To consider the Annual Budget Report, Medium Term Financial Strategy, Financial Strategies and Council Tax.

The Portfolio Holder for Finance presented the Annual Budget, Medium Term Financial Strategy, Financial Strategies and Council Tax Report.  The report had been presented to and reviewed by Executive Board on 19th February 2020, Executive Board Minute No.74 refers.

 

A recorded vote was required for this item, in line with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014. (Council Procedure Rule 5.2 (b)). 

 

In introducing the report the Portfolio Holder for Finance made reference to:

 

•           Income 2020/21 had been anticipated to be the first year of a new central Government financial settlement and the Council had braced itself for a significant reduction, however due to Brexit uncertainties and Government focus on other priorities, this had not happened;

 

•           Instead a “single year” largely neutral settlement had been confirmed, so income remained largely unchanged;

 

•           The annual critical budget challenge had taken place during September, October and November to enable Service Managers the freedom to table budgets, targets and expected risks;

 

•           Whilst the Council had a further year to build on existing plans to increase its income and to move towards financial sustainability, there was a word of caution, as during 2021/22 the loss of Government Grants would potentially lead to a deficit;

 

•           It was highlighted that the Council must, in order to provide an appropriate level of budgetary resilience, continue to pursue the projects and activities identified in its Financial Sustainability Strategy and Capital Programme guided by the emerging Corporate Strategy, in order to insulate itself and to generate an improved level of financial resilience.  It was for this reason that it was proposed to increase Council Tax by £4.95 per year, which for Band D homes was equivalent to 9.5p per week;

 

•           However, it remained a fact that in 2021/22 the Council would be facing a year of significant financial uncertainty.  It was highlighted that this was due to the expectation that Government initiatives such as the business rates reset, new Business Rate system, the Fairer Funding Review and Comprehensive Spending Review 2020 would all affect negatively;

 

•           The potentially negative effect of BREXIT had been considered, the budget estimate assumed a neutral impact, however fortunately there were mechanisms in place to ensure that the Council could respond to any negative outcomes.  The Government was continuing to provide specific BREXIT related financial support for Councils to the tune of £58m nationally which was welcome;

 

·                     Reference was made to the foresight applied in augmenting the Council reserves, particularly the Business Rate Volatility Reserve which provided a valuable level of financial strength for the Council and an extended period of time to generate income streams needed to pursue financial sustainability.  It was for this reason it was proposed that a predicted in year surplus of £600k for 2020/21 should not be automatically assigned to reserves, but should be rather assigned for use by appropriate Portfolio Holders to support our Corporate Strategy by:

 

·         The creation of a Market Towns investment fund

 

·         To focus on targeted deprivation intervention projects and

 

·         Provide support for Council’s carbon reduction ambitions

 

The Portfolio Holder concluded that he was particularly happy to note that this budget estimate emphasised that the Council’s performance was excellent and its financial position was strong.

 

Following which it was Proposed and Seconded

 

‘That Council:

 

1.         Approves the East Lindsey District Council budget for 2020/21 the five year Medium Term Financial Strategy and the associated financial strategies (2020/21 to 2024/25) (Appendix 1);

 

2.         Agrees the formal Council Tax resolutions detailed at Appendix B1 (Parishes , the County and the Police and Crime Commissioner for Lincolnshire are also dealt with as a part of this resolution), that there is a 3.49% increase in East Lindsey’s Council Tax, the Band D Council Tax being £146.79;

 

3.         Approves the creation of an Investments Volatility Reserve and the transfer of £1m into the new reserve from the Council’s General Fund with immediate effect.’

 

An Amendment was proposed and seconded by the Labour Group which had been circulated in advance of the meeting to Members as follows:

 

Labour Budget Amendment 2020/21

 

Rough Sleeping Initiative:

The Rough Sleeping Initiative team carries out life?changing work for some of our most vulnerable residents, and we want to see this work protected. However, much of the funding for this depends on a grant from central government that must be bid for.  Therefore we propose creating a reserve against the risk that this money is withdrawn in future years, so that continuity of service can be maintained as long as it is needed.

 

Pride in place:

In order to boost the appearance of our towns, and thereby make them more appealing to residents and also encourage tourism, there will be a one?off increase in the budget for repairs and replacements to deal with such things as rusting bins.

 

Food hygiene service officer:

The food hygiene service has been a cause of concern in 2019/20. In order to better protect the public from risks associated with an outbreak associated with food hygiene problems we propose adding another officer to ELDC’s team.

 

Electric Vehicles:

Electric vehicles contribute to our carbon reduction targets. However, they are more expensive to buy than petrol or diesel models. We propose to create a fund to supplement the difference in cost between buying a petrol or diesel vehicle and buying an electric one, so that any department that needs to replace a vehicle can make use of this fund to upgrade to a more environmentally friendly model.

 

Electric vehicles were, however, cheaper to maintain and fuel.  The Medium Term Financial Plan assumed that fuel cost rises would be met by service efficiencies.  However, this had proven difficult to achieve, and the rise in 2019/20 was 5%. We are proposing this so that long?term savings in fuel and maintenance can be made as soon as possible. Investing now in electric vehicles is intended to create a long?term saving for the authority.

 

Savings:

This budget balances due to savings from the Carbon Reduction Reserve and the Business Rates Volatility Reserve (BRVR).

 

The Carbon Reduction Reserve is at £106,000, and the Conservative budget does not propose to add to this or use it. We propose to use £70,000, leaving £36,000 in this reserve for other projects.

 

Our plans will take £339,015 from the BRVR over 4 years. This reserve is projected to remain at healthy levels, and with our proposed spending it should not dip below £5.077 million in the next four years.

 

Our budget proposals will therefore have no impact on the level of council tax.

 

2020/21:

 

Spending

•           Food hygiene officer;

•           Rough Sleeping Initiative reserve – one off;

•           Carbon reduction reserve Electric Vehicles supplement;

•           £50k towards repairs and replacements in Technical Services and Repairs – one off.

 

 

Food hygiene officer	£  44.660
Rough Sleeping Initiative reserve	£100.000
Electric Vehicles Fund	£  70.000
Repairs and replacements	£  50.000
Impact on savings income	£    2.779
Total	£267,439

 

Saving Plans:

 

Carbon Reduction Reserve	£70,000
Business Rates Volatility Reserve	£197,439
Total	£267,439

 

2021/22

 

Spending

•           Food hygiene officer.

 

Food hygiene officer	£45,553
Impact on savings income	£     592
Total	£46,145

 

                                                                                                           

Saving Plans:

 

Business Rates Volatility Reserve	£46,145
Total	£46,145

 

2022/23

Spending

 

Food Hygiene	£46,464
Impact on savings income	£     720
Total	£47,184

 

 

Saving Plans

Business Rates Volatility Reserve	£47,184
Total	£47,184

 

2023/24

Spending

Food Hygiene	£47,394
Impact on savings income	£     853
Total	£48,247

 

Saving Plans

Business Rates Volatility Reserve	£48,247
Total	£48,247

 

 

Total cost over 4 years	£409,015

 

 

Assumptions:

Pay costs increase 2020/21 ? 2%

2021/22 ? 2%

2022/23 ? 2%

2023/24 ? 2%

 

Return on cash investments 2020/21 – 1.05%

2020/21 – 1.05%

2021/22 – 1.30%

2022/23 – 1.55%

2023/24 – 1.80%

 

On speaking on the Amendment, Councillor Jackson as proposer made specific reference to the following points:

 

Food Safety – Members were advised that the Food Standards Agency estimated that 2.4m cases per year out of a possible 18m cases were related to food borne illnesses, with potentially fatal consequences.  It was highlighted that the district had approximately 2000 registered food businesses spread out over a wide geographical area; therefore inspection presented a huge challenge.  Furthermore, the percentage of low rated food premises requiring improvement to a level 3 or higher on their next inspection was shown as red in the latest performance papers provided to Overview Committee and had been rated so since 2018/19.  Consequently, the amendment proposed that an additional member of staff should be recruited to this team.

 

Electric Vehicles - Recent flooding had brought home that climate change had a direct effect on residents.  Electric Vehicles were highlighted as being an invest to save opportunity.  It was argued that the Council should lead on this initiative make it easier for others to invest in charging points. 

 

Rough Sleeper Initiative - It was highlighted that the most consistent message throughout the rough sleeping scrutiny had been the need for continued funding.  The creation of a reserve (to be used if government funding ceased abruptly) would protect the districts most vulnerable residents and provide a second line of defence, only to be utilised if required.

 

Pride of place - It was proposed that a one off payment should be included to improve the state of our towns, in Louth for instance the Bus Station required work following a spate of vandalism and was one such example.

 

With regard to provision for these proposals, it was highlighted that funding was available from this year’s windfall amount within the budget.  Furthermore, whilst the need for the Business Rates Volatility Reserve was acknowledged, it was stressed that some of the Reserve could be spent for the benefit of and the protection of residents. 

 

In seconding the Amendment, the Leader of the Labour Group highlighted the importance of pride in our places for residents and also for the reputation of the District Council. 

 

During discussion on the Amendment, the Portfolio Holder for Planning acknowledged the proposal as a function of the opposition and made the following points:

 

•           The overall content presented a wish list rather than an amended budget;

•           If additional officers were needed, this would be dealt with via the usual procedures; 

•           The Council was looking to move its HQ to Horncastle in the near future; therefore it was impractical, given the current fleet of pool cars of less than 4 years old to consider the points made on electric vehicles at this point. 

 

For these reasons, Councillor Ashton could not support the proposed Amendment.

 

In response to the Amendment, the Portfolio Holder for Finance provided the following response:

 

With reference to the proposed reserve for the rough sleeping initiative, practically, it was unnecessary to set aside reserves for projects currently funded, it would be budgeted for if required in the future. 

 

With regard to Pride of Place, the Council had a project for bin replacement and a Market Towns Investment Fund had been announced, to support our towns. 

 

In terms of the food hygiene officer post, an advert was already in place.  However, the Portfolio Holder stressed that one of the problems faced in respect of food hygiene was the lack of longevity of food businesses, although the number of officers did not impact on this particular variable nor reflect on their hygiene score.

 

In respect of the acquisition of Electric vehicles, practically speaking there were no electric vehicles available that met the specific needs given the distances travelled.  The Council was working with the Carbon Trust and this would be considered in the future.  The Portfolio Holder added that his door was always open to discuss suggestions, but commented that this offer was not always taken up.  

 

The Vice Chair of Overview Committee advised that she was currently chairing a Scrutiny Panel on Economic Development, part of the scrutiny scope was the promotion of certain areas, for example Louth as a food town.  Councillor Parkin stressed that the district was a safe place to visit and highlighted the need to keep operational challenges that were being addressed in perspective.

 

The Chairman of Executive Board thanked all for their comments and fully supported the responses by the Portfolio Holder for Finance.

 

During further debate questions were put regarding:

 

·         Staffing of the food safety team, a Member sought assurance that this was adequate and asked if this was the cause of the red performance indicators;

 

·         Whether Finance Officers had been consulted on the Labour Amendment as it had been suggested in earlier debate that the amendment was not balanced;

 

·         A Member considered that Rough Sleeper projects should continue to be centrally funded;

 

N.B. Councillor Leonard asked that it be noted that he was the owner of a local restaurant and echoed the earlier positive comments on the work of the Environmental Health Team, however wished to highlight that inspections included a wide range of points including record keeping and building structures etc.

 

·         Councillor Davie wished to put on record that the Council was doing everything it could to ensure the safety of people eating in the district. Furthermore, work was required to fully utilise the benefits of electric vehicles in the east of the district so to ensure investment was purposeful.

 

In response to the points made on the Amendment, the Leader of the Labour Group considered that a small number of electric vehicles were possible without major changes to capacity.

 

Councillor Jackson as proposer of the amendment stated that:

 

·         Electric vehicles were very much a moving feast in terms of their cost, and queried why the Council would delay given the current climate emergency as this was something that the Council should lead on;

 

·         In respect of comments on Rough Sleeping provision, it was important and prudent to plan ahead;

 

·         With regard to an additional Food Hygiene Officer, Councillor Jackson acknowledged that the Food Hygiene Team did an excellent job, but had a massive challenge in terms of coverage, shown in the KPIs which were no reflection on the competency of the team.

 

On putting the Amendment to the Vote it was declared lost.

 

Debate returned to the original Motion.

 

The Leader of the East Lindsey Independent Group (ELIG) commented that this was another balanced budget with some unexpected money to spare.  It was highlighted that the ELIG supported the Budget proposal and had not therefore presented an amendment. 

 

The benefits of including back benchers through Overview Committee via a budget consultation process were highlighted and it was hoped that in future years this would enable greater engagement in the process.

 

Councillor Swanson on behalf of the New East Lindsey Independent Group added his congratulations to officers involved for this balanced budget, and highlighted that whilst central government placed the council in this position, there was no alternative but to support the increase in Council Tax. 

 

Councillor Swanson commended the Portfolio Holder for Finance on his aspirations for operating in a more commercial and business like way to influence capital receipts, but also commented that he could see no sense in increasing car parking charges to swell income from empty car parks.  Finally, Councillor Swanson considered that whilst the budget consultation comments were interesting, the Council’s claim to be listening may not be entirely justified with reference to the Horncastle Hub. 

 

Further comments were received as follows:

 

·         The rise in Council Tax was relatively modest compared to others, particularly as 60% of its funding went towards the Internal Drainage Boards.  It was highlighted that a Lincolnshire proposal to lobby government to remove the IDB from the precept was being considered which did not detract from the excellent work of the Drainage Boards;

 

·         The Council was supporting projects and delivering investment to the coast and inland through its efficient financial management;

 

·         A Member referenced the move to Horncastle in terms of the anticipated disposals of Tedder Hall and Skegness Town Hall.  It was stressed that the purchase of the Horncastle site must demonstrate good value for money and it was highlighted that when the Council had considered the disposal of Horncastle Town Hall the Executive Board had resolved to require Ward Members to be involved in such circumstances and a consultation plan to be drafted, which he had seen no evidence of.

 

The Chairman of Executive Board acknowledged that this had been an interesting debate that illustrated the Council’s broad strategic view.  In respect of the comments on the Horncastle Hub, it was highlighted that the previous Executive Board had different issues to consider and it was confirmed that Councillors had been consulted on the move to Horncastle.  Furthermore, it was highlighted that there were occasions when debate was restricted to private session, as Louth Town Council had done in considering the purchase of their new building.

 

A point of order was raised and it was highlighted that the debate referred to at Louth Town Council was properly restricted on commercial sensitivity grounds.

 

The Portfolio Holder for Finance thanked all for their comments and reiterated his willingness to discuss budget proposals.  Councillor Fry paid tribute to his team of officers, including Adrian Sibley as S151 Officer.

 

With regard to comments on consultation on the Horncastle Hub and notification of, it was highlighted that Councillors had been emailed identifying the cost neutral nature of the acquisition of the site, which was as a minimum 14 acres with some exciting potential uses for the site.

 

Following which, in line with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014. (Council Procedure Rule 5.2 (b)), a recorded vote was taken as follows:

 

For the proposal:

Councillors David Andrews, Tom Ashton, Richard Avison, Stan Avison, Adrian Benjamin, Wendy Bowkett, Billy Brookes, Danny Brookes, Jimmy Brookes, Trevor Burnham, Sandra Campbell-Wardman, Richard Cunnington, Mark Dannatt, Colin Davie, Sid Dennis, Sarah Devereux, Carleen Dickinson, Dick Edginton, Martin Foster, Richard Fry, William Gray, Chris Green, Will Grover, Alex Hall, Sandra Harrison, Paul Hibbert-Greaves, George Horton, Neil Jones, Thomas Kemp, Andrew Leonard, Craig Leyland, Jill Makinson-Sanders, David Mangion, Graham Marsh, Helen Matthews, Daniel McNally, Edward Mossop, Julie Platt, Jim Swanson and Mel Turton-Leivers.

 

Against the Proposal:

Councillors David Hall, Tony Howard, Ros Jackson, Sarah Parkin and Phyll Smith.

 

Abstentions:

None

 

Vote:

 

40 For

5 Against

 

Following which it was

 

RESOLVED

 

1.         That the East Lindsey District Council budget for 2020/21, the five year Medium Term Financial Strategy and the associated financial strategies (2020/21 to 2024/25) (Appendix 1) be approved;

 

2.         That the formal Council Tax resolutions detailed at Appendix B1 (Parishes , the County and the Police and Crime Commissioner for Lincolnshire are also dealt with as a part of this resolution), be agreed including a 3.49% increase in East Lindsey’s Council Tax, the Band D Council Tax being £146.79;

 

3.         That the creation of an Investments Volatility Reserve and the transfer of £1m into the new reserve from the Council’s General Fund be approved with immediate effect.

 

N.B. Councillors Danny Brookes and Billy Brookes left the meeting at 4.05pm.