General Fund Revenue and Capital - Revised Budget 2020/21, and Final Budget Proposals 2021/22
Report of the Cabinet Member Finance and Assets
The Cabinet Member Finance and Assets presented the budget report, explaining that it continued the Covid recovery work which invested in the economy and tackling climate change. He wished to place on record his thanks to all staff for their efforts during Covid and praised them for rising to the challenge. He paid tribute to the Executive Director Finance and Assets and his team for their work on distributing a total of £31.4 m of business grants to date.
He explained that the budget before Members was based on the Covid recovery budget agreed by Council in November 2020. This had focussed on certain asset disposals so the council was able to underwrite the budget for the next three years. Since November, the country had entered into a further lockdown which impacted the budget in terms of reduced income, amounting to a net £100k which would be funded from general balances. The 2021/22 budget builds on the recovery strategy. In terms of the national context, the government settlement was confirmed on 10 February and was only for one year which was disappointing, particularly as there had been promises of a business rates and fair funding review. On a positive note, government commitment to support loss of income by 75% had been extended to the end of June, although there was concern that loss of income would continue. It was therefore difficult to predict the impact of this and the impact of Covid on the potential to collect council tax and business rates. New Homes bonus had been extended for a further year and revenue support grant remained at zero. A lower tier service grant had been received amounting to £121k; this represented an adjustment grant and was top-sliced from the national new homes bonus allocation.
In terms of council tax support, more than 4,000 people locally had benefitted from the CBC scheme. The Gloucestershire business rates pool continued to prove beneficial meaning the council was £1.184m better off against its baseline target. Covid was having an impact on business rates as government had allowed zero rates. To that end, projected income has dropped but government funding was in place to cover this. Government had requested local authorities to delay billing until the national budget had been announced.
In preparing the budget, Cabinet were mindful of the economic difficulty many people and businesses were facing. The council continued to try to maximise efficiency, reduce costs and increase income where practicable and he was pleased to report that a further £400k of savings could be banked into this budget. This was an exceptional effort, given the circumstances.
The budget would continue to protect frontline services whilst investing in tackling climate change and economic growth locally. The council’s commercial strategy, adopted in 2018 would continue, maximising the use of skills and assets and aiming to achieve long term, sustainable growth. Evidence showed that Cheltenham remained an attractive place to invest which was positive in terms of the council approach.
The Cabinet Member highlighted the following additional element of the proposals:
- inflation only assumed where demonstrated
- a 1% pay increase assumed in the base budget
- a freeze on fees and charges
- extending the flexible use of receipts policy
- reconfirmation of £1.5m investment in the cyber central project to ensure it was well resourced in order to seize on this massive opportunity for the wider community
- £75k into budget to support resourcing of carbon neutral projects
- £21k in base budget for the sustainable weeding regime
- £75k investment in economic development
- £75k investment in apprenticeships representing four extra posts to be recruited in the next 6 months
- £0.4m set aside for high street towards Cambray phase of work
- £500k to fund disabled facilities grants
- £500k towards Cheltenham Trust to pump prime commercial activities
- £4.5m to fund PRS housing in addition to the affordable housing provision accounted for in the HRA.
The Cabinet Member referenced the reduction in PWLB rates by 1% which was a positive, with the CBC focus remaining on the local economy and service provision. He also referenced the large rolling programme of planned maintenance which had been scrutinised by the Asset Management Working Group.
In terms of consultation, he wished to thankthe Budget Scrutiny Working Group, the C5 Parish Councils Group and the voluntary sector. The voluntary sector was pleased that the council intended to protect the grants such as community pride and emphasised the importance of tackling the social divide in the town.
He emphasised the legal requirement for S151 officer to publish a report on the proposals and referred Members to Appendix 2.
In terms of council tax, the Cabinet Member confirmed that district councils remained capped in terms of any increase without a referendum. The proposed council tax rise for Cheltenham equated to 2.34%, which represented less than 10 pence a week for a band D property, a modest amount for the investment being made in the town and the services provided.
The budget was seconded by Councillor Hay.
In response to a question relating to a breakdown of S106 drawdown in light of the move towards Community Infrastructure Levy, the Executive Director Finance and Assets explained that this was not traditionally part of budget setting but would be reported at year end and included in the budget monitoring report which is submitted to Cabinet.
Group Leaders were invited to address Council:
Councillor Harman, Conservative Group Leader, firstly wished to pay tribute to Kevan Blackadder, congratulated Cheltenham Town Football Club on its recent performance in the FA cup and thanked all volunteers currently assisting with the vaccination programme.
Moving on to the budget, he thanked the Executive Director Finance and Assets and his team. On behalf of his group, Councillor Harman advised Members of the following amendment (which had been circulated to Group Leaders in advance of the meeting).
· Reduce cabinet posts by 3 = £42k pa saving
· Move to 4-yearly elections = £32k pa saving (see note below)
Total = £74k pa
· Additional bring site recycling collections at peak times = £9k pa
· Community Investment Fund = £20k pa (i.e. £1k per ward)
· Climate Change Funding = £45k pa
Speaking to the amendment, Cllr Harman stated that Cheltenham was the only district in the county which did not have 4 yearly elections. Not only would this save money, but also provide the electorate with the opportunity to change the whole council if it wished to do so. Additionally, the current cycle caused a degree of confusion. Although the impact of 4-yearly elections would not be felt straight away, there was an elections equalisation reserve comprising £250k. Should there be fewer elections in future, there would be ample headroom for this reserve to be drawn on in the first two years to make the savings available from next year.
In terms of the proposal relating to number of Cabinet Members, he emphasised that this was not about changing the functions of Cabinet, but rather that the funding of this role would be best allocated to projects, rather than an additional Cabinet Member. In total these measures would save £74k without effecting frontline services.
With regard to capital, Councillor Harman referred to an area of concern for residents in the borough which was the issues around bring sites around bank holidays and he proposed £9k to address this.
Secondly, he referred to a proposal for a community investment fund of £20k, comprising a £500 allocation for each ward councillor. This would represent a modest way locally for elected members who know the needs of their areas to allocate funding appropriately. Finally, Councillor Harman referred to an additional £45k, to supplement the existing budget, to tackle climate change and this could be used to fund the bus station feasibility study. Boosting public transport would assist greatly with carbon reduction in the town. He finished by saying that these proposed amendments would improve the budget proposals.
On behalf of the PAB, Councillor Stennett was invited to address Council. He congratulated the Executive Director Finance and Assets, and the finance team on putting together a balanced budget in these particularly difficult times. He commended the speed in which officers were able to provide financial support to businesses and the council tax support schemes. He supported the long term investment approach to generate funding to support services and his group would be supporting the budget proposals.
The conservative amendment was proposed by Councillor Harman, seconded by Councillor Babbage.
In response to a question on the amendment, Councillor Harman clarified that in terms of the proposed reduction in Cabinet Members, the intention was to redistribute the functions across a smaller number of Members.
The following points were raised in the debate on the amendment:
- Similar amendments had been proposed by the opposition in previous years and it was regretful they were being debated once again
- The £20k pot (£500 for each ward Councillor) proposed for community investment represented a token amount and would therefore be of minimal benefit; there were better means to leverage in additional funding for communities in cooperation with partners such as charities and community organisations.
- Abolishing the Cabinet Member Climate Change role would send out the wrong signal at a time when Cabinet was focused on supporting the climate emergency, which required significant community engagement. Additionally, it was important to recognise not only the knock on effect of the global crisis, but also the fact that businesses were struggling to deal with Brexit. There was a great need to do all we can to support the town in terms of innovation, green growth, connectivity, reimagining high streets, new planning policies and the significant investment in the Golden Valley development which would plan 4000 new homes, 40% of which would be affordable. The council was incredibly ambitious and innovative and this required significant Cabinet Member involvement.
- Regarding bring sites, it was noted that the last 12 months had been unprecedented with recycling increasing from 850t to 960t with a 49% increase at bring sites. Crews had worked tremendously hard and there was no evidence to suggest there were any particular issues around bank holidays. The proposed £9k would have minimal effect in improving the sites which cost £200k to operate.
- Four yearly election - more democracy is good; there were other Conservative-run authorities with elections by halves and thirds.
In seconding the amendment, Councillor Babbage was disappointed with the reaction to the amendment. The investment for climate change would facilitate progress to the bus station feasibility study and this would make a difference to the town.
In summing up, Councillor Harman emphasised the importance of whole council elections. It would save money and would provide the opportunity to change the administration if the electorate wanted and, from his experience, it would provide clarity for residents. In terms of number of Cabinet Members, he did not want to downplay climate change but made the comparison with the County Council budget and the size of its Cabinet. He felt that the £1000 per ward community investment proposal would facilitate projects that would be of benefit the town.
In responding to the amendment, the Cabinet Member Finance & Assets regretted the late input into the budget process by the opposition. He rejected the proposed reduction in size of the Cabinet particularly given the County Cabinet had increased in size. On principle he disagreed with the four yearly election proposal. Ubico had responded excellently in managing the levels of recycling caused by the impact of the pandemic with no specific issues on bank holidays.
The proposed community investment funding was minimal and the administration around it would absorb most of this allocation. As far as tackling climate change was concerned, there was an additional £300k in the capital budget and £75k in revenue. This council had set itself a high target and a key determinant to its success would be the amount of government and other funding it would attract. Government changes to building regulations, energy policy and planning rules would also help in tackling climate change. He regretted the recent County Council decision not to support the Connecting Cheltenham proposals.
The Mayor moved to a recorded vote on the amendment.
FOR: (6): Babbage, Cooke, Harman, Mason, Savage, Seacome
AGAINST: (28): Atherstone, Baker, Barnes, Barrell, Boyes, Britter, Coleman, Collins, Dobie, Fisher, Flynn, Harvey, Hay, Hobley, Holliday, Horwood, Jeffries, Jordan, McCloskey, McKinlay, Oliver, Payne, Stafford, Stennett, Wheeler, Whyborn, Williams, Willingham.
The amendment was lost.
After a brief adjournment Members moved to the debate on the substantive. The following points were made:
- The Chair of the Audit, Compliance and Governance Committee explained that the committee had responsibility for signing off the statement of accounts. Last year the council’s independent auditors had stated that the council was fiscally sound and fiscally well managed. He added that it was also one of the first local authorities in the country to distribute a support package for its local businesses, which was to be applauded.
- The £4.5m funding on the enabling of private rented sector housing was welcomed
- Thanks was given to officers in the licensing team for their consistent work to drive the recovery in the town, particularly when they go above and beyond. The example was given of the significant contribution the team made to the all-party parliamentary group on ideas for the recovery of the night time economy.
- There was recognition of the high level of financial stewardship by the Executive Director Finance and Assets and the finance team in delivering the budget.
- Providing apprenticeships was to be welcomed at a time when there had been an overall drop in funding from businesses in the period 2019-20
- CBC was one of the first authorities to publish a recovery strategy and thanks were given to the members of the Cheltenham Economic Recovery Task Force. 9 key priorities had been identified in the recovery plan for CBC to focus on over the coming months. The additional funding proposed in this budget would ensure the council is delivering for the residents and businesses in the town and for those businesses wishing to position themselves in Cheltenham.
- The capital programme was exciting and something to be proud of as it would really make a difference to the town. There was significant investment in the town’s economy, giving the example of the airport, the minster innovation exchange and these capital projects would create jobs and wealth. Allotment investment was welcomed, parks and gardens play area refurbishment. Something for everyone given the challenging circumstances.
In seconding the budget, the Leader emphasised that there was a clear view and vision for the borough. The council had a strong track record of financial management and a bright future. She then gave a snapshot of the significant effort and financial investment the council had made in the town over the past year. This was staggering and she was really proud of the value for money the council provided for the town.
She thanked the Cabinet Member Finance for his significant contribution and wholly supported the budget moving forward.
In summing up, the Cabinet Member Finance thanked Members for their input.
The Mayor moved to a recorded vote on the substantive.
- The revised budget for 2020/21 be approved;
- The budget assessment by the Section 151 Officer at Appendix 2 be considered in agreeing the following recommendations;
- The final budget proposals be approved, including a proposed council tax for the services provided by Cheltenham Borough Council of £219.08 for the year 2021/22 based on a Band D property (an increase of 2.34% or £5.00 a year for a Band D property), as detailed in paragraphs 4.17 to 4.22;
- The growth proposals at Appendix 4 and outlined in Section 6 be approved;
- The savings / additional income totalling £400,000 and the budget strategy at Appendix 5 be approved;
- The use of reserves and general balances be approved, and the projected level of reserves as detailed at Appendix 6 be noted;
- The capital programme at Appendix 7 be approved;
- The programmed maintenance programme at Appendix 8 be approved;
- The flexible use of capital receipts strategy as detailed in Appendix 9 be approved;
- It be noted that the Council will remain in the Gloucestershire business rates pool for 2021/22 (paragraphs 4.6 to 4.16);
- The Medium Term Financial Strategy (MTFS) detailed in Section 5 and Appendix 10 be approved;
- The Pay Policy Statement for 2021/22 be approved, including the continued payment of a living wage supplement at Appendix 11;
- A level of supplementary estimate of £100,000 for 2021/22, as outlined in Section 14, be approved.
FOR: (28): Atherstone, Baker, Barnes, Barrell, Boyes, Britter, Coleman, Collins, Dobie, Fisher, Flynn, Harvey, Hay, Hobley, Holliday, Horwood, Jeffries, Jordan, McCloskey, McKinlay, Oliver, Payne, Stafford, Stennett, Wheeler, Whyborn, Williams, Willingham.
ABSTENTIONS: (7) Babbage, Cooke, Harman, Mason, Savage, Seacome, Sudbury
- 2021_02_22_COU_General_Fund_Budget, item 10. PDF 655 KB
- 2021_02_16_CAB_COU_Final budget 2021-22_App2_S151_commentary, item 10. PDF 574 KB
- 2021_02_16_CAB_COU_Final Budget 2021-22_Appendix 3 - Summary Net Budget Requirement, item 10. PDF 134 KB
- 2021_02_16_CAB_COU_Final Budget 2021-22_Appendix 4 - Growth_Summary, item 10. PDF 10 KB
- 2021_02_16_CAB_COU_Final Budget 2021-22_Appendix 5 - Savings_additional_income, item 10. PDF 244 KB
- 2021_02_16_CAB_COU_Final Budget 2021-22_Appendix 6 - Reserve_Statement, item 10. PDF 204 KB
- 2021_02_16_CAB_COU_Final Budget 2021-22_Appendix 7 - Capital_Programme, item 10. PDF 46 KB
- 2021_02_16_CAB_COU_Final Budget 2021-22_Appendix 8 - Planned_Maintenance_Programme, item 10. PDF 100 KB
- 2021_02_16_CAB_COU_Final budget 2021-22_App9_Use_Capital_Receipts_Strategy, item 10. PDF 352 KB
- 2021_02_16_CAB_COU_Final Budget 2021-22_Appendix 10_MTFS, item 10. PDF 16 MB
- 2021_02_16_CAB_COU_Final budget 2021-22_App11_CBC_Pay_Policy_Statement, item 10. PDF 463 KB
- 2021_02_16_CAB_COU_Final budget 2021-22_App12_Budget_Consultation_Questions_Public, item 10. PDF 399 KB
- Budget Procedure, item 10. PDF 122 KB