Agenda item

Members are asked to note that under the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, the Council is required to take a named vote when a decision is made on the budget calculation at a budget decision meeting of the Council.

 

 

Pay Policy 2023/2024

 

The Portfolio Holder for Finance and Governance presented the Pay Policy report for Members’ consideration. It was explained that the Pay Policy needed to be approved by Council on a yearly basis and that the Statement needed to set out the relationship between the highest and lowest paid staff at the Council. Included within the report was the breakdown of remuneration of all Officers across the Council.

 

Council was informed that the Officer structure within the Council was as follows:

 

·       Officer Grades 1-11

·       2 Manager Grades

·       3 Head of Service Grades

·       Executive Director

·       Deputy Chief Executive

·       Chief Executive

 

It was highlighted in this Pay Policy Structure that the Council were part of the National Pay Bargaining Framework. Furthermore, Members were advised that Manager posts were evaluated by an external assessor (West Midlands Employers).

 

In respect of new appointments, it was noted that these would normally be made at the minimum of the relevant grade and that there was a system of annual progression to the next point on pay scales.  The Council did not apply bonuses or performance related pay to its Chief Officers and progression through the incremental scale of a relevant grade was subject to satisfactory performance assessed on an annual basis. It was noted that the pay related allowances were subject to either national or local negotiated rates.

 

Members were advised that posts that were remunerated at over £50,000 per annum were also required to be published in the Statement of Accounts and it was reported that the current lowest salary at the Council, as at 1^st April 2022, was £20,441 Full Time Equivalent (FTE).

 

The Appointments Committee was responsible for recommending to Council matters relating to the appointment of the Chief Executive, Monitoring Officer, Section 151 Officerand other Chief Officers.

The recommendations were proposed by Councillor G. N. Denaro and seconded by Councillor K. May.

 

RESOLVED that the Pay Policy 2023/2024 be approved.

 

Budget and Medium Term Financial Plan 2023/24 to 2025/26 (Including Treasury Management Strategy and Capital Programme)

 

The Portfolio Holder for Finance and Governance presented the Budget and Medium Term Financial Plan 2023/24 to 2025/26 (Including Treasury Management Strategy and Capital Programme) proposed by the Cabinet for Council’s consideration.  In doing so, it was noted that the report set out the final 2023/24 to 2025/26 budgets for the Council as its Medium Term Financial Plan (MTFP). 

 

Members were reminded that this year the Council had followed a two Tranche approach to the Budget setting process. In the initial stages of the Budget setting process, the Council had an ongoing £1.6m gap to be closed.  The Tranche 1 proposals set out progress made and £1.6m of proposed savings had been identified.  However, pressures of £1.6m, mainly due to significant inflationary increases, had resulted in a  £1.6m gap remaining to address.  It was noted that these Tranche 1 savings and pressures had been agreed by Council at its meeting on 7^th December 2022.

 

The Portfolio Holder for Finance and Governance stated that in reviewing basic assumptions (following the Provisional Local Government Settlement on 19^th December 2022):

 

·       The Council would increase Council Tax by 1.99%. This was less than the additional percentage that the Government had permitted the Council. The rationale behind this was that it was hoped that this smaller amount of increase would strike the right balance between raising much needed income for the Council whilst still recognising the increased bills people were facing during the current cost of living crisis.

·       The adjustment of pay inflation increases to the actual award levels which were applied to employees pay budgets in December.  This adjustment amounted to £718,000.  It was noted that future pay awards were assumed at 2%.

·       An assumption of general inflation increases of 10% had been made and that there would be a 200% increase on utilities fees. Members were reminded that this assumption had not changed since Tranche 1.

 

In terms of the Provisional Local Government Settlement that had been announced on 19^th December 2022, it was reported that the Council had received a settlement totalling £1.198m. This included New Homes Bonus funding (£127,000), Services Grant (£68,000), Funding Guarantee (£1.027m) and a £24,000 reduction in the Council Tax Base.

 

This was positive for the Council and was in line with previous years’ overall amounts. However, it was stated that as this was only a one-year settlement, an assumption of an ongoing amount of £1m had been made for the final 2 years of the MTFP.

 

In addition to the positive news in respect of the Local Government Settlement, further positives were highlighted for Members’ attention. These were as follows:

 

·       The final Triennial Pension Fund amounts had added a further £356,000 of ongoing savings for the next three years.

·       Officers had reviewed Earmarked Reserves, reallocating £1m to cover half of the 200% utilities increase assumption and reducing budgetary amounts by £351,000 a year.

·       Business Rates had many factors impacting on them, including reliefs from the Covid-19 pandemic period. Overall, £517,000 would support the base budget, £100,000 the General Fund and £638,000 to the Financial Services Reserve.  As this was assessed by the Government on a yearly basis, only £400,000 benefit had been assumed in future years, £200,000 for the base budgetand £200,000 for the general fund.

 

This had the combined effect to move the £1.6m deficit position that the Council had been in when Tranche 1 savings had been considered into an £857,000 surplus.  However, there were £1.1m of pressures to add to this. Consequently, the bottom-line figure for each year in the MTFP would be:

 

·       A £250,000 deficit in 2023/24

·       A £44,000 surplus in 2024/25

·       A £431,000 deficit in 2025/26

 

Council was asked to note that, as set out at the Cabinet meeting held on 18^th January 2023, the revenue amounts needed to be increased from 2024/25 by £6,000 to fund the CCTV upgrade increases, which were approved by Council in January 2023.

 

Further information regarding key pressures that remained were provided, these included:

 

·       Refurbishment of the fleet – This refurbishment would extend the life of the existing vehicles for five years and would enable the Council to buy replacement vehicles in 2028 when the supply would be more stable.

·       Leisure Contract – It was reported that this was a £550,000 net payment to the Council.  However, it was only delivering a £100,000 surplus.  It was noted that this had been reviewed with the contractor and budgets adjusted to a £150,000 surplus in 2023/24, increasing to £209,000 in 2024/25, and £275,000 in 2025/26. Members were further informed that this included absorbing the present costs of utilities.  If these costs reduced, which seemed to be the case at the time of the meeting, these savings would come to the Council in addition to the above amounts.

·       Fund for apprentices £50,000 – This had been allocated in order for the Council to take advantage of apprenticeship levies and “grow” the Council’s own staff.

·       Funding of a Data Analyst at a cost of £25,000 – It was reported that currently there was only one staff member who could lead on this kind of work. As the Council moved forward with work on automation and robotics this role would provide support in this area.  It was noted that this would indirectly lead to further savings as these processes/changes were embedded in future years’ budgets.

·       The extension of the use of Worcestershire Regulatory Services (WRS) to expedite the Planning Enforcement process at a cost of £25,000.

·       The increased costs of WRS due to the pay award and other inflationary increases at a cost of £39,000.

·       Bringing employee budgets up to the full 2% level for pay awards in 2023/24 and 2024/25 at a cost of £140,000.

·       The cost of all out elections in Bromsgrove. This expense was incurred every 4 years and was forecast to be £167,000 in 2023/24.

·       The Council Tax Collection Fund was projected to under-recover by £1.020 million.  The Council portion of this was 13% which was £132,000 for 2023/24.

 

Officers had reviewed Earmarked Reserves, which had seen little movement in recent years:

 

·       £1.053m had been able to be reallocated to a Utilities Reserve and £2.682m transferred to the General Fund.

·       The majority of funding to support these changes had come from the Covid-19 Pandemic Reserve (£1.177m), the Finance Reserve (£1.000m), and the Economic Regeneration Reserve (£0.600m).

·       It was assumed that the Utilities Reserve would reduce to £0 over the MTFP period.

 

The significant issue for the General Fund was the impact of the 2022/23 overspend position which, as reported in the Quarter 2 Monitoring Report, was £1.472m. The impact of all these factors was that at the end of the MTFP period, the 31^st March 2026, General Fund Reserve levels were projected to be £5.558m.  This was above the 5% level suggested by the Department of Levelling Up Housing and Communities (DHLUC) of £1.4m, although given the overspend in 2022/23, it was noted that a level of 10% would be considered a more prudent benchmark.

 

The Financial Strategy, as set out in Tranche 1 of the budget setting process, needed to move the Council to financial sustainability in its Revenue Accounts by the 2024/25 financial year.  To get to this position there would be the need for investment and possibly the requirement to fund redundancy (both from reserves). These requirements would arise as a result of the Council having to implement changes to the way it operated and in order to continue to become a viable entity going forward. This would take 18 months to implement fully. 

 

The Capital Programme for the next three years was set out in the report.  Many of these schemes were already in partial delivery in the 2022/23 financial year.  By approving this list, the Council were also agreeing for sums not spent in 2022/23 to be carried forward into 2023/24.  The programme was significant, however it was supported by substantial external funding:

 

·       In 2023/24, of the £10.8m programme, £9.1m was externally funded.

·       In 2024/25, of the £4.9m programme, £2.7m was externally funded.

·       In 2025/26, of the £3.1m programme, £1.6m was externally funded.

 

The significant Council investment had been the Burcot Housing initiative, which would move to completion towards the middle of 2023.

 

Linked to the Capital Programme was the Council’s Capital Strategy, Treasury Management Strategy, Minimum Revenue Provision Strategy and Investment Strategy.  These strategies detailed how the Council could invest surplus funds and borrow to fund its capital investments.  Members were asked to note that if Councils “invest for gain”, then they could not use the Public Works Loans Board (PWLB) to fund expenditure – which had significantly lower interest rates than private finance.  Members were advised that the Council did not “invest for gain”.

 

Council was advised that the opinion of the Interim Chief Finance Officer was that the 2023/24 budget estimates contained considerable risk due to the continued level of uncertainty in the Council’s operating environment and a single year financial settlement, making it problematic to develop meaningful assumptions. Key risks to be aware of included:

 

·       The Council had not yet closed its 2021/22 accounts, with the Period 11 Monitoring Report estimated outturn of £367,000 underspend still to be validated.

·       The 2022/23 financial monitoring was showing an overspend position of £1.472m.

·       The core risks of implementation of any MTFP.

·       Loss of key personnel, with the average age of staff being 49. As a result, mitigation plans were being drawn up as part of the Council’s Workforce Planning approach. 

·       The time limited nature of the large Levelling Up and UK Shared Prosperity Funds. If programmes were not delivered within the Government’s specified timescales, then the Council would be liable for ongoing delivery expenditure.

·       Business Rates Income – especially with the 1st April 2023 revaluations that were being undertaken, actual income received would vary depending on actual Business Rates growth, and levels of appeals. 

·       The ongoing impact of inflation, especially around utilities. 

·       Possible change of corporate direction/priorities following the elections in May 2023.

 

It was the Chief Financial Officer’s opinion that the estimates were robust and the level of Reserves adequate.

 

The Cabinet’s proposals in respect of the Budget and Medium Term Financial Plan 2023/24 to 2025/26 (Including Treasury Management Strategy and Capital Programme) were proposed by Councillor. G. N. Denaro and seconded by Councillor K. May.

 

During consideration of this item, Councillor P. McDonald proposed an alternative budget on behalf of the Labour Group, as detailed in the main agenda pack. The alternative budget from the Labour Group was seconded by Councillor H. D. N. Rone-Clarke.

 

In proposing the Motion, Councillor McDonald explained that the alternative budget was based on the figures provided in the MTFP report.  However, it did not include an increase to Council Tax.  A balanced position with no increase to Council Tax would be achieved by removing the following from the budget:

 

Savings	£
Play Audit	£11,750
Data Analyst	£25,000
Climate Change Officer	£30,000
Subtotal	£66,750
Withdrawal from Town Hall	£68,000
Withdrawal from Crossgates	£20,000
Withdrawal from General Fund	£29,250
Sub-Total	£117,250
Total	£184,000

 

 

During consideration of this proposal, Councillor McDonald highlighted the current cost of living crisis and the impact on local residents,including the increased use of foodbanks and difficulty in paying households bills. He stated that a Play Audit would be an unnecessary cost that could be carried out by Officers already at the Council rather than paying consultants to undertake the work. Furthermore, it was queried whether the new proposed roles of the Data Analyst and Climate Change Officer were necessary, and he commented that again potentially the Officers in current roles would be able to carry out these duties.

 

Council was informed that withdrawing payments to Redditch Town Hall and Crossgates would also result in savings.

 

It was reported that the withdrawal of £29,250 from the General Fund for 2023/24, although not sustainable in future years, coupled with the savings made as outlined above, would ensure that there was no increase in Council Tax to help alleviate financial pressures of local residents in the short term during the cost of living crisis.

 

In seconding the proposal, Councillor H. D. N. Rone-Clarke reiterated that the alternative budget proposed by the Labour Group had identified a number of ways that would result in not having to raise Council Tax. It was also suggested that the use of consultants was not always the most effective use of the Council’s finances.

 

Members subsequently discussed the alternative budget from the Labour Group in detail and in doing so commented on the following:

 

·       The potential to use consultancy services, when necessary, in Council operations in order to increase specialist knowledge.

·       The role of the Play Audit, to ensure Health and Safety in Council owned recreational places.

·       The importance of the Climate Change Officer and Data Analyst posts. These posts would ensure that the Council made stronger progress towards the ‘green’ targets as set out in the Council’s Carbon Reduction Strategy and to develop data collection further in order to improve services to residents and make savings if possible.

·       The lack of sustainability of withdrawing money from the General Fund.

·       The need for greater collaborative cross party working within the Council in order to provide the best services for residents.

 

In accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, the alternative budget from the Labour Group was subject to a named vote.

 

Members voting FOR the alternative budget from the Labour Group:

 

Councillors P. McDonald and H. D. N. Rone-Clarke (2)

 

Members voting AGAINST the alternative budget from the Labour Group:

 

Councillors A. Beaumont, S. Colella, R. Deeming, G. N. Denaro, S. Douglas, A. English, C. Hotham, R. Hunter, R. Jenkins, H. Jones, J. King, A. Kriss, K. May, M. Middleton, S. Robinson, M. Sherrey, C. Spencer, P. Thomas, M. Thompson, J. Till, S. Webb, P. Whittaker and R. Laight (23)

 

Members ABSTAINING in the vote:

 

No Councillors (0).

 

The vote on the alternative budget from the Labour Group was therefore lost.

 

Members subsequently considered an alternative budget submitted by The Bromsgrove Independent Group. The alternative budget was proposed by Councillor C. Hotham and seconded by Councillor S. Colella.

 

In proposing the alternative budget Councillor C. Hotham commented that he was disappointed in the lack of a community grants funding scheme in the budget proposed by the Cabinet and explained that these had been successful in the past and had helped to alleviate the pressures on local communities.  Therefore, it was proposed in the Bromsgrove Independent Group’s alternative budget that the net surplus from the Burcot Lane development, which was likely to be around £10,000 per annum, be used to support a community grants funding scheme in the future.

 

Council was informed that another proposal in the alternative budget included increasing Council Tax by the full 2.99% as permitted by the Government. It was proposed that the £92,000 raised from the 2.99% increase should be ringfenced and used to invest in youth services within the District. It was hoped that this could result in established Community Safety programmes such as the Friday Night Diversionary Programme and Empowering Young People projects potentially being taken to other parts of the District.

 

During consideration of this alternative budget the following was discussed by Members:

 

·       The increase in Council Tax of 2.99% and whether this was too great during a cost of living crisis and would impact directly on residents living within the District.

·       The assumption that had been made in the alternative budget about the use of the surplus from the Burcot Lane Development. It was highlighted that the plan had been for any surplus to stay with the Housing Company in order to impact on the local Housing Market.

·       The importance of the work the Community Safety Team undertook in respect of young people and that it was felt that their work needed to be extended across the District. It was however, highlighted that increasing the Council Tax by 2.99% to fund Youth Services could be considered double taxation. This suggestion was made in light of Worcestershire County Council (WCC) providing £530,000 to fund youth services annually. Furthermore, it was stated that WCC had also provided £350,000 from the Contain Outbreak Management Fund (COMF) for the years 2021/2024 to provide additional detached or targeted youth work to support recovery from the Covid-19 pandemic.

 

In accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, the alternative budget from the Bromsgrove Independent Group was subject to a named vote.

 

Members voting FOR the alternative budget from the Bromsgrove Independent Group:

 

Councillors S. Colella, A. English, C. Hotham, R. Jenkins and J. King (5)

 

Members voting AGAINST the alternative budget from the Bromsgrove Independent Group:

 

Councillors A. Beaumont, R. Deeming, G. N. Denaro, S. Douglas, R. Hunter, H. Jones, K. May, P. McDonald, M. Middleton, S. Robinson, H. Rone-Clarke, M. Sherrey, C. Spencer, P. Thomas, M. Thompson, J. Till, S. Webb, P. Whittaker and R. Laight (19)

 

Members ABSTAINING in the vote:

 

No Councillors (0).

 

The vote on the alternative budget from The Bromsgrove Independent Group was therefore lost.

 

(Councillor A. Kriss left the room during the vote on the alternative budget from The Bromsgrove Independent Group and as such he did not participate in the vote thereon).

 

Members subsequently considered an alternative budget submitted by The Liberal Democrat Group. The alternative budget was proposed by Councillor R. Hunter and seconded by Councillor S. Robinson.

 

This alternative budget was based on the figures provided in the MTFP report.  However, it proposed an increase to Council Tax by an additional 1% (2.99% in total). The £92,000 generated as a result of the increase would be used for an annual subsidy for the Artrix.

 

In proposing the alternative budget, Councillor Hunter highlighted the lack of support for the Artrix and that the proposed Council Tax increase (which equated to an additional 20p per week on the average Band D property) would raise revenue that could provide financial support. It was noted that the Finance and Budget Working Group had looked at the Council Tax Support Scheme in detail and particularly those residents on the lowest incomes.

 

During consideration of this alternative budget the following was discussed by Members:

 

·       That the Artrix was not a Council run entity and that a business plan was to be commissioned by The Artrix Holding Trust and considered by the Council in the near future. It was commented that until this happened no one could establish the financial support that would be necessary, and it was suggested that it was therefore premature to assume that the £92,000 of revenue raised by the increase of Council Tax would provide the necessary financial support. In addition to this, the Council Tax bills were to be issued within the following 4 weeks and that an amendment such as this would result in delays to sending this information to residents.

·       Residents and Members cared deeply for the Artrix.  However, there had been problems with the financial situation when it was open as audiences were not attending in great numbers. Issues had also been experienced with parking and high running costs. Members commented that there had been changes made to the fixtures and fittings of the building, including in relation to carbon reduction measures  which had been undertaken as a result of grant funding received.

·       The effect on the mental health of residents as a result of having no arts provision in the town. This, it was highlighted could particularly impact on young people in the town who had no provision to showcase their skills and talents in an arts setting.

 

Members once again commented that they could not support the increase in Council Tax to 2.99%, at a time when residents were struggling to pay bills and provide food for their families.

 

In accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, the alternative budget from the Liberal Democrat Group was subject to a named vote.

 

Members voting FOR the alternative budget from the Liberal Democrats:

 

Councillors S. Colella, S. Douglas, A. English, R. Hunter, R. Jenkins and S. Robinson (6)

 

Members voting AGAINST the alternative budget from the Liberal Democrats:

 

Councillors A. Beaumont, R. Deeming, G. N. Denaro, H. Jones, A. Kriss, K. May, M. Middleton, H. Rone-Clarke, C. Spencer, P. Thomas, M. Thompson, J. Till, S. Webb, and R. Laight (14)

 

Members ABSTAINING in the vote:

 

No Councillors (0).

 

The vote on the alternative budget was therefore lost.

 

[Prior to the consideration of the alternative budget from the Liberal Democrat Group, Councillors C. Hotham, J. King, P. McDonald, M. Sherrey and P. Whittaker declared a pecuniary interest due to their role as members of the Artrix holding Trust.  They left the meeting room prior to consideration of this alternative budget and took no part in the vote thereon].

 

Following consideration of the three alternative budgets, the Portfolio Holder for Finance and Governance asked Members once again to consider the content of the MTFP recommendations from the Cabinet meeting held on 15^th February 2023.

 

Members were advised that this had been a difficult three years for the Council as a result of the Covid-19 pandemic. However, there were opportunities for the future and the Levelling Up Funding of £14.5m, the UK Shared Prosperity Funding of £2.8m and the Centres Strategy would be catalysts for regeneration.

 

In accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, the MTFP 2023/24 to 2025/26 was subject to a named vote.

 

Members voting FOR the recommendations in the Budget and Medium Term Financial Plan 2023/24 to 2025/26 (Including Treasury Management Strategy and Capital Programme)

 

Councillors A. Beaumont, R. Deeming, G. N. Denaro, S. Douglas, H. Jones, A. Kriss, K. May, M. Middleton, M. Sherrey, C. Spencer, P. Thomas, M. Thompson, J. Till, S. Webb, P. Whittaker and R. Laight (16)

 

Members voting AGAINST the recommendations in the Budget and Medium Term Financial Plan 2023/24 to 2025/26 (Including Treasury Management Strategy and Capital Programme)

 

Councillors P. McDonald and H. D. N. Rone-Clarke (2)

 

Members voting to ABSTAIN in the vote on the recommendations in the Budget and Medium Term Financial Plan 2023/24 to 2025/26 (Including Treasury Management Strategy and Capital Programme)

 

Councillors S. Colella, A. English, C. Hotham, R. Hunter, R. Jenkins, J. King and S. Robinson (7)

 

The vote on the Budget and Medium Term Financial Plan 2023/24 to 2025/26 (Including Treasury Management Strategy and Capital Programme) was therefore carried.

 

RESOLVEDthat Council approve the:

 

1.     Tranche 2 growth proposals.

 

2.     additional funding to the Council as per the Local Government Settlement on 19th December 2022, including the estimated levels for 2024/25 and 2025/26.

 

3.     Tranche 2 savings proposals, including an Increase of Council Tax at 1.99%.

 

4.     Capital Programme 2023/24 to 2025/26 and associated projects where outstanding budgets to be allowed to be carried forward at the end of the 2022/23 financial year.

 

5.     levels of reserve being carried forward into future years.

 

6.     level of General Fund balances being used to balance budgets over the Medium-Term Financial Plan (MTFP) period.

And that Council NOTE

 

7.     The Chief Financial Officer (CFO) Opinion on Estimates and Reserve Levels – the Robustness Statement (Section 25 Statement).