Agenda item

Cabinet, at its meeting on 3 February 2022, considered the attached report of the head of finance on the the draft revenue budget 2022/23, and the capital programme to 2026/27.

The Scrutiny Committee considered the report at its meeting on 7 February 2022 and made no recommendations to Cabinet.

RECOMMENDATIONS: to

1.    set the revenue budget for 2022/23, as set out in appendix A.1 to the head of finance’s report to Cabinet on 3 February 2022;

2.    approve the capital programme for 2022/23 to 2026/27, as set out in appendix D.1 to the report, together with the capital programme changes as set out in appendix D.2 and appendix D.3 to the report;

3.    set the council’s prudential limits, as listed in appendix E to the report;

4.    approve the medium-term financial plan to 2026/27, as set out in appendix F to the report;

5.    allocate £500,000 to fund the Communities Capital and Revenue grant scheme;

6.    ask officers to review the Medium-Term Financial Strategy following the announcement by the Secretary of State for Levelling Up, Housing and Communities of changes to the council’s future funding streams.

The chair referred to regulations that require councils to record the names of those councillors voting in favour, against or abstaining from any vote on the budget, including amendments, and the council tax. In accordance with the regulations she would call for a named vote on each of these matters at this meeting.

The chair reminded councillors that they were not entitled to vote on any issue affecting the level or administration of the council tax or other decisions which might affect the making of any such calculation such as the budget, if they were over two months in arrears with their council tax payments. Where such circumstances applied, councillors were under a statutory obligation to disclose the restriction placed on them and refrain from voting at the relevant meeting. No councillor made any such declaration.

Council noted the report of the chief finance officer on the robustness of the budget estimates and the adequacy of the reserves.

Council considered Cabinet’s recommendations, made at its meeting held on 3 February 2021, on the revenue budget for 2021/22 and the capital programme to 2025/26. Scrutiny Committee had considered the report of the interim head of finance on 7 February and had made no recommendations. 

Councillor Rawlins, Cabinet member for finance, presented Cabinet’s proposals for the revenue budget and capital programme. He moved and Councillor Rouane, Leader of the council, seconded a motion to approve Cabinet’s recommendations as follows:

To

1.    set the revenue budget for 2022/23, as set out in appendix A.1 to the head of finance’s report to Cabinet on 3 February 2022;

2.    approve the capital programme for 2022/23 to 2026/27, as set out in appendix D.1 to the report, together with the capital programme changes as set out in appendix D.2 and appendix D.3 to the report;

3.    set the council’s prudential limits, as listed in appendix E to the report;

4.    approve the medium-term financial plan to 2026/27, as set out in appendix F to the report;

5.    allocate £500,000 to fund the Communities Capital and Revenue grant scheme;

6.    ask officers to review the Medium-Term Financial Strategy following the announcement by the Secretary of State for Levelling Up, Housing and Communities of changes to the council’s future funding streams.

In introducing the budget proposals, the Cabinet member stated that the budget would help chart the council back to a more stable financial position and recovery from the position the administration had inherited at the district council elections in 2019.  The council had faced significant financial issues in the preparation of the budget.  Its council tax was the fifteenth lowest in the country for a shire district and well below the national average; the council was unable to increase its council tax significantly.  The council had not benefitted from the business rates retention scheme and, whilst the council had benefitted from the New Homes Bonus scheme, this was under review by the government and was expected to be less generous in future.      

The revenue budget set for 2021/22 had predicted an unsustainable use of the council’s reserves that was unsustainable over the medium to long term.  Following the thorough review of the base budget, the medium term financial plan now predicted a significantly better position with less reliance on reserves.  The transformation activities identified in the report during 2022/23 were central to tackling the budget gap for future years. 

The budget proposed no cuts to services and included revenue growth to support the council’s corporate plan priorities in climate action, nature recovery, and community wellbeing.  Council tax was proposed to increase by £5 for a Band D property—the maximum allowed.   The capital programme included several new schemes to be funded from the community infrastructure levy income, and also income from section 106 receipts to support affordable housing schemes.   

A number of councillors expressed views against the budget proposals. They opposed the capital costs for the building of a new council headquarters at the Didcot Gateway site. Alternative council owned accommodation was available, notably Abbey House in Abingdon, which could be repurposed reducing carbon costs and allow the site in Didcot to be made available for alternative uses including social housing. Financing the new offices would account for a substantial element of the council’s capital programme and had necessitated the council borrowing money for the first time in many years. There was also an assumption that part of the building could be rented out for office space which, in light of the current surplus availability of office space, was not guaranteed and could worsen the financial burden. Other councillors expressed the view that the budget did not include sufficient funds to address the climate and ecological crisis. The proposed increase in council tax, together with the increase in car park charges, would have a detrimental impact on residents and businesses at a time of rising fuel bills and inflation.  

However, the majority of councillors supported the budget proposals. A number of councillors welcomed the reduction in the budget deficit going forward. Others welcomed funding to support the climate action plan work and nature recovery (including tree planting schemes and promoting green construction skills).  Capital growth schemes would improve the leisure centres across the district, the replacement of the roof at Cornerstone and support the provision of affordable housing. A number of councillors expressed views that initiatives such as the decision to work on a joint local plan with Vale of White Horse District Council and bring services back in house had saved significant sums. The decision to develop new council offices shared with Vale of White Horse District Council, would save significant sums in terms of current office rental charges, provide the opportunity to earn income and would also contribute towards the regeneration of an important site in Didcot. 

In accordance with regulations requiring councils to record the names of those councillors voting in favour, against or abstaining from any vote on the budget the chairman called for a recorded vote which was carried with the voting being as follows:

RESOLVED: to

1.    set the revenue budget for 2022/23, as set out in appendix A.1 to the head of finance’s report to Cabinet on 3 February 2022;

2.    approve the capital programme for 2022/23 to 2026/27, as set out in appendix D.1 to the report, together with the capital programme changes as set out in appendix D.2 and appendix D.3 to the report;

3.    set the council’s prudential limits, as listed in appendix E to the report;

4.    approve the medium-term financial plan to 2026/27, as set out in appendix F to the report;

5.    allocate £500,000 to fund the Communities Capital and Revenue grant scheme;

6.    ask officers to review the Medium-Term Financial Strategy following the announcement by the Secretary of State for Levelling Up, Housing and Communities of changes to the council’s future funding streams.

Councillors thanked the head of finance and his team for the work undertaken to prepare the budget.