Agenda item

To approve:

1.       the draft revenue and capital budgets for the five years 2015-20;

 

2.       the level of the council tax precept for 2015/16; and

3.       the revised treasury management strategy, including the borrowing and operation limits (prudential indicators) for 2015-20, the policy for the provision of the repayment of debt (minimum revenue provision (MRP)) and the treasury management policy.

The Chairman said that the papers for this item were included in the agenda and the supplementary report of the Cabinet circulated last week, which included details of the final Local Government Finance settlement. He asked Members to note that the recommendations before them today, numbered (1) to (16) were set out in the Council agenda papers.

 

He 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 2015/16 to 2019/20, the Council Tax Requirement for 2015/16 and the Treasury Management Strategy and made a statement in support of the proposed budget.  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, Mr Harrison and Mr Johnson) were invited to speak on the budget proposals.

 

Key points made by Mrs Watson were:

 

·         Support for the level of Council Tax increase proposed but opposition to the Budget as a whole

·         Referred to specific budget pressures including the additional school places required and also pressures within the Adult Social Care budget

·         Proposed that some budget savings could be made by deleting Cabinet Associate posts, stopping the publication and circulation of Surrey Matters, removing unused office space from the County’s property portfolio and using the untouched earmarked reserves

·         Considered that the cuts to the youth service budget was a short sighted approach and that this reduction could have been funded from the additional funding received as part of the final Local Government Finance Settlement

·         Proposed other alternatives, such as funding front line services by reducing back office support

·         Considered that this budget lacked detail.

·         Finally, she requested a separate vote on recommendations (8) – (10)

 

Key points made by Mr Harrison were:

 

·         Highlighted the budget pressures and the need to request a council tax uplift of 1.99% for 2015/16

·         Agreed it was not the year to accept the council tax freeze grant

·         Considered that there was not sufficient information in the Budget report, in relation to the savings required

·         Highlighted Appendix 1 of the report, which set out details of the steps taken by the County Council to reduce unit costs

·         Referred to the savings target for 2015/16 and the budget proposal to eliminate the risk contingency

·         Expressed disappointment that a list of savings proposals, and how they would be achieved, had not been presented to all Members

·         That there was a need to look at the overall headcount because there had been an increase over the last 12 months

·         That by agreeing to the overall budget today, the detail of it would have to be taken on trust

 

Mr Kington moved an amendment, to the Budget recommendations, which was formally seconded by Mr Harrison. This was the addition of this following recommendation:

 

‘Requests that as a priority the Leader and Cabinet engage with the LGA and Stanton Marris with the view to undertaking a management organisational review using the Decision Making Accountability (DMA) process with the aim of cutting costs, clarifying role responsibilities and developing a more productive and agile workforce.’

 

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

 

·         That this was not an open and transparent budget because the detail of this budget would not be available until either the  Medium Term Financial Plan (MTFP) was agreed in March 2015 or its refresh in July 2015

·         The County Council could not continue to provide the same level of services – there would be cuts i.e. Sure Start Centres

·         Could not vote for a Budget that does not provide the detailed Services Budgets

·         This amendment requested a review  of the staffing structure before making any service cuts

·         Council Overview and Scrutiny Committee had been unable to obtain Directorate staffing figures

·         Decision Making Accountability (DMA) was a proven way of creating an effective and efficient organisation and this process was undertaken with LGA guidance – it had also been used successfully in other organisations

 

Seven Members spoke on the amendment, making the following points:

 

·         The BDR (Business Delivery Review) had been a similar exercise to DMA – this had taken place 10 years ago and had a negative impact on the County Council

·         Significant efforts had been made to achieve greater accountability within the Council

·         The objective of this meeting was to set the Budget envelope and the detail would follow in the MTFP, as it always has done

·         Following changes to top management, this Council had been improving since 2009 and had made savings of nearly £300m since 2010

·         Unit costs had also been driven downwards

·         This organisation did not need expensive consultants’ advice because there were already competent staff running its services

·         Members had a responsibility to scrutinise the Budget in their respective select committees before the MTFP was considered by the Cabinet on 24 March 2015

·         A increase in headcount could be due to Public Health staff transferring from the NHS into Surrey County Council

·         Also, management structures in several services had been reviewed and were leaner so it was not considered that using consultants would be of significant benefit to the Council

·         Praise for the current senior staff within the Council

·         That the Council was actively looking at new ways of delivery to reduce costs, including partnership working – the example of joint working with East Sussex County Council was cited

·         Administration costs should be reduced and front line services protected

·         That this amendment had been discussed at the Council Overview and Scrutiny Committee (COSC), where there had been a general consensus of agreement by all Members of that committee

·         This amendment was a modest suggestion which should be taken seriously

·         That using DMA was a tried and tested method which had been used successfully in other Councils.

 

The amendment was put to the vote, with 12 Members voting for and 55 Members voting against it. There were 5 abstentions.

 

Therefore the amendment was lost.

 

Returning to the original motion, 10 Members spoke on it.

 

Key points made in the debate were:

 

·         That pages 30/31 of the Budget report set out the savings, pressures and funding 2010/11 – 2015/16

·         The Council Property portfolio was under constant review and there were several examples of effective use of Council buildings and also energy efficiency within them – property costs had been reduced by over 20% in the last four years

·         The efficiency savings achieved to date were impressive

·         That the additional funding allocated to Surrey County Council from Government in the final Local Government Settlement was welcomed

·         This Council had been given a significant number of extra responsibilities over the last few years, including Public Health and was still managing to deliver services whilst making substantial efficiency savings

·         Concern about the effect of demographic pressures on the Council’s services, including the shortfall of funding for the additional school places required

·         That the need to raise council tax by 1.99% was generally supported

·         The Budget process was flawed and that Members needed the detail on how the proposed savings would be achieved in order to balance the Budget in 2015/16

·         Concern whether the Adult Social Care budget was adequate to meet the needs required

·         Members had been given more information about the Budget proposals this year, than in previous years because there had been workshops and the opportunity for all Members to comment and make suggestions on the proposals

·         Today was about setting the Council tax increase and the overall cash envelopes for each Directorate

·         There was significant support for Surrey Matters

·         That the County Council had no alternative but to use agency staff for some Social Services provision

·         That the County Council would continue to lobby Government for sufficient funding so that the best service possible could be provided for Surrey residents

 

 

The Chairman agreed to the request from Mrs Watson to have a separate vote for recommendations (8) – (10).

 

Recommendations (1) – (7) were agreed, with no Member asking for their vote to be recorded against and there were no abstentions.

 

For recommendations (8) to (10), the following Members voted for it:

 

The following Members voted for it:

 

Mrs Angell, Mr Barker, Mr Bennison, Ms Bowes, Mrs Bramhall, Mr Brett-Warburton, Mr Carasco, Mr Chapman, Mrs Clack, Mr Cosser, Mrs Curran, Mr Ellwood,

Mr T Evans, Mr Few, Mrs Frost, Mr Fuller, Mr Furey, Mr Gardner, Mr Goodman,

Mr Gosling, Dr Grant-Duff, Mr Gulati, Mr Hall, Mr Harmer, Miss Heath, Mrs Hicks, Mr Hodge, Mr Hussain, Mr Ivison, Mr Jenkins,  Mr Johnson, Mrs Kemeny, Mr Kemp, Mrs Lake, Mrs Lay, Ms Le Gal, Mrs Lewis, Mr Mahne, Mrs Marks, Mr Martin,

Mrs Moseley, Mrs Mountain, Mr Munro, Mr Norman, Mrs Ross-Tomlin,

Mrs Saliagopoulos, Mr Samuels, Mr Selleck, Mr Skellett, Mr Taylor,  Mr Walsh, Mr Wilson, Mrs Windsor, Mr Young and Mrs Young

 

And the following Members voted against it:

 

Mr Beardsmore, Mr Cooksey, Mr Essex, Mr Robert Evans, Mr Forster, Mr Goodwin,

Mr Hickman,  Mr Orrick, Mrs Searle, Mrs Watson and Mrs White

 

There were six abstentions:

 

Mr Beckett, Mr Harrison, Mr Kington, Mr Mallett, Mrs Mason and Mr Townsend

 

Therefore, recommendations (8) to (10) were agreed.

 

Recommendations (11) to (16) were agreed, with no Member asking for their vote to be recorded against and there were no abstentions.

 

Therefore, these recommendations were agreed.

 

Recommendations (11) to (16) were agreed

 

Therefore, it was:

 

RESOLVED:

 

(1)     That the Director of Finance’s statutory report on the robustness and sustainability of the budget and the adequacy of the proposed financial reserves (Annex 1 to the submitted report) be noted.

 

(2)     That the council tax requirement for 2015/16 be set at £587.0m (Annex 3, paragraph 3.4 in the submitted report).

 

(3)     That the 2015/16 council tax up-lift be fixed at 1.99%.

 

(4)     That the basic amount for 2015/16 council tax at Band D be set at £1,219.68 (Annex 3, paragraph 3.6 in the submitted report).

 

(5)     That the council tax for each category of dwelling in its area will be as follows:

 

Valuation band	£
A	813.12
B	948.64
C	1,084.16
D	1,219.68
E	1,490.72
F	1,761.76
G	2,032.80
H	2,439.36

 

(6)     That the payment for each billing authority, including any balances on the collection fund will be as follows:

Billing authority	£
Elmbridge	77,182,111.80
Epsom & Ewell	39,005,966.32
Guildford	68,642,880.96
Mole Valley	49,846,761.76
Reigate & Banstead	70,288,938.72
Runnymede	40,145,137.60
Spelthorne	48,092,591.25
Surrey Heath	45,390,885.64
Tandridge	44,959,506.56
Waverley	65,915,986.02
Woking	48,453,355.22
TOTAL	597,924,101.85

 

          That the payment for each billing authority, including any balances on the collection fund to be made in ten equal instalments on the dates, already agreed with billing authorities as follows:

 

17 April 2015	16 October 2015
22 May 2015	20 November 2015
26 June 2015	6 January 2016
31 July 2015	12 February 2016
11 September 2015	16 March 2016

 

(7)     That the council tax rate set above be maintained and powers be delegated to the Leader and the Director of Finance to finalise detailed budget proposals following receipt of the Final Local Government Financial Settlement.

 

(8)     That the £4.6m additional council tax surplus on the Council Tax Collection Fund be transferred to the Economic Downturn Reserve.

 

(9)     That the County Council budget for 2015/16, be approved.

 

(10)   That the following capital programme proposals be agreed:

 

·      To fund essential schemes over the five year period (schools and non-schools) to the value of £695m including ring-fenced grants

·      To make adequate provision in the revenue budget to fund the revenue costs of the capital programme

·      To enhance provision for Local Growth Deal and flood schemes, as stated in paragraph 114 of the submitted report, including making a £0.5m contribution to the River Thames scheme.

 

(11)   That the Cabinet agrees to refresh the Medium Term Financial Plan (MTFP) for the financial years 2015 – 20 (MTFP 2015 – 20) revenue and capital budgets in summer 2015.

 

(12)   That the Chief Executive and Director of Finance be required to continue regularly to track and monitor progress on the further development and implementation of robust plans for achieving the efficiencies across the whole Medium Term Financial Plan (MTFP) period.

 

(13)   That Strategic Directors and Senior Officers be required to maintain robust in year (i.e. 2015/16) budget monitoring procedures to enable Cabinet to monitor the achievement of efficiencies and service reductions through the monthly budget monitoring Cabinet reports, the quarterly Cabinet Member accountability meetings and the monthly scrutiny at the Council’s Overview & Scrutiny Committee.

 

(14)   That a robust business case be required to be prepared (and taken to the Investment Panel) for each revenue invest to save proposal and capital scheme before committing expenditure.

 

(15)   That the final detailed MTFP (2015-20) be considered and approved by Cabinet on 24 March 2015, following scrutiny by Select Committees.

 

Treasury management and borrowing:

 

(16)   That the Treasury Management Strategy for 2015/20 be approved and that the provisions have immediate effect (Annex 2 to the submitted report).

 

This strategy includes:

 

·  the investment strategy for short term cash balances

·increasing the number of AAA-rated money market funds from five to seven  (with the individual amount to a single fund increased from £20m to £25m).

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

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

·  the scheme of delegation (Annex 2, Appendix 11 to the submitted report)

· the minimum revenue provision policy (Annex 2, Appendix 14 to the submitted report).