Agenda item

This report is for the County Council to approve:

 

• the revenue and capital budgets for 2019/20, including budget reductions
• the council tax precept level for 2019/20
• Council tax precept due from each Surrey borough and district
• the council’s capital receipt flexibilities policy, including the level of investment required to deliver the transformation programme for 2019/20
• further investment in reform and transformation in 2018/19 to be funded from capital receipts
• indicative directorate budget envelopes to 2023/24
• the council’s Capital and Investment Strategy, which provides an overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of local public services.

 

 

The Chairman informed Members that amendments to the report had been published in a supplementary agenda published on 30 January 2019, and include replacements for annexes 1 and 2.  Annex A of the supplementary report replaced Annex 1 and Annex B replaced Annex 2.  A further supplementary agenda was circulated on 4 February 2019 with a further revision which amended recommendations 2 and 3, and introduced a new recommendation 19.

 

The Leader presented the Report of the Cabinet on the Revenue and Capital Budget 2019/20 and Key Financial Strategies to 2023/24 and made a statement in support of the proposed budget.  A copy of the Leader’s statement is attached as Appendix A.

                             

Each of the Minority Group Leaders (Mr Botten and Mr Harrison) were invited to speak on the budget proposals.

 

Key points made by Mr Botten were that:

 

·       he appreciated the tone of the Leader’s statement and understood the difficulty of balancing the budget.

·       he felt the proposals had failed to update the treasury management policy appropriately.

·       he welcomed the drive to improve Children’s Services.

·       more information was needed to better understand what Members were asked to vote on and its impact on residents.

·       He supported proposals related to children with Special Educational Needs and Disabilities (SEND)

·       there was a need for more specific and detailed consultations in the future.

·       the council was spending £2.5 million per year on interim management while simultaneously cutting services. 

·       there was an increased need for transparency throughout the council’s transformation.

·       further work was needed to monitor the council’s contractors and suppliers to ensure competence.

·       the residents of surrey needed council services that they can be proud of.

·       he could not collude with cuts to services that he did not understand. 

 

Key points made by Mr Harrison were that:

 

·       the five consultations had given a better idea of public opinion and that those about ‘place’ had drawn the most attention.

·       the significant impact to residents of cuts to the budgets for children’s centres, recycling centres and the libraries and cultural services should be noted.

·       over 50% of the libraries and cultural services budget would be cut over the next three years.

·       schools would suffer the impact of a drop in funding for the higher needs block.

·       his group understood the need for many of the transformations but felt that some needed more detail to understand their impact.

·       select committees had not fully considered the transformation projects prior to considerations of the budget.

·       it was concerning that the council was using its capital receipts to meet ongoing project expenditure.

·       £21 million of savings in the Children’s Services were rated as red or amber.

·       the development of the property investment portfolio would be a huge challenge.

 

Mr Essex moved an amendment, to the Budget recommendations, which was formally seconded by Mr Robert Evans. This was:

 

(amended wording in italics and underlined)

 

16.       Approve £413.8m indicative five year capital programme, with £129.2m capital investment in 2019/20 (Annex 1)and request business cases for further capital investment to increase SEND school places in Surrey and assess viability of bringing more residential care of children and adults in house.

17.       The Capital and Investment Strategy for 2019-24 (Annex 4) and commit to establishing a separate energy and sustainable resource investment fund within 3 months, to bring forward robust business cases that diversify Surrey’s investment and reduce the carbon and resource impact of public service delivery across Surrey.

In support of his amendment, Mr Essex made the following points:

 

·       Highlighted that, in the previous year, the council agreed to bring specialist school provision in house.

·       Stated that it was important that the council make the budget future proof.

·       Stressed the need for higher environmental standards for the council.

·       That the council should invest to save to support those most in need.

 

 Mr R Evans reserved his right to speak.

 

The Leader of the Council spoke on the amendment, making the following points:

 

·       highlighted that the council needed to balance its budget.

·       agreed to accept the amendment to recommendation 16 as it was in line with the council’s plans.

·       stated that he could not support the amendment related to the investment fund. 

 

As seconder to the amendment, Mr R Evans made the following points:

 

·       stated that he was disappointed that there was not more debate from Members.

·       highlighted that Surrey could no longer rely on funding from the business rates pilot.

·        felt disappointed that Members were not prepared to consider a more environmentally friendly approach.

·       stated that the council should reconsider the 2-tier local government structure.

 

The Chairman agreed to take a vote on each amendment recommendation separately.

 

The amendment to recommendation 16 was put to the vote and unanimously supported. Therefore the amended recommendation became the substantive recommendation. 

 

The amendment to recommendation 17 was put to the vote, with 6 Members voting for and 52 Members voting against. There were 14 abstentions. Therefore the amendment was lost.

 

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

 

·       highlighted that they were grateful for the decision to retain the children’s centre in Farnham but felt it was a mistake to close other children’s centres in Surrey.

·       noted that the budget for schools was at risk.

·       that the council needed to take control of its property portfolio.

·       stated that the transformation would cost the council over £30 million in order to make £150 million in savings.

·       that there was a need for improved IT systems in the council.

·       highlighted the need for better highways services in Surrey.

·       that children’s centres were important as they teach children essential social skills.

·       stated that the Fire & Rescue service was failing to effectively use its resources.

·       noted that two out of the four children’s centres in Epsom & Ewell would be closing.

·       raised concern over the sums of money paid to interim managers.

·       felt concerned that many of the savings in the report lacked detail.

·       highlighted that the Treasury Management Strategy was scrutinised at the Corporate Overview Select Committee on 25 January 2019.

·       stated that the changes to children’s centres were part of wider changes in Children’s Services following the judgement of Ofsted.

·       informed Members that, according to  the National Audit Office, areas where children’s centres were closed did not see a subsequent rise in safeguarding cases.

·       that there was a need to change how services were provided.

·       that more trust was needed between the council and its partners.

·       highlighted that progress was being made by not relying on the council’s reserves to balance the budget.

·       stated that residents did not want gesture politics.

·       highlighted concerns related to the closure of recycling centres in Surrey and its impact on residents.

·       highlighted that the opposition had not tabled an alternative budget.

·       that they felt positive with the changes related to extra care accommodation.

·       raised concern with the treatment of grants to disabled people and stated that they were essential to some residents.

·       highlighted concerns that the changes to bus services would have a negative impact on residents.

·       highlighted that the Highways Service was not a statutory service.

·       that the council needed to ensure it met the needs of its most vulnerable residents.

·       that sufficient communications were needed to explain the reasoning for the closer of multiple children’s centres and Community Recycling Centres (CRCs).

 

The Leader of the Council made the following comments in response:

 

·       he recognised the challenges the council faced.

·       that all services should demonstrate the highest standards.

·       that optimisation of the property portfolio was a priority.

·       he was looking to reduce the council’s operational buildings from 300 to 100.

·       there was a need to improve the select committee and scrutiny process.

·       he understood concerns related to the cost of interim management and that he hoped to be less dependent on them in the future.

·       that it was important for all Members to engage as the transformation programme unfolds.

 

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:

 

Ms Azad, Mr Bennison, Mrs Bramhall, Mr 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, Miss Griffiths, Dr Grant-Duff, Mr Gulati, Mr Hall, Mrs Hammond, Mr Harmer, Mr Harris, Mr Hawkins, Miss Heath, Mr Hussain, Mrs Iles, Mr Islam, Mr Kemp, Rachael Lake, Mrs Lewis, Mr McIntosh, Mr Mansfield, Mr Martin, Mrs Mooney, Ms Morley, Mrs Moseley, Mrs Mountain, Mrs Muir, Mr Nuti, Mr Oliver, Mr O’Reilly, Dr Povey, Mr Ramsdale, Mrs Rush, Mr Samuels, Mrs Steeds, Dr Szanto, Mr Taylor, Ms Turner-Stewart, Mr Walsh, Mr Witham, Mrs Young

 

And the following Members voted against it:

 

Mr Beckett, Miss Boote, Mr Botten, Mr Cooksey, Mr Darby, Mr Essex, Mr Robert Evans, Mr Foster, Mr Goodwin, Mrs Goodwin, Mr Kington, Mrs Mason, Mrs Rivers, Mr Spence, Mr Townsend, Mrs Watson, Mrs White.

 

The following Members abstained:

 

Mr Harrison, Mr MacLeod, Mr Mallett.

 

Therefore, it was:

 

RESOLVED:

That the following important features of the revenue and capital budget be noted:

1.           The Executive Director of Finance’s statutory conclusions in his Section 25 statement. (Annex A)

Proposed budget: That the following revenue and capital budget decisions be approved:

 

2.           the net revenue budget requirement be set at £886.2m (net cost of services after service specific government grants) for 2019/20 (Annex A), subject to confirmation of the Final Local Government Financial Settlement

3.           the total council tax funding requirement be set at £731.6m for 2019/20. This is an increase in the level of the council tax of 2.99% (Annex A).

4.           noted that for the purpose of section 52ZB of the Local Government Finance Act 1992, the council formally determines that the increase in council tax is not such as to trigger a referendum.

5.           that the Surrey County Council precept for Band D council tax be set at £1,453.50, which represents a 2.99% up-lift. This is a rise of 81p a week from 2018/19’s precept of £1,411.29. This includes £102.39 for the Adult Social Care Precept, which remains at the same rate as last year.

6.           the Council Tax for each category of dwelling as set out in the table below

Council Tax Band	2018/19 £	2019/20 £
Band A	940.86	£969.00
Band B	1,097.67	£1,130.50
Band C	1,254.48	£1,292.00
Band D	1,411.29	£1,453.50
Band E	1,724.91	£1,776.51
Band F	2,038.53	£2,099.51
Band G	2,352.15	£2,422.51
Band H	2,822.58	£2,907.01

 

7.          the payment for each billing authority, including any balances on the collection fund, will be as set out in Annex B.

8.           that powers be delegated to the Leader and the Executive 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.           the Flexible Use of Capital Receipts Policy for 2019/20 to meet the statutory guidelines for the use of capital receipts to fund the transformation and reform of services (Annex 3)

10.        the application of a further £7.2m in the current 2018/19 financial year to fund the transformation under the capital receipt flexibilities policy (Annex 3).

11.        the use of £16.3m in the 2019/20 financial year, to fund the transformation under the capital receipt flexibilities policy (Annex 3).

12.        that the underlying balance on the general fund remains set at £21.3m as at 1 April 2019.

13.        the Total Schools Budget of £492.9m to meet the council’s statutory requirement on schools funding. (Annex 1).

14.        the overall indicative budget envelopes for Executive Directorates and individual services for the 2019/20 budget (Annex 1).

15.        noted the indicative budget envelopes for 2020-24 (Annex 1).

16.        the £413.8m indicative five year capital programme, with £129.2m capital investment in 2019/20 (Annex 1)and requested business cases for further capital investment to increase SEND school places in Surrey and assess viability of bringing more residential care of children and adults in house.

Capital Strategy: That the following be approved:

17.        The Capital and Investment Strategy for 2019-24 (Annex 4)

18.        The policy for making a prudent level of revenue provision for the repayment of debt (the Minimum Revenue Provisions policy) (Annex 4a)

19.        That the increase of £0.1m in the council tax collection fund surplus be included within the Contingency Budget.