The Council noted a report from the Cabinet which provided information on issues considered at its meetings held on 15 and 29 September 2021 (for copy see file of Minutes).
The Chair informed Council that three questions on the Cabinet report had been submitted and reminded Council that Members were permitted to ask a supplementary question arising from the question/answer.
Councillor R Crute asked the following question:
At the Cabinet meeting held on Wednesday 15 September 2021 members considered a report on the Forecast of Revenue and Capital Outturn (2020-21) which included an update on progress made towards achieving MTFP (12) savings and referred to budget pressures across individual services within the council.
It has been reported recently by the charity Age UK that council tax may have to rise on average by 10% next year, just to ensure that social care services can ‘stand still’. This follows the charity’s concerns that revenue raised from the government’s proposed increase in National Insurance (NI) Contributions will be diverted directly to the NHS over the next three years, leaving social care ‘desperately short of funds’.
Could the relevant cabinet member advise what assistance has been sought or received from central government to mitigate any adverse impact on social care services during this period, and also advise which measures are to be put in place to protect social care budgets from additional pressures.
Councillor R Bell, Deputy Leader and Cabinet Portfolio Holder for Finance thanked Councillor Crute for his question and gave the following response:
Councils have been provided with the ability to increase council tax via the adult social care precept in recent years, with a 6% increase allowed over the three years 2018/19 to 2020/21 and then a further 3% across 2021/22 to 2022/23. In addition, the social care grant available to Durham is £22.9 million, with a further £5.25 million provided in 2021/22.
I would refer Cllr Crute to the MTFP(12) update report considered by Cabinet last week, which provided an overview of the Health and Social Care Levy announced on 7 September, to be funded through the introduction of an increase to both employers and employee’s national insurance rates and an increase in dividend tax.
The total sums to be raised from the announced tax rises is forecast to be circa £12 billion per annum, with the NHS expected to receive the majority of this funding (85%) in each of the next three years to help to address the current backlogs.
The expectation is that after three years the backlogs will be at a manageable level and additional funding will then flow to social care, but a sum of £4.9 billion will be made available to local government over the next three years.
The major draw overtime for this additional funding will be to address the changes to charging for social care services, where the government has announced a range of changes to the charging regime, including a cap on care costs, and the ability of self-funders to access the council’s contracts.
These proposals will have a profound impact upon the income that local authorities receive for providing social care services and on residential and nursing care providers.
We await further Government announcements as there is little by way of detail available at this stage, but our officers are currently assessing what these new measures might mean for the council, its residents and care providers across the county.
The announcements to date would indicate that there is an expectation from Government that demographic and fee related pressures need to be met from council tax increases and efficiencies within the local authority going forward.
As members will be aware, as things stand there is a cap on the level of Council Tax increases that can be applied without a referendum and that the additional flexibility through the application of an Adult Social Care Levy ends next year. The recent announcements do appear to open up the prospect for further council tax raising powers beyond next year but we just don’t know at this stage.
The Government has stated that public sector employers will receive new grant funding to offset the budget pressures linked to employers NI increases and our updated MTFP forecasts include an additional £2m of new grant funding to offset the estimated £2m costs impacts of the 1.25% increase on the Councils employer’s National Insurance costs from next year.
The Age UK report which my colleague quotes from references adult social care pressures, the major budgetary concern for this council in recent years has been in children’s social care rather than adult social care. I can however confirm that the council did respond to the recent call for evidence on the inquiry into Long Term Funding of social care, pushing for:
· Additional grant funding for social care rather than precept raising powers;
· Free dementia care, which would resolve most issues of significant charges; and
· A premium National Living Wage for the care sector to improve recruitment and retention of care workers.
Finally, after his appointment as Secretary of State, I wrote to Michael Gove requesting that adequate support be given to Councils on a needs basis for both adult social care and children’s social care pointing out that Council Tax is not the way for us to find the funds given our low council tax bands and hence low ability to raise additional revenue through Council Tax. 1% on our Council Tax yields around £2.4m of revenue. The Council also makes its case through bodies like the County Council’s Network and other national bodies. I am not aware of any assurances from Central Government on funding going forward but I am sure that they are having lively discussions on these matters.
Councillor Crute thanked Councillor Bell for his response. Councillor Crute thought it was grossly unfair in these times that hard pressed families were having to pick up a bill for social care either through an adult social care precept or through an additional National Insurance contribution and asked whether Councillor Bell would agree with this.
Councillor Bell thanked Councillor Crute for his supplementary question and provided the following response:
The National Insurance increase will be fully debated I am sure at Agenda Item 13 and I will reserve comments for that. I would observe that clearly money has to be found from somewhere and if it is not from local taxation it has to come from national taxation in some manner or means. I would agree that Council Tax is not the way for Durham County Council to fund its budgetary pressures on children and adult social care, given our limited capacity to raise Council Tax because of our low Council Tax bands.
Councillor R Yorke asked the following question:
Changes to the proposed leisure provision in Bishop Auckland have been amended, jeopardising the ability to create a new 4G football pitch for use by the local community.
The previous proposals, recommended by DCC Officers, also included a proposal to invest millions of pounds to create a community hub and spearhead a major regeneration scheme for Woodhouse Close. Can the Leader of the Council please explain whether Bishop Auckland will receive the same levels of investment, bringing about the regeneration and positive changes the community of Woodhouse Close deserve? How the Council will help to fulfil its obligations and promises previously made to support grassroots football in Bishop Auckland and work to rebuild the partnership that had been developed with Bishop Auckland FC and the Council?
As a supplementary question, now that the Coalition has closed Sunnydale School, can we look at siting a community hub in Shildon, a town of 12,000 people and now without a secondary school.
Councillor A Hopgood, Leader of the Council, thanked Councillor Yorke for his question and provided the following response:
At the time of the March 2021 Cabinet report plans for the facility mix of each new build, including outdoor facilities and consideration of outdoor space had not yet reached a stage of proposals, and as such a 4G football pitch wasn’t in scope of the project and the Council has not therefore committed to the investment in 4G pitches noted by Councillor Yorke.
The provision of playing pitches is the subject of the emerging playing pitch strategy and emerging priorities within the south of the county note that according to current calculations using Sport England formula, there is no demonstratable requirement for additional pitches in Bishop Auckland, as two such facilities already exist.
When considering investment in pitches the Council uses this nationally adopted formula and is committed to ensuring a balanced investment across the whole county based on need and the availability of funding.
Officers have met with representatives of Bishop Auckland Football Club and are continuing to work with them to develop and understand levels of demand and how this can be considered as part of playing pitch provision.
Proposals for the community hub will be blended with plans for the leisure centre on the existing Woodhouse Close site. This approach will ensure the same positive opportunities for the immediate and wider community yet represent much better value for money and a more operationally sound investment.
The leisure strategy builds on the significant wider investment in Bishop Auckland in retail, leisure, skills and town centres.
With respect to the supplementary question this relates to Shildon which is not part of the agenda, I would provide Councillor York with a written response or he could bring the question to the next Council meeting when it would be on the report from Cabinet.
Councillor C Marshall asked the following question
Can the Leader of the Council please explain the reputational risk to the Council for the decision taken by Coalition to build a third Council HQ on Aykley Heads. The report informs there is only one interested party and states that existing County Hall is no longer fit for purpose.
The Council has an almost complete HQ and any new build on Aykley Heads creates uncertainty for investors, jeopardises job creation and is a complete waste of taxpayers money.
How will the Council be able to scrutinise this, given the Chair of the Overview and Scrutiny Management Board refused to call a special meeting to discuss the proposal or will Members who want to see a transparent process need to contact the Local Government Ombudsman to ensure our taxpayers are receiving a fair deal?
Councillor A Hopgood, Leader of the Council, thanked Councillor Marshall for his question and provided the following response:
The report that was presented to Cabinet in September clearly sets out that the Council is committed to the development of Aykley Heads as a strategic employment site and sets the timescale for marketing the site.
The report also clearly and directly sets out the requirement for a business case to assure the decision-making process of the council and have clear regard to economic, financial, commercial, environmental, management and strategic objectives.
Based on evidence gathered to date, and considering the interest shown in the building on the Sands, there is an opportunity for the Council to explore the potential broader economic impacts that could be achieved through disposal of the building to the interested third party.
The business case required will be completed, as a matter of urgency, to determine the Council’s options for moving forward with its office and civic accommodation, therefore I am confident that a prompt decision can be made, which will fully address the value for money and public interest tests that we always need to apply in our decision making. The business case that will come forward will be comprehensive and transparent and all Members will be afforded the opportunity to raise any questions or queries at that time.
Should the value for money and public interest tests not be met by an alternative course of action, then, as the report clearly states, the Council will occupy the building on the Sands as originally planned.
With regards to our external auditors or as referred to the Ombudsman, I can confirm that they have and will continue to be kept informed and that they have raised no objections or issues with the course of action we are pursuing.
As regards the involvement of Scrutiny, their work programme is a matter for the Scrutiny Chairs and Vice Chairs and individual Committees to determine and not something that the Executive, rightly so, can get involved in.
Councillor Marshall informed Council it was his knowledge that a Cabinet Member was at a Scrutiny meeting last week suggesting agenda items which should be added to the work programme and asked the following supplementary question:
If the Coalition want to build a third HQ and sell off one of the three it has how is publicly announcing there was only one interested party negotiating with the Council on the building at the Sands going to secure the best value for the taxpayer?
The Leader of the Council thanked Councillor Marshall for his supplementary question and provided the following response:
The Joint Administration has always said that it would be transparent. To say that there was more than one when there was only one is totally inappropriate and as already stated the external auditors are more than happy with what has been done so far in terms of the report produced. This was the first report and I would ask that you wait until you see the next report and come back with more questions at that point.