Agenda item

Council is asked to approve the 2020/21 Final Budget Report and Medium-Term Financial Strategy.

 

The Leader presented the Report of the Cabinet on the 2020/21 Final Budget Report and Medium-Term Financial Strategy 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 Darby and Mr Botten) were invited to speak on the budget proposals.

 

Key points made by Mr Darby were that:

 

·         There was greater stability this year due to a balanced budget without the use of reserves which was an essential improvement and he welcomed the improvements in the Children’s directorate.

·         Commended the capital funding for additional care and children’s homes.

·         Noted the need to accelerate key project areas to improve residents’ experiences whilst generating savings.

·         The provision of affordable key worker housing should be considered, working closely with boroughs and district councils to have a strategic approach to housing, developing Surrey’s 2050 Place Ambition for the right houses in the right places.

·         Welcomed the additional funding for highways and flood defences, but more detail was needed on the £100 million for the Community Investment Fund.

·         Praised the positive changes to scrutiny across the Council agreed last May, which must be cross-party and to be effective.

·         Noted that it was the role of the opposition to scrutinise the proposed budget as opposed to providing an alternative one.

·         Questioned the amount set aside in the budget to address the Climate Emergency.

·         That the move to Woking was positive due to the current economic and environmental costs - low energy rating - of County Hall and promotion of agile working.

·         Despite the £20 million contingency in the budget, he asked whether that would be adequate due to the significant annual cuts and rationing in Adult Social Care.

·         Both SEND and public health faced low central Government funding, as well as a £700,000 cut for mental health. Years of austerity had affected the Council’s provision of services and of the £40 million increase in the Council’s budget by 2020/21, £28 million was from a rise in Council Tax.

·         Increased funding was short-term as there was a forecasted £160 million deficit by 2024/2025, noting that ‘efficiencies’ were cuts.

·         That the Fair Funding Review and the green paper on Adult Social Care remained outstanding making forward planning difficult.

·         Proposed that there was a need for two extra Council Tax bands at the top end covering those who could afford to contribute more, savings from this would fund services and provide relief for those in lower tax bands.

·         Commended the budget, but expressed concern on criticisms from CIPFA and the Council’s auditors around areas lacking significant Government funding.

 

Key points made by Mr Botten were that:

·         There was a challenging context concerning inadequate local government funding which created a burden on the Council to address the ongoing concerns of residents, including the difficulty in getting the right care packages for SEND and elderly relatives.

·         Praised the Council’s Transformation Programme, but queried whether transformation was reaching the front line where services were rationed despite significant demand.

·         The capital investment programme was of huge importance to residents, particularly the £270 million flood prevention scheme.

·         The continued integration with Public Health was beneficial and welcomed the Executive Director for Children, Families, Lifelong Learning involvement in health commissioning for children.

·         Raised concerns with the lack of effective transformation on the ground, noting cost pressures the transformation project on Spans and Layers which generated a £500,000 cost pressure.

·         The proposed £14 million efficiencies in SEND were worrying when individuals struggled to see educational psychologists and speech therapists.

·         Highlighted that elderly care packages, and learning disability and autism services were cut by £4.6 million apiece and a saving of £700,000 was needed for the recent transformation programme on the reorganisation of Section 75 concerning mental health - compared to the £100 million investment in the Community Investment Fund.

·         Noted the premature savings on the total spending of £12.3 million in Adult Social Care but welcomed the Local Learning Fund of £1 million for schools to access resources for SEND.

·         In response to the recent petition to Council on the Fire Service, a positive interim report on the service had been released, but the £1.5 million in efficiencies was problematic as staffing levels remained a challenge.

·         Felt that the protection of the most vulnerable in the Council would be compromised by the efficiencies needed within the transformation programmes.

·         Commended the competence of the proposed budget but noted the remaining ethical challenges.

 

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

 

·         That despite future uncertainty over local government funding, the budget was a clever balance with a sensible level of reserves especially utilising the low interest rates by having a large capital programme. Commended greater investment in highways, local projects and the additional £70 million funding for schools including non-academies.

·         That the budget was not developed through cross-party consultation and was concerned that local projects were not a priority to the Council, such as the major development in Farnham, Brightwells Yard. That development had not been audited and traffic reduction and air pollution issues in Farnham were not budgeted for - actions to address pollution in Farnham plan remained outstanding.

·         Praised the budget as being reflective of the immediate requirements of communities and highlighted the approximately £3 million significant capital investment in public rights of way to ensure traffic avoidance and improved access, enabling five hundred miles of paths to be brought back into use. The twelve thousand finger posts, bridges and overgrown vegetation needed constant maintenance to ensure public safety, thanking the volunteers.

·         Commended the ambitious but financially sustainable budget without the use of reserves in which each of the select committees scrutinised effectively despite the short time frame and hoped for a resolution to the Eco Park.

·         That the proposed budget was a wasted opportunity to change Surrey due to the limited amount and resources set aside to address the urgent Climate Emergency, there was no mention of the promised £84 million for Surrey’s Greener Future despite the doubling of reserves.

·         Queried the millions set aside for ambiguous areas in the budget such as the Feasibility Fund and Other Pipeline Schemes.

·         Questioned the significantly low spending on public health, whilst £200 million for road maintenance was prioritised with no funding for new bus routes or for improving road safety for cyclists and pedestrians.

·         That it was a concerning that SEND where Education, Health and Care Plans (EHCPs) were not properly resourced or implemented on a timely basis, and the transition for people with learning disabilities and autism were identified as needing to make ‘efficiencies’ or savings as they were underfunded.

·         Highlighted the necessity in ensuring the Property Service was fully resourced as it was crucial to achieve savings targets across the Council.

·         That a cultural shift was needed to commit to significant carbon reductions as the budget inadequately addressed the Climate Emergency, no additional funding was set aside to train specialist officers in areas like greener travel.

·         Sought confirmation that the Council’s executive would negotiate with the current landlord of Midas House to secure an appropriate contribution to aid the Council in raising the building’s energy efficiency from the low E rating.

·         Felt that in some areas rights of way were diminishing and that it was essential that investments in the budget would be in the right places and financially sound - including the move to Midas House - to deliver good services, especially as borrowing would double in the next two years.

·         That past budget regimes lacked meaningful scrutiny, positive change came after critical reports from CIPFA and the Council’s external auditors. The current budget embraced transparency, long-term planning and scrutiny in some areas. 

·         That senior officer pay and the amount in the top pay bracket had increased since last May despite cuts across other areas. Although the senior officers were well-qualified, there must be an annual opportunity for Members to monitor senior officer pay to ensure Value for Money.

·         Welcomed the optimistic budget, noting the static funding towards Public Health and highlighted a number of directorates with budgetary increases, as well as the total budget increase of £40 million and £1.4 billion of capital expenditure over the next five years.

·         That the Council took climate change seriously with funding for solar farms, electric vehicles and ultra-low emission buses. The Council were in consultation across a wide range of focus groups to benchmark current progress and to ensure spending in the right areas - as a result a climate strategy would be announced in April 2020.

·         That there were sufficient funds at local level with the borough council and project developers to address air quality in Farnham, through improving road conditions by enforcing a 20mph speed and 7.5 tonnage limits.

 

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

 

·         He recognised the difficulty of balancing the budget with confined resources and delivering the many transformation programmes to provide good services to residents.

·         That there was no trade-off between addressing the Climate Emergency and supporting vulnerable residents.

·         He urged all Members to aid the work on a deliverable climate strategy within select committees and working groups, to be announced in April.

·         That £84 million of the budget was set aside to address the Climate Emergency and it was correct that some areas of the budget remained undefined as it was for Members - not the executive - alongside officers to allocate expenditure in the right areas.

·         He did not accept that efficiencies meant cuts in SEND and public health, as it was important to allocate money effectively such as the transformation programme on prevention and early intervention. Supporting children to have more independent lives by enhancing vocational opportunities was crucial and having special learning facilities nearer to home to save transport costs.

·         That he was working closely with the Executive Director for Children, Families, Lifelong Learning to establish a new single point of access for SEND children.

·         In collaboration with Surrey Members of Parliament, the Council had contributed to and was actively lobbying the delayed Fair Funding Review.

·         He had spoken to the Chief Executive on the possible initiative in which residents could make voluntary contributions to Council Tax and he agreed that there needed to be a review in Council Tax bands and business rates.

·         He stressed that the Community Investment Fund was a capital fund which did not negate from revenue and reminded Members of the upcoming all-Member workshop to help identify appropriate projects to promote.

·         He noted the £1.6 million additional revenue from the collaborative service with West Sussex concerning fire services.

·         He expressed disappointment that measures to improve the air quality in Farnham had not progressed since the Pollution Summit last November. The Council would take control of the project by providing officer time and hold public consultations, as progress had not been made at borough council level.

·         That sustainability was key to the Rethinking Transport programme, there was funding for additional bus routes which would reduce emissions, congestion and social isolation - noting the Chatterbus - to enable seamless movement around the county.

·         That plans were underway to improve the energy efficiency of Midas House, stating that improving home efficiency was also important.

·         Although the Council was getting recognition from CIPFA, HMICFRS and Ofsted for its improvements, the real focus was ensuring the best service provision for residents.

·         The Council had a statutory responsibility to pass the budget, which was a living document which would evolve.

·         There was no lack of transparency or scrutiny due to monthly budget monitoring and oversight by the select committees. Members could track the progress of the budget and Council’s aims through the twenty-four transformation plans.

 

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 Bowes, Mrs Bramhall, Mr Brett-Warburton, Mr Carasco, Dr Chapman, Mrs Clack, Mrs Curran, Mr Deach, Mr Tim Evans, Mr Few, Mr Furniss, Mr Gardner, Mr Goodman, Miss Griffiths, Dr Grant-Duff, Mr Gulati, Mr Hall, Mr Harmer, Mr Harris, Mr Hawkins, Mr Hussain, Mrs Iles, Mr Islam, Mr Kemp, Mr Knight, Rachael I. Lake, Mrs Lewis, Mr McIntosh, Mr Mansfield, Mr Martin, Mrs Mooney, 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 Botten, Mr Cooksey, Mr Essex, Mr Robert Evans, Mr Forster, Mr Goodwin, Mrs Goodwin, Mr Lee, Mrs Rivers, Mr Spence, Mrs Watson, Mrs White,

 

The following Members abstained:

 

Mrs Barton, Mr Beckett, Miss Boote, Mr Darby, Mr Harrison, Mr Kington, Mrs Mason, Mr Townsend,

 

Therefore, it was:

 

RESOLVED:

 

That the following important features of the revenue and capital budget be noted, and in line with Section 25 of the Local Government Act 2003:

 

1.    The Executive Director of Resources’ (Section 151 Officer) conclusion that estimates included in the Final Budget Report and Medium-Term Financial Strategy are sufficiently robust in setting the budget for 2020/21; and

 

2.    It is the view of the Executive Director of Resources (Section 151 Officer), that a General Fund Balance of £21.3m and the level of Earmarked Reserves is adequate to meet the Council’s needs for 2020/21 and a Contingency of £20.4m, will be held to mitigate against the risks in delivery of transformation efficiencies and cost containment plans in 2020/21.

                  

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

 

3.    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), subject to confirmation of the Final Local Government Financial Settlement;

 

4.    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);

 

5.    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 (i.e. not greater than 2%);

 

6.    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.

 

7.    Agreed to maintain the Council Tax rate set after the Final Local Government Finance Settlement;

 

8.   

The Council Tax for each category of dwelling as set out in the table below:

 

 

9.    The payment for each billing authority, including any balances on the Collection Fund, as set out in Annex E;

 

10.  Delegated powers to the Leader and Executive Director of Resources (Section 151 Officer) to finalise budget proposals and recommendations to County Council, updated to take into account new information in the Final Local Government Finance Settlement;

 

11.  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);

 

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

 

13.  The overall indicative Budget Envelopes for Executive Directorates and individual services for the 2020/21 budget (Annex B); and

 

14.  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).

 

Capital and Investment Strategies: That the following be approved:

 

15.  The Capital Strategy (Annex G), 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;

 

16.  The policy for making a prudent level of revenue provision for the repayment of debt (the Minimum Revenue Provision (MRP) Policy) (Annex H); and

 

17.  The Investment Strategy (Annex I), which provides detail on how the Council will manage commercial investments.