Agenda item

This report is for the Full County Council to approve:

·      the council tax precept for 2017/18;

·      the revenue budget  for 2017/18 to 2019/20;

·      the capital programme quantum and principles; and

·      the treasury management strategy.

 

For the last six years Surrey County Council has faced unprecedented increases in demand, particularly for adult social care and children’s services.  At the same time central government funding for the council has reduced significantly, especially over the last two years, and this will continue until at least 2019/20.  Furthermore the main methodology used to distribute Government funding nationally has changed.

 

The Council has a legal duty to prepare a balanced and sustainable budget and to deliver statutory services to residents. To maintain essential services, the council requires a budget that funds these shortfalls and the funding for this can either come from further Government support or locally raised sources.

Annex 3, Council Tax requirement – To Follow

The Chairman said that the papers for this item were included in the agenda, the supplementary report of the Cabinet circulated last week and Annex 3, which set out the Council tax requirements. This was emailed to Members yesterday and paper copies were tabled.

 

She asked Members to note that the recommendations before them today were set out in the supplementary agenda.

 

She said that the debate on the Budget would be conducted in accordance with the County Council’s Standing Orders.

 

The Leader presented the Report of the Cabinet on the Revenue and Capital Budget 2017/18 to 2019/20, the Council Tax Requirement for 2017/18 and the Treasury Management Strategy.  A copy of the Leader’s statement is attached as Appendix B.

 

The Budget proposals were formally seconded by the Deputy Leader.

 

The Director of Finance presented her report to Council. A copy of her statement is attached as Appendix C.

 

The Leader of the Council announced that he believed that the County Council no longer required residents to pay additional council tax above 4.99%, which included the 3% Adult Social Care precept, and therefore tabled both revised recommendations and council tax requirement - Annex 3 (Appendices D and E respectively). The Chairman proposed an adjournment of 20 minutes to consider this new information prior to the minority Group Leaders being invited to speak.

 

Each of the Minority Group Leaders (Mr Harrison, Mrs Watson and Mrs Windsor), were then invited to speak on the budget proposals.

 

Key points made by Mr Harrison were:

 

·         Disappointment that there was no specific detail in relation to the funding

·         Concern about the issues of funding Adult Social Care and that the Government grant for Surrey was unfair

·         The county of Surrey paid more income tax, apart from London, than any other part of the country

·         Income tax was a fair tax but council tax was not

·         That there had been much dialogue and lobbying with all the Surrey MPs and that they were listening. However, there was no evidence to date that Surrey would receive more funding

·         The Better Care Fund and its funding issues for Surrey

·         Surrey had a large number of residents with learning disabilities

·         The continued reduction of the Revenue Support Grant, which would be a negative figure by 2018/19, and that the formula for calculating it was wrong

·         Concern that the proposed savings of £93m were unidentified and that the cuts would have to be made in non-statutory areas such as bus services, youth service, fire stations and road schemes

·         He suggested a review of: Members Allowances including Special Responsibility Allowances, staffing numbers including back office and accommodation costs, Surrey Matters.

 

Key points made by Mrs Watson were:

·         That the last minute changes had been secretive and shambolic

·         Members were being asked to keep their fingers crossed and hope that the funding appeared in the council’s bank account

·         She questioned where the £93m savings would be made

·         That the Liberal Democrats would not serve on the newly formed Sustainability Review Board

·         She was pleased that the 15% proposed council tax increase had been avoided. However, there were still many residents that could not afford a 4.99% increase

·         Social Care was at the heart of the County Council budget but she considered it was a national issue and should be funded centrally

·         That the Leader had cancelled the referendum at the last minute because he knew that it would not be supported by Surrey residents

·         That Surrey residents did not believe that they had received Value for Money from the County Council

·         Her suggestions for areas to review included: Surrey Matters, Special Responsibility Allowances, reviewing the Cabinet Associate positions, Property Investment, SEND out-county educational provision, investment in key worker housing, reducing locum costs.

 

Key points made by Mrs Windsor were:

 

·         That UKIP would have been in favour of a referendum. However, the Conservative Administration had withdrawn the forthcoming referendum for the proposed 15% increase in council tax because the Leader did not want it to be held on the same day as the County Council elections

·         It was the same message as last year, the Government were raising taxes by stealth because there was 3% Adult Social Care precept this year

·         Surrey residents were treated as a ‘cash cow’ by the Government

·         Changes to the Revenue Support Grant had penalised Surrey, which was why the County Council had not accepted the four year settlement

·         Surrey was not the only Council facing increased costs in Adult Social Care

·         Council tax increases affected those who could least afford to pay and also those residents who were asset rich / cash poor

·         Her residents had been unhappy with the proposed 15% council tax increase and would have voted ‘No’ in the referendum. Therefore, she considered that the Conservative Administration had made this decision based on residents’ feedback.

 

Twenty Members spoke on the Budget proposals and the following key points were made:

 

·         That Members had previously been told that there was no alternative to raising council tax by 15% but they had now been informed that this increase was not necessary and that the proposed council tax rise would be 4.99%

·         Adult Social Care needed to be funded by Central Government because it was unrealistic to fund it from council tax

·         That the Leader had withdrawn the referendum as he knew that the County Council would lose and several Members seats would be in jeopardy

·         The Director of Finance had expressed concern about Surrey’s budget for 2017/18

·         Members had not been told of any deal offered by the Government to Surrey

·         There was a ‘top heavy’ democracy in Surrey, with approximately 600 councillors – steps should be taken to reduce both this cost and the Special Responsibility Allowances

·         Concern that this was a secret budget and there was no detail in today’s papers or any Equality Impact Assessments

·         It was not clear where the cuts would be made

·         As Surrey was a Conservative Council, it should be receiving a better deal from Government

·         The opposition did not make their own budget proposals – they should take this opportunity to explain to Surrey residents what they support and what are their proposals

·         Central Government were forcing Surrey County Council into an impossible financial position and the County Council had worsened the situation by stating that it could make savings without cutting front line services

·         Members were being asked to vote on the Budget without having the detailed figures

·         That the Director of Finance had delivered a damning report on the Council’s financial situation

·         Support for the U-turn on the proposed 15% council tax rise but that it could just be a postponement until next year, after the County Council elections

·         Residents will be concerned which services would be cut and only want to pay more for the services that they use

·         Only a small percentage of Surrey residents actually use Adult Social Care but this service was a large percentage of Surrey’s budget

·         Members were reminded that they were also approving the Treasury Management Strategy today and that Orbis had saved £10m this year

·         The Leader always fought hard to get the best deal for Surrey residents and Surrey MPs were listening

·         A suggestion that the County Council looks at the new arrangements in Oxfordshire which were delivering significant savings

·         That the Leader should inform Members what the last minute changes were that enabled him to propose a 4.99% rather than 15% council tax rise

·         That the Social Care budget had overspent its budget for the last three years – it was considered that social care was a problem, which required a national solution

·         A review of the Property and Assets owned by the County Council was proposed

·         Surrey was the ‘golden goose’ of the country but residents wanted more of their money to be spent on them

·         That these late changes were embarrassing for the Conservative Administration and if the Cabinet had planned the 4.99% council tax increase earlier, it would not be in the situation today where further savings were urgently sought

·         The opposition proposals for savings, such as reviews of high salary costs, Member Allowances and County Council care beds were dismissed every year

·         Surrey County Council was an efficient Council which had been treated with contempt by Central Government

·         There had been relentless efforts made by the Leader to obtain an improved financial deal from Government but he had not panicked and was steadfast

·         The negotiations with Government had now reached a point where the Leader had sufficient confidence in the outcome that he could propose a 4.99% council tax increase

·         That CIPFA (Chartered Institute of Public Finance and Accountancy) had carried out a financial resilience review of the County Council’s finances in November 2016 and had confirmed that its budget planning assumptions and figures were sound

·         Some residents would have supported the original proposed increase, if the additional 10% had been ring-fenced for Adult Social Care

·         Setting the council tax was a matter for the County Council and not Central Government

·         The Leader had worked tirelessly to achieve a better deal for Surrey – in the last four years, successes included the provision of a large number of additional school places and also Project Horizon

·         All Members had been aware that the County Council leadership had been in discussion with Government in relation to the Council’s finances and, in particular, the funding of Adult Social Care

·         A belief that the Government was now more focussed on the Adult Social Care issues facing all Councils across the country

·         As a result of discussions with Government, there were now potential solutions to move forward on the basis proposed today, with a 4.99% council tax increase and this was much better than having a divisive referendum on a proposed 15% council tax increase.

 

The Leader responded to the points made by Members during the budget debate and made the following points:

 

·         The duty of all Members today, as set out in the Constitution, was to set a budget envelope and a council tax rate, which could then be passed to the Council’s billing authorities

·         If the opposition Members did not support the revised recommendations, did that mean that they supported the original proposals of 14.99%?

·         That the S151 Finance Officer and her team were available if required, to meet with opposition Members to assist them in preparing an alternative budget

·         He had hoped to unite all Members in the Chamber with the revised Budget recommendations

·         Agreed that Adult Social Care was a national issue and that he was confident that the Government would work towards a better way of funding it

·         Referring to recommendation 17(b), he invited all Members / Groups to provide proposals for identifying permanent service reductions and one-off reductions so that a balance budget could be achieved in 2017/18

·         Finally, he said that he considered that all Members became councillors to improve their communities so that there would be a better future for the next generation and he commended his revised recommendations to Council.

 

After the debate the Chairman called the recommendations, which included the council tax precept proposals, and a recorded vote was taken. 

 

The following Members voted for it:

 

Mrs Angell, Mr Bennison, Ms Bowes, Mr Brett-Warburton, Mr Carasco,

Mr Chapman, Mrs Clack, Mrs Coleman, Mr Cosser, Mrs Curran, Mr Ellwood,

Mr Tim Evans, Mrs Frost, Mr Fuller, Mr Furey, Mr Gardner, Mr Goodman,

Mr Gosling, Dr Grant-Duff, Mr Gray, Mr Gulati, Mr Hall, Mrs Hammond, Mr Harmer, Mrs Hicks, Mr Hodge, Mr Hussain, Mr Ivison, Mr Johnson, Mrs Kemeny, Mr Kemp, Mrs Lake, Mrs Lay,

Ms Le Gal, Mrs Lewis, Mrs Marks, Mr Martin, Mrs Mountain, Mr Page, Mr Persand, Mr Pitt,

Mr Ramsdale, Mrs Ross-Tomlin, Mr Samuels, Mr Skellett, Mr Taylor, Mrs Turner-Stewart,

Mr Walsh, Mr Wilson, Mrs Windsor, Mr Witham, Mr Young and Mrs Young

 

And the following Members voted against it:

 

Mrs Barton, Mr Beardsmore, Mr Beckett, Mr Cooksey, Mr Essex, Mr Robert Evans, Mr Forster,

Mr Goodwin, Mr Harrison, Mr Hickman, Mr Kington, Mr Mallett, Mrs Mason, Mrs Searle,

Mr Selleck, Mr Townsend, Mrs Watson and Mrs White.

 

Mrs Saliagopoulos abstained.

 

53 Members voted for and 18 Members voted against the Budget recommendations. There was one abstention.

 

Therefore, it was:

 

RESOLVED:

 

1.       That the council tax requirement for 2017/18 be set at £656,821,897.48, as set out in paragraph 3.4 of the revised Annex 3.

2.       That the level of the general council tax be increased by 1.99%.

3.       That council tax be increased by a further 3% for the adult social care precept, which will provide £18m to support the growth in demand for services.

4.       That the County Council precept for band D council tax be set at £1,331.55, which represents a 4.99% up-lift.

5.       That the council tax for each category of dwelling to be as follows:

Valuation band	£
A	887.70
B	1,035.65
C	1,183.60
D	1,331.55
E	1,627.45
F	1,923.35
G	2,219.25
H	2,663.10

 

6.       That the payment for each billing authority, including any surplus or deficit balances on the collection fund, will be set out as follows:

 

Billing authority	£
Elmbridge	85,728,065.25
Epsom & Ewell	43,738,124.52
Guildford	76,246,236.74
Mole Valley	53,650,096.35
Reigate & Banstead	79,835,944.80
Runnymede	44,376,566.85
Spelthorne	52,941,846.33
Surrey Heath	51,190,822.85
Tandridge	51,396,753.30
Waverley	72,190,134.96
Woking	54,604,577.55
TOTAL*	665,899,169.48

 

*This total includes the Council Tax Collection Fund balance.

 

 

 

Each billing authority’s payments to be made in ten equal instalments on the following dates, already agreed with relevant authorities:

20 April 2017	13 October 2017
26 May 2017	24 November 2017
26 June 2017	5 January 2018
28 July 2017	12 February 2018
8 September 2017	16 March 2018

 

7.       That the council tax rate set above be maintained after the Final Local Government Financial Settlement.

8.       That powers be delegated to the Leader of the Council and the Director of Finance to finalise budget proposals, updated to take account of new information.

9.       The requirement for the Chief Executive and the Director of Finance to continue their work to ensure delivery of planned efficiencies and service reductions, as set out in paragraph 92 of the submitted Council report.

10.     That the County Council’s £1,666m gross revenue expenditure budget for 2017/18, for the substitute budget (Table 17 in the submitted Council report) be approved.

11.     That only capital schemes which are funded without requiring borrowing be supported and approved, unless a sustainable basis for funding borrowing costs is identified and a compelling business case developed that demonstrates best value in progressing a particular scheme (paragraph 110 of the submitted Council report).

12.     That the detailed programme of schemes be agreed at the March 2017 Cabinet, as part of the Medium Term Financial Plan.

13.     That a robust business case be prepared (and taken to the Investment Panel for review) before committing expenditure for the use of:

·      all revenue ‘invest to save’ proposals, and

·      capital schemes.

Treasury Management and Borrowing:

14.     That the Treasury Management Strategy for 2017?18 be approved with immediate effect. This strategy includes:

· the investment strategy for short term cash balances;

· the borrowing strategy for funding the capital programme

· the treasury management policy (Annex 2, Appendix 8 of the submitted report);

· the prudential indicators (Annex 2, Appendix 9 of the submitted report);

· the schedule of delegation (Annex 2, Appendix 11 of the submitted report);

· the minimum revenue provision policy (Annex 2, Appendix 12 of the submitted report).

That the following decisions have been approved by Cabinet:

15.      That services will develop detailed budgets and savings ahead of approval by Cabinet on 28 March 2017 when the final Medium Term Financial Plan (MTFP) 2017?20 will be presented.

16.    That the draft MTFP for the financial years 2017?20 be approved, which includes the Total Schools Budget of £545.2m (paragraphs 66 to 71 in the Cabinet report) and the overall cash limits for individual services for the proposed budget and the substitute budget.

17.    (A) That a Sustainability Review Board be established comprising three cross party Members, the Strategic Director for Adult Social Care and Public Health, the Deputy Chief Executive and the Director of Finance.

         (B) That this board be required to bring back an initial report to the Cabinet meeting on 28 March 2017 on progress towards identifying £30m permanent service reductions and up to a further £22m one-off reductions required to achieve a balanced budget in 2017/18.