Agenda item

Cabinet, at its meeting on 4 February 2019, considered the report of the head of finance on the draft revenue budget 2019/20, and the capital programme to 2023/24.

Cabinet resolved to agree to maintain car park fees and charges at current levels and to agreethat the Cabinet member for finance, in conjunction with the head of finance, may make minor adjustments to the report and prudential indicators should they prove necessary prior to submission to Council. Any adjustments will be reported to Council.

The report of the head of finance, which Cabinet considered on 4 February 2019, is attached. 

The Scrutiny Committee will consider this report at its meeting on 7 February 2019. Any views or recommendations will be reported to Council.

The report of the chief financial officer on the robustness of the budget estimates and adequacy of the reserves is attached.

RECOMMENDATION to Council to:

(a)      set the revenue budget for 2019/20 as set out in appendix A.1 to the head of finance’s report to Cabinet on 4 February 2019;

(b)      approve the capital programme for 2019/20 to 2023/24 as set out in appendix D.1 to the head of finance’s report, together with the capital growth bids set out in appendix D.3 to the head of finance’s report;

(c)       set the council’s prudential limits as listed in appendix E to the head of finance’s report;

(d)      approve the medium term financial plan to 2023/24 as set out in appendix F.1 to the head of finance’s report. 

Mr Crawford addressed Council on this item and asked a question of Councillor Cox, Leader of the council.

He expressed the view that the council’s budget was not sustainable with a budget deficit of £1.5million predicted by 2023/24 having used the current reserves of £12.3million to support revenue expenditure.

He highlighted the cost of The Beacon, the 5 council’s partnership which was not realising savings and an alleged payoff to a departing chief executive as areas in which the taxpayer had not been well served.

He asked the following question of Councillor Cox:

“Given the parlous state of the financial position the current administration has created at the Vale why should the electorate have any faith that it can deliver anything but more financial mismanagement and misery in the future?”

Councillor Cox undertook to provide a written response.

The Chairman referred to regulations that require councils to record the names of those councillors voting in favour, against or abstaining from any vote on the budget, including amendments, and the council tax. In accordance with the regulations she would call for a named vote on each of these matters at this meeting.

The Chairman reminded councillors that they were not entitled to vote on any issue affecting the level or administration of the council tax or other decisions which might affect the making of any such calculation such as the budget, if they were over two months in arrears with their council tax payments. Where such circumstances applied, councillors were under a statutory obligation to disclose the restriction placed on them and refrain from voting at the relevant meeting. No councillor made any such declaration.

Council noted the report of the chief finance officeron the robustness of the budget estimates and the adequacy of the reserves.

Councillor Sharp, Cabinet member for finance, presented the Cabinet’s proposals for the revenue budget 2019/20 and capital programme to 2023/24. On behalf of the council he thanked officers for their part in continuing to control costs and in preparing the draft budget.  

Councillor Sharp moved and Councillor Cox seconded a motion to approve Cabinet’s recommendations as follows:

1.    set the revenue budget for 2019/20 as set out in appendix A.1 to the head of finance’s report to Cabinet on 4 February 2019; 

2.    approve the capital programme for 2019/20 to 2023/24 as set out in appendix D.1 to the head of finance’s report, together with the capital growth bids set out in appendix D.3 of the report; 

3.   set the council’s prudential limits as listed in appendix E to the head of finance’s report, 

4.   approve the medium term financial plan to 2023/24 as set out in appendix F.1 to the head of finance’s report; 

In moving the recommendation Councillor Sharp drew attention to the funding issues facing the council – rising expenditure with lower central government funding and lower investment returns.  

Councillor Smith moved and Councillor Hoddinott moved an amendment in the following terms:

“Council notes the Medium-Term Financial Plan showing that if nothing changes, we will run out of money during 2023-24.

Council recognises the £9million of predicted savings from the 5 councils partnership outsourcing exercise has not materialised and while the overall financial cost to this council is yet to be finalised, the Vale will ‘break even at best’.

Council notes the huge uncertainty about the future of this council’s funding from central government ahead of this year’s spending review – particularly as Vale has been relying heavily on New Homes Bonus – and recognises the need to take pro-active action to protect council services.

Therefore, Council resolves to amend the budget to include in the 2019/20 budget a growth bid to create a Commercial Investment Projects Fund”.

The £50k fund would be drawn down during the year to pay for resource and expertise to explore how to maximise the council’s investments and identify appropriate revenue generating schemes then make recommendations to council. The s151 officer had confirmed that the amendment, if carried, would not impact on the robustness of the budget estimates and adequacy of reserves.

Whilst a number of councillors spoke in support of the amendment, because it would support the development of a more commercial approach for the council and bring in additional revenue, other councillors expressed views that the council could not afford the proposal and that any benefits would not be realised before the outcome of the government spending review. 

The Chairman called for a recorded vote on the amendment which was

lost with the votes recorded as follows:

A number of councillors spoke against the budget proposals.  There were no plans to address the gradual decline in council reserves. The promised financial savings from the 5 councils partnership outsourcing exercise had not materialised, grants had been cut, capital leisure projects had been halted and other projects delayed. 

However, the majority of councillors supported the budget proposals.  In light of the uncertainty over New Homes Bonus, and in anticipation of the government’s review of local government funding, it was necessary to set a prudent budget recognising the current pressures on funding.

In accordance with regulations requiring councils to record the names of those councillors voting in favour, against or abstaining from any vote on the council tax the Chairman called for a recorded vote which was carried with the voting being as follows:

RESOLVED: to

1.    set the revenue budget for 2019/20 as set out in appendix A.1 to the head of finance’s report to Cabinet on 4 February 2019;

2.    approve the capital programme for 2019/20 to 2023/24 as set out in appendix D.1 to the head of finance’s report, together with the capital growth bids set out in appendix D.3 to the head of finance’s report;

3.    set the council’s prudential limits as listed in appendix E to the head of finance’s report;

4.    approve the medium term financial plan to 2023/24 as set out in appendix F.1 to the head of finance’s report.