Agenda item

This report sets out the financial context for the Council and the draft Revenue and Capital budgets for the 2020/21 financial year and the Medium Term Financial Strategy.

RESOLVED:

That Cabinet makes the following recommendations to Council on 4 February 2020. 

Cabinet recommends that Council:

1. Approve the net revenue budget requirement be set at £968.4 million (net cost of services after service specific government grants) for 2020/21 (Annex B to the submitted report), subject to confirmation of the Final Local Government Financial Settlement;
2. Approve the total Council Tax funding requirement be set at £765.3 million for 2020/21.  This is an increase of 3.99%, made up of an increase in the level of core Council Tax of 1.99% to cover core Council services and an increase of 2% in the precept proposed by Central Government to cover the growing cost of Adult Social Care (Annex E to the submitted report);
3. Note 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 (i.e. not greater than 2%);
4. Set the Surrey County Council precept for Band D Council Tax at £1,511.46, which represents a 3.99% uplift. This is a rise of £1.11 a week from the 2019/20 precept of £1,453.50. This includes £131.46 for the Adult Social Care precept, which has increased by £29.07. A full list of bands is as follows:

5. Approve the Flexible Use of Capital Receipts Strategy for 2020/21 to meet the statutory guidelines for the use of such receipts to fund transformation and the move back into the County (Annex F to the submitted report);
6. Note that underlying General Fund Balances remain at £21.3 million as at 1 April 2020;
7. Approve the Total Schools Budget of £505.7 million to meet the Council’s statutory requirement on schools funding;
8. Approve the overall indicative Budget Envelopes for Executive Directorates and individual services for the 2020/21 budget (Annex B to the submitted report);
9. Approve the total £1.447 billion proposed five-year Capital Programme (comprising £851m of budget and £596m pipeline) and approves the £175.7 million capital budget in 2020/21 (Annex C to the submitted report);

10. Approve the Capital Strategy (Annex G to the submitted report), which provides an overview of how risks associated with capital expenditure, financing and treasury will be managed as well as how they contribute towards the delivery of services;
11. Approve the policy for making a prudent level of revenue provision for the repayment of debt (the Minimum Revenue Provision (MRP) Policy) (Annex H to the submitted report); and
12. Approve the Investment Strategy (Annex I to the submitted report), which provides detail on how the Council will manage commercial investments;

Cabinet recommends that the Audit & Governance Committee:

13.  Approve the Treasury Management Strategy and Prudential Indicators (Annex J to the submitted report) which set a framework for the Council’s treasury function to manage risks, source borrowing and invest surplus cash.

Reasons for decision:

Council will meet on 4 February 2020 to agree a budget and to set the Council Tax Precept for 2020/21. Cabinet is required to recommend a budget to Council for consideration at this meeting. The budget directs available resources to support the achievement of the Council’s ambitions and priorities in the 2030 Vision and the Organisation Strategy.

The budget will also support the delivery of the continuing transformational changes that are required to ensure that the Council can improve priority outcomes for residents, while managing growing demand for services and ensuring future financial sustainability.

Cabinet considered the budget report that set out the financial framework within which the Council’s refreshed Organisation Strategy and the next phase of transformation would be delivered.  Both the Leader and Cabinet Member for Finance highlighted several areas of the final budget and Medium Term Financial Strategy (MTFS) for recommendation to the Council meeting on 4 February.  It was stated that for the first time in 10 years, Central Government funding for the County Council has increased.  It was noted that the Council had no confirmation on the funding for future years and the Medium Term Financial Plan had been done on the basis of the current level of funding reducing over the time period. It was also the first time in over 10 years that a balanced budget without the use of reserves could be presented.  It was proposed to increase Council Tax by 1.99%, together with the recommended increase from central government of a further 2% to support the funding of the Adult Social Care service.

The Leader highlighted several areas where investment was to be made, for example, roads and pavements, flood alleviation and tackling the climate emergency.

A Member highlighted the listed budget efficiencies and that going forward select committees would be able to scrutinise their delivery through the transformation programmes.  Several Members gave thanks to officers and the Cabinet Member for Finance for his and the finance team’s hard work.

RESOLVED:

That Cabinet makes the following recommendations to Council on 4 February 2020. 

Cabinet recommends that Council:

1. Approve the net revenue budget requirement be set at £968.4 million (net cost of services after service specific government grants) for 2020/21 (Annex B to the submitted report), subject to confirmation of the Final Local Government Financial Settlement;

2. Approve the total Council Tax funding requirement be set at £765.3 million for 2020/21.  This is an increase of 3.99%, made up of an increase in the level of core Council Tax of 1.99% to cover core Council services and an increase of 2% in the precept proposed by Central Government to cover the growing cost of Adult Social Care (Annex E to the submitted report);

3. Note 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 (i.e. not greater than 2%);

4. Set the Surrey County Council precept for Band D Council Tax at £1,511.46, which represents a 3.99% uplift. This is a rise of £1.11 a week from the 2019/20 precept of £1,453.50. This includes £131.46 for the Adult Social Care precept, which has increased by £29.07. A full list of bands is as follows:

5. Approve the Flexible Use of Capital Receipts Strategy for 2020/21 to meet the statutory guidelines for the use of such receipts to fund transformation and the move back into the County (Annex F to the submitted report);

6. Note that underlying General Fund Balances remain at £21.3 million as at 1 April 2020;

7. Approve the Total Schools Budget of £505.7 million to meet the Council’s statutory requirement on schools funding;

8. Approve the overall indicative Budget Envelopes for Executive Directorates and individual services for the 2020/21 budget (Annex B to the submitted report);

9. Approve the total £1.447 billion proposed five-year Capital Programme (comprising £851m of budget and £596m pipeline) and approves the £175.7 million capital budget in 2020/21 (Annex C to the submitted report);

10. Approve the Capital Strategy (Annex G to the submitted report), which provides an overview of how risks associated with capital expenditure, financing and treasury will be managed as well as how they contribute towards the delivery of services;

11. Approve the policy for making a prudent level of revenue provision for the repayment of debt (the Minimum Revenue Provision (MRP) Policy) (Annex H to the submitted report); and

12. Approve the Investment Strategy (Annex I to the submitted report), which provides detail on how the Council will manage commercial investments;

Cabinet recommends that the Audit & Governance Committee:

13. Approve the Treasury Management Strategy and Prudential Indicators (Annex J to the submitted report) which set a framework for the Council’s treasury function to manage risks, source borrowing and invest surplus cash.

Reasons for decision:

Council will meet on 4 February 2020 to agree a budget and to set the Council Tax Precept for 2020/21. Cabinet is required to recommend a budget to Council for consideration at this meeting. The budget directs available resources to support the achievement of the Council’s ambitions and priorities in the 2030 Vision and the Organisation Strategy.

The budget will also support the delivery of the continuing transformational changes that are required to ensure that the Council can improve priority outcomes for residents, while managing growing demand for services and ensuring future financial sustainability.