Agenda item

Consideration was given to a report of the Director of Finance which provided the Cabinet with the forecast budget reduction requirement and the budget proposals for 2020/21 together with forecast budget reduction requirement estimates for the period 2021/22 to 2024/25, having regard to the Provisional Local Government Finance Settlement published on 20 December 2019.

The report set out proposals for the Council’s Revenue Budget for 2020/21 and Medium Term Financial Strategy for 2020/21 to 2024/25. It advised Members of the key financial challenges and issues which would be faced by the Council over the forecast period and set out the revenue budget proposals for 2020/21 together with updated budget reduction requirement estimates for the period 2021/22 to 2024/25.

Members noted the purpose and scope of the Medium Term Financial Strategy and how it had a vital role to play in enabling the translation of the Council’s ambition and priorities into action. They were advised of the national policy landscape and economic context in which the Council was setting its revenue budget for 2020/21 and Medium Term Financial Strategy to 2024/25.

The report highlighted policy announcements and implications which arose from the Government’s 2019 Spending Round presented on 4 September 2019, the Local Government Finance Settlement 2020/21 Technical Consultation and the Provisional Local Government Finance Settlement (LGFS) published on 20 December 2019.The report also detailed key budget adjustments and expenditure pressures which underpinned the forecasts that provided the backdrop for the Council’s Medium-Term Financial Strategy.

The Cabinet was informed that the key adjustments to funding confirmed in the 2020/21 Provisional LFGS were:

·         An increase in expected Core Government Funding over previous estimates of £6.664m (estimates assumed the continuation of austerity);

·         An additional £10.596m of Government Grants over and above the expected level - primarily the continuation of previously time limited Improved Better Care Fund and Winter Pressures Grants (totalling £2.708m) and the 2020/21 Social Care Support Grant (£6.954m).

The Provisional LGFS confirmed referendum limits for a general purpose Council Tax increase and the Government would permit rises of up to 2% per annum for 2020/21 without the need to hold a referendum. The Government also confirmed the continued ability to charge an Adult Social Care Precept allowing up to a 2% increase in Council Tax for 2020/21 (ringfenced for use for Adult Social Care). The Council Tax referendum limits for 2020/21 applicable to the Council therefore allowed an overall increase of 4%.

Members were reminded that the Council Tax policy approved within the 2019/20 budget was that for 2020/21 Council Tax would increase by 2% for the Adult Social Care Precept (ASCP) and 1.99% for general purposes; an overall increase of 3.99%. whilst the capping criteria for 2020/21 would permit this approach, mindful of the financial position of the Authority but also the impact of a further increase in Council Tax on the citizens of Oldham, a revision to Council Tax Policy was proposed with the retention of the 2% increase in relation to the ASCP but a reduction to the increase in Council Tax for general purposes to 0.99% rather than 1.99%. in overall terms the proposed increase to Oldham Council Tax would be 2.99%.

The Government proposed not to set Council Tax referendum principles for Mayoral Combined Authorities in 2020/21 but had set referendum principles for Police and Crime Commissioners (including the GM Mayor) which gave Police and Crime Commissioners the flexibility to increase funding by setting the Council Tax referendum limit to £10 for a Band D property. An increase of £14 was being proposed by the Mayor for the Mayoral General Precept (which included Fire and Rescue Services) and an increase of £10 was being proposed for the GM Police and Crime Commissioner precept. An increase of up to £24 was being consulted upon.

The Cabinet was informed that, based on the latest estimates, the budget reduction requirement for 2020/21 had decreased from the previously reported figure of £22.871m to £18.169m. Section 10 of the report detailed the Administration’s budget reduction proposals. There were a total of seven proposals expected to deliver savings of £3.011m in 2020/21. If approved in full, these proposals further reduced the budget reduction requirement to £15.158m for 2020/21.

Sections 11 and 12 explained the approach to balancing the 2020/21 budget. In order to remove the requirement for further spending reductions, it was proposed to part-finance the 2020/21 budget by using the opportunities provided by the ability to use Capital Receipts to support spending on transformational projects up to a value of £3.750m and from an available Collection Fund Surplus of £1.400m. The following specific and corporate reserves would be used to address the balance:

·           £1.413m from gains anticipated in 2019/20 from the Greater Manchester 100% Business Rates Retention Pilot Scheme;

·           £1.300m of further benefit made available by the GMCA from the Greater Manchester 100% Business Rates Retention Pilot Scheme in 2019/20;

·           £3.113m from reserves relating to a refund of the 2019/20 Waste Levy; and

·           £4.182m from Corporate Reserves.

Approval of the proposals set out in the report in full by Budget Council would deliver a balanced revenue budget for 2020/21. The budget reduction requirement for subsequent years was forecast to be £23.243m for 2021/22, £13.016m for 2022/23, £13.568m for 2023/24 and £12.921m for 2024/25.

The Fees and Charges proposals for 2020/21 were presented at Appendix 7 and the Council’s Pay Policy Statement was presented at Appendix 12.

The report also summarised the reserves and balances position supporting the Councils financial resilience.  In addition, section 17 of the report set out the proposed budget strategy for future years

The Director of Finance confirmed that these proposals constituted a valid budget that could be delivered.

The report had been presented to the Performance and Value for Money Select Committee on the 23^rd January 2020 and the Committee commended the report to Cabinet.

Following consideration of the Opposition Budget proposals on the 4^th February 2020 the Select Committee made eight recommendations to the Cabinet, which were considered as follows:

1.    the Committee suggested that the Cabinet give a consideration to the provision of refreshments at meetings going forward. The Cabinet noted that this issue had been presented and rejected previously, and were not minded to recommend this to Council for 2020/21;

2.    The Cabinet were reminded of the decision of the Council on 27^th February 2019 to undertake a review of essential car user allowances and were recommended to consider this issue within the wider review of reward packages. The Cabinet were minded to recommend to Council for 2020/21 that the review be undertaken along with a wider review of recognition and reward packages;

3.    The Committee suggested that the Cabinet gave consideration to the reduction of the subsidisation of Trade Union support. The Cabinet noted that this issue had been presented and rejected previously, and were not minded to recommend this to Council for 2020/21;

4.    The Committee suggested that the Cabinet give a consideration to increasing the income target with regard to Section 38 and Section 278 inspections within the Highways service. The Cabinet were mindful that the achievement of additional income in this service area could not be guaranteed and had therefore not chosen to pursue this as a budget reduction proposal. It would not therefore be recommended to Council;

5.    The Cabinet was asked to investigate the feasibility of the provision of additional healthcare centres in Saddleworth and Chadderton when it considered the Capital Programme in a future year. Cabinet noted that the 2020/21 to 2024/25 Capital Programme to be considered at the Council meeting on 26^th February 2020 reflected the Administration’s priority projects. Cabinet were minded to recommend that, when a review was undertaken to determine which schemes may be included in future years, additional health care centres for Saddleworth and Chadderton be considered.;

6.    The Cabinet be recommended to reverse the decision to reduce Parish Council Grant funding and re-instate the £15,000 budget. Cabinet were informed that the reduction had been agreed on the basis that it was in equal proportion to the loss in government funding experienced by the Council. It was not considered appropriate to protect Parish councils from the impact of government funding cuts and the Cabinet were not minded to recommend this to Council for 2020/21;

7.    The Cabinet was asked to look at the issue of School Holiday Food Clubs and try to find funding to provide additional support to School Holiday Clubs. The Cabinet recognised the importance of the School Holiday Food Clubs, given the pressure on family budgets caused by government welfare reforms, and was minded to recommend that there be a review of the level of support that could be offered from within existing budgets;

8.    The Cabinet be asked to undertake a review of the Corporate Priorities Budget to consider whether £15,000 funding of the annual Saddleworth Band Contest could be identified. The Cabinet recognised the importance of the Saddleworth Band Contest and was minded to recommend that, during the preparation for the contest in 2020, there be a review of the level of support that could be offered from within existing budgets

Options/Alternatives considered:

Option 1 – Cabinet accepts the assumptions and resulting financial forecasts presented within the report and the budget position at Appendix 4.

Option 2 – Cabinet proposes amendments to the assumptions which would change the resulting budget gap and financial forecasts.

Option 3 – Cabinet approves and commends to Council all the budget reduction proposals included in this report to the value of £3.011m and the approach to the use of reserves and balances as well as Council Tax and Adult Social Care Precept in increases.

Option 4 - Cabinet requests that further work is undertaken on some or all of the budget proposals and the approach to reserves and balances.

RESOLVED – That:-

A.  The Cabinet accepted and commended to Council:

1.     The policy landscape and economic context in which the Council was setting its revenue budget for 2020/21 and Medium Term Financial Strategy to 2024/25;

2.     The impact of Oldham Council Policies and Strategies on the Council’s budget setting process and the development of its Medium Term Financial Strategy;

3.     The financial forecasts for 2020/21 to 2024/25 having regard to the Provisional Local Government Finance Settlement and associated funding announcements;

4.     The key issues to be addressed in continuing to respond to the financial challenges facing the Council;

5.     The 2020/21 Budget Reduction Proposals at a value of £3.011m;

6.     The proposed use of £5.826m of reserves for specific purposes and £4.182m of corporate reserves to balance the 2020/21 budget;

7.     The fees and charges schedule included at Appendix 7;

8.     A proposed Council Tax increase of 2.99% for Oldham Council services resulting in the charges set out at paragraph 15.3 and Table 29 of the report and in detail at Appendix 8;

9.     The proposal to draw on the Collection Fund for major preceptors of £113.271m for Borough Wide services and £96.466m for Council services;

10.  The proposed budget for 2020/21 for the Council set at £233.512m;

11.  The revised estimated budget reduction targets of £23.243m for 2021/22, £13.016m for 2022/23, £13.568m for 2023/24 and £12.921m for 2024/25.

12.  The pay policy statement included at Appendix 12.

13.  That a review of reward and recognition packages, to include essential car user allowances, be undertaken during 2020/21.

B.  The Cabinet recommended that:

1.     Additional health care centres for Saddleworth and Chadderton be considered when a review is undertaken to determine which schemes may be included in the Capital Programme in future years;

2.     In relation to School Holiday Food Clubs, there be a review of the level of support that could be offered from within existing budgets;

3.     In relation to the 2020 Saddleworth Band Contest, there be a review of the level of support that could be offered from within existing budgets.