Issue - meetings

Councillor Williamson, the Deputy Leader and Executive Member for Financial Sustainability, submitted a report on the Budget 2021/22 and Medium Term Financial Plan 2021-2024. The budget proposals contained revenue budgeting, funding through council tax, review of fees and charges, use of reserves and the capital programme. The report also contained plans for how the council intended to prepare for future financial challenges. He referred back to 2020, where it was identified that £4 million of savings needed to be found over the next three years and the Leadership Team were asked to present ideas for savings within their services to meet the saving targets and the set of preferred option were listed in Appendix A. He confirmed that the proposal to charge for green waste collections had been approved by Council in January 2021 and sign ups to the scheme were progressing well and meeting the expectation contained in the Medium Term Financial Plan. At the time of speaking, 9,550 households had already signed up which represented a third of all households.The savings would be introduced in stages over the next three years, with the savings proposals published filling the budget gap in 2021/22 but leaving £200k in 2022/23 and £1 million in 2023/24 to find.

Councillor Williamson referred to the New Homes Bonus which had been scaled back over the last three years and explained that its future looked doubtful with the government having launched a consultation on proposals to replace it. A proportion of this bonus used to be distributed to Town and Parish Councils on a discretionary basis. This budget proposed that they would be able to request funding up to the level which they would have previously received for community projects.

Councillor Williamson outlined that the council had, in previous successive years, frozen or had limited increases in council tax. Three years ago, the government made clear that they expected local authorities to become financially self-sufficient and accepted need to increase Council Tax to the maximum allowed without a referendum. He explained this position had not changed and Council Tax would be increased each year in the life of the Medium Term Financial Plan which was equivalent of £5 a year on a Band D property and this would generate critical additional revenue every year.

Councillor Williamson outlined the fees and charges, another key source of council income which had been reviewed annually and a 2.5% increase in line with inflation was built into the budget.

Councillor Williamson said the financial challenges were not new and the council had endeavoured to become more entrepreneurial and less dependent on central government funding. Good management of reserves were vital and would be reviewed regularly.

Councillor Williamson said that the Hartham Leisure Centre and Hertford Theatre projects as part of the capital programme had been progressing well and their business cases had been refreshed last year. The final business case for the Old River Lane project would be presented to Council on 18 March 2021.

Councillor Williamson looked  ...  view the full minutes text for item 401

The Executive Member for Financial Sustainability submitted a report setting out the Budget for 2021/22 and Medium Term Financial Plan 2021-24.

The Executive Member detailed the challenges in producing this budget and the council knew last year that £1 million of savings needed to be found this year, another £1 million in 2022/23 and a further £3 million in 2023/24. The preferred options for savings are detailed in Appendix A of the report and charging for green waste collections was approved at Council in January. The savings identified are phased over the next three years but if any of these savings cannot be realised for any reason, an equivalent saving will need to be found elsewhere. Adverse events in the last year have made balancing the budget more difficult, including the changes to the Public Works Loans Board (PWLB) lending facility that the government would now withhold lending from any local authority that seeks to borrow for investment in “assets primarily for yield”. In addition to this, the covid pandemic and subsequent lockdowns have had an impact on the council’s finances and losses are only partly covered by government grants.

The Executive Member also addressed the changes to the New Homes Bonus. The 25% previously distributed to Town and Parish Councils will now be held in reserves for the councils to bid for. The report recommends the maximum increase to Council Tax without holding a referendum which is equivalent to a £5 increase on a Band D property.

The Executive Member detailed plans for budget gaps in future years and the council will start a Transformation Programme to identify efficiency savings. Despite the difficulties in producing this budget, the council have managed to do so without any real cuts to front line services.

The Leader thanked officers for their work on producing a balanced budget whilst maintaining services and commented that it will not get easier in future years and government funding is uncertain.

Councillor Curtis said he raised a question at the Joint Meeting of Scrutiny Committees regarding the assumptions underpinning the budget on parking. He was keen to know what was considered when residents’ habits may change post covid and did not want the council to be out of pocket.

Councillor Williamson said a written answer was circulated after the meeting. He asked for this to be recirculated after the meeting and attached to the minutes (see Appendix A).

Councillor McAndrew confirmed that the council are looking at what fees to charge where in the car parks and an exercise is currently being carried out to understand parking behaviours but this will not be completed until there is a return to some sort of normality as the dynamics of parking changed considerably.

Councillor Williamson proposed and Councillor Haysey seconded a motion supporting the recommendations in the report. On being put to the meeting and a vote taken, the motion was declared CARRIED.

          RESOLVED –

a)   To recommend to Council that:

                               I.            The East Herts share of the Council  ...  view the full minutes text for item 380

The Executive Member for Financial Sustainability briefly introduced the report. He set out a number of difficulties with the budget which had added to existing pressures, including the impact of the COVID-19 pandemic on the Council’s revenue streams, which had only partly been subsidised by government grants, as well as new rules which prevented borrowing from the Public Works Loan Board (PWLB) for investment in assets ‘primarily for yield’. This meant income from planned additional property acquisitions by Millstream Property Investments Ltd and rents from planned commercial property acquisitions by the Financial Sustainability Committee had to be removed from the budget. As such, additional savings would need to be made elsewhere.

Members were also advised of changes relating to Business Rates. The Council would receive around £2.2m for New Homes Bonus awards next year. The automatic payment of 25% of the grant to town and parish councils would not be made, although they could bid for money subject to conditions, including having spent all of their previous New Homes Bonus awards. The Council would also increase council tax by £5 in 2021/22 and that increase would also be seen in each year of the Medium Term Financial Plan (MTFP).There would also be a 2.5% increase in fees and charges. Whilst this Budget had been challenging, there had been no substantial changes to front line services.

Councillor Goldspink asked when the external auditor would consider the Council’s use of capital receipts. The Head of Strategic Finance and Property said this was likely to happen towards the end of February or the beginning of March, but audit firms were currently under a lot of pressure.

Councillor Brady asked how much the Council borrowed externally each year for the capital projects and whether this had been borrowed from the PWLB. She also asked if this borrowing would continue to be considered legitimate under the new rules.

The Executive Member said that the Council’s external borrowing would amount to just under £22m. The borrowing was to be incurred from 2022/23 onwards and it was envisaged that all of the borrowing would be from the PWLB. These particular capital projects were not considered to be ‘primarily for yield’, so would be unaffected.

Councillor Pope asked when initiatives such as the Fairer Funding Review were likely to take place. He also asked what the provision of bad debts had been increased to for Business Rates, and what impact this would have on the Council’s position. Finally, he asked for clarification in respect of the reference in the report to the sharing system.

The Head of Strategic Finance and Property said the bad debt provision had been increased by just over £1m, and the appeals provision by £3.4m, based on the assumption of a 25% reduction in rateable value due to material change in circumstances appeals for offices, retail, food and beverage and leisure properties. This would result in a forecast deficit of £18m for 2020/21. This loss would be subject to an irrecoverable loss grant  ...  view the full minutes text for item 347