9
Councillor Cook, Cabinet Member with responsibility for Resources, presented report ES/0309, which sought approval of the Medium Term Financial Strategy (MTFS) for the period 2020/21 to 2023/24 and the Council Tax resolutions.
Councillor Cook reported that the MTFS and the proposed Budget have been the subject of extensive updating, scrutiny, and consultation over the course of this year’s budget process. Since Cabinet considered the Budget on 4 February 2020, the proposed budget increases received from the Norse partnership, in respect of the services that they provide to the Council, have been incorporated into the Budget and MTFS. These increases potentially have a very significant impact on the Council’s financial position and at this point have not been agreed however they do need to be included to ensure a balanced budget is set, as a worst case scenario. The proposals from Norse would be challenged and reviewed in detail, and the result of these discussions will be reported to Cabinet during 2020/21.
It was noted that in 2020/21, the Council’s financial position had benefited from the deferral of proposed changes to the business rates system and the roll forward of a one-year finance settlement from 2019/20. However, there was a high degree of uncertainty in the medium term. This means that it was important that the Council approved an appropriate increase in the Council Tax, and maintained its reserves and balances, to ensure both financial sustainability and the continuation of key projects and initiatives.
The increase proposed for East Suffolk’s element of the Council Tax was £4.95 per year, for a Band D property. With around 68% of the district’s properties being in Bands A to C, a typical Band B household would pay an additional £3.85 a year, or just over 7p a week. In addition, the Council was maintaining the current Local Council Tax Reduction Scheme so that the 14% of households in East Suffolk who were in receipt of those discounts would typically only pay 8.5% of the council tax bill. Section 25 of the Local Government Act 2003 placed a personal duty on the Chief Financial Officer to make a report to Council about the robustness of the estimates made for the purpose of the Council Tax calculations and the adequacy of reserves and balances. The 2020/21 Report of the Chief Finance Officer was provided in Appendix C, and the Act required the Council to have regard to this report before it made its budget and council tax decisions.
Councillor Cook reported that Appendix A presented the updated Budget and MTFS, which reflected the Final Local Government Finance Settlement that was issued on 6 February 2020. There were no changes from the Provisional Settlement issued in December 2019. Appendices to the MTFS include more detail on the Budget and budget movements, and detail on reserves and balances. It was noted that it was a requirement for the Efficiency Strategy in Appendix B to be approved annually in respect of the potential flexible use of Capital Receipts for the one-off revenue costs of transformation projects, although no use of this flexibility was currently proposed in 2020/21. The Efficiency Strategy would be revised during the course of the year to reflect the new East Suffolk Strategic Plan.
At the Full Council meeting on 22 January 2020, Councillors approved that the Council retained the current Local Council Tax Reduction Scheme for 2020/21 as the 8.5% benefit scheme, i.e. the maximum benefit to working age claimants was 91.5%. Full Council also approved the introduction of a tolerance to the treatment of Universal Credit income in the Scheme. Council Tax Discounts and Premiums, and Long Term Empty Property Premium from 1 April 2020 were previously approved by the East Suffolk Shadow Council. These premiums should make a significant contribution to bringing empty properties back into use.
The Government have announced additional business rates measures that will apply from 1 April 2020, increasing the current retail discount and extending it to cinemas and music venues; extending the duration of the local newspapers discount; and introducing an additional discount for public houses. In the Recommendations, the Council was requested to use discretionary relief powers to grant these reliefs. The Council has a statutory requirement to produce a Pay Policy Statement for each financial year. The Statement to be approved for 2020/21 was provided in Appendix D. Finally, the formal Council Tax Resolutions for 2020/21 were set out in Appendix E. In addition to the Councils own Council Tax Requirement, this Appendix provided the Band D Council Tax for Suffolk County Council, the Police and Crime Commissioner for Suffolk, and the Parish Precept requests by each individual Parish.
Councillor Elliott sought reassurance that the Council was claiming the maximum amount of Council Tax from second homes and long term empty properties in the District. Councillor Cook confirmed that the Council was receiving the maximum amount of Council Tax that it could receive, whilst working within the framework of the legislation.
Councillor Topping commented on the 5 themes that were currently in the East Suffolk Business Plan and the East Suffolk Strategic Plan and queried whether an additional theme could be included regarding the Climate Emergency? Councillor Cook reported that the East Suffolk Strategic Plan was due to be discussed as the next item of business on the Council's Agenda, therefore this question should be deferred until then.
Councillor Deacon queried Appendix 4 in the report, on page 44, which illustrated the MTFS Key Movements. He sought clarification on the figures for Car Park Enforcement and also the additional income from car parking. The Finance Manager and Deputy S151 Officer reported that the increase in costs for Car Park Enforcement related to the additional staff who were being employed to cover Civil Parking Enforcement in the District, which would commence shortly. The increase in income from car parking, was to reflect the actual amounts that were being received, as there had been an underestimation of receipts in the past.
Councillor Elliott raised concerns about the increase in costs of the Norse contract and he sought assurance that the Council would be looking to bring back the function in house, in order that the Council could increase control over the budget. Councillor Cook reported that officers were looking into the matter of the increased costs. He advised that the figures shown in the report were, in fact, the worst case scenario and it was hoped that the actual figures would be reduced. Further reports regarding the progress of the negotiations with Norse, would be brought back to Cabinet, in due course.
Councillor Elliott drew Members attention to the Pay Policy and he raised concerns about whether the Council's partner organisations and parties such as Norse were also bound to review their lowest paid workers. The Finance Consultant confirmed that the Pay Policy only applied to those staff employed by East Suffolk Council, it did not include partners or other organisations. Councillor Elliott queried whether it would be possible to see if the Pay Policy could be made to apply to partner organisations and Councillor Cook reported that this could be reviewed in due course.
Councillor Gooch advised that the Environmental Task Group was concerned about ensuring that the Council considered green and sustainable options wherever possible. She queried whether it would be possible to have an additional appendix in the future Budget Reports, to show the money spent by the Council on reducing damage to the environment and environmentally sustainable products? Councillor Cook reported that there was no defined budget for the Environment or any of the Core Themes within the Business Plan or Strategic Plan. He reported that all of the Council's projects had to provide a detailed business case prior to their consideration and environmental concerns and mitigation were clearly shown within them. It would therefore not be prudent to have a separate budget for Environmental matters, they were considered within everything that the Council undertakes. Councillor Mallinder, Cabinet Member with responsibility for the Environment, reported that the Environment could be compared to a 'golden thread' and was an important part of the decision making process in everything the Council does.
Councillor Blundell took the opportunity to raise the concern that he could not see Purdis Farm listed in Appendix E, which listed all of the Council Tax Resolutions. Councillor Cook reported that this would be investigated and Councillor Blundell would be updated outside of the meeting. Later, during the meeting, Councillor Gallant provided clarification that Purdis Farm had been included under the Parish Area - 'Brightwell, Foxhall and Purdis Farm'.
Councillor Cook then moved the recommendations within the report and they were duly seconded by Councillor Rivett.
Councillor Byatt took the opportunity to thank Councillor Cook for his report and he congratulated him on his recent appointment as Cabinet Member with responsibility for Resources. He reported that this was the first time East Suffolk Council had set a budget and he stated that he would support the proposed budget if the money was being spent wisely, however he and his colleagues would scrutinise the money that was spent and ensure that the Council would keep its promises. With the challenging economic climate, with various local shops closing, it was important that the Council did everything it could to breathe life into High Street. It was also important that East Suffolk Council did the best for the people who lived and worked in the District, regardless of their politics. Future funding was a significant concern, as the Revenue Support Grant (RSG) would disappear entirely in the near future and funding grants were only for a year at a time, therefore it was very difficult for all Council's to plan in the longer term. He reported that the role of the Opposition was not just to oppose everything, it was to work with the Administration and to challenge and question as much as possible. He felt that rural and coastal communities had been overlooked by central Government for many years and that work needed to be undertaken to ensure that this was addressed. The District also had a number of assets such as the countryside, award winning beaches and many other opportunities and it was important that the Council made the most of them, wherever possible.
Councillor Gallant confirmed that he welcomed being held to account by the Opposition and he would also welcome any suggestions or ideas that could help the Council in the future.
Councillor Beavan took the opportunity to congratulate the Council for producing a prudent and balanced budget. He recognised that it was difficult for finance to balance the budget and it would only become more difficult in the future. He took the opportunity to raise that second home owners were able to use a legal loop hole to avoid paying Council Tax and Business Rates on their properties and they were therefore being subsidised by the remaining Council Tax payers in the District. He reported that there were approximately 354 holiday let businesses registered in Southwold and there was no substantial proof that any of them were genuine holiday let businesses. The Council was losing around £0.5 million each year as a result of this legal loophole and he urged the Council to lobby the Government ti investigate closing the loop hole as a matter of urgency, in order that everyone was treated fairly and was paying the various taxes that they owed.
In accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, the Councils Standing Orders contained the need to have a Recorded Vote at meetings where decisions on the budget were made. Therefore, in accordance with Paragraph 15.5 (Recorded Votes) of Part 3 of the Constitution, the Council would be having a recorded vote for this item. The results of the vote are shown below:
For the recommendations contained within the report:
Councillors M Allen, P Ashdown, E Back, D Beavan, S Bird, C Blundell, J Bond, E Brambley-Crawshaw, N Brooks, S Burroughes, P Byatt, A Cackett, J Ceresa, J Cloke, M Cook, T Cooper, L Coulam, J Craig, M Deacon, G Elliott, J Fisher, S Gallant, A Gee, T Goldson, L Gooch, T Green, C Hedgley, R Kerry, S Lawson, G Lynch, J Mallinder, T Mortimer, K Patience, M Pitchers, C Poulter, D Ritchie, C Rivett, K Robinson, M Rudd, L Smith, R Smith-Lyte, E Thompson, C Topping, S Wiles and K Yule.
Against the recommendations the recommendations contained within the report:
There were none
Abstentions
There were none.
Upon being put to the vote it was unanimously
RESOLVED
1. That the Council considered the Chief Financial Officer’s report attached at Appendix C;
2. That the Medium Term Financial Strategy for 2019/20 to 2023/24, including the General Fund Revenue Budget for revised 2019/20; proposed 2020/21; and forecast budgets for 2021/22 to 2023/24 as set out in Appendix A be approved;
3. That the movements to and from Earmarked Reserves and the General Fund Balance for 2020/21 to 2023/24 as set out in Appendix A6 be approved;
4. That the items to be treated as special items in 2020/21 as set out in Section 6 – the precepts by town/parish councils and parish meetings be approved;
5. That a Band D Council Tax for 2020/21 of £171.27, representing an increase of £4.95 or 2.98% on 2019/20 be approved;
6. That the Efficiency Strategy attached as Appendix B be approved;
7. That the Pay Policy Statement set out in Appendix D be approved;
8. That the Council Tax Resolutions in Appendix E be approved;
9. That the discretionary business rate reliefs referred to in paragraph 4.2 under Section 47 of the Local Government Act 1988 be granted;
10. That the Business Rates base (total net Business Rates income) of the district for 2020/21 of £96.159 million be noted; and
11. That the Council Tax Base of 87,888.87 for 2020/21 be noted.