allocation of funds to core investment in the Council’s strategies, and through making revenue funding available to deliver the Capital Strategy. The budget was supported this year through a new funding settlement from the Government which provided new core funding to the Council. At the same time, the Council faced significant pressures arising from the pandemic as well as the macroeconomic picture. The Council had to also balance the level of Council Tax levied; in 2021-22 the Council decided not to take the 3% Adult Social Care precept that was available, but this remained available for use in 2022-23, alongside a further 1% Adult Social Care precept as well as a 1.99% Council Tax increase for core services before any referendum principles occurred. To support the most vulnerable, it was proposed to provide a one-off £150 reduction in Council Tax for claimants receiving Council Tax Reduction falling within a working age category. The revenue budget sought to manage these demands whilst achieving financial balance.

The budget detailed the investment for the year ahead to deliver the Council Strategy, the ambitions in the Capital Strategy and support core Council Services. This included investment in approved strategies which included Adult Social Care, the Environment Strategy, the Digital and customer engagement strategies, and prevention work. The report also included savings proposals, other income sources, and the use of specific reserves which ensured the Council had a sustainable financial footing. The budget also allocated revenue funding to deliver the Capital Strategy that had a substantial amount of investment in infrastructure for the year ahead. The Council was proposing to support the budget with a £4m contribution from reserves; these were largely from specific reserves which included the residual Covid-19 non-ring-fenced grant, Council Strategy reserve, Transformation Fund, and Collection Fund reserves.

The report also proposed the Fees and Charges for 2022-23 (set out in Appendix F) and the Parish Expenses (set out in Appendix G) and recommended the level  ...  view the full minutes text for item 85.