Agenda item

This report is for the County Council to approve the:

·        Council Tax precept for 2018/19

·        revenue budget for 2018/19 and medium term financial plan to 2020/21

·        capital programme quantum and principles

·        key corporate and financial strategies.

 

The Leader presented the Report of the Cabinet on the Revenue and Capital Budget 2018/19 to 2020/21, the Council Tax Requirement for 2018/19, the Corporate Strategy and other key financial strategies.  A copy of the Leader’s statement is attached as Appendix A.

 

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

 

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

 

Key points made by Mrs Watson were:

 

·        That she would be voting against the proposed budget.

·        That it set out drastic cuts to libraries, road maintenance and services for people with learning disabilities on top of cuts already made to services such as community recycling centres.

·        It was a failure of central government and the administration.

·        She was pleased that the council tax proposal was not a 15% increase but not pleased that there was still a 6% rise proposed.

·        That there were four Cabinet Ministers that were Surrey MPs.

·        She had written to all Surrey MPs asking them to vote against the local government settlement and urged residents to do so too.

·        That the business rates pilot should be extended beyond one year.

·        The situation would worsen when the adult social care precept ended.

·        In December 2016 a CIPFA (Chartered Institute of Public Finance and Accountancy) report on the Council’s finances referred to the organisation as ‘at risk of being financially unsustainable’.

·        She welcomed the plans around capital receipts however these rules had been in place since 2016 and should have been introduced sooner.

·        That the Council had spent a significant amount of money on maintaining empty buildings.

·        She felt that during the financial crisis the Council should not spend £200m of council tax payers’ money on properties outside of Surrey.

·        That the government had reminded councils that their prime duty was to provide statutory service.

·        Residents were being asked to pay more for less, which did not provide value for money.

 

Key points made by Mr Harrison were:

 

·        The Council was facing increasing demands and had lost £200m in core funding and the gap was being met by increasing council tax.

·        That 90% of the Council’s income came from council tax compared to 60% for the rest of the country.

·        He referred to the events of the 2017 Budget meeting and promise of increased funding from central government.

·        That there had been an adult social care green paper promised and that the fairer funding review had been delayed.

·        Central government could have a deficit that contributed to national debt however local government had to balance the books.

·        Northamptonshire County Council was now in special measures.

·        That a one year business rates retention pilot would not solve the issue.

·        He welcomed appendix 6 of the papers and the involvement of the select committees in the budget setting process.

·        A further £66m of savings would be harder to achieve.

·        That the pace of transformation had not been enough and that a council tax rise was inevitable.

·        The Council was being asked to approve a financial strategy without a credible plan in place.

·        That Surrey MPs were either not listening or not interested in tackling the issue.

·        There was a need to work constructively and review the headcount, review management and IT.

·        If a 15% rise was necessary last year how had the council managed without this.

·        The CIPFA (Chartered Institute of Public Finance and Accountancy) report on the Council’s finances had been issued in the run up to the elections and the record needed to be put straight.

 

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

 

·        That Members were pleased to see the increase in local member allocations and highways funding.

·        There was concern regarding the use of reserves to balance the budget.

·        That Surrey residents contribute more money to the Exchequer than anywhere other than the City of London.

·        Demands were increasing and there needed to be plans for the future.

·        Surrey MPs should stand up for Surrey and show leadership.

·        Resident priorities needed to be recognised and funded accordingly.

·        Local government was in crisis.

·        Concerns that the Children, Schools and Families budget had £26m of savings to make and this would be challenging.

·        Transformation was essential along with place based services and funding.

·        Concerns that there was ‘smoke and mirrors’ regarding transformation programmes and that 41% of the Council’s budget had been removed since 2010.

·        That the report told the truth and that the Council would continue to deliver statutory services.

·        The Council would invest to save, earn and grow and do this at a good pace.

·        The Conservatives did not want to raise taxes but there was no alternative.

·        Budget figures were available far earlier than in previous years and select committees had been able to scrutinise the budget earlier.

·        That the budget lacked a long term plan and more information was required to understand what the cuts would mean to residents.

• The opposition did not make their own budget proposals.

·        Concerns for a balanced budget in 2019/20.

·        A great deal of partnership working had taken place between the County Council and District and Boroughs.

·        Non-traditional methods of income would need to be considered going forward.

·        The numbers of children in transition that would require Adult Social Care support was increasing.

·        That it had been right for the Council not to accept the council tax freeze grant.

 

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

 

·        The budget papers were honest and represented the facts.

·        The Council had made £540m of savings in the past eight years and that it would be difficult to name another organisation that had done this.

·        It was important for Members to recognise the demand pressures that were set out in the papers and that the opposition were not listening to these.

·        That he had no issue with national taxation however local taxation should be fair.

·        The Cabinet were aware that it was important to do local things in local places and that this had been recognised in the proposals to provide more money to member allocations.

·        Transformation had begun in 2009 and this would need to be looked at again.

·        That there had been no suggestions of alternative ways to balance the budget.

·        He was prepared to stand up and be accountable and take responsibility for his decisions.

·        The work undertaken with District and Boroughs regarding the business rates retention pilot had been really successful.

·        That Members should be ‘game changers’ for local people and not for political groups.

·        The 2019/20 Budget would not be easy and that the decision not to accept the council tax freeze grant had been the right thing to do.

·        That the future was what mattered and it was important to recognise the demand pressures.

·        He encouraged all residents to write to their MPs regarding fairer funding, as 3% of services would be lost each year.

·        It was important to work with Districts and Boroughs and parish councils on transformation.

·        That he was proud to be a Conservative and that he would continue to lobby MPs and government and stand up for Surrey.

·        He closed by recommending that Members vote in favour of the proposed budget.

 

After the debate the Chairman called the recommendations, which were taken in three parts.

·        Recommendation 1

·        Recommendations 2 to 22 (which included the council tax precept proposals, and a recorded vote was taken)

·        Recommendations 23 to 25

 

The results were as follows:

 

Recommendation 1:

 

60 votes for, 11 votes against and 1 abstention.

 

Recommendations 2 to 22:

 

A recorded vote was taken. The following Members voted for it:

 

Mrs Angell, Ms Azad, Mr Bennison, Mrs Bowes, Mrs Bramhall, Mrs Brett-Warburton, Mr Carasco, Mr Chapman, Mrs Clack, Mrs Curran, Mr Deach, Mr Ellwood, Mr Tim Evans, Mr Few, Mr Furey, Mr Furniss, Mr Gardner, Mr Goodman, Dr Grant-Duff, Mr Gulati, Mr Hall, Mrs Hammond, Mr Hampson, Mr Harmer, Mr Harris, Mr Hawkins, Miss Heath, Mr Hodge, Mrs Iles, Mr Kemp, Mr Knight, Mrs Lake, Mrs Lay, Mrs Lewis, Mr McIntosh, Mr Mansfield, Mr Martin, Mrs Mooney, Ms Morley, Mrs Muir, Mr Nuti, Mr Oliver, Mr O’Reilly, Dr Povey, Mr Ramsdale, Mr Samuels, Mrs Steeds, Dr Szanto, Mr Taylor, Ms Thomson, Mrs Thorn, Ms Turner-Stewart, Mr Walsh, Mr Wilson, Mr Witham and Mrs Young.

 

And the following Members voted against it:

 

Mr Botten, Mr Cooksey, Mr Essex, Mr Forster, Mr Goodwin, Mrs Goodwin, Mr Lee, Mrs Rivers, Mr Spence, Mr Townsend and Mrs Watson.

 

The following Members abstained:

 

Mr Beckett, Mr Darby, Mr Harrison, Mr Kington, Mr MacLeod and Mr Mallett.

 

Recommendations 23 to 25:

 

63 votes for, 9 against and 1 abstention.

 

Therefore, it was:

 

RESOLVED:

 

County Council noted the following important features of the revenue and capital budget.

 

1.           The Director of Finance’s statutory conclusions that the council’s budget was balanced for 2018/19 and it was developing a major transformation programme to be able to set a balanced budget for 2019/20 and become sustainable over the medium to long term (Annex 1 of the submitted report).

Proposed budget: County Council approved the following revenue and capital budget decisions.

 

2.           Increased the level of the general Council Tax by 2.99% (paragraphs 101 and 102 of the submitted report).

3.           Increased Council Tax by a further 3% for the adult social care precept, which would provide a further £20m to support the growth in demand for services (paragraph 102 of the submitted report).

4.           Set the County Council precept for band D Council Tax at £1,411.29 which represented a 5.99% up-lift. This was a rise of £1.53 a week from 2017/18’s precept of £1,331.55.

5.          The Council Tax for each category of dwelling to be as set out in Annex 3 of the submitted report.

6.          The payment for each billing authority, including any balances on the collection fund, would be as set out in Annex 3 of the submitted report.

7.           Agreed to maintain the Council Tax rate set out after the Final Local Government Financial Settlement.

8.           Delegated powers to the Leader and the Director of Finance to finalise budget proposals and recommendations to County Council updated to take into account new information in the Final Local Government Financial Settlement.

9.           Approved the County Council’s £1,705m gross revenue expenditure budget for 2018/19 (Table 9 of the submitted report).

10.        Approved the application of up to £15m capital receipts to fund the revenue costs associated with transformation projects (paragraphs 33 to 36 and Appendix 3 of the submitted report)

11.        Approved the use of up to £24m of earmarked reserves to support the revenue budget (paragraph 109 of the submitted report).

12.        Approved the £316m three year capital programme, with £139m capital investment in 2018/19 (paragraph 124 and Appendix 7 of the submitted report).

13.        Agreed to support only capital schemes that did not require borrowing, unless the scheme had a compelling business case developed that demonstrated best value and a sustainable basis for funding borrowing costs (paragraph 135 of the submitted report).

14.        Noted that the detailed programme of schemes would be agreed ahead of implementation of the detailed budget (if necessary).

15.        Required a robust business case to 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 (paragraph 120 of the submitted report).

16.        To help ensure the council achieves its savings programme, required the Chief Executive and the Director of Finance to:

·      continue to ensure delivery of existing MTFP efficiencies and service reductions for the remaining years of the MTFP 2018?21; and

·      continue to ensure services monitor their demand and cost pressures and develop plans to mitigate the impact of those pressures (paragraph 95 of the submitted report).

17.        Required the Chief Executive and the Director of Finance to lead the development of a transformation programme to move the council to a sustainable position in 2019/20.

Corporate and key financial strategies: County Council approved the following.

 

18.        the refreshed Corporate Strategy for 2018/19 that Cabinet had endorsed (paragraphs 18 to 24 and Appendix 1 of the submitted report);

19.        the refreshed Financial Strategy for 2018/19 (paragraphs 29 to 31 and Appendix 2 of the submitted report);

20.        the Capital Strategy for 2018-22 (paragraphs 117 and 118 of the submitted report); and

21.        the Flexible Use of Capital Receipts Strategy for 2018/19 (paragraphs 33 to 36 of the submitted report).

Treasury management and borrowing: County Council approved the following.

 

22.        Approved with immediate effect, the Treasury Management Strategy for 2018/19 (Annex 2 of the submitted report), which included:

·      the investment strategy for short term cash balances;

·      the borrowing strategy for funding the capital programme;

·      the treasury management policy (Appendix 10 of the submitted report);

·      the prudential indicators (Appendix 11 of the submitted report);

·      the treasury management scheme of delegation (Appendix 12 of the submitted report);

·      the minimum revenue provision policy (Appendix 13 of the submitted report).

County Council noted the following Cabinet decisions.

 

23.        That services would develop final detailed budgets and savings within budget for review by the council’s Scrutiny function, ahead of approval by Cabinet on 27 March 2018 when the final MTFP 2018?21 would be presented.

24.        That Cabinet approved allocation of a part of the additional funding from the additional 1% increase in the Council Tax, and a change to the funding for the Member Allocations to provide the following to support members’ work in their local communities (paragraphs 104 and 105 of the submitted report):

·      a new Member Local Highways Fund;

·      a Revenue Highways Fund shared among Local Committees; and

·      revised Members Community Allocation.

25.        That Cabinet approved the draft MTFP for the financial years 2018?21, which included:

·      the Total Schools Budget of £505.8m (paragraphs 110 to 115 of the submitted report);

·      overall cash limits for individual services for the 2018/19 budget (Table 9 of the submitted report).