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Cabinet received report ES/0663 by the Cabinet Member with responsibility for Finance relating to the draft General Fund Budget for 2021/22 and the updated Medium Term Financial Strategy (MTFS) as at January 2021.
The Cabinet Member with responsibility for Finance reminded Cabinet that it considered the draft MTFS on 1 December 2020. Since then, it had been continually revised with updates.
The report presented a balanced position for the current year and for 2021/22; this was achieved by the use of reserves. For the current year £2.001m was being used from the In-Year Savings reserve; for 2021/22 the budget gap of £3.167m was being met from the In-Year Savings reserve (£2.269m) and from the Business Rates Equalisation reserve (£0.898m). This meant that all of the In-Year Saving reserve has been committed.
Councillor Cook drew members' attention to section 6 and Appendix A6 of Appendix A of the report and commented that it provided details on the Council’s reserves position. From April 2022 to April 2025, the average total on the Council’s Earmarked Reserves is £27m, plus a General Fund Balance being maintained at £6m.
At the end of the 2021/22 budget process, the Council was required to approve a balanced budget for the following financial year and set the Band D rate of Council Tax. Covid-19 had presented significant additional financial challenges to the Council and the outlook was very uncertain at this stage for both next year and the medium term. However, the Council’s robust reserves position enabled it to meet these challenges; develop its response to the pandemic and the objective of maintaining financial sustainability; and freeze its element of the council tax for 2021/22.
The Cabinet Member with responsibility for Finance highlighted the appendix that had been added to the report, since the Scrutiny Committee meeting, relating to the consultation that had taken place with the public, town and parish councils and businesses. Councillor Cook commented that the responses supported the strategic thinking of ESC in producing the budget.
The Leader, after welcoming the report, commented on the challenges in respect of the pandemic, local authorities and council budgets. The Leader highlighted the uncertainty in respect of public finances going forward, but he stated that there were many members of the public who were feeling a similar level of uncertainty in respect of their own finances. The Leader stated that ESC needed to be realistic in that some people, who had been furloughed, may end up without a job at the end of the scheme. The Leader stated that the role of ESC was to continue to deliver against its strategic aims and to consider the financial position of residents. The Leader was pleased, therefore, to be able to recommend a zero percent rise in ESC's element of the Council Tax, but he emphasised that this would not stop ESC delivering. The Leader emphasised that the proper use of reserves was being applied to enable this to happen.
In response to a question from the Cabinet Member with responsibility for Customer Services and Operational Partnerships in respect of how ESC was able to deliver a zero percent increase in respect of its Council Tax, compared to many other authorities, the Cabinet Member with responsibility for Finance stated that, in the first instance, there had to be the will to do it; and ESC had that will and aspiration. Councillor Cook emphasised that, back in the autumn of 2020, the conversations began, but at that time the decision was subject to so many different facets. However, the aim remained in place. Councillor Cook referred to the support from Government, stating that it had been good and had been used to its best. Also, due to the pandemic, some savings had been made from within and the use of reserves had been a contributing factor; with voluntary reserves playing a large part. Councillor Cook concluded by stating that the response from town and parish councils had been particularly pleasing, with many following the lead of ESC and putting a zero percent increase on their precepts. Overall Councillor Cook concluded, it was a massive team effort, and it also stemmed from prior to ESC as well, with good prudent conservative management of the finances by the predecessor authorities.
The Cabinet Member with responsibility for the Environment stated that he very much supported the proposals before Cabinet; he welcomed the use of reserves and the wish to put the residents first. Going forward, Councillor Mallinder supported the wish to invest in the people of East Suffolk and to invest in environmental positive infrastructure.
Councillor Topping referred to the budget consultation that had taken place via the website between 4 and 22 January and commented that the responses, 190 respondents to two questions, were very disappointing; she wondered if that was due to the timing, with many businesses still being in lockdown and some parish councils only meetings bi-monthly. Councillor Topping suggested that ESC needed to be mindful of those factors and provide consultees with as much time as possible. The Cabinet Member with responsibility for Finance acknowledged and understood all of those points but added that this was the first time, in recent years, that the Council had gone out to the public with a survey on its aspirations and strategies to seek their opinions. Councillor Cook commented that feedback had been received, which would be taken on board, and going forward surveying would take place more frequently, with longer being given for people to engage and the questions would be given careful consideration. The Leader added that all members of the Council would know the budget setting calendar going forward and he added that, as ward members, they could discuss budget issues with residents and with town and parish councils, and he knew that the Cabinet Member with responsibility for Finance would welcome all feedback.
Councillor Gooch commented on the pie chart that represented the demography of the respondents, and the fact that there had been low participation from younger people; Councillor Gooch suggested that, in future, ESC should look to increase the representation, perhaps reaching out through the colleges etc. Councillor Gooch was heartened by how honest and how pragmatic the responses were; people seemed to recognise the pressures faced by local government. The Leader, in response, commented that some ward councillors, through their work, may spend time and engage with young people on a regular basis, and he suggested that those opportunities may be used to engage young people.
Councillor Byatt endorsed the comments of both Councillor Topping and Councillor Gooch; he noted that people disagreed with reducing the quality of services; they agreed with sharing with councils and they did not want any of ESC's services to be transferred to commercial companies. Councillor Byatt, in conclusion, commenting on the zero percent Council Tax rise by ESC, suggested that it would need to be explained that the the bulk of Council Tax would not increase, but their were elements for others, ie the Police, SCC, and town and parish councils. Councillor Byatt very much supported the zero increase by ESC, commenting that it was wise and fair in the circumstances, to support residents in this time of crisis.
The Leader commented that it would be wrong of him to pass judgement on the finances of any other authority; the reality was that they needed to balance their budgets and take account of their pressures; all ESC could do was to support its residents while still maintaining the quality of services that was important to the residents.
On the proposition of Councillor Cook, seconded by Councillor Gallant, it was by unanimous vote
RESOLVED
That it be recommended to Full Council that it:
1. Approves the General Fund Revenue Budget as set out in this report and summarised in Appendix A5 and notes the budget forecast for 2022/23 and beyond;
2. Approves the Reserves and Balances movements as presented in Appendix A6;
3. Approves that no further changes are made to Council Tax Discounts and Premiums for 2021/22;
4. Approves the Efficiency Strategy attached as Appendix B; and
5. Approves a Band D Council Tax for 2021/22 of £171.27, which is no increase on 2020/21.