Agenda item

Details of the Budget Process are attached

 

8a) Leader’s Budget Speech

 

8b) Relevant extract of the minutes of Cabinet held on 2 Feb 2021

 

8c) Proposed amendment

 

8d) Reports of the Special Overview and Scrutiny Management Committee meetings held on 26 January and 9 February 2021.

 

8e) Financial Plan 2021/22. Report by the Chief Executive can be accessed at this link Budget Papers  

The Chairman introduced the item, drew attention to the various papers connected to the item and explained the procedures to be followed. The Chairman then invited Cllr Philip Whitehead, Leader of the Council, to present his budget speech.

 

Cllr Whitehead detailed how difficult the last year had been and how COVID-19 had deeply affected everyone. Wiltshire Council had not lost sight of the ambition for stronger communities and the pandemic had highlighted how strong communities could become stronger when faced with challenges.

 

Cllr Whitehead gave some facts and figures detailing the extra spending and work undertaken in response to the pandemic. Business as usual had also continued throughout, with teams working towards a stronger future. 

 

Cllr Whitehead explained that there would be further challenges to come due to continued uncertainty and latent demand, these had been planned for in the budget. The budget was proactive and efficient, there would be more scrutiny of finances, more demand modelling and organisational recovery would take advantage of lessons learnt during the pandemic, driving efficiencies. The budget would offer resilience and ensure that vital services were provided and those most in need supported.

 

Cllr Pauline Church, Cabinet Member for Finance, Procurement and Commercial Investment, presented the Financial Plan 2021/22, Medium Term Financial Strategy Update, Capital Strategy and Capital Programme. Cllr Church explained that the last year had been a journey. When she accepted her Cabinet post Wiltshire Council was £50 million in deficit and had lobbied the government for funds to cover this shortfall. In response to the pandemic the Corporate Leadership Team had reassessed forecasts and spending controls had been implemented.

 

It was stated that uncertainty and the ever-changing landscape was a huge challenge and Wiltshire Council needed to ensure that service delivery could continue throughout the pandemic, recovery and beyond. The extra Government funds received were a one year settlement and a planned Government review of financing of local councils had been delayed due to the pandemic. As a result, Wiltshire Council had made preparations within the budget by setting up a latent demand reserve account and a council tax volatility reserve account. Officers had also introduced a mechanism to control reserve levels using a risk assessment model. It was proposed that Council Tax and the Adult Social Care levy should be increased, raising £8.5 million for services.

 

Some services had seen demand go down, however there could be hidden issues leading to latent demand and a surge for services, so a latent demand reserve account would be created, and funds added to the council tax discretionary hardship fund. Funding had also been set aside to help Wiltshire’s town centres adapt and recover. Significant funds had been set aside for Children’s Services, SEN and disability transport and Waste Services. Wiltshire Council was investing in the health and wellbeing of residents by bringing all leisure centres in house and providing improved facilities/activities.

 

Cllr Church thanked all officers who had worked on the budget.

 

Cllr Pauline Church proposed a motion to adopt the recommendations as set out in the budget report on page 112 of the agenda. This was seconded by Cllr Philip Whitehead.

 

The Chairman invited Cllr Graham Wright, Chairman of the Overview and Scrutiny Management Committee to comment and present the report of the Scrutiny meeting held on 26 January 2021. The report could be found at pages 119-126 of the agenda. Cllr Wright explained that a report by the Financial Planning Task Group had been welcomed, received and noted at the meeting. Senior officers, Members of the Executive and Scrutiny Chair’s were in attendance so that issues could be raised, and answers provided as required. Cllr Wright stated that the OSMC had noted the plan and assured Members and the public that robust scrutiny had been undertaken, despite the difficulties of this during the pandemic. Cllr Wright considered the reports and the questions and answers received at the meeting to be of a high quality.

 

The Chairman invited Cllr Pip Ridout as Chair of the Financial Planning Task Group to comment. Cllr Ridout stated that she considered the budget to be of a very high quality, with an improved layout and increased readability. The task group had also invited Members and officers to attend their meeting in order to raise questions and obtain answers, full details of all the issues considered and raised could be found in the report to OSMC.

 

Questions and statements were then received from members of the public; their responses were published in the agenda supplement. There were no supplementary questions.

 

Adrian Temple-Brown read a statement regarding the risks of extreme weather, increased temperatures caused by global warming and the mass migration of people to the UK as a result of flooding and famine elsewhere, which could create food shortages here. Mr Temple-Brown felt that the budget Cabinet recommended to Council did not contain adequate risk assessments of climate and ecological damage and did not consider the environment or carbon emissions..

 

The Chairman then invited group leaders to comment as follows:

 

Cllr Philip Whitehead, Leader of the Council had no comment.

 

Cllr Ian Thorn, Leader of the Liberal Democrats thanked residents, businesses, Wiltshire Council staff and Members for their resilience and hard work during the past year. Regarding the question on delivery of political leaflets Cllr Thorn stated that he did not feel it was acceptable in the present situation and apologised for any that had been delivered by his party. Cllr Thorn reflected on the past four years and issues that his party had fought on, highlighting Furlong Close and called for an independent inquiry into the situation surrounding Furlong Close. In regards to the budget Cllr Thorn stated that the briefing and scrutiny process had been helpful. However, he felt that the budget was not ambitious enough. Cllr Thorn drew attention to the large increase over the last year in residents claiming Universal Credit; children claiming free school meals and the increase in usage of food banks. Meanwhile he stated that Wiltshire Council had a record surplus; was putting a record £17 million into reserves and was putting Council Tax up by the maximum amount allowed by central government. Whilst Cllr Thorn acknowledged that it was prudent to save for an uncertain future, he felt that people were struggling now. Therefore, the Liberal Democrats would not support the budget. Their intention had been to produce a full budget, however after discussion with officers it was deemed untenable at the current time due to the demands on officers dealing with the pandemic. The amendments being proposed at the meeting were sound and would help to rebalance the proposed budget in favour of the needs of the people of Wiltshire.  

 

Cllr Ernie Clark, Leader of the Independents, stated that Cllr Thorn had covered most of his points. Cllr Clark also hoped the Furlong Close situation could be resolved. Cllr Clark questioned whether Wiltshire Council was Member led, stating that some Members felt Wiltshire Council was officer led.

 

Cllr Ricky Rogers, Leader of the Labour Group stated that the Furlong Close situation was very difficult, welcomed a possible rapid scrutiny exercise and hoped that a satisfactory solution could be found for all. Cllr Rogers declared that the response given by Wiltshire Council during COVID-19 was outstanding and thanked all involved. Cllr Rogers agreed with Cllr Whitehead that this was an apolitical budget. However, after listening to feedback from his community and the difficulties that residents were facing, he felt unable to support the budget and a rise in Council Tax.    

 

The Chairman then invited Cllr Gavin Grant, seconded by Cllr Ian Thorn to proposed Amendment A, as follows.

 

Amendment A

·       To reduce the Adult Social Care levy from 3% in 2021/22 to 2% in 2021/22 and to apply a 1% levy in 2022/23. The loss of funding is approximately £2.841m in 2021/22. The £2.841m shortfall is to be met from a draw of funds from the Latent Demand Reserve.

 

Cllr Graham Wright, Chair of the Overview and Scrutiny Management Committee confirmed that appropriate scrutiny had taken place on the financial issues being discussed. Cllr Wright stated that Cllrs Thorn and Grant had confirmed that there wold be no impact on service delivery by spreading the adult social care levy over 2 years. Details were sought on additional draw down on the latent reserve fund and queries raised on overall council position on reserves. In response to queries around the balancing of financial risks by the council, it was noted that the S151 Officer had estimated the cover of that risk from 96% to 80% in the event all three amendments were approved.

 

The Leader stated Wiltshire Council had frozen Council Tax from 2011-2016, which had been opposed each year by Liberal Democrats, if Council Tax had been raised each of those years, residents would be paying approximately £200 per year more than current levels. The proposed amendment would save residents £15.00 a year. Cllr Whitehead felt it was sensible to raise the Council Tax and use the monies raised to protect the vulnerable and the poor, he also highlighted that those on Universal Credit get 80% of their Council Tax paid for them, so the amendment would save them £2.00. Cllr Whitehead confirmed the S151 officer had stated that there were risks in reducing earmarked reserves and any reduction in the level of the reserves reduced Wiltshire Councils ability to meet demand and deal with volatility in the future.

 

Cllr Clark, Leader of the Independent Group, stated he had a mixed mind in the amendment.

 

Cllr Ricky Rogers stated that the proposed amendments would slightly reduce the burden of the Council Tax increase. However, he identified the social care levy as an issue and felt that this should be funded by central government rather than being passed to local councils to collect.

 

The Chairman opened the debate to all Members.

 

Comments in support of the amendment included but were not limited to: That the reduction in Council Tax proposed by the amendment was a lot of money to those on low incomes and could make a real difference; the amendment would not affect the delivery of frontline services or pose a financial risk; that the amendments had at its heart the people of Wiltshire.

 

Comments in objection to the amendment included but were not limited to: the wealthy would benefit from the amendment rather than the poor who could be supported by benefits; the reserve funds were incredibly important and to reduce them was risky, and there was large latent demand forecast.

 

Cllr Thorn was invited to respond as Liberal Democrat Group Leader, regarding the amendment Cllr Thorn reiterated his support for the amendment.

 

Cllr Grant as the mover of the motion was given the opportunity to respond and detailed facts and figures in support of the motion and stated that the amendment was about cash flow, timing and leaving money in the pockets of residents at this time, which he felt was correct.

 

Cllr Church as the mover of the original motion was given the right to reply. Cllr Church stated that Wiltshire Council could not deliver services if they did not have sufficient reserves. The proposed motion would leave a shortfall in the latent demand reserve.  

 

In accordance with the Constitution the vote on the Amendment A was a recorded vote:

 

·       For – 27

·       Against - 59

·       Abstentions – 3

 

Amendment A was lost.

 

The meeting was adjourned at 1.47pm for lunch and would reconvene at 2.15pm.

 

Amendment B

 

The Chairman invited Cllr Gavin Grant to table Amendment B, seconded by Cllr Ian Thorn as follows:

 

·       To increase the Hardship Fund from £0.300m to £1.000m in 2021/22.  The pressure is £0.700m. That pressure to be made up by an additional draw of funds from the Collection Fund Volatility Reserve.

 

Cllr Graham Wright, Chair of the Overview and Scrutiny Management Committee confirmed that appropriate scrutiny had taken place on the financial issues being discussed and there would not be any additional risks to the Council arising from the amendment.

 

The Leader commented on the amendment highlighting that there was no additional funding proposed with the amendment, merely a release of funding from a reserve account that may be used following advice, calculations and judgement by officers and he would not support the amendment.

 

Cllr Ian Thorn, Leader of the Liberal Democrat Group, supported the amendment, indicating that it maintained a growing need and covered the options against a growing economic challenge.

 

Cllr Ernie Clark, Leader of the Independent Group expressed support for the amendment.

 

Cllr Ricky Rogers, Leader of the Labour Group expressed support for the amendment.

  

Cllr Pauline Church, Cabinet Member for Finance, Procurement and Commercial Investment did not accept the amendment as a friendly amendment and therefore the debate was opened to all Members.

 

During the debate the following issues and comments were raised – observing an increase in need in schools and local communities and support for appropriate funding to help residents during the coming year, officers react to needs as they arise during the year and this should continue, need for a flexible reserve, the Council needs the ability to react to circumstances and ability to move funding as necessary.

 

In accordance with the Constitution the vote on the Amendment B was a recorded vote:

 

·       For - 24

·       Against - 55

·       Abstain - 9

 

Amendment B was lost.

  

Amendment C

 

The Chairman invited Cllr Gavin Grant to table Amendment C, seconded by Cllr Ian Thorn as follows:

 

·       To ring-fence any in-year favourable variance that arises against the £1m reduction of section 31 grants attributed to Business Rate reliefs in the budget report (paragraph 64 & 65) and that variance be transferred to an earmarked reserve specifically to support businesses that are in financial distress by way of discretionary reliefs or discretionary grants.

 

Cllr Graham Wright, Chair of the Overview and Scrutiny Management Committee confirmed that appropriate scrutiny had taken place on the financial issues being discussed and there would not be any additional risks to the Council arising from the amendment.

 

The Leader commented on the amendment highlighting that Members had relied on officer advice during the COVID-19 epidemic and the amendment would raise unnecessary challenges if the funding needed to be used for another purpose.

 

Cllr Ian Thorn, Leader of the Liberal Democrat Group, did not comment on the amendment.

 

Cllr Ernie Clark, Leader of the Independent Group did not support the amendment.

 

Cllr Ricky Rogers, Leader of the Labour Group did not support the amendment.

  

Cllr Pauline Church, Cabinet Member for Finance, Procurement and Commercial Investment did not accept the amendment as a friendly amendment and therefore the debate was opened to all Members.

 

During the debate the following comments were raised – the amendment conveys a message of support to the business community and the Council should have maximum discretion to react to events as they materialise.

 

In accordance with the Constitution the vote on the Amendment C was a recorded vote.  The result of the vote was:

 

·       For - 21

·       Against - 59

·       Abstain - 5

 

Amendment C was lost.

 

There were no further amendments moved by Group Leaders and debate was opened to all Members.

 

During the debate the following issues and comments were raised – the budget was ambitious and deliverable and rose to the challenge of COVID-19, the budget may negatively impact some residents who suffer financial hardships, the budget would not address issues as a result of savings year on year, references to the increases in demands for funding especially Children’s Services, Social Care, and impact of mental health issues associated with COVID-19, and the budget was flexible, maintaining and investing in services for the future.

 

Resolved:

 

Vote 1

That Council:

 

1.     That a net general fund budget of 2021/22 of £412.561m is approved;

 

2.     That the Councils Tax requirement for the Council be set at £298.265m for 2021/22 with an average Band D of £1,590.60;

 

3.     That the Wiltshire Council element of the Council Tax be increased in 2021/22 the        following:

 

                                                    i.     A 1.99% general increase

                                                  ii.     Plus a levy of 3% to be spent solely on Adult Social Care;

 

4.     That the Corporate Leadership Team be required to meet the revenue budget targets for each service area as set out in Appendix 1 to this report, for the delivery of Council services in 2021/22;

 

5.     Delegate changes in fees and charges as set out in the report.

 

6.     That the Capital Programme 2021/22 to 2029/30 is approved;

 

7.     That the Capital Strategy set out in Appendix 9 is adopted;

 

8.     8-10.  In Vote 2

 

11. Endorses the Medium Term Financial Strategy and the forecast budget gap of £45.512m for the 2022/23 financial year with regular updates to be received on delivery against strategy and addressing the forecast budget gap.

 

Vote 2

That Council:

 

8.     That the Housing Revenue Account (HRA) budget for 2021/22 is set at £23.626m;

 

9.     That a 1.5% increase is set for social dwelling rents, except for rents currently over the formula rent which will be capped at formula rent as per national guidance;

 

10. All service charges related to the Housing Revenue Account (HRA) being increased to cover costs and garage rents increased by 1.5%;

 

 

In accordance with the Constitution this was a recorded vote.

 

Vote 1

Votes for the motion (59)

Votes against the motion (22)

Votes in abstention (5)

 

Vote 2

Votes for the motion (77)

Votes against the motion (0)

Votes in abstention (5)

 

Details of each vote are attached to the minutes.