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.

The Overview & Scrutiny Committee is asked to consider the report and agree any comments or recommendations to be passed to the Executive on the proposed recommendations to Executive and Council as set out in the report.

Rosie Plaistow (Finance Manager) presented the General Fund Budget and Medium-Term Financial Plan 2023/34. She advised that the report detailed a number of issues brought into the 2023/24 Budget, including:

-          A 2.99% increase in Waverley’s Band D council tax charge for the next financial year

-          A general inflationary increase to fees and charges

-          A 4% increase in the weekly charge for garages

-          Details assumptions regarding inflation and mitigating inflationary cost through some of the targets set commercially.

Rosie Plaistow further explained that the Fair Funding Review had been delayed by a further year and would be carried out in line with Government Spending Review. It was noted that the funding provided by the government for the next financial year was set out in the report.

Councillors Edmunds and Hyman joined the meeting at 18:28pm due to technical difficulties and requested the incident be minuted.

During the meeting, several councillors expressed concern about the proposed budget. Councill Neale raised concerns about item 10.4, he queried why garages intended for council tenants were being rented to private residents; and if that related to tenants parking on roads and possible Electric vehicle charging concerns. Councillor Mulliner queried whether garages were mainly leased to HRA tenants or other tenants. Officer Peter Vickers stated that 75% of garages were leased to private tenants. He also explained that garages as they stand were not part of the Housing Act 85 Provision of Dwellings due to the state of repair. Peter Vickers noted that they could not be ring fenced in the HRA therefore they have to fall to the General Fund. Councillor Hyman queried the appropriation of garages from HRA to general fund. Officer Peter Vickers explained the garages were appropriated through the CFR in the treasure management strategy with a net revenue stream of £100,000 a year to the General Fund.

Councillor Heagin expressed concern that some of the financial issues attributed to COVID-19 in Annex 1 Note A, may be due to the cost-of-living crisis, such as reduced gym membership and changes in parking.

Councillor Martin asked for more information regarding savings from collaboration with Guildford Borough Council. There was an identified budgetary saving of £202,000 in 23/24 but wanted to understand the savings from the financial year and the previous financial year. He went on to request more information on staff vacancies, local costs, and income from leisure centres, as well as fluctuations in the new homes bonus and the funding guarantee grant. The Officer responded by offering to provide further information on staff vacancies and agency costs outside of the meeting. He went on to explain that the new homes bonus was driven by the performance of the council tax base itself i.e., new properties brought into use within the course of the year. He also noted that the funding guarantee grant was a late announcement from the government in response to the cost-of-living crisis, guaranteed a 3% spending power guarantee, but this was a one-off and would not be received next year. The Officer also agreed to circulate more information on the income from leisure centres and the savings from collaboration with Guildford Borough Council at a later time.

Councillor Edmunds and Mulliner queried the pension contribution decline due to a rise in interest rates. Officer Rosie Plaistow confirmed that a triannual review of the pension fund was carried out every 3 years for current members and back funding applied to members. She advised that forecasts had been provided for the next year which included savings for the following 2 years until the next triannual review. It was noted that there was a cash saving made.

Councillor Heagin sought clarification on the redundancy costs as part of the collaboration savings included estimates on pension strains. Officer Rosie Plaistow agreed that the costs of collaboration savings and redundancy would also include pension strain. However, from the known redundancies made, pension strain was not applicable to any at Waverley. However, efforts would be made to include pension strain alongside redundancies going forward.

The Committee then discussed Council Tax increases. Councillor Martin referred to Annex 2 and queried the correlation of council tax to the increase in the number of houses. He also queried the £1m funding grant from the government and how the funds were distributed within the service costs. Officer Rosie Plaistow explained that Annex 1, showed a tax increase as part of the £11,232,335 figure and the £63,465 growth element that indicated an increase in taxable dwellings within the year which was a higher increase than usual. She advised that it was important to note that Waverley borough council only keeps 10% of the revenue. To answer the second question, the officer referred to Annex 1 Note C, which outlined that the government grant was predominantly used for the increase in Property Maintenance Fund, growth in the development management and the local plan review. Councillor Martin then referred to the Waste Contract in Annex 1 Note I and the CPI and house increases, he sought further clarification on the increase in house numbers. Rosie Plaistow agreed to circulate the requested information outside of the meeting.

Councillor Mulliner referred to item 7.7 and recommended that within the structural deficit to Waverley’s budget, ‘other sources of income’ should be added, because they were also limited by government controls. He then referred to Annex 1 and recommended a proper breakdown of collaboration savings be included and sent to the Executive, as a full analysis of JMT savings for Waverley was essential. Councillor Mulliner highlighted item 13.1 ‘Investment Property Voids’; he sought further clarification of the wording and felt that the word ‘voids’ should be changed to prevent negative connotations where the document stated that it was an increasingly important revenue stream. Councillor Mulliner queried the investment property voids reference to the loss of income or the creation of provisions to avoid loss of income Peter Vickers explained that the investment property stream was an important source of income to the Council and voids needed to be mitigated. Officers agreed to amend the wording.

Councillor Edmunds asked if leisure centres were becoming unsustainable due to heating costs. He also queried why the council was entering into contracts with inflations risks. Rosie Plaistow explained that contractors would not accept contracts without inflation risk and that the Council would be faced with increased contract costs or reduced contract income where contractors had mitigated the risk themselves.

It was noted that the proposed budget allocated 5% of funds for road maintenance, while 30% was allocated for new construction. Councillors argued that the borough’s roads were already in poor condition and in need of repair, and that prioritising new construction over maintenance was short-sighted.

It was also argued that the proposed 10% cut in funding for social services would have a negative impact on vulnerable members of the community who relied on those services for support. Councillors expressed the need for a more balanced budget that prioritised critical infrastructure and public services, such as road maintenance and public safety, while still allowing for necessary investments in new construction and economic development.

The committee resolved to make the following recommendations to the Executive:

-        The Executive must consider whether it is appropriate to continue referring to the Covid run-off where cost of living may be more appropriate. This is in reference to Annex.1, Note. A where a number of items were attributed to Covid.

-        The Committee requested a detailed breakdown of the collaboration savings.

Members agree and the motion was passed.