9
N.B. Councillor Thompson left the meeting during the discussions on this item at 8.37pm.
Full Council received report ES/1049 of Councillor Cook, Cabinet Member with responsibility for Resources, which sought approval of the General Fund Budget and Council Tax for 2022/23. Members noted that the Medium Term Financial Strategy (MTFS) and the proposed Budget had been the subject of extensive updating, scrutiny, and consultation over the course of this year’s budget process, with the Final Local Government Finance Settlement announced on 7 February 2022. There were no significant changes from the Provisional Settlement, and it was generally favourable to local government and the council, with a new round of New Homes Bonus (NHB) allocations and a one-off Services Grant for 2022/23. Other grant funding, such as the Revenue Support Grant and the Rural Services Delivery Grant, also continued into next year, with no significant change from current year funding levels. The council’s and the Suffolk Pool’s advantageous position on business rates had also been maintained for at least another year.
Councillor Cook reported that the Council Tax base was an improved position for 2022/23, with growth at 1.93%, compared to previous forecasts of 1%. The Final Settlement confirmed no change to the referendum limit for Council Tax and remained at the higher of 2% or £5. For the council, an increase of £4.95 (2.89%) equated to a District Band D Council Tax of £176.22 for 2022/23. A cautious approach had been taken with forecasting tax base growth in future years, with prudent assumptions regarding LCTRS reliefs and Collection Rates, and completion of development sites levelling off.
Since the Cabinet had considered the Budget and MTFS at its meeting on 1 February 2022, there had been some updates to the budget. The key changes had been to Business Rates income for next year, following the completion of the NNDR1 Return and the additional Section 31 Grant in the current year associated with Business Rates Reliefs in response to Covid.
Councillor Cook reported that as of February 2021, the budget gap reported for 2022/23 was £5.4m. The council had been able to close this gap and achieve a balanced budget, predominately assisted by the deferral of the Business Rates system for at least one more year. Following the completion of the NNDR1 return for 2022/23 the Council was in a position to transfer £0.549m to the In-Year Savings Reserve. It was noted that the impact of these changes had been managed through reserve movements. Councillor Cook then took Members through the appendices to the report in detail, for completeness.
Councillor Cook was pleased to announce that this report presented a balanced position for the current year and next, which was achieved by a combination of additional income, savings and use of reserves. Budget gaps would, however, remain in future years of the MTFS (£5-£6m) and were subject to significant uncertainty due to local government finance reforms - a position that was likely to become clearer during the course of next year. It was likely that a combination of action would be needed to ensure a longer term sustainable position, including a phased use of reserves, maximising income and achievement of savings. These would need to be worked up over the coming year, as it was increasingly likely that funding reforms would finally be implemented in 2023/24.
Councillor Cook advised that guidance from government had been received earlier today, regarding the one-off Council Tax Rebate. He then invited Mr Mew, Chief Finance Officer, to update Members on the newly received guidance. Mr Mew stated that the Council Tax Rebate was referred to in paragraph 3.24 of the report and in recommendation 14. The scheme was substantially similar to the scheme referred to in the report in that it would be a one off payment of £150, for households in Council Tax Bands A – D, however second homes and empty properties would not be eligible for this payment. There would also be a discretionary fund, which was intended to support other energy bill payers, who were not eligible for this Council Tax Rebate scheme, and councils were able to decide how best to use this fund, to support those people affected by the energy crisis. It was noted that there would be different payment arrangements in place for those whom the council held live direct debit information and those for whom it did not. Reassurance was provided that the appropriate checks and balances would be undertaken. Mr Mew stated that an information leaflet would be provided regarding the rebate and it would be included within the Council Tax bills sent to every household over the coming weeks. It was noted that recommendation 14 would need to be amended slightly, to accommodate the newly released guidance and in particular the discretionary fund.
The Chairman invited questions to Councillor Cook.
Councillor Deacon queried the second titled item 'Additional Income' in the table on page 73, Appendix A4, of the meeting papers. He wanted to know if this was where the income from the sale of the former Suffolk Coastal District Council headquarters in Melton would appear when it had been finalised? Councillor Cook invited Mr Mew to provide clarification on where this particular capital receipt would appear. Mr Mew stated that the analysis on page 73 related to revenue income and as Councillor Cook had previously stated, capital receipts would appear within the Capital Programme, as a potential source of funding for other projects.
Councillor Deacon asked if there was any update in relation to the progress of the sale, as this site was one of the largest disposable assets that the council had? Councillor Gallant reported that he was unable to provide any details for commercial reasons, however, he advised that the sale was progressing and he hoped to have positive information to share in due course.
There being no further questions, Councillor Cook moved the recommendations, including the amended recommendation 14, which was ‘That the Chief Finance Officer and Section 151 Officer be granted delegated authority in consultation with the Cabinet Member with responsibility for Resources to award Council Tax Rebates in respect of energy costs in 2022/23 under the Discretionary Fund announced by the Government on 23 February 2022.’ The recommendations were then seconded by Councillor Gallant, who reserved his right to speak.
The Chairman invited Members to debate.
Councillor Topping thanked the Chief Finance Officer and his Team for their ongoing hard work in relation to the budget preparation, which was a very difficult task. She then drew Members’ attention to Appendix C, paragraph 5.1 and read out the wording therein regarding future reforms to the local government finance system, which would provide greater uncertainty in relation to funding, which would require increased savings and maximising income, to maintain services.
Councillor Topping reported that the GLI Group would not be voting against the proposed budget and that they were pleased that the mistake of freezing Council Tax had not been repeated again this year. She stated that the small increase of £5 for a Band D household, with those on benefits receiving relief, proposed by the GLI last year, would have been worth approximately £300,000 which could have been spent on front line services and support for residents. If the Conservatives had not frozen Council Tax last year, this council would not have lost that £300,000 going forwards and the proposed increase could have been smaller this year, when residents were suffering much hardship and were in more desperate need.
Councillor Beavan confirmed that he supported Councillor Topping in this respect. He stated that while he supported the proposed increase, he was also concerned about council employees pay. Employees were likely to get a pay increase of only 2% for this year, while the rate of inflation was currently very high, at around 5%. He asked if Councillor Cook would help to put pressure on the government to increase the amount of Council Tax rises for next year, as 2% may not be sufficient?
Councillor Byatt stated that, as always, it had been suggested that Opposition Groups should present an Alternative Budget however that was not practical given the number of staff available and all the things the council had committed to do. He joined Councillor Topping in thanking Councillor Cook and the Finance Team for their hard work. He thanked Councillor Gandy, Labour’s Shadow Cabinet Member for Resources, for allowing him to speak regarding the budget this evening. He acknowledged the Council's statutory duties, providing much needed services to residents and that there was very little wriggle room. Therefore, attention was being focused upon opportunities where there was room for manoeuvre, such as in capital projects and income generation. He confirmed that this council had significant ambitions and the Strategic Plan featured investments in many of its assets, spending its funds wisely and in the best interests of residents. All were good and commendable projects, however there was one area where the council was lacking and that was the provision of council homes.
Councillor Byatt felt that the council should have greater expectations, commit to a larger base figure and be more aspirational. The council was also in the difficult situation of losing around 30 of its council homes each year, due to the Right To Buy (RTB) scheme, which was not just a loss of income but a significant reduction in the councils assets. 30 properties could equate to a loss to the councils’ estate of some £3million, therefore he felt that this council should actively campaign against RTB. He felt that the council could not sit and blame the government, it should instead see how it could support community led housing projects to provide more social housing. The council needed to start being creative with some of its significant reserves and be bold in anticipating future income from those homes.
Councillor Byatt stated that Members were aware that the council had 2 guaranteed sources of future income - both were known unknowns in the form of the Local Authority Trading Company (LATCO) and Freeport East. Members had been told the LATCO had been formed to save money, therefore any money saved should be invested into housing and Freeport East could create 13,500 new jobs and attract a potential £650 million of investment. He felt that this council should be bold and set up a task group or similar, within the council's resources directorate, to investigate what would be the prudent level of funding that we could commit to, to increase council housing stock. This would need to include realistic forecasts of what we could expect from the LATCO and Freeport East, alongside the anticipated savings from the new procurement systems. The council should also look at potential sites for development, in the council’s own land holdings and on the open market.
In relation to Council Tax, Councillor Byatt stated that there was always debate about increasing financial burdens and there would be more families struggling than ever, however the proposed Council Tax Rebate for households in bands A - D would provide some relief. Therefore, the Labour Group reluctantly supported the Council Tax increase this year. There was also to be an increase in the Policing Precept and he felt that there needed to be a demonstrable reduction in crime as a result, however if that did not happen, the council should hold the Police and Crime Commissioner to account. There were many key projects in the Capital Programme and if they all come to fruition, they would greatly benefit residents.
Councillor Burroughes stated that setting the budget was always a difficult task and he wished to comment in relation to Councillor Topping’s statement about the supposed mistake of the zero increase in Council Tax last year. He stated that many people were struggling last year and because the Conservative Administration was astute financially, it had been able to make no increase in Council Tax last year, which had helped many people. A lot of people did not have any savings to draw upon or had the benefit of being on furlough. This council did exactly what it needed to do, at the correct time. Therefore, the zero-increase last year was not a mistake, and he felt it was more evidence of this council's financial prudence. Overall, this was an exciting, good, strong and visionary budget, which he fully supported.
Councillor Deacon stated that he agreed with Councillor Burroughes' comments and that there had been many people in his Ward who had been grateful for the zero-increase last year. Many people struggled and it had meant a lot to them that there was no increase. The Labour Group were proud to have supported the zero-increase last year.
Councillor Gallant stated he had listened carefully to the comments made by Members so far this evening. He commented that the GLI Group, of whom Councillor Topping was the current leader, spoke on behalf of the Greens, the Liberal Democrats and the Independent Councillors. It was clear that they wanted to make sure this council took the maximum rises in Council Tax possible. Councillor Gallant stated that he hoped that this information was shared widely. The gesture of a zero increase last year was key, the council understood people were suffering at a difficult time and this council did what it could to support them. People had been grateful for that approach. The budget presented this evening was the work of Councillor Cook, Cabinet Member with responsibility for Resources, and Mr Mew, Chief Finance Officer, and his team. The budget was excellent, balanced and the envy of many other councils in the country and this council was continuing with its many aims and aspirations.
Councillor Gallant stated that Councillor Byatt had mentioned housing earlier and Members will look at the Housing Revenue Account as the next item of business on the agenda, however, the Council's aspiration had always been to build as many council houses as possible but it had to be a balanced process. Councillor Gallant confirmed that he did not want to build more housing until the current housing stock was of the right standard for its tenants. He commended the proposed budget and called for all Members to support it.
Councillor Cook stated that he had a couple of responses to some of the matters raised. He reiterated that last year's zero increase was not a mistake, there was a referendum limit and he was pleased that it didn't change for this year. He stated that he would not wish to exceed the maximum increase and, as mentioned by Councillor Beavan earlier, the PCC had gone above the maximum increase, however, he had consulted on that matter. As crime was such an important issue, the proposed increase had been agreed, which was the responsibility of the PCC. Councillor Cook stated that the Council had an incredible Capital Programme, which totalled over £340 million. All of those projects would need to have a full business plan in place and detailed reports would need to be brought to the Cabinet for consideration, while some of those reports would also need Full Council approval, due to their significant costs. Those projects would also have an environmental agenda attached, many of the projects would also increase the council’s asset base and in due course provide valuable income for the council. This budget would ensure that this council was financially sustainable and any budget gaps would be addressed. There were many exciting projects that had been completed this year and more would be completed next year. Councillor Cook reported that he was optimistic for the future, was proud of the budget and guidance had been received about the distribution of the £150 Council Tax Rebate, therefore, leaflets would be included about this in all of the Council Tax letters being sent to all households in the district. For those people who were most affected, there was an additional Hardship Fund of £130,000, to assist and he commended the budget to the Council.
The Chairman invited Chris Bing, Monitoring Officer, to undertake the Recorded Vote for this item. The results of the Recorded Vote are shown below:
For the recommendations:
P Ashdown, E Back, D Beavan, S Bird, C Blundell, N Brooks, S Burroughes, P Byatt, A Cackett, J Cloke, M Cook, T Cooper, L Coulam, J Craig, T Daly, M Deacon, J Fisher, S Gallant, T Gandy, A Gee, T Goldson, L Gooch, T Green, C Hedgley, M Jepson, R Kerry, S Lawson, J Mallinder, K Patience, M Pitchers, S Plummer, R Rainger, D Ritchie, C Rivett, K Robinson, M Rudd, L Smith, R Smith-Lyte, C Topping and S Wiles.
Against the recommendations:
None.
Abstentions:
None.
RESOLVED
1. That the Chief Financial Officer’s report attached at Appendix C be noted;
2. That the Medium Term Financial Strategy for 2021/22 to 2025/26, including the General Fund Revenue Budget revised for 2021/22; the proposed budget for 2022/23; and forecast budgets for 2023/24 to 2025/26 as set out in Appendix A6 be approved;
3. That the movements to and from Earmarked Reserves and the General Fund Balance for 2021/22 to 2025/26 as set out in Appendix A7 be approved;
4. That the items to be treated as special items in 2022/23 as set out in paragraph 3.18 – the precepts by town/parish councils and parish meetings be approved;
5. That no further changes are made to Council Tax Discounts and Premiums for 2022/23 be approved;
6. That a Band D Council Tax for East Suffolk Council of £176.22 for 2022/23, an increase of £4.95 or 2.89% be approved;
7. That the Flexible Use of Capital Receipts Policy (Efficiency Strategy) attached as Appendix B be approved;
8. That the Pay Policy Statement set out in Appendix D be approved;
9. That the Council Tax Resolutions in Appendix E be approved;
10. That the award of 50% relief on rates bills up to £110,000 per business to eligible retail, hospitality and leisure properties using its discretionary relief powers under section 47 of the Local Government Finance Act 1988 as amended be approved;
11. That the award of rate reliefs under the Transitional Relief scheme and the Supporting Small Business scheme (SSB) using its discretionary relief powers under section 47 of the Local Government Finance Act 1988 as amended be approved;
12. That the Chief Finance Officer and Section 151 Officer be granted delegated authority to award any further reliefs in 2022/23 arising from Government announcements under these powers;
13. That, for 2022/23, awards of Discretionary Rate Relief to Charities, Non Profit Making Organisations, (NPMOs) and Community Amateur Sports Clubs (CAS) disregard the value of Covid-19 Grant funding from the value of unrestricted reserves and operating surpluses be approved; and
14. That the Chief Finance Officer and Section 151 Officer be granted delegated authority in consultation with the Cabinet Member with responsibility for Resources to award Council Tax Rebates in respect of energy costs in 2022/23 under the Discretionary Fund announced by the Government on 23 February 2022.
With the agreement of Full Council, the Chairman announced there would be a short adjournment from 8.45pm to 8.55pm.
N.B. During the adjournment Councillors T Daly, J Fisher, S Plummer, R Smith-Lyte, C Topping and S Wiles left the meeting.
When the meeting had been reconvened by the Chairman, Councillor Goldson expressed his concern and disappointment that a significant number of the GLI Group had left the meeting whilst other budgetary matters were still to be considered by Full Council. The Monitoring Officer provided clarification that Members were able to leave a meeting when they chose to. The Chairman noted Councillor Goldson's concerns.
CONTINUATION OF THE MEETING OVER 3 HOURS DURATION
The Chairman then suggested that, as the meeting had been going for over 2.5 hours duration, that the meeting continue in excess of three hours. This was duly seconded upon being put to the vote it was
RESOLVED
That the meeting continue beyond 3 hours duration.