To consider a report of the Portfolio Holder for Finance, Commercial and Capital Assets.
The Portfolio Holder for Finance, Commercial & Capital Strategy set out the Budget Strategy and medium-term financial plan report. The Council had a duty to set a balanced revenue budget and to approve the level of council tax.
The Portfolio Holder set out the headlines of the budget including the proposal to set an increase in general council tax of 1.998% and 0.996% in social care precept, providing a band D council tax figure for Dorset Council of £1,832.67; an overall increase of 2.994%. Additional funds of 10.4 million had been awarded to the council from central government. However, he stated that some of this funding had been ring-fenced and any balance not used or ring-fenced should be used as a contingency fund given the current climate and the ongoing pandemic.
The budget proposals had been built around the priorities identified in the Dorset Council Plan and were considered by the Dorset Council Scrutiny Committees on 10 December 2021 and 7 January 2022. The Chairman also stated that all councillors had the opportunity to attend recent budget café meetings so that they could be part of shaping the budget for the forthcoming year.
The following comments and questions were made by non-executive councillors:
· 3% was the maximum that council tax could be increased without a referendum. We have one of the highest council tax rates in the country and this was likely to continue to be so.
· Concern expressed about future fuel cost increases to residents
· Capital Programme – there is a need to continue to keep the Council’s capital programme under review in terms of its affordability and alignment with the Council’s priorities.
In response, the Chairman advised that following the scrutiny meeting he had agreed that a fundamental review of the capital programme would be carried out and this would come back to scrutiny at some point.
There were no additional questions from Cabinet. The Portfolio Holder for Finance, Commercial & Capital Strategy read out his 10 recommendations to full council in respect of the budget strategy.
Cabinet confirmed that their “minded to” view was to support the recommendation.
Recommendation to Full Council from the Portfolio Holder for Finance, Commercial and Capital Strategy.
(a) That the revenue budget summarised in appendix 1, be agreed
(b) That the increase in general council tax of 1.998% and 0.996% in the social care precept, providing a band D council tax figure for Dorset Council of £1,832.67, an overall increase of 2.994%, be agreed.
(c) That no change to the current scheme of Local Council Tax Support as set out in the report, be agreed.
(d) That the capital strategy set out in Appendix 3 and the capital programme set out in Appendix 4, be agreed.
(e) That the treasury management strategy as set out in Appendix 5, be agreed
(f) That the assumptions used to develop the budget strategy and medium-term financial plan (MTFP) as set out throughout the report and summarised in Appendix 6, be agreed
(g) That the recommended balances on earmarked reserves and on general funds, including the minimum level of the general fund, be agreed
(h) That the addition of £4.4m from the settlement into the contingency budget, until there is clarity around further costs of implementing national reforms and as a hedge against emerging cost pressures, be agreed
(i) That the responses to the recommendations and comments made as part of the budget scrutiny process, be agreed
(j) That the concern around the cumulative overspend on the High Needs Block (HNB) and more importantly, the impact that an unmitigated transfer of this deficit to the council will have on its financial position when the statutory instrument falls away, as currently scheduled, on 1 April 2023, be noted.
Reason for Recommendation:
The Council is required to set a balanced revenue budget, and to approve a level of council tax was an integral part of this. A balanced budget is essentially one where all expenditure is funded by income without unsustainable use of one-off, or short-term sources of finance.
The Council is also required to approve a capital strategy, a capital programme and budget, and a treasury management strategy, each of which were included with the report to Cabinet.
The draft budget proposals had been considered by the Place and Resources Scrutiny Committee and by the People and Health Scrutiny Committee and their recommendations were set out in appendix 7 of the report for Cabinet consideration.