Agenda item

Policy and Resources Strategy 2023-24 [Initial Budget Scrutiny]

To receive information from the Cabinet Member for Communities, Equalities and Finance and Strategic Director of Finance and Governance concerning the latest position on the policy and resources strategy 2023-24 following the report received by cabinet on the 6 December 2022 and the provisional local government finance settlement for 2023-24 published by the Department for Levelling Up, Housing and Communities on 19 December 2022.


To also receive information in relation to the Housing Revenue Account (HRA) budget and rent setting 2023-24 due to be considered by cabinet on the 17 January 2023.


Note:  The overview and scrutiny committee budget scrutiny (cabinet member interviews) is scheduled to take place on Monday 23 January 2023.


The committee heard from Councillor Stephanie Cryan, Cabinet Member for Communities, Equalities and Finance, and Duncan Whitfield, Strategic Director of Finance and Governance, on the Financial Remit 2023-24.  The committee also heard from Tim Jones, Departmental Finance Manager.


Councillor Cryan highlighted the following:


·  The current deficit was around £1m.  This was considered a good position in comparison to the earlier position in July, £20m deficit, and £6m deficit in December.


·  The local government settlement had not provided any inflation uplift - in real terms it was less than 2022/23, taking account of the impact of inflation.


·  The government had not provided any financial support for homelessness prevention, homelessness or temporary accommodation for the second year running.


·  There was an increasing reliance on ring fencing and grants, which meant the council received funding but it had to be used for a specific purpose, which reduced the local decision making the council could make.


·  As grant funding reduced, the government was putting more reliance on local authorities to raise money through council tax and business rates.  This meant that residents and businesses were funding a greater proportion than before.


Tim Jones, Departmental Finance Manager went through the presentation on the Financial Remit 2023-24 (available on the council website).


At the end of the presentation, discussion took place around the following:


·  Consultation undertaken with residents on the budget.

·  Council acquisitions of property – whether collection of commercial rents were exceeding interest being paid, in light of pandemic impact on use of office space.

·  Changes to the way Adult Social Care might be funded.

·  Climate change implications and climate impact assessment.

·  Inflationary pressures and support for the voluntary sector.

·  Comparison of this year’s settlement to past settlements.

·  Council tax and business rates collection targets.

·  Local government borrowing and interest rates.

·  Growth in budget for No Recourse to Public Funds.

·  Use of cash reserves to accrue interest.


Information relating to the Housing Revenue Account HRA budget and rent setting 2023-24 was received under this item.


The committee received a briefing from Councillor Darren Merrill, Cabinet Member for Council Homes and Homelessness and Michael Scorer, Strategic Director of Housing and Modernisation and on the Housing Revenue Account budget and rent setting process for 2023/24.  The committee also heard from Ian Young, Departmental Finance Manager.


Councillor Merrill took the report as read and highlighted the following:


·  Inflationary costs were at 10%

·  Building materials inflation costs were around 30%

·  Extreme stress on the HRA ring fenced budget

·  Government 7% cap had not allowed for inflation, causing £8m inflationary pressure on the budget

·  Proposed rent increase required in order to bring in investment

·  Most vulnerable tenants protected by housing benefit and universal credit

·  Council proposing to match discretionary housing payments to make sure there are sufficient funds for those in most need that fall just outside of the eligible criteria to receive housing benefit and universal credit.


Following the cabinet member’s presentation, discussion took place around the following:


·  Increase in district heating and hot water charges, and communication to residents

·  Requirements around consulting with residents around charges, and wording in the tenancy agreement in relation to ‘consultation’.

·  Redesigning the housing revenue account to ensure genuinely affordable high quality council homes.

·  Communication strategy to residents around increases

·  How cost of energy generated by SELCHP is calculated, and timescales for implementation of heat metering in council housing stock

·  Consideration of repayment options for resident leaseholders, in light of potential significant leaseholder charges

·  The extent to which the HRA is under unprecedented pressure.

Supporting documents: