Budget 2021/22 and Medium Term Financial Plan
To review the draft Budget and Medium Term Financial Plan for 2021/22 and to consider making recommendations to Cabinet on 10 February 2020.
Cabinet Members and their Deputies; and the following Officers have been invited to attend the meeting, as have all Members:
Chief Executive, Director of Regeneration, Chief Financial Officer, Head of Policy, Communications and Customer Services, Head of Planning Services, Head of Commissioning, Environment and Leisure and Head of Housing, Economy and Community Services.
Tabled paper added 19 January 2021.
In welcoming the Cabinet and Deputy Cabinet Members, the Chairman confirmed that Members had received the tabled update, circulated and added to the website the previous day.
The Leader and Cabinet Member for Finance introduced the report and said the Council faced serious challenges that had built up over the last decade, and from the impact of the Covid-19 pandemic. He said that core funding did not meet the funding of core services. The Leader explained that Government had postponed the changes to Local Government funding but SBC would not be making staff cuts, and a pay increase to staff was included in the budget. The table on page 32 of the report set out the funding streams that had or would be received by SBC. The Leader said £996k was also received as part of Tranche 5 Covid-19 funding from Government. He referred to the Coalition Priorities, and in particular the creation of a housing company, Rainbow Homes, to help increase the supply of affordable homes with Council funding of £23m.
The Leader referred to the Council Tax rise of £4.95 per annum for a band D property and said that whilst he was aware of the impact this might have, no rise would impact on SBC’s fragile finance.
Drawing attention to Appendix I – 2021/22 Medium Term Financial Plan (MTFP) on page 39 of the report, the Leader said the Council was in a far better position than expected but there was no flexibility and no extra income except for Government grants, and the shortfall would have to be met from reserves. He warned that this was not unlimited or sustainable, but it was an unusual situation, and some other Councils were in difficulty. In highlighting paragraphs 2.16 – 2.19 on page 35 and 36 of the report, the Leader stressed that there was no possibility of a Section 114 Notice being issued in SBC.
In the debate that followed Members asked questions and raised points including:
· Was there any indication when the Local Government review might come forward?;
· praised and thanked the Finance team;
· as few savings were currently being made in the current ‘Covid-19’ budget, would there be a more harsh impact in future ‘normal’ years?;
· pleased that staff were being recognised with a pay rise;
· suggested SBC would have to look at other options and how they delivered services; and
· welcomed news that Coalition Priorities would be maintained as residents needed good news.
The Leader said that the Local Government review had been delayed for the previous 2 years and it would be difficult for Government to make radical changes whilst assessing the impact of the Covid-19 pandemic. The Chief Financial Officer added that the Treasury were pressing for a review, any Council that was allocated less funding would have to be safety netted and it was too difficult to consider during the Covid-19 pandemic. The Leader said that the General Fund might not be able to be used in future years, there had been many savings over the previous 10 years but there would not be staff cuts. He said that a large percentage of the budget was staff costs.
In response to a Member’s question, the Leader said that balancing the budget required using funds from the £4-5m in General Reserves.
A Member sought more information on the increase in charges from Environmental Health, Tunbridge Wells Borough Council and from Local Land Charges, listed in the table at 3.5 on page 37 of the report. The Chief Financial Officer explained that the Environmental Health shared service had increased their charges and the negotiation process on this was ongoing. He added that, in respect of the Local Land Charges, there was a decrease in income as customers could use outside services, but the Council would continue to drive down costs and find solutions. The Head of Planning Services said it was difficult to predict future Planning and Local Land Charges income.
A Member commented that whilst the Council was resisting pressure, Area Committees and, in the future, Cabinet Advisory Boards were a drain on officer time. The Leader said that Area Committees were part of the Coalition Priorities and it was not a drain but might change what some officers spent their time on. The Monitoring Officer added that Area Committees were a key part of engaging the public and officers were confident they could deliver.
The Chairman went through the Budget Variations on Appendix II, by each Head of Service Area and Members made comments and asked questions.
A Member asked whether the loss of income would ever recover and questioned the free use of Swale House. In the debate that followed the Chief Financial Officer said that the financial situation of Sittingbourne FM (SFM) had been considered and rent would not be charged now or in the future. He added that there were different types of tenants and SFM were a valuable asset to the community but if more commercial organisations were to rent, they would be charged. The Chief Financial Officer said that Government would compensate on Parking and Planning fee income but not on commercial income, and SBC only had a small portfolio. The Cabinet Member for Economy and Property added that SBC were generally in a good position for rent collection.
The Cabinet Member for Health and Wellbeing reminded Members that the figures were from last September, the situation was changing, and costs would increase going forward but would be reviewed at a later date.
In response to a Member’s question on adopting play parks, the Cabinet Member for Environment said that there would be a loss of income but savings longer term with no maintenance costs. A Member said that it should be made clearer that the cost of maintenance was greater than the income received from Section 106 monies.
The Cabinet Member for Environment clarified that the lower level of issuing Fixed Penalty Notices was for littering.
A Member sought clarification on the end of the reserve funding for the Project Support Surveyor. The Chief Financial Officer agreed to report back on this.
The Head of Policy, Communications and Customer Services clarified that the projected increase in future years was for hire of premises and included indexation.
The Cabinet Member for Housing confirmed that SBC were likely to receive more grants.
In response to a Member’s clarification on the restructuring of the Licensing team, the Chief Finance Officer advised that a Senior Licensing Officer was required to strengthening the team, and more enforcement work was planned.
Lines 64 -81
There was a debate around staff savings and the Chief Financial Officer agreed to follow up with a Member who questioned how the Council could make savings without reducing staff or salaries, and this information would be included in the final report.
Lines 95 – 100
The Chief Financial Officer highlighted that as the facilities at Bourne Place did not open during summer 2020, an income was not received. In the discussion that followed, the Leader said that he hoped that when the Covid-19 pandemic was over there would be a burst for demand for the entertainment and hospitality industries and a return from the long-term investment was vital. A Member congratulated the administration on finding alternative tenants and making alterations to the units to accommodate bowling.
The Head of Commissioning, Environment and Leisure confirmed that the New Play Area at Iwade came forward before the 2018 Open Spaces and Play Strategy.
There was a discussion around the Milton Creek Access Road and the Head of Commissioning, Environment and Leisure advised that the item would be left in the capital programme as they were waiting for developer plans to come forward.
Members debated Sheppey Improvement – Capital Receipts. The Leader advised that the £250k, allocated from the income from Malro, would fund projects on the Isle of Sheppey, and some had already been spent on a memorial. In response to a Member’s question, the Leader advised that £1.1m was received from Malro.
The Chief Financial Officer advised that the increase in the budget for IT was for essential work. The Cabinet Member for Economy and Property added that IT was fundamental to the refurbishment of Swale House and a report on this would be considered at Cabinet in the future.
The Chief Financial Officer confirmed that the funding for Leaky Lucy’s mini-bus for the Air Training squad was not on the Asset Register but was funded through the Capital Budget.
In response to a Member’s comment that the Council were taking risks by borrowing and using reserves, the Leader said it was not taking excessive risks and he drew attention that the borrowing commitment to STC and the Rainbow Housing company would provide an income. He said that there was no commitment borrowing for Swale House refurbishment. The Leader said they were prepared to use funding from the General Fund and Reserves due to the Covid-19 pandemic but this was not sustainable, and would be monitored.
The Chairman said he looked forward to the Swale House refurbishment report being considered by Scrutiny before Cabinet. The Leader said that any borrowing for the refurbishment would lead to savings or generate an income.
Members thanked Cabinet Members and officers for their attendance. The Leader joined in the thanks and praised the Chairman for his chairing of the meeting.
(1) That the draft 2021/22 revenue and capital budgets be noted.
(2) That the Medium Term Financial Plan be noted.
- MTFP and 2021-22 Budget Report for Scrutiny 20-1-21 (Cabinet 16-12-20 final v2), item 408. PDF 532 KB
- scrutiny budget update 21 22, item 408. PDF 66 KB