Agenda item

The Council considered a report from Cabinet which detailed budget recommendations for the 2017/18 Revenue and Capital Budget and Medium Term Financial Plan (MTFP(7)) 201718 to 2019/20 (for copy see file of Minutes).

 

In Moving adoption of the Cabinet report, Councillor Henig made a statement on the Budget and Precept for 2017/18, summarised as follows:

 

The proposals for the Medium Term Financial Plan 2017/18 to 2019/20 and Revenue and Capital Budget 2017/18 to Council followed a budget process which had lasted several months and involved input from scrutiny members and several thousand County Durham residents.

 

The MTFP and budget was set against a background of seven years of austerity, with government funding cut relentlessly year after year.  Reductions in grant for County Durham now exceeded £180 million and more cuts were still to come.  It was also against a background where the government’s own preferred measure, Core Spending Power, showed Durham receiving less than the England average in 2017/18 despite its greater needs in areas like adult social care.  Durham would receive 20% less than affluent Surrey on this measure, which until a sudden unexplained u-turn, believed it needed a 15% increase in council tax to balance its budget.

 

Paul Johnson, Director of the Institute for Fiscal Studies had said that public finances in the next few years looked set to be defined by the spending cuts announced by George Osborne with cuts to day-to-day public service spending due to accelerate while the tax burden continued to rise.  He had also pointed out that attempts to eliminate the deficit by spending cuts since 2010 were already the longest and deepest on record and speculated that austerity may continue into the mid-2020s.

 

Against this background of the longest and deepest cuts on record, the Council had approached forming its MTFP and budget using five key principles.

 

Firstly, the Council remained guided by one of the earliest decisions of the unitary council, which was to re-direct many of the savings made through the abolition of two tier local government and the large reduction in numbers of senior officers, into local community improvements.  This ensured that every year, several million pounds were still spent at the grassroots, on communities across County Durham and using equal distribution as well where everyone received the same, whether Area Action Partnership budget or Neighbourhood Budget.  Councillor Henig knew of no other council in the north of England which supported local communities on this scale and the Council could point to hundreds of local groups and community facilities which had benefited across all of County Durham.

 

Secondly, the Council continued to involve and engage the public in its budget consultation events in large numbers.  In the autumn the Council took its budget consultation to meetings in every AAP area, as well as involving other local groups including young people.  Feedback was taken by feedback forms, online and even in supermarkets.  The Council went out across County Durham and asked, as we had done previously, what people’s priorities were and what should be protected.

 

The public had responded in large numbers.  More than three thousand people attended events during the consultation, with nearly 2,000 consultation forms submitted.

 

The Council had also asked how it was doing so far in making savings.  One in six had marked the Council at less than five out of ten, in particular many of the online respondents.  Nearly sixty per cent said they would mark the Council at six out of ten or higher.  Furthermore, almost two thirds of respondents, 63%, stated that the Council’s proposed approach to making future savings was a reasonable way to go forward in 2017/18.

 

Councillor Henig thanked the public of County Durham for their involvement in the budget consultation, which was invaluable in such difficult times of reducing budgets.  The public’s priorities were the council’s priorities and it would do all it could to protect those services seen as essential by people across our communities.

 

A third principle of the approach to savings had been to prioritise savings from management, support services and efficiencies while protecting front line services.  This was not without its consequences.  It was currently forecast that by the end of 2017/18 the council would have reduced its number of posts by 2,674, a huge number and one which encompassed a vast amount of experience.  As a comparison, this was ten times more than the number of staff who left during local government reorganisation in 2008-09.

 

However it was the right approach that the Council continued to protect the front line services prioritised by the public by taking as many savings as it could from efficiencies and restructures.  Of the £36 million of further savings outlined in plans for 2017/18 and detailed in Appendix 4 of the report, the word ‘restructure’ appeared seven times and ‘review’ thirteen times as the Council did all it could to maintain essential services for as long as possible in the face of huge and ongoing grant reductions.

 

Recommendations in the report included approval of the 2017/18 Net Budget Requirement of £387.594M, a 1.99% 2017/18 Council Tax increase and a further 2% increase for the government’s adult social care precept, totalling 3.99%.  It was quite wrong for the government to pass the buck for growing adult social care needs onto councils and council tax payers and it was time that adult social care was funded properly.  Even the maximum 3% increase in adult social care precept, set to be agreed by a majority of councils, would not solve what was a growing national crisis and in Durham it was proposed this increase was kept down to 2%.

 

A fourth priority within the Council’s approach was that it would continue to support its Local Council Tax Reduction Scheme which ensured that many of the County’s poorest residents received relief from council tax.  Durham was one of only a small number of councils who continued do this in the North East and nationally.

 

A fifth principle was to maintain a fully funded Capital Programme and the report included a 2017/18 capital budget of £109.744M and MTFP capital budget of £324.139M.  This was set out and itemised in Appendix 9 of the report and was essential for County Durham, whether funding Town Centre masterplans, roads and highways or the new build primary school proposed for Bowburn.

 

In the face of relentless government austerity, the Council would stick to its principles.  It would prioritise local communities, consult and engage with the public across County Durham and protect the front line for as long as it could. It would protect the poorest in society and also invest in the future. These were the principles put before council this morning.

 

In Seconding adoption of the Cabinet report Councillor Napier, Portfolio Holder for Finance informed the Council that it was charged with managing ongoing government cuts in funding against growing pressures on budgets.

 

To the end of the financial year the Council would have had to make savings of £186m as a result of ongoing government austerity and the Council needed to find a way of making these savings which had the least impact on communities.

 

It had been proven to be a myth that austerity would be short-term to balance the books and to get the budget into surplus by 2015, indeed the Institute for Fiscal Studies had suggested austerity had the potential to last for 15 years and the current Chancellor had stated there would not be a budget surplus before the mid-2020’s.

 

The 2017/18 budget would continue to protect frontline services and the Council would be using £12.6m from the budget support reserve.  Since 2011 the Council had used £70m of reserves.  Some Members had called for reserves to be used year on year and if this had been done the Council would now be in a much worse position.  The Council’s policy had always been to plan ahead with a balanced approach and a prudent reserves policy.

 

Government policy was to push costs onto local people.  The Council had no option than to charge a 2% Adult and Social Care precept but was not charging 3% which it had the option to do.  Surrey had proposed a 15% increase which was then withdrawn.  Surrey would be one of the pilots to retain 100% of business rates and for every 1% rise in Council Tax would receive £7m, whereas Durham only raised £2m.

 

Councillor Napier was proud that the Council had retained the Council Tax Reduction Scheme for 2017/18 and was only one of a handful of authorities to have done so.

 

Referring to the Capital Programme the Council would continue to invest in local community schemes.

 

Councillor Napier thanked Members and officers for their input to the budget process for 2017/18.

 

Councillor J Armstrong, Chairman of the Overview and Scrutiny Management Board informed Council that there had been four scrutiny meetings to consider the budget.  The process had been hindered by the late confirmation of the final budget settlement, which had only just been announced.  The Overview and Scrutiny Management Board had met on 13 February 2017 to consider the MTFP and Revenue and Capital Budget and had no further suggestions to share with the Council, other than to express concerns about ongoing austerity.

 

An amendment was Moved by Councillor R Bell, Seconded by T Henderson as follows:

 

The Council to make additional savings by:

 

·       Stopping the publication of County Durham News from April 2017 but retaining the Events Guide and Guide to Services.  This would produce an annual saving of £137,000.

 

The council to increase the budget on:

 

·       Roadside gully cleaning through the engagement of an additional tanker at a cost of £159,000 a year

 

The £21,000 additional funding required to come from the Neighbourhood Services Cash Limit Reserve.

 

The increase in spending in Children’s’ Services on Agency staff, had risen from £1,309,253 (2.45% of Employee Budget) in 2014 to £3,188,365 (5.44% of Employee Budget) in 2016, of which £370,580 was cover for long term sickness absence.  This spending on Agency staff be reduced to £1m or below, a saving of £2,188,365 on Agency spend.

 

For the Amendment

Councillors R Bell, T Henderson, N Martin, R Ormerod, G Richardson, J Rowlandson, A Savory, J Shuttleworth, D Stoker, O Temple and A Willis

 

Against the Amendment

Councillors E Adam, J Allen, J Alvey, B Armstrong, J Armstrong, A Batey, D Bell, E Bell, J Bell, H Bennett, G Bleasdale, D Boyes, P Brookes, C Carr, J Carr, J Chaplow, J Clare, P Conway, K Corrigan, R Crute, K Davidson, M Davinson, M Dixon, S Forster, N Foster, I Geldard, B Graham, J Gray, O Gunn, J Hart, S Henig, D Hicks, L Hovvels, E Huntington, S Iveson, I Jewell, O Johnson, B Kellett, A Laing, P Lawton, J Lee, J Lethbridge, J Lindsay, A Liversidge, R Lumsdon, J Maitland, C Marshall, L Marshall, J Maslin, P May, B Moir, S Morrison, A Napier, T Nearney, M Nicholls, Nicholson, P Oliver, A Patterson, T Pemberton, M Plews, C Potts, L Pounder, S Robinson, K Shaw, H Smith, T Smith, M Stanton, B Stephens, A Surtees, L Taylor, P Taylor, K Thompson, F Tinsley, E Tomlinson, J Turnbull, A Turner, A Watson, C Wilson, R Yorke and R Young

 

Abstention

Councillors D Freeman and M Wilkes

 

The Amendment was Lost.

 

 

An amendment was Moved by Councillor J Shuttleworth, Seconded by Councillor A Savory as follows:

 

The Council to make additional savings by

 

·       Reducing staffing in communications and marketing   320,000

(Approx 10+ posts)

·       Abolishing County Durham News                               205,000

·       Extra use of Budget Support Reserve                        1,513,500

Total Savings                                                          2,038,500

 

These savings to provide funding for the following:

 

·   Reducing the Council Tax increase to 0.99%                     1,880,000

·   Provide Annual Grant of £500 to 317 village halls and

community associations across the county                        158,500

        TOTAL COSTS 2017/18                                                  2,038,500

 

 

For the Amendment

Councillors R Bell, T Henderson, D Hicks, C Marshall, N Martin, G Richardson, J Rowlandson, A Savory, J Shuttleworth, D Stoker, O Temple, M Wilkes and A Willis

 

Against the Amendment

Councillors E Adam, J Allen, J Alvey, B Armstrong, J Armstrong, A Batey, D Bell, E Bell, J Bell, H Bennett, G Bleasdale, D Boyes, P Brookes, C Carr, J Carr, J Chaplow, J Clare, P Conway, K Corrigan, R Crute, K Davidson, M Davinson, M Dixon, S Forster, N Foster, D Freeman, I Geldard, B Graham, J Gray, O Gunn, J Hart, S Henig, L Hovvels, E Huntington, S Iveson, I Jewell, O Johnson, B Kellett, A Laing, P Lawton, J Lee, J Lethbridge, J Lindsay, A Liversidge, R Lumsdon, J Maitland, L Marshall, J Maslin, P May, B Moir, S Morrison, A Napier, T Nearney, M Nicholls, H Nicholson, P Oliver, R Ormerod, A Patterson, T Pemberton, M Plews, C Potts, L Pounder, S Robinson, K Shaw, H Smith, T Smith, M   Stanton, B Stephens, A Surtees, L Taylor, P Taylor, K Thompson, F Tinsley, E Tomlinson, J Turnbull, A Turner, A Watson, C Wilson, R Yorke and R Young

 

The Amendment was Lost.

 

 

An amendment was Moved by Councillor O Temple, Seconded by Councillor M Wilkes as follows:

 

The Council’s General Reserve for 2017/8, even after the proposal to apply the Newcastle Airport dividend to the capital budget, would be £1.405 million above the council’s agreed policy of maintaining General Reserves between 5% and 7.5% of the Net Budget Requirement.

 

The following amendments were therefore proposed to the budget:

 

 

Youth Work: £500,000

The provision of a fund of £250,000 a year for each of two years to enable the provision youth work sessions by local youth group/charities, to help them bridge the gap caused by the ending of universal youth work provision whilst they develop new and sustainable models of youth work delivery. This fund to be administered through Area Action Partnerships.

Cost: £500,000 from Excess General Reserves.

 

Safer Communities: £500,000

The provision of a fund of £250,000 a year for each of two years to enable local communities desirous of introducing 20 mph zones for residential areas to bid for funds to do so. At the end of two years, Cabinet to review the initiative and decide whether it merits inclusion in the budget on an annual basis. This fund to be administered through Neighbourhood Services.

Cost: £500,000 from Excess General Reserves.

 

Additional Road and Footpath repairs: £10 million

An injection of an additional £10 million, over two years, to improve the quality of the county’s roads and footpaths.

Cost: £0.32 million in the first year, £.0.64 million in subsequent years.

 

These costs to be met from the Excess General Reserve in Year One, whilst steps are taken to reduce the Corporate News Team budget (currently £1.4 million) by £640K from 2018/19 to meet the ongoing costs of this proposal.

 

All figures in the budget to be amended consequentially in respect of these changes.

 

For the Amendment

Councillors R Bell, D Freeman, T Henderson, D Hicks, N Martin, P Oliver, R Ormerod, G Richardson, S Robinson, J Rowlandson, A Savory, J Shuttleworth, D Stoker, O Temple, K Thompson, A Watson, M Wilkes and A Willis.

 

Against the Amendment

Councillors E Adam, J Allen, J Alvey, B Armstrong, J Armstrong, A Batey, D Bell, E Bell, J Bell, H Bennett, G Bleasdale, D Boyes, P Brookes, C Carr, J Carr, J Chaplow, J Clare, P Conway, K Corrigan, R Crute, K Davidson, M Davinson, M Dixon, S Forster, N Foster, I Geldard, B Graham, J Gray, O Gunn, J Hart, S Henig, L Hovvels, E Huntington, S Iveson, I Jewell, O Johnson, B Kellett, A Laing, P Lawton, J  Lethbridge, J Lindsay, A Liversidge, R Lumsdon, J Maitland, C Marshall, L Marshall, P May, B Moir, S Morrison, A Napier, T Nearney, M Nicholls, H Nicholson, A Patterson, T Pemberton, M Plews, C Potts, L Pounder, K Shaw, H Smith, T Smith, M Stanton, B Stephens, A Surtees, L Taylor, P Taylor, F Tinsley, E Tomlinson, J Turnbull, A Turner, R Yorke and R Young.

 

The Amendment was Lost.

 

 

An amendment was Moved by Councillor O Temple, Seconded by Councillor M Wilkes:

 

That the Council Tax requirement be reduced by 1.99%, this to be funded by a transfer of reserves.

 

For the Amendment

Councillors R Bell, D Freeman, T Henderson, N Martin, R Ormerod, G Richardson, J Rowlandson, O Temple and M Wilkes.

 

Against the Amendment

Councillors E Adam, J Allen, J Alvey, B Armstrong, J Armstrong, A Batey, E Bell, J Bell, H Bennett, G Bleasdale, C Carr, J Carr, J Chaplow, J Clare, P Conway, K Corrigan, R Crute, K Davidson, M Davinson, M Dixon, S Forster, N Foster, I Geldard, B Graham, J Gray, O Gunn, J Hart, S Henig, L Hovvels, E Huntington, S Iveson, I Jewell, O Johnson, B Kellett, A Laing, P Lawton, J Lindsay, A Liversidge, R Lumsdon, J Maitland, C Marshall, L Marshall, P May, B Moir, S Morrison, A Napier, T Nearney, M Nicholls, H Nicholson, A Patterson, T Pemberton, M Plews, C Potts, L Pounder, A  Savory, K Shaw, J Shuttleworth, H Smith, T Smith, M Stanton, B Stephens, A Surtees, L Taylor, P Taylor, F Tinsley E Tomlinson, J Turnbull, A Turner, A Willis, R Yorke and R Young,

 

Abstention

Councillor K Thompson

 

The Amendment was Lost.

 

A vote was then taken on the main Motion which was the recommendations contained within the report.

 

For the Motion

Councillors E Adam, J Allen, J Alvey, B Armstrong, J Armstrong, A Batey, E Bell, J Bell, H Bennett, G Bleasdale, C Carr, J Carr, J Chaplow, J Clare, P Conway, K Corrigan, R Crute, K Davidson, M Davinson, M Dixon, S Forster, N Foster, I Geldard, B Graham, J Gray, O Gunn, J Hart, S Henig, L Hovvels, E Huntington, S Iveson, I Jewell, O Johnson, B Kellett, A Laing, P Lawton, J Lethbridge, J Lindsay, A Liversidge, R Lumsdon, J Maitland, C Marshall, L Marshall, P May, B Moir, S Morrison, A Napier, T Nearney, M Nicholls, H Nicholson, A Patterson, T Pemberton, M Plews, L Pounder, K Shaw, H Smith, T Smith, M Stanton, B Stephens, A Surtees, L Taylor, P Taylor, K Thompson, F Tinsley, E Tomlinson, J  Turnbull, A Turner, A Willis and R Young.

 

Against

Councillors R Bell, D Freeman, T Henderson, N Martin, R Ormerod, G Richardson, J Rowlandson, Savory, Shuttleworth and Temple.

 

The Motion was Carried.

 

Resolved:

That the report and its recommendations be adopted in full.