Policy & Resources Committee
Agenda Item 108
Subject: General Fund Revenue Budget, Capital & Treasury Management Strategy 2022/23
Date of meeting: Policy & Resources Committee:10 February 2022
Budget Council: 24 February 2022
Report of: Chief Finance Officer
Contact Officer: Name: Nigel Manvell Tel: 01273 293104
James Hengeveld Tel: 01273 291242
Email: nigel.manvell@brighton-hove.gov.uk
james.hengeveld@brighton-hove.gov.uk
Ward(s) affected: All
FOR GENERAL RELEASE
iv) The authorised borrowing limit for the year commencing 1 April 2022 of £590m.
· The likely requirement to plan for the repayment of reserves over the medium term period, including reserves of £1.521m used to ‘financially smooth’ the 2021/22 budget;
· Cover for Collection Fund taxation losses (deficits) experienced in 2020/21 due to the pandemic which government allowed to be spread over 3 years starting in 2021/22;
· The numbers of people supported in, and the cost of, Emergency and Temporary Accommodation and associated support services has been increasing year-on-year and has been further exacerbated by the pandemic. Although short term funding has been received to meet accommodation costs through the pandemic, if people are not successfully ‘moved on’ to sustainable accommodation or settings, this will increase baseline numbers further and the impact on the council’s budget will be potentially very substantial over the next few years. There are significant challenges in achieving ‘move on’ due to a range of factors outside of the council’s control including the housing situation.
· The council’s increasing reliance on income from fees and charges, particularly parking and permit revenues. Fees & Charges are related to visitor and economic activity and behaviours which can change over time, potentially affecting income levels (up or down).
· Similarly, the council’s commercial property portfolio, which provides substantial rental income of around £9m, is known to be highly geared toward the retail sector, which had been declining prior to the pandemic and may now be further impacted in the medium term;
· The council is also highly reliant on suppliers and providers who may be impacted, at least in the short term, by Brexit and/or the pandemic either in terms of the cost of supplies or cost of labour, or the impact on supply chains. Suppliers/providers may also be impacted by the National Minimum Wage increase (6.6%) and/or the National Insurance increase. This could result in increased contractual costs filtering through to the council.
· Increased pay costs resulting from: inflationary pressures which are driving up pay awards; the cost of increasing the council’s minimum pay grade (including the Real Living Wage increase); the increasing cost of market supplements due to national and local labour supply issues, and; the cost of resolving the recent industrial dispute.
Provisional Local Government Financial Settlement (LGFS)
· Confirmation that the threshold at which an increase in Council Tax requires a local referendum will be 3% including a 1% Adult Social Care (ASC) precept. Any proposal to increase council tax by 3% or more would therefore need to be accompanied by an agreed substitute budget, which would need to be implemented if the increase were voted down by the electorate;
· Allocation of the core funding increase of £1.5bn nationally including additional Adult Social Care grant funding of £3.056m and a one-off Services Grant of £4.077m. The Services Grant has been allocated on a one-off basis as the government intends to review the allocation mechanism for future years to make best use of this resource therefore this funding will continue into future years but the impact of any changes is unknown;
· Increase in the Revenue Support Grant (RSG) from £6.666m to £6.877m;
· Increase to the Improved Better Care Fund, which provides joint funding toward adult social care, from £9.182m to £9.459m;
· Increase to the Lower Tier Services Grant from £0.624m to £0.657m;
· Increase in the New Homes Bonus grant by £0.486m, reflecting the new property completions in the city, however, this has been provided on a one-off basis as the government intends to replace the mechanism for distributing this funding in the future.
Table 1: Social Care Resources |
2020/21 |
2021/22 |
2022/23 |
ASC Precepting * |
2% £2.894m |
3% £4.450m |
1% £1.588m |
Improved BCF |
£9.181m |
£9.181m |
£9.459m |
Adult Social Care Grant |
£6.815m |
£7.759m |
£10.815m |
· A city to call home
· A sustainable city
· A healthy and caring city
· A city working for all
· A stronger city
· A growing and learning city
Priority |
Proposed Corporate Plan Investments |
Annual |
Annual |
One-off |
Enabled |
Enabled |
|
Housing |
Provision for increased Temporary Accommodation |
1.000 |
|
|
|
|
|
Continued investment in Housing First (after expiry of Contain Outbreak Management Funding in 2022/23) |
|
0.138 |
|
|
|
||
Preparatory costs for creating a council-run not-for-profit lettings agency |
|
|
0.075 |
|
|
||
|
|
|
|
|
|
||
NEW GENERAL FUND HOUSING INVESTMENTS |
1.000 |
0.138 |
0.075 |
0.000 |
0.000 |
||
A City Working |
Investment on eastern seafront/Madeira Terrace beautification |
|
|
0.022 |
|
|
|
Seafront heritage lighting renewal programme |
0.016 |
0.028 |
|
0.250 |
0.450 |
||
Victoria Fountain refurbishment |
0.014 |
|
|
0.250 |
|
||
Increased investment in Public Toilet provision (above £2.7m already approved) to include Saltdean Undercliff |
0.012 |
|
|
0.190 |
|
||
Prince Regent entrance works |
0.008 |
|
|
0.070 |
|
||
Expand graffiti pilot and fund additional clean-up / clean-up week for 2022/23 |
0.050 |
|
|
|
|
||
Investment in 6 additional seasonal staff to manage sustainable weed removal |
0.070 |
|
|
|
|
||
Investment in Planning Guidance for the Liveable Cities initiative |
|
|
0.150 |
|
|
||
Investment to support Planning Reforms including provision of further design expertise |
0.100 |
|
|
|
|
||
Development of a city-wide Strategic Transport Model and ongoing update costs |
0.076 |
0.076 |
|
0.500 |
0.500 |
||
Anticipated one-off cost of Public Inquiries in 2022/23 |
|
|
0.050 |
|
|
||
Continuation of support for EU Settled Status refugees and migrants |
|
|
0.070 |
|
|
||
NEW INVESTMENT TO SUPPPORT A WELL-RUN CITY |
0.346 |
0.104 |
0.292 |
1.260 |
0.950 |
||
Climate Action & Sustainability |
Warmer Homes - extend capital investment into 2023/24 |
|
0.189 |
|
|
3.000 |
|
City Downland Estate - implementation and actions to develop the Whole Estate Plan (WEP) |
0.100 |
|
|
|
|
||
Parks Infrastructure including boundary works, replacement trees and tree planting |
0.025 |
0.063 |
|
0.400 |
1.000 |
||
Managing Ash and Elm Dieback safely to improve public spaces, including a co-ordinator post |
|
|
0.600 |
|
|
||
Provision of funding for a Tree Preservation and Enforcement Officer |
0.040 |
|
|
|
|
||
Investment to increase the supply of allotments |
|
|
0.040 |
|
|
||
On-Street and Communal Bin infrastructure investment to improvement collection and recycling |
|
0.056 |
|
|
0.500 |
||
Extension of the Tech Take back recycling scheme |
|
|
0.068 |
|
|
||
Circular economy investment (promotion and awareness) |
0.040 |
0.020 |
0.057 |
|
|
||
Food Waste * |
|
|
|
|
|
||
Ongoing support for the School Streets initiative |
0.067 |
|
|
|
|
||
Cycle Training - Bike it |
|
|
0.027 |
|
|
||
Increased provision of Bike Hangers (self-financing capital investment) |
0.000 |
|
|
0.500 |
|
||
Increased investment in the Carbon Neutral 2030 programme including: - Air Quality - Two automatic analyser stations and continued diffusion tube monitoring - Expanding liveable neighbourhoods - Carbon reduction measures to operational buildings - Items covered under the Sustainability Carbon Reduction Infrastructure Fund (SCRIF) programme |
0.597 |
0.398 |
|
7.500 |
6.500 |
||
NEW INVESTMENT TO SUPPORT CLIMATE ACTION & SUSTAINABILITY |
0.869 |
0.726 |
0.792 |
8.400 |
11.000 |
||
A Growing & Learning City |
Investment to manage the increase in Education, Health and Care Plans (Education Psychologists) |
0.145 |
|
|
|
|
|
Investment in SEN Casework Officers due to increased Education, Health & Care Plans (EHCPs) |
0.080 |
|
|
|
|
||
Youth Mental Health |
|
|
0.025 |
|
|
||
Developing and embedding the Disadvantage Strategy and Early Help |
|
|
0.050 |
|
|
||
NEW INVESTMENT TO SUPPORT A GROWING & LEARNING CITY |
0.225 |
0.000 |
0.075 |
0.000 |
0.000 |
||
A Health & Caring City / A Stronger City |
Investment to meet increased demand and costs for Adult Social Care – Physical Disability Age 18 - 64 |
1.846 |
|
|
|
|
|
Investment to meet increased demand and costs for Adult Social Care – Physical Disability Age 65+ |
0.882 |
|
|
|
|
||
Investment to meet increased demand and costs for Adult Social Care – Mental Health |
0.043 |
|
|
|
|
||
Investment to meet increased demand and costs for Adult Learning Disability |
1.805 |
|
|
|
|
||
Investment to maintain in-house Care Home provision |
0.440 |
|
|
|
|
||
Investment to meet increased Children’s Disability Agency Placement and Children in Care costs |
2.351 |
|
|
|
|
||
Increased funding to meet demands on the Home to School Transport Service |
0.440 |
|
|
|
|
||
Investment in the Information, Advice & Assistance (IAA) Service (Children & Young People) |
0.041 |
|
|
|
|
||
Preventive investment in Emotional Health & Mental Health Service (Staffing) |
0.042 |
|
|
|
|
||
Strategic Lead for anti-racist social care |
0.036 |
|
|
|
|
||
Funding to maintain Prevent Co-ordination following withdrawal of government funding |
0.060 |
|
|
|
|
||
Investment for Information & Privacy Advisers to manage increased Subject Access Requests |
0.100 |
|
|
|
|
||
Investment to enhance support and simplify the Council Tax Reduction Scheme (CTRS) |
0.331 |
|
|
|
|
||
Enhanced support for the Council Tax Reduction Discretionary Fund |
|
|
0.190 |
|
|
||
Continuation of the Welfare Reform Support Fund including the Local Discretionary Social Fund |
|
|
0.180 |
|
|
||
Community wealth building/social value staff and member training |
|
|
0.035 |
|
|
||
Business case development for victims of domestic abuse accommodation |
|
|
0.010 |
|
|
||
Support for drink spiking tests |
0.005 |
|
|
|
|
||
Pavilion and Mess Room refurbishment programme |
0.016 |
0.063 |
|
0.250 |
1.000 |
||
|
|
|
|
|
|
||
NEW INVESTMENT TO SUPPORT A HEALTHY & CARING CITY |
8.438 |
0.063 |
0.415 |
0.250 |
1.000 |
||
Corporate Pressures |
Increased Housing General Fund management and staffing costs due to significantly increased demands on the service including Temporary and Emergency Accommodation, Housing First services, Health & Safety management, and substantially increased major Housing Investment programmes |
0.175 |
|
|
|
|
|
Investment to maintain Procurement & Contract Management services following ending of 3-year Modernisation Fund support |
0.220 |
|
|
|
|
||
Investment to maintain support functions following withdrawal of HROD and Business Operations from the Orbis Partnership arrangements |
0.700 |
|
|
|
|
||
City parks and City Clean pay and grading increases following re-evaluation of roles and duties |
0.750 |
|
|
|
|
||
Investment required to develop and implement the council's Data Governance Framework |
0.070 |
|
|
|
|
||
Additional Democratic Services Officer to service the increased number of council meetings, appeals and panels |
0.042 |
|
|
|
|
||
Provision of permanent funding for the bi-annual City Tracker (£50k every 2 years) to start in 2023/24 |
0.025 |
|
|
|
|
||
Increased cost of Corporate Cleaning contract due to increasing the number of lots to enhance social value |
0.100 |
|
|
|
|
||
Increased cost of the Corporate Security Contract (training, certification, living wage) |
0.200 |
|
|
|
|
||
Provision for various unavoidable above-inflation contractual and service cost increases across a range of priority directorate services |
0.254 |
|
|
|
|
||
CORPORATE SERVICE PRESSURES |
2.536 |
0.000 |
0.000 |
0.000 |
0.000 |
||
|
TOTAL CORPORATE PLAN INVESTMENTS |
13.414 |
1.031 |
1.649 |
9.910 |
12.950 |
* The council commissioned a high level feasibility report into the introduction of a food waste collection service. This was presented to committee in June 2021 and a more detailed business case is being produced setting out options and associated costs for dealing with the logistics and complexities around introducing a food waste collection service. Under the Environment Act 2021 the government may mandate food waste collections and have indicated that they would provide new burdens funding to councils who do not yet have a service but funding would not be provided to council’s who already have a food waste collection service. An announcement from the government is expected in Spring 2022. An update report will be presented to committee in 2022/23 setting out the options for how the new service could be funded.
· Significantly higher numbers of Council Tax Reduction claimants, resulting in taxation losses, although numbers have been steadily reducing since June 2021 but are still around 1,000 higher than pre-pandemic levels;
· Significant impacts on Adult Social Care in order to ensure discharge from hospitals into care settings as soon as possible. However, NHS funding has helped to partially mitigate this financial impact in 2021/22.
· Similarly, continued high levels of cost and activity relating to homelessness and rough sleeping which has required the use of £3.6m Covid funding in 2021/22 and is a key area of risk for 2022/23.
· Continuing losses of fees, charges and rental incomes due to suppressed economic and visitor activity in the city, however, this impact is significantly less than in 2020/21. Subject to restrictions remaining limited or being removed fully, most revenue streams are expected to recover, however, commercial rentals are expected to remain somewhat suppressed for much of 2022/23 reflecting the slow progress of economic recovery.
Table 3: Covid-19 One-off Cost Pressures 2022/23 |
£m
|
Temporary Accommodation spot purchase costs |
1.500 |
Ongoing use of emergency (hotel) accommodation for rough sleepers |
0.160 |
Reduction in income/attendance, council run nurseries |
0.150 |
Management of tented encampments (co-ordinator) |
0.023 |
Commercial rent reductions, voids and bad debts (not covered by Sales, Fees & Charges compensation grant) |
0.400 |
Total One-Off Covid-19 Costs 2022/23 |
2.233 |
Table 4: One-off Resources, Liabilities and Proposed Allocations |
£m |
£m |
Released general reserves (detailed in appendix 4) |
|
1.279 |
|
|
|
Revenue Budget position 2021/22 (TBM): |
|
|
Forecast outturn underspend (as at TBM Month 9 / December) |
|
1.093 |
|
|
|
Collection Fund Position: |
|
|
· Estimated 2021/22 Council Tax collection fund net deficit including 3-year smoothing |
-2.150 |
|
· Business Rates collection fund deficit relating to Section 31 grant including retail and nursery relief awarded in 2021/22 |
-20.459 |
|
· Contribution from Section 31 grant timing reserve (retail and nursery reliefs) |
20.459 |
|
· Estimated 2021/22 Business Rates Retention collection fund net surplus including 3-year smoothing |
0.889 |
|
· Planned contribution from collection fund adjustment reserve for 3-year deficit smoothing |
0.538 |
|
|
|
|
Sub-total Collection funds net position |
|
-0.723 |
|
|
|
Projected One-off Resources available at the start of 2022/23 |
|
1.649 |
|
|
|
Proposed One-off Allocations in 2022/23: |
|
|
Corporate plan one off investments as set out in Table 2 |
-0.479 |
|
Diseased Trees removal |
-0.600 |
|
Planning – Provision for Public enquiries |
-0.050 |
|
Planning – Guidance for Liveable Cities |
-0.150 |
|
Allocation to Council Tax Reduction Discretionary Fund |
-0.190 |
|
Allocation to Welfare Reform Support Fund (LDSF) |
-0.180 |
|
|
|
|
Short-Term Covid-19 pressures shown in Table 3 |
-2.233 |
|
|
|
|
MTFS contribution from reserves (2022/23) |
-1.983 |
|
Net shortfall in one off resources |
|
-4.216 |
|
|
|
Managed by: |
|
|
Internal borrowing for short-term Covid-19 costs spread over 10 years |
2.233 |
|
Internal borrowing to balance resources over the 4-year MTFS period |
1.983 |
|
Balance |
|
0.000 |
· Covid-19 financial impacts (£2.233m): these are set out in detail in the table at paragraph 5.11 above;
· One-off investment in Corporate Plan priorities (£0.479m): these investments are set out in detail in the table at paragraph 5.9 of the report;
· Ongoing management of Ash & Elm dieback (health & safety works) (£0.600m): these allocations are in relation to the recommendations emanating from the Tree Diseases report, which were approved by the Environment, Transport & Sustainability Committee at its meeting on 24 November 2020 (Item 43). The allocations help to manage the spread of the diseases as well as safely removing dying and unsafe trees.
· Public Inquiries (£0.050m) - two public inquiries are anticipated next year (re: Toad’s Hole Valley) and this pressure funding is required to fund barrister services, specialist witnesses and associated costs.
· Planning Guidance for a Liveable City (£0.150m) – this investment follows the report to Environment, Transport & Sustainability Committee to provide a project manager and consultants to prepare a Supplementary Planning Document that will provide a framework and guidance for delivering a future city centre with liveable, 20 minute neighbourhoods in the context of a post-covid environment, changes to the retail market, new transport measures and regeneration sites.
· Council Tax Reduction Discretionary Fund (£0.190m): This allocation is for approval by full Council on 3 February 2022 in considering its annual review of the Council Tax Reduction Scheme. The allocation, if approved, will again top-up the existing recurrent budget of £0.010m to £0.200m. The discretionary fund provides extra one-off support, via application, for people in hardship who may need help to meet exceptional housing costs, rent or Council Tax shortfalls, home removal costs, or rent in advance.
· Allocation to maintain the Welfare Reform Support Fund (£0.180m). In recent years, the council has made an annual allocation to maintain support for people in hardship, in particular, those impacted by welfare reforms including the benefit cap. This fund complements welfare benefits and other discretionary funds including Discretionary Housing Payments (DHP) and the Council Tax Reduction Scheme discretionary fund. The fund is used primarily to ensure continuation of the Local Discretionary Social Fund (LDSF) which, for example, provides emergency assistance and vouchers for food and white goods.
· The proposed Capital Investment Programme
· The Governance & Risk Framework
· Potential and pending non-financial investments
· An overview of the council’s Risk Exposure
· New investment for retrofitting and renewable investment in council housing as well as expansion of the additional council homes investment through the HRA;
· The Carbon Neutral Investment Programme and the Climate Assembly Action Fund, and further investment in the Warmer Homes capital investment programme;
· Similarly, investments in active travel including covered cycle racks, support for green spaces and tree planting, and sports facilities and pitches are proposed to improve air quality and promote public health improvements.
Table 5: Capital Investment Programme 2022/23 |
£m
|
New Housing including New Homes for Neighbourhoods, the Home Purchase scheme, the Hidden Homes programme, the Housing Joint Venture, Temporary Accommodation purchases and conversions, and Housing First accommodation |
95.226 |
Sustainability & Carbon Reduction including the Carbon Neutral 2030 Fund, Warmer Homes, Street Lighting, BikeShare and Solar PVs |
17.061 |
Parks & Open Spaces including playground refurbishments, Kingsway to the Sea LUF, Parks infrastructure including tree replacement and Stanmer Park redevelopment |
7.879 |
Transport & Highways reflecting the Local Transport Plan (LTP) allocation for 2022/23, Pothole Action funding and development of the Strategic Transport Model. |
6.750 |
New Pupil Places (Basic Need) to provide educational places for pupils based on demographic changes in the city |
15.296 |
Regeneration including Madeira Terraces, Black Rock, Valley Gardens, Royal Pavilion Estate and Saltdean Lido |
35.872 |
Tackling Inequality including Disabled Facilities Grant (DFG) projects and the Knoll House redevelopment |
13.235 |
Building Maintenance including the Workstyles programme, Planned Maintenance, Education Buildings Maintenance, the Asset Management Fund and various security, fire and safety works |
23.389 |
IT&D / Modernisation including the Modernisation Fund as well as re-procurement of the Wide Area Network, investment in digital services for customers, and ongoing investment in the IT&D infrastructure |
5.580 |
Vehicles & Equipment for the council’s vehicle fleet replacement programme |
2.500 |
TOTAL CAPITAL INVESTMENT PROGRAMME 2022/23 |
222.788 |
Table 6: Indicative Modernisation Fund |
|||||
Programme Area |
2020/21 |
2021/22 |
2022/23 |
2023/24 |
Total |
£m |
£m |
£m |
£m |
£m |
|
Invest to Save (4-Year Plans) |
0.650 |
0.550 |
0.450 |
0.350 |
2.000 |
Customer Digital |
1.750 |
1.750 |
1.550 |
1.050 |
6.100 |
Modernisation enablers |
1.510 |
0.920 |
0.930 |
0.940 |
4.300 |
Managing staffing changes |
0.700 |
0.500 |
0.200 |
0.600 |
2.000 |
IT Modernisation Investment |
0.800 |
0.300 |
0.000 |
0.000 |
1.100 |
Total |
5.410 |
4.020 |
3.330 |
2.740 |
15.500 |
· Invest-to-Save Budget Proposals: Based on the experience of the previous 4 years and 2020/21 to date, a further £0.800m is estimated to be required to support implementation of specific savings and efficiency programmes including service redesigns, recommissioning and process improvements. Investment requirements are currently being reviewed and finalised and will be refreshed each year. This resource will be held in a reserve and only released through review of business cases by the officer Corporate Modernisation Delivery Board (CMDB). Committee approvals are also sought where required by Financial Regulations and the council’s constitution.
· Customer Digital: £2.600m is anticipated to be required over the next 2 years to support ongoing investment in digital infrastructure and applications and to support continued development of the council’s digital services and integration of data across systems and services to improve the accessibility, efficiency and ease-of-use of on-line services. The importance of these services and the digital infrastructure has been highlighted by the pandemic which required numerous on-line application portals to be developed very quickly to enable people and businesses to apply for grants and financial assistance remotely.
· Modernisation Enablers: £1.870m is estimated to be required to support ongoing change and modernisation programmes over the next 2 years. This includes everything from an effective project management support team, business improvement analysts, workstyles property team support, investment in ‘Our People Promise’ for staff development and skills programmes, together with additional specialist support where required.
· Managing staffing changes: efficiency programmes and a continual drive for improved value for money will often result in changes in the level or mix of staffing and skills required across the council. Changing staffing levels or skills will often need financial consideration in order to effect voluntary severance for roles or posts no longer required or needing to be replaced or re-trained with different roles or skills. Estimated resources of £0.800m are required to meet severance costs to manage change over the next 2 years.
· IT Modernisation Investment: Investment in IT equipment, software, systems and services (e.g. voice and data) is important to enable the organisation to remain secure, resilient and efficient. Historically, the organisation has suffered from long periods of under-investment which has had to be addressed over the last 4 years through approval of large IT Capital Schemes including Windows 10 roll-out, replacement of the Housing and Social Care systems, General Data Protection Regulation (GDPR) security upgrades, etc. This backlog of investment has now been substantially addressed and provision has also been made in the core revenue budget to provide financing for future investment to ensure that infrastructure is properly maintained and upgraded.
· Providing appropriate support to staff throughout the change process to enable them to maximise any opportunities available;
· Controlling recruitment and ensuring there is a clear business case for any recruitment activity;
· Managing redeployment at a corporate level and maximising the opportunities for movement across the organisation;
· Managing the use of temporary or agency resources via regular reports to Directorate Management Teams (DMT’s);
· Offering voluntary severance where appropriate to staff affected by budget proposals on a case by case basis.
These measures will remain in place as consultation with trade unions, staff and other stakeholders is undertaken. Where necessary, a targeted voluntary approach to releasing staff in areas undergoing change will be managed to support service redesigns whilst ensuring that the organisation retains the skills that will be needed for the future.
· Information at sub-divisional levels to aid understanding of the wide range of services and teams in each service directorate;
· Analysis of spending and income by category (subjective analysis);
· Staffing information for each service;
· Analysis of budget movements between years;
· Analysis of savings, investments and service pressure funding by category;
· Information on capital investments.
Table 7 Medium Term Financial Strategy |
2022/23 |
2023/24 |
2024/25 |
2025/26 |
£m |
£m |
£m |
£m |
|
Sub-total Net Budget Requirement B/Fwd |
219.722 |
199.853 |
239.768 |
251.418 |
Reset budget MTFS smoothing |
|
1.983 |
1.403 |
-0.876 |
Standard inflation - Pay and prices |
6.569 |
7.276 |
7.910 |
8.059 |
Costs of new National insurance/Care levy |
0.963 |
|
|
|
Changes to pay including adjusting for the 2021/22 pay award, pay negotiations and market supplements |
5.047 |
|
|
|
Standard inflation - Income |
-1.286 |
-2.664 |
-2.851 |
-2.935 |
Changes to S31 grants and reserves relating to Business Rates Retention reliefs |
-31.141 |
30.828 |
1.142 |
-0.170 |
Changes to financing costs |
-2.468 |
0.891 |
1.851 |
0.849 |
Removal of one-off Covid-19 grant allocation |
8.023 |
|
|
|
Expected unringfenced grant reductions |
|
0.883 |
0.100 |
0.090 |
New funding for social care from government and NHS (including the Services Grant) |
-7.922 |
-1.000 |
-1.000 |
-1.000 |
Investment in modernising IT & Digital services |
0.500 |
0.500 |
0.500 |
|
Other changes to commitments |
0.912 |
0.320 |
0.251 |
0.118 |
Changes to 3-year collection fund smoothing |
|
0.297 |
1.468 |
0.000 |
Demographic and other cost pressures |
12.125 |
7.750 |
6.000 |
5.250 |
Corporate Plan priority investments |
0.958 |
1.031 |
|
|
Contribution from (-) / to (+) Reserves for MTFS smoothing |
-1.983 |
-1.403 |
0.876 |
2.510 |
Repayment of Covid-19 one-off costs (10 years) |
0.152 |
0.233 |
|
|
Savings Package 2022/23 |
-10.318 |
|
|
|
Savings programme - operational buildings |
|
-0.250 |
-0.500 |
-0.500 |
Savings programme - service redesigns and digital efficiencies |
|
-0.500 |
-0.750 |
-0.750 |
Budget Gap (further Savings Requirement) |
|
-6.250 |
-4.750 |
-3.718 |
Budget Requirement C/Fwd |
199.853 |
239.768 |
251.418 |
258.345 |
Funded by: |
|
|
|
|
Revenue Support Grant |
6.877 |
7.014 |
7.154 |
7.297 |
Locally retained Business Rates |
51.038 |
65.667 |
68.064 |
70.002 |
Business Rates - Collection Fund Deficit |
-19.564 |
-1.207 |
|
|
Council Tax - Collection Fund Deficit |
-2.150 |
-1.520 |
|
|
Council Tax - 1% Adult Social Care Precept |
1.588 |
1.650 |
1.695 |
|
Council Tax - including a 1.99% increase |
162.064 |
168.164 |
174.505 |
181.046 |
Total Funding |
199.853 |
239.768 |
251.418 |
258.345 |
· Changes to capital financing: the current high level of cash balances (see Appendix 3 Treasury Strategy for reasons), low borrowing rates with increasing investment rates, and substantial delays to capital programme spending will significantly reduce capital financing costs over the next 2 years. However, this will eventually smooth out over the MTFS period as capital programmes delayed by the pandemic catch up, as indicated by the reversal of the 2022/23 reduction across later years.
· Expected unringfenced grant reductions: this relates to New Homes Bonus funding dropping out over the MTFS period.
· Savings programme - operational buildings: this relates to estimated potential savings through further reduction of the council’s civic office estate in the light of increased remote and mobile working and the ongoing aim of reducing the council’s carbon footprint. The programme will need more detailed investigation and the indicative profile of savings may change over the course of the MTFS.
· Savings programme - service redesigns and digital efficiencies: similarly, the council has invested substantially in its technology, hardware and systems in support of more efficient ways of working including enabling remote working, increasing the use of on-line applications and services, and increasing self-service technologies.
· Budget Gap (further Savings Requirement): the Budget Gaps indicate the estimated additional savings required in future years of the MTFS period to balance the budget and, importantly, to repay reserves used to balance (smooth) the budget in earlier years. The predicted budget gaps are significant but are substantially lower than any budget gap in the previous 10 years assuming 2% Council Tax increases and additional 1% Adult Social Care precepts are agreed for future years. Further savings will be developed as part of a more detailed MTFS during 2022/23 and will consider potential income generation opportunities, examine the comparative cost of services (benchmarking) and consider options for alternative delivery of higher cost services, and explore further partnership working opportunities, particularly with the NHS.
· selecting only those institutions that meet stringent credit rating criteria or, in the case of non-rated UK building societies, have a substantial asset base; and
· limiting exposure risk by limiting the amount invested with any one institution.
· The authority continues to demonstrate its long track record of managing within or close to budget despite the very challenging financial climate. At month 9 this year, the forecast overspends earlier in the year have been managed through a combination of government and NHS funding support (Contain Outbreak Management Funding in particular) and financial management action detailed in the report. The delay to delivery of a number of capital programmes due primarily to the pandemic has also contributed through lower capital financing (MRP) charges. The month 9 position is now a projected underspend of £1.093m which provides much needed one-off resources to support the high demand for one-off resources including predicted one-off Covid-19 costs, the net Collection Fund deficit, and financial smoothing of the 2022/23 revenue budget;
· The authority’s track record demonstrates that it can successfully manage risk across demand-led statutory services of between 2% and 3% of the total net budget through effective management of non-statutory budgets and services;
· The authority continues to enable and achieve substantial saving packages through its Modernisation Programmes which have enabled re-investment to support priority areas, meet cost pressures and growth in demand for statutory services, and address future budget gaps;
· The authority continues to work closely with the Clinical Commissioning Group to jointly manage and mitigate risks as far as practicable. This has been evidenced in the current year where the NHS has continued to provide funding for managing Covid-related hospital discharges. Proposals for joint funding arrangements under the Integrated Care System (ICS) are currently being considered for the medium term;
· The authority has maintained adequate reserves and provisions against other known and identified risks and has made no unplanned drawdown of its reserves or balances. Initially, internal borrowing from reserves (financial smoothing) of £3.971m was undertaken to support the 2021/22 budget, repayable over a period of 10 years, to manage the financial impact of Covid-19. However, this was later reduced to £1.521m through allocation of £2.450m resources from the 2020/21 outturn underspend to repay reserves early. Limited financial smoothing is proposed to manage one-off Covid-19 costs and to balance the budget for 2022/23 but the latter will be managed (repaid) within the timeframe of the 4-year Medium Term Financial Strategy;
· The authority has set aside appropriate one-off, discretionary resources and funding to mitigate the impacts of Welfare Reforms including a Council Tax Reduction Scheme discretionary fund and Welfare Reform Support fund.
i) The risk of not achieving the saving is assessed to be high;
ii) There is insufficient evidence or information to assess the potential saving;
iii) The alternative proposal is adding to or bringing forward an existing saving without further information as to how this can be achieved;
iv) The alternative proposal requires one-off investment or loan financing that cannot be supported; or
v) The alternative proposal is beyond the powers and duties of the local authority.
Phase |
2019/20 £’000 |
Percentage of budget 2019/20 |
2020/21 £’000 |
Percentage of budget 2020/21 |
Nursery |
40 |
5.06% |
34 |
4.26% |
Primary |
3,395 |
4.49% |
3,527 |
4.58% |
Secondary |
784 |
1.51% |
3,277 |
6.28% |
Special & AP |
128 |
1.19% |
74 |
1.24% |
Total |
4,347 |
3.12% |
6,912 |
5.08% |
Financial Year |
Schools Block £’000 |
CSSB £’000 |
High Needs Block £’000 |
Early Years Block £’000 |
Total DSG £’000 |
Provisional 2022/23 |
153,922 |
2,270 |
32,983 |
15,033 |
204,208 |
2021/22 |
150,859 |
2,415 |
30,632 |
14,691 |
198,597 |
Increase |
3,063 |
(145) |
2,351 |
342 |
5,611 |
· secondary school basic entitlement age weighted pupil unit (AWPU) rates will be adjusted to adopt differential unit rates for KS3 and KS4 in line with the approach in the NFF;
· the unit rate of funding for the low prior attainment factor (with an offsetting reduction in the deprivation factor) will be increased. This brings both factors closer to the NFF, but BHCC still applies a higher weighting to the deprivation factor compared to the NFF;
· the mandatory factor has been adopted to ensure that minimum funding per pupil levels (excluding premises factors) are set at £4,265 for primary schools and £5,525 for secondary schools;
· uplifts to formula factors will be applied to reflect increases in national funding allocations; and
· a minimum funding guarantee of +1.00% per pupil will be applied.
1.10 Funding proposals for 2022/23 were presented to, and agreed with, the Schools Forum on 17 January 2022 and are subject to final sign off by the government.
· Doesn’t Council Tax [alone] pay for all council services?
· How about using [i.e. raising or changing] parking charges further?
· [Why not] Cut pay instead of services?
· [Why not] Make students pay Council Tax?
· [Why not] Just cut councillors and/or their allowances?
· [Why not] Charge wealthier people more Council Tax?
· Extra Business Rates will solve the problem [won’t they]?
Financial Implications
Finance Officer Consulted: James Hengeveld Date: 01/02/2021
Legal Implications
Lawyer Consulted: Elizabeth Culbert Date: 03/02/2021
Sustainability Implications
Crime & disorder implications:
Public health implications:
SUPPORTING DOCUMENTATION
Appendices:
1. Budget Book 2022/23
2. Capital Strategy 2022/23
3. Treasury Management Strategy Statement 2022/23
4. Review of Reserves
5. Assessment of Risks
6. Equalities Impact Assessments (EIAs) – Individual Assessments
7. Equalities Impact Assessments (EIAs) – Cumulative Impact Statement
Documents in Members’ Rooms
1. None
Background Documents
1. Budget files held within Finance