Issue - meetings

This report sets out the draft General Fund Budget for 2023/24 and Medium-Term Financial Plan (MTFP) ending 2026/27. The MTFP sets out the key work streams for the Council to focus on over this period which, collectively, aim to address the significant shortfall in annual budget projected.

Recommendation

The Executive makes the following recommendations to Council, to:

i)             agree a 2.99% increase in Waverley’s Band D Council Tax Charge for 2023/24 with resultant increases to the other council tax bands;

ii)           agree to continue the Council’s existing Council Tax Support Scheme at the current levels;

iii)          agree to a general inflationary increase to Fees and Charges for 2023/24 except for car parking charges and some exceptions as proposed in Annexe 4;

iv)          note the appropriation of garages from the HRA to General fund and approve an increase of 4% to the weekly charge for all garages from 1 April 2023; 

v)           approve the General Fund Budget for 2023/24 as summarised in Annexe 2, incorporating the baseline net service cost variations included at Annexe 1 and Annexe 3;

vi)          approve the General Fund Capital Programme as detailed in Annexe 5; and,

vii)        approve the reserve movements as set out in Annexe 6.

85.1     The Leader of the Council briefly introduced the General Fund Budget 2023/24 and Medium Term Financial Plan (MTFP) 2023/24 – 2025/26, and thanked the Section 151 Officer, Financial Services Manager and Senior Accountant for the work put into developing the budget and the MTFP, which provided a high level of confidence and assurance that the numbers presented were accurate and valid.

85.2     The Leader went on to thank Cllr Mark Merryweather, Portfolio Holder for Finance, Commercial and Assets, for the patience he had shown with Members in explaining budgetary matters over the past four years. The Leader commended the budget to Council, which was duly seconded by Cllr Kika Mirylees, and invited Cllr Merryweather to present the detailed budget proposals.

85.3     Cllr Merryweather referred the Mayor and Members to their agenda papers (pages 35-106) and presented the detailed proposals for the General Fund Budget 2023/24:

“Our General Fund provides the funding for most of our activities except most notably our Social Council Housing which is covered as a separate item later in the agenda this evening.

Even pre-Covid, cost based inflation was running ahead of our ability to replace the income we were losing from central government.  Since then and on top of Covid we now also face the more structural and perhaps more sustained consequences of eye-watering cost inflation that will compound that structural gap.

We expect cost inflation will add a further £3m to our cost base next year alone:  a total impact to date of over £4.5m annually since before Covid.  Inflation is a rate increase, and we also have net activity cost increases for unavoidable and other necessary growth items, including:

·         a provisional allocation of £330k for the beefing up of staffing for our development management team, to restructure it following the sustained increase in applications post-Covid, although this is still subject to the confirmation of a business case, and

·         £150k toward the provisional budget for the Local Plan Update, the balance of which will be spread over the following years if necessary, but which should at least be a one-off cost if it crystallises.

In terms of the cost focussed measures and other cost mitigations we expect:

·         New Service savings and the ongoing Head of Service Costs review programme to continue to deliver a number of recurring benefits - including for example from our new insurance arrangements – which all add up;

·         As we consider necessary future cost increases, we will try where possible to contain them at least to one-offs too;

·         While we are cautious about savings from the Business Transformation strategy in 2023/24 - as both the new corporate structure settles in and as office costs inflate with everything else - further savings from further reviews of both customer services and staff travel are expected from 2024/25, and

·         Our collaboration with Guildford is on target to achieve net savings of at least the £700k - annually – as originally projected.

Turning next to the pressures on our income from  ...  view the full minutes text for item 85

This report sets out the draft General Fund Budget for 2023/24 and Medium-Term Financial Plan (MTFP) ending 2026/27. The MTFP sets out the key work streams for the Council to focus on over this period which, collectively, aim to address the significant shortfall in annual budget projected.

This report contains the following Annexes:

          Annexe 1 – draft Medium Term Financial Plan 2023/24 – 2026/27

          Annexe 2 - draft General Fund Revenue Budget Summary 2023/24

Annexe 3 – statement of key variations by service line from the baseline 2022/23 budget 

          Annexe 4 – draft Fees & Charges for 2023/24

          Annexe 5 – draft General Fund Capital Programme 2023/24

Annexe 6 – schedule of projected General Fund usable reserves and provisions 2023/24

Recommendation

It is recommended that the Executive, after considering comments from the Resources Overview & Scrutiny Committee, makes the following recommendations to Council, to:

i)     agree a 2.99% increase in Waverley’s Band D Council Tax Charge for 2023/24 with resultant increases to the other council tax bands;

ii)    agree to continue the Council’s existing Council Tax Support Scheme at the current levels;

iii)   agree to a general inflationary increase to Fees and Charges for 2023/24 except for car parking charges and some exceptions as proposed in Annexe 4;

iv)   note the appropriation of garages from the HRA to General fund and approve an increase of 4% to the weekly charge for all garages from 1 April 2023; 

v)    approve the General Fund Budget for 2023/24 as summarised in Annexe 2, incorporating the baseline net service cost variations included at Annexe 1 and Annexe 3;

vi)   approve the General Fund Capital Programme as detailed in Annexe 5; and,

vii)  approve the reserve movements as set out in Annexe 6.

The Executive RESOLVED to make the following recommendations to Council, to:

i)     agree a 2.99% increase in Waverley’s Band D Council Tax Charge for 2023/24 with resultant increases to the other council tax bands;

ii)    agree to continue the Council’s existing Council Tax Support Scheme at the current levels;

iii)   agree to a general inflationary increase to Fees and Charges for 2023/24 except for car parking charges and some exceptions as proposed in Annexe 4;

iv)   note the appropriation of garages from the HRA to General fund and approve an increase of 4% to the weekly charge for all garages from 1 April 2023; 

v)    approve the General Fund Budget for 2023/24 as summarised in Annexe 2, incorporating the baseline net service cost variations included at Annexe 1 and Annexe 3;

vi)   approve the General Fund Capital Programme as detailed in Annexe 5; and,

vii)  approve the reserve movements as set out in Annexe 6.

Reason: The General Fund Budget is a major decision for the Council and setting a balanced budget is a statutory requirement. Scrutiny of these MTFP and Budget proposals demonstrate transparency and good governance. The Covid-19 negative impact on the finances has mostly been overcome through the swift response and actions taken by the council. This challenge was immediately followed by the impact of the global economic crisis driving up UK inflation and interest rates and the resulting current cost of living crisis. The council has been well positioned to respond to these challenges and whilst the latest MTFP for the subsequent years ending 2026/27 continues to project future financial pressures, and opportunities, the council is able to take action to ensure sufficient funding is in place to deliver and maintain services.

[This matter is recommended to Council for decision.]

The Portfolio Holder for Finance, Commercial and Assets, Cllr Mark Merryweather, gave a detailed presentation on the report which set out the proposed budget for 2023/24 and highlighted key areas for the Executive to consider.

He reminded Members that even before Covid, cost base inflation had been running ahead of the Council’s ability to replace income lost from central government. The impact of Covid and pressures emerging since had resulted in a more structural and possibly sustained period of cost inflation that would compound the structural budget gap.

Cllr Merryweather gave an overview of the financial pressures on the Council including cost inflation which would add a further £3m to the cost base in 2023/24, in addition to a number of activity cost increases. He identified a number of cost mitigations including net savings of at least £700k annually arising from the collaboration with Guildford.

On the income side, he noted that it was becoming harder to distinguish between Covid and the Cost of Living inflation crises as an underlying cause for income still being below pre-pandemic levels, although key income streams including car parking income were recovering. A number of mitigation measures had been implemented.

There were similar pressures on the capital projects budget, and whilst a one-off £170k increase in the contribution to the general property maintenance fund was proposed, the backlog of planned works remained a concern.

The proposed 2023/24 budget was a balanced budget, however the Medium Term Financial Plan continued to show a projected unresolved budget gap, with continued uncertainty about the level of funding that might be received from central government over the Plan period.

The Executive was recommending that the Council’s share of Council Tax be increased by 2.99% in 2023/24, amounting to £5.85 for the year for a Band D home. This compared to a £5 increase in 2022/23, which would be a 2.6% increase. The Council Tax Support Scheme would be maintained, and would be supplemented by a prescribed central government Council Tax Support Fund.

Cllr Merryweather thanked the officers for their hard work in pulling together the budget.

Cllr Jerry Hyman spoke on this item and questioned whether it was right to increase the fee for playing pitch hire by 9% as this would impact on the ability of children to enjoy team games, and would contribute to ongoing inflation. He asked if any sensitivity analysis had been undertaken on alternative levels of increase. He also asked for a response on his previous question regarding the appropriation of council-owned garages from the HRA to the General Fund.

In response, Cllr Merryweather advised that an explanation of the approach to increasing fees and charges was set out in section 11 of the report. With regard to the transfer of garages from the HRA to the General Fund, this was essentially an accounting exercise to recognise that the provision of garages was no longer directly connected to the provision of the housing service, as only around 20% of garages were let to  ...  view the full minutes text for item 83