Agenda item

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 HRA tenants. Therefore, the cost of maintaining the garages should not be borne by the HRA as this meant that the HRA would be effectively cross-subsidising the General Fund. A full explanation was set out in the budget report and would be provided to Cllr Hyman. Cllr Merryweather also noted that the Landlord Services Advisory Board had discussed this matter and had been content with the proposals.

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.