General Fund Revenue and Capital – Final Budget Proposals 2023/24
Report of the Cabinet Member Finance and Assets
The Cabinet Member for Finance and Assets presented the report, which summarised the revised budget for 2022/23 and the Cabinet’s final General Fund Revenue and Capital budget proposals and pay policy statement for 2023/24.
He reflected on the economic changes over the last twelve months, including record inflation of 11.1% compared to 5.1% when last year’s budget was agreed. Interest rates had increased eight times since then, from a base rate of 0.5% in February 2022 to 4% last week. This time last year a unit of electricity had cost 15p while a unit of gas was 3p, and these were now 40p and 10p respectively even with government caps on pricing. In addition to this, there had been three Prime Ministers and four Chancellors during the year, causing a circus of economic self-harm which everybody in the country was paying for.
The council had to act in a volatile and unpredictable financial situation, and had to take decisive action to ensure resources were balanced to deliver on their commitments, particularly considering the economic challenges which were forecast to continue into the medium term. The final Local Government Finance Settlement setting out government funding for 2023/24 only included a 3% increase in core funding and only a one-year guarantee of this. They had only received single year settlements since 2019, and no long-term guarantee of funding was expected until the Fair Funding review which had been delayed again until at least 2025/26. After a decade of austerity, this was a bitter pill to swallow.
With the latest budget monitoring report for 2022/23 reporting a £2.39m overspend against what was a reasonable and prudent budget this time last year, they were placing reliance on their general balances to balance the budget this year. These balances were finite, and this was not a long-term strategy. Greater reliance had been placed on local tax generation and the council’s own commerciality to enable them to balance the budget for 2023/24. In order to meet their financial commitments and deliver services whilst maintaining robust reserves year after year while spending pressures continued to outstrip the funding received from government, it was a challenging savings strategy to deliver.
The council’s challenge had been to continue to drive forward with the goals outlined in the COVID-19 Recovery Strategy and in the new Corporate Plan agreed earlier in the meeting. These priorities were to continue with the aim of making Cheltenham the cyber capital of the UK, to invest in the sustainable economic growth of the town, to continue to support the most vulnerable communities through the No Child Left Behind initiative, to continue their £180m affordable housing program and deliver more homes across the town, and to continue with their commitment to make the council and town net carbon zero by 2030.
He added that they were looking forward to the coronation of King Charles III and wanted Cheltenham’s communities to be able to commemorate this occasion, so they were relaunching the existing Community Pride grant as the King Charles Coronation Grant, centred on some of the King’s known values including inclusion, young people, biodiversity and the environment. He hoped that this would provide opportunities for our communities to come together and celebrate as they looked to the future, in the same way as the Platinum Jubilee Grant did last year.
He summarised that the budget presented today reaffirmed this administration’s commitment to the delivery of the Corporate Plan, in spite of the extraordinary economic environment they were operating in. There was a lot about Cheltenham that made him optimistic, including the people, the ambition, the skills and their communities. He placed on the record his thanks to the council’s finance team, who had worked through these ongoing financial challenges and brought this budget together, and commended the report to Council.
In response to questions from Members, the Cabinet Member for Finance, Assets and Regeneration confirmed that:
- planning fees haven’t increased for four years, but the council has no direct control over planning, licensing or gaming fees, with many of these fees being set nationally;
- the figures for vehicles and recycling equipment at the bottom of Appendix 6 – in the 2022/23 budget set at £1.7m but with an actual spend of £500k – were provided by Ubico; this was a rolling replacement programme;
- regarding the 10% increase in cemetery fees, this was the starting point and that discussions took place with each department about what exactly was appropriate. In the cemetery’s case, the increase was most due to inflation, and fuel prices in particular. The Member noted that the cost of the service was £1.5m but it raised £2.7m in fees, and asked where this surplus went. The Cabinet Member for Finance and Assetsdid not have the figures to hand but was happy to provide more information outside of the meeting;
- the £1m earmarked for the future development of the Cheltenham Trust – which operates independently of the council – was allocated a couple of years ago to pump prime commercial opportunities.
Cllr. Harman gave his statement as the leader of the Conservative group. He outlined the amendments to the budget that were proposed by his group, namely to reduce the number of Cabinet Members by two, restore the previous opening hours to the Swindon Road recycling centre, move to four-yearly elections and to allocate £50k grant funding to mark the coronation for biodiversity and tree planting projects. He acknowledged that the world had changed hugely since last year, and thanked CBC and CBH officers for their support throughout.
He highlighted that the reduction in opening hours at the recycling centre had only saved £35k, and there had not been a trial to assess the impact on this very valued service. Cabinet was too big, and its functions could easily be covered by seven Members. Next year, there would be an all-council election, but only because of boundary changes. CBC was the only district council in Gloucestershire that elected in instalments, and he suggested keeping the four-year terms so the public had the option of changing the whole council in one go.
Cllr. Payne gave his statement as the leader of the People Against Bureaucracy group. He was pleased to confirm that the PAB group would not be putting forward any amendments, but emphasised that this did not mean they didn’t have any reservations. He thanked officers for producing the budget, as well as CBH and Cabinet, acknowledging the balancing act between political ambitions and the availability of resources. The council was fortunate to have a Cabinet and finance team that had balanced investment, retention of key services and the creation of reserves. These reserves had come to our rescue in what had been a financially turbulent year.
He raised a number of issues with potentially important financial implications in the future, the first of these being the Golden Valley development, which aimed to ensure the council’s financial sustainability. Developments of this size could deliver significant returns, but they were also risky, and these risks were not entirely within CBC’s control. As Chair of the O&S Committee, he had requested that GV officers report emerging risks to the committee on a regular basis, as well as how they were being mitigated. He encouraged the council to continue with its diverse investment program to mitigate risk. On the topic of climate change, CBC had been one of the first councils to declare a climate emergency, and recently published its climate change SPD. If Cheltenham were to become carbon neutral by 2030, government funding would be absolutely critical. He noted CBH had submitted a bid for £2.2m towards the £6m needed to retrofit 200 houses. In total, CBH owned 4,000 houses. Finally, on the topic of deprivation, he noted that priority 4 of the corporate plan was to ensure residents and communities benefitted from future growth. This was critical to Cheltenham’s success and was clearly articulated within the Place Strategy. The ongoing O&S task group on deprivation had demonstrated that they were some way away from being a town where everybody thrived. Limited resources restricted intervention, and a lot of topic areas weren’t under the council’s control, but they could look to provide resources in forthcoming budgets to address these issues.
Cllr. Joy gave her statement as co-leader of the Green group. They had participated in the budget consultation and while they had not been able to put forward a strategic and inclusive proposal of their own, they had raised some concerns to take into account going forward. As a relatively new councillor, she was still getting to know the budget process, and it could be onerous to unpick what exactly was within the council’s sphere of influence. A more integrated and holistic approach would allow them to adapt to unexpected circumstances, and they needed to be transparent about processes to ensure they were as proactive as possible, preventing problems before they arise. The Green group would keep checking in on the progress of the budget proposals and assorted projects.
Cllr. Harman formally moved the Conservative group’s amendments, with Cllr. Fifield seconding.
The meeting was adjourned between 16:00 and 16:15 to facilitate consideration of the amendments. Upon returning to the Chamber, Cllr. Jeffries confirmed that the amendments had not been accepted.
The Mayor moved into the debate on the proposed amendments. Members made the following points:
- the Cabinet Member for Waste, Recycling and Street Services recognised the importance of the Household Recycling Centre to the people of Cheltenham and went the extra mile to provide it as a discretionary service. CBC was the only district council in the country to do this. In order to continue delivering it in the face of year-on-year cuts to local authority funding, it was necessary to look at its opening hours, especially since the pandemic as new patterns of usage had emerged. Energy usage was also a key concern, and they had not taken this decision lightly;
- the recycling centre’s former hours should be restored, as making it harder for residents to recycle would lead to more fly-tipping;
- which two Cabinet positions should be deleted, noting that one of the newest two portfolios was to manage and support the Golden Valley development, which was an essential project for the council, town and county. In addition, reducing the number of the Cabinet Members would increase the workload of those remaining, which might discourage people from standing for Cabinet if they worked or had a family;
- a separate Cabinet Member for the climate wasn’t necessary as the issue should be embedded within every portfolio anyway;
- the annual allowances received by the nine Cabinet Members totalled £15k each, 10% of which went to local party for campaigning costs. Another Member clarified as a point of information that public funds were not being diverted to a political party. It was stated that there may be private arrangements where councillors chose to give money to their party, but this was not a diversion of public funds;
- it was important to have some level of continuity, to ensure experience was retained and shared with new Members, and electing by halves made this easier. Another Member agreed that two-yearly elections gave this continuity and were also more democratic, as the public could vote more often. There used to be all-Member elections, leading to the criticism that there were too many new Members in one go lacking experience, and there were plenty of Conservative authorities around the UK happy with elections by half, and a number of district councils that elected by thirds;
- two-yearly elections brought greater accountability, were an important part of councillors providing the best service to residents. Elected Members had to learn a huge amount in just a year or two of service, and it made a real difference that their ward colleague was elected a year before them and could lend their experience;
- in future, proposed budget amendments should be submitted further in advance to enable a more detailed discussion;
- the request for biodiversity funding was cost-neutral so would have to be redirected from somewhere else. The new Corporate Plan, which had just been unanimously agreed by all Members present, contained a specific focus on biodiversity, and a range of policy changes like the Climate Change SPD. As Conservative group leader, Cllr. Harman clarified that they did not advocate for cutting any frontline services, and instead wanted to increase the availability of the recycling centre;
In seconding the amendments, Cllr. Fifield praised the hard work of officers and suggested that the proposal to reduce the size of Cabinet to seven would give officers more resources to do their jobs. Continuity was provided by council officers, not by entrenched Members. The justification given for two-yearly elections surely meant that annual elections would be even more democratic. The current system entrenched the local Lib Dem advantage, and should change to the national standard.
In summary, Cllr. Harman noted the importance of democracy and open debate, and was grateful for the support of the Green group on the amendments.
The Mayor moved to the vote on the proposed amendment:
- to reduce the number of Cabinet Members by two;
- to restore the previous opening hours to the Swindon Road recycling centre;
- to move to four-yearly elections;
- to allocate £50k grant funding to mark the coronation for biodiversity and tree planting projects.
FOR: 7 (Cllrs. Babbage, Fifield, Flynn, Harman, Joy, Nelson, Seacome)
AGAINST: 25 (Cllrs. Andrews, Atherstone, Baker, Bamford, Beale, Britter, Chelin, Chidley, Clark, Collins, Dobie, Fisher, Harvey, Holliday, Horwood, Jeffries, Lewis, McCloskey, Pineger, Sankey, Tailford, Tooke, Wheeler, Williams, Willingham)
ABSTAIN: 1 (Cllr. Payne)
The amendment was lost.
The Mayor moved into debate on the original budget proposals, where the following points were made:
- inflation was a key factor in the proposals, along with the turmoil caused by the government in Westminster. This was the best budget that could be delivered in the circumstances with the resources available.
- licensing fees were set in law by the Licensing Acts of 2003 and 2005 update, and there was no apparent uplift coming from the government. For the last 18 years they had been asked to do the same amount of licensing and enforcement work on what was, in real terms, a pay cut. The government had failed to support local government in order to deliver statutory services and the discretionary things they wanted to do. Colleagues needed to use their leverage within the county council, LGA, licensing and parliament to make a difference;
- there were some good things in the budget, but the rise in cemetery fees was disappointing. Charging people who had lost a loved one an extra 10% during a cost of living crisis, when the service is already making a huge surplus, seemed incredibly wrong.
In seconding the budget proposals, Cllr. Lewis reflected on the importance of investing in safeguarding and young people. The budget delivered on their priorities and went above and beyond in order to build a Cheltenham fit for the future. Their diverse investment portfolio protected both statutory and non-statutory services which the government would rather see cut to the bone. They needed to support those hit hardest by the cost of living crisis, including community and voluntary sector organisations. She thanked the S151 officer and Monitoring Officer, as well as the Cabinet Member and the wider finance team.
The Cabinet Member for Finance and Assets thanked colleagues for their questions and input into the debate. Local accountability was central to democracy, and tackling deprivation was an important challenge. Considering the national economic uncertainty, the budget would need continually monitoring and reviewing, and he suspected that the next year would be just as tough as the previous one. The support of officers across his portfolio and across the council had once again been exemplary. He thanked Members across the chamber for engaging with the budget through a variety of forums, and thanked his Cabinet colleagues for their challenge, input, and collective support.
1. the revised budget for 2022/23, reported as part of the budget monitoring process for 31 December 2022, be approved;
2. the budget assessment by the Section 151 Officer at Appendix 2 be considered in agreeing the following recommendations:
3. the final budget proposals including a proposed council tax increase for the services provided by Cheltenham Borough Council for the year 2023/24 based on a Band D property (an increase of 2.99% for a Band D property), as detailed in paragraphs 9.1 to 9.5 be approved;
4. the savings / additional income totalling £1,300,000 and the budget strategy at Appendix 4 be approved;
5. the use of reserves and general balances and note the projected level of reserves, as detailed at Appendix 5 be approved;
6. the capital programme at Appendix 6 be approved;
7. the programmed maintenance programme at Appendix 7 be approved;
8. the flexible use of capital receipts strategy as detailed in Appendix 8 be approved;
9. To note that the Council will remain in the Gloucestershire business rates pool for 2023/24;
10. the Medium Term Financial Strategy (MTFS) detailed in Appendix 9 be approved;
11.the Pay Policy Statement for 2023/24, including the continued payment of a living wage supplement at Appendix 10 be approved;
12.the proposed fees and charges schedule for 2023/24 at Appendix 11, subject to appropriate consultation where required be approved;
13.a level of supplementary estimate of £100,000 for 2023/24 as outlined in Section 19 be approved;
14.the definition of a Key Decision as set out in the constitution be amended, to increase the threshold for the acquisition or disposal of land from £250,000 to £500,000, and gives delegated authority to the Monitoring Officer to make the associated change to the constitution as outlined in Section 17.
FOR: 26 (Cllrs. Andrews, Atherstone, Baker, Bamford, Beale, Britter, Chelin, Chidley, Clark, Collins, Dobie, Fisher, Harvey, Holliday, Horwood, Jeffries, Lewis, McCloskey, Payne, Pineger, Sankey, Tailford, Tooke, Wheeler, Williams, Willingham)
ABSTAIN: 7 (Cllrs. Babbage, Fifield, Flynn, Harman, Joy, Nelson, Seacome)
- Final Budget Proposals 2023-24, item 11. PDF 550 KB
- Appendix 2 - S25 report S151 commentary 2023-24, item 11. PDF 582 KB
- Appendix 3 - Summary Net Budget Requirement, item 11. PDF 234 KB
- Appendix 4 - Proposed Budget Savings and Additional Income, item 11. PDF 20 KB
- Appendix 5 - Projection of Reserves, item 11. PDF 33 KB
- Appendix 6 - Capital Programme, item 11. PDF 51 KB
- Appendix 7 - Planned Maintenance Programme 2023-24, item 11. PDF 20 KB
- Appendix 8 - Flexible use of capital receipts strategy 2023-24, item 11. PDF 252 KB
- Appendix 10 - Pay Policy Statement 2023-24, item 11. PDF 403 KB
- Appendix 11 - Fees and Charges 2023-24, item 11. PDF 1 MB
- Appendix 12 - Budget Consultation 2023-24 Questions from the Public, item 11. PDF 261 KB
- Appendix 13 Climate Assessment Tool, item 11. PDF 459 KB
- Appendix 9 - Medium Term Financial Strategy, item 11. PDF 2 MB
- Budget Process, item 11. PDF 211 KB