Agenda and minutes

C Mason-Morris, Co-optee, declared that she was a casual employee of Telford & Wrekin Council.

RESOLVED – that the minutes of the meeting held on 9 December 2020 be confirmed and signed by the Chair.

To examine the Financial Monitoring and Mid-Year Budget Review Report.

Members received the Councils financial monitoring update and budget proposals as set out in the two reports to Cabinet on 7 January 2021. The Financial Monitoring update report set out the Council’s position for the year with the budget report covering the upcoming year for the revenue budget and capital plans over a longer period of three to four years.

The Committee heard that there had been significant pressures on the budget for the 2020/21 financial year with additional spending pressures for adult social care, provision of PPE for a large number of Council employees, and notably reduced revenue from commercial activities (e.g. leisure centres), amongst other complications. The Authority had not furloughed any employees, however, with employees redeployed to support the Council’s work in the community during its response to the pandemic. Additional pressures from lost income from business rates and council tax had compounded the situation.

There was a £14 million pressure on the service budget with a £5.1 million shortfall to business rates and council tax. The Authority had received a £17.2 million emergency grant from the Government, which had alleviated some of the pressures that had arisen because of the pandemic. There was, therefore, a net pressure of £2 million though this was a provisional figure as the Council expected further assistance from the Tax Income Guarantee scheme that had been announced in the Comprehensive Spending Review. The scheme would reimburse 75% of unrecoverable losses from business rates and council tax, there were, however, no details on how the scheme would work or a definition of unrecoverable.

The projected shortfall of £5.1 million would to some extent be unrecoverable and some would be recovered but there would be a time delay.

a)         To consider the draft budget proposals agreed by Cabinet on 7 January 2021

b)         To consider any alternative budget proposals put forward; and

c)         To agree items for further scrutiny

The Cabinet Member for Council Finance and Governance will attend for this item.

The Chief Financial Officer continued their presentation to the Committee, providing Members with information regarding the Council’s budget proposals.

The revenue budget proposals would cover one year, as there had been a one-year settlement from the government. There had been significant grant cuts over the preceding ten years and a reduction of £0.862m in the total grants received from Government next year compared to the current year.. The Council had had to make budget savings in those preceding ten years in order to maintain a balanced budget. By the end of the 2020/21 year, the Authority would have delivered £126.4 million in savings and there was an expectation that the coming years would prove to be similar with further pressures and savings to be made. Savings thus far had been executed through the shrinking of the organisation, with 1600 posts eliminated and fewer Council buildings. The Council had sought to protect frontline services, instead seeking to make savings from management and back-office functions as far as possible. Members were informed that, inverse to grant funding, demand for services had increased significantly, most notably in children’s safeguarding and adult care.

There was funding of £129 million in 2020/21. The largest part of this was funded through council tax (£70.2 million or 54%), this was a significantly higher proportion of the net revenue budget than it had been a ten years prior; this was as a result of the decreasing levels of grant funding from the Government.

The most significant area of expenditure was safeguarding, social care, and education and skills, which accounted for £94.3 million or 73% of the budget. £33.9 million (26%) followed this on health and wellbeing, commissioning, and neighbourhood and enforcement.

Before the proposals, the Authority had the lowest council tax at Band D amongst all authorities in the Midlands, almost £200 lower than the average for the region. Under the proposals, council tax would be increased by 1.99% plus the Government’s 3% for the Adult Social Care Precept for a total increase of 4.99%, which would increase revenue by £3.6 million. The settlement from the Government was £0.86 million smaller than the previous year and Government had assumed that councils with responsibility for Adult Social care would raise taxes by the full 4.99% allowed.

The precept had to be ring-fenced for adult social care, it was worth £2.19 million and would fund the majority of the additional investment required in that area. The budget for adult social care would be in excess of £47 million for the next financial year, with the increased precept revenue.

The increased tax would be roughly £1.01 per week on the average property in the Borough. This would be more significant for some residents than others; to mitigate this the Council offered reductions and had a hardship fund for those that faced the greatest difficulty. The proposals suggested that the hardship fund be doubled. It was noted that even if no other council in the Midlands increased its council tax for the  ...  view the full minutes text for item BFSC20

The Chair informed the Committee that a letter to the Leader of the Council had been drafted to express support for the Local Enterprise Partnership.