Agenda item

The Council considered reports from Cabinet which detailed budget recommendations for the 2022/23 balanced revenue budget, details of significant investments in key front-line services, an outline Medium Term Financial Plan (MTFP(12)) covering the period 2022/23 to 2025/26 and a fully funded Capital Programme, and provided financial information and forecasts to enable the Council to set the Council Tax for 2022/23 (for copies see file of Minutes).

 

In moving adoption of the Cabinet reports, Councillor Hopgood made a statement on the Budget and Precept for 2022/23 as follows:

 

These were the first set of budget proposals the new Joint Administration had prepared and clearly demonstrated the scale of the Joint Administration’s ambition for the Council and for the County with significant new capital investments, recurrent investment in key front-line services and the utilisation of £10m of reserves to invest in some one-off initiatives that would have a lasting legacy.

 

These were a set of budget proposals which were prudent and affordable with no increase in core council tax proposed and no reliance on using reserves to balance the base budget next year, something the Council had not been able to achieve in the current year or previous years.  The budget proposals had been informed by community conversations and consultations and which targeted investment in areas that would have a significant impact on people’s lives.  At each stage Scrutiny had been involved in the budget setting process and the report included feedback from those meetings and from wider engagement through AAPs, business rate payers and trade unions. 

 

The budget had once again been prepared against a backdrop of significant uncertainty that existed beyond the next financial year, particularly in relation to the new service grant funding the Council was to receive next year as the publication of the Fair Funding Review was awaited later in the year.

 

The report provided a comprehensive and detailed overview of the Comprehensive Spending Review announcements on 27 October 2021 and the Local Government Finance Settlement for 2022/23 which was received on 16 December 2021.

 

In comparison to previous years the Council had received a reasonably good financial settlement with a significant year on year uplift in funding, better than anticipated.  This meant the Council had an above average increase in its core spending power.  However, the Council still lagged behind the national average core spending power per dwelling as outlined in the report.  If the Council had the funding in line with the average core spending per dwelling it would have a further £39m available to it in 2022/23.

 

The Council’s low tax base and consequential low tax raising capacity continued to constrain and place pressure on budgets.  The Joint Administration would continue to press government on this in terms of rectifying the position in the Fair Funding Review Formula.

 

A key risk for the Council next year, and potentially beyond, was the ongoing and potential long-term impact of Covid.  There was no new Covid grant funding available next year and whilst the Council had needed to adjust its waste disposal budgets to include growth in the 2022/23 budget it was unknown when usage and income would return to pre-pandemic levels.

 

Pay and price inflation was another significant concern and the budget proposals included significant uplifts in energy budgets and prudent assumptions in terms of other inflationary pressures.  Unavoidable budget pressures of £45m had to be accommodated and these were set out in detail in Table 4 within Section 104 of the report.  Key elements included pay and price inflation, the impact of the National Living Wage increase on Adult Social Care contracts, home to school transport, waste disposal contract increases and demographic pressures in Looked After Children budgets.

 

Despite these pressures, and as a consequence of the continued strong financial management of the Councils finances, the Council was making some significant and much needed investments in key front-line services.

 

The budgets next year made provision for:

·         £13m in relation to pay and price inflation next year, which included £3m in relation to energy prices;

·         £12m for Adult Social Care fee inflation;

·         £4.4m for children’s social care next year, which was on top of the additional £4.5m budget transfer agreed in the current year and represented aa approximately £10m year on year budget uplift in this volatile area of the revenue budgets;

·         £4.4m in waste disposal budgets, in part due to the ongoing impact of the pandemic;

·         £2.6m additional budget for Home to School Transport;

·         £313,000 of investment in the low carbon team staffing;

·         £250,000 investment in drainage inspections;

·         £100,000 for bin replacement;

·         £600,000 to continue with the ‘Free After 2’ parking initiative;

·         £890,000 to tackle workforce development challenges in the Community Protection Teams, who had been so important throughout the pandemic and where there was a national skills shortage;

·         £130,000 of investment in Street Scene services;

·         £120,000 of investment in Neighbourhood Wardens;

·         £250,000 of investment in countryside management, local nature reserves and public rights of way; and

·         £360,000 of investment in allotments management and maintenance.

 

The capital investment plans were both ambitious and significant with just under £113m of new capital investments and an overall Capital Programme in excess of £600m included in the MTFP, further demonstrating the scale of ambition the Council held.

 

The capital programme, including details of the new additions to the programme and the capital financing requirements linked to the programme were set out in sections 151 to 170, with the updated Capital Strategy and details of the individual schemes set out at Appendices 9 and 10.

 

New schemes included further investment in the new build primary at Spennymoor and the rebuild of Belmont Community School and CE Primary School; investment in new Children’s Homes as part of the Looked After Children sufficiency strategy, significant additional investment in Highways, including targeted investment to tackle the condition of unclassified roads across the county; investment in playing pitches and in allotments; significant investment in net Zero and decarbonisation aspirations for Council buildings; a new climate change community loans scheme; investment in flood prevention and in the Council’s parks and countryside estate, including public rights of way, which had all been neglected for far too long.

 

The Joint Administration was delivering on its commitments to raise the bar and scale of ambition for the County, as was also demonstrated by the City of Culture bid.

 

The one-year settlement from government was disappointing and the Leader acknowledged that there remained significant uncertainty beyond next year, with the planned Fair Funding Review casting a shadow over financial plans from 2023/24 onwards.

 

That said, the budget was balanced next year, with no increase in core council tax and no reliance on reserves to balance the budget in 2022/23, a position many other Councils would no doubt be envious of.

 

Not raising the core council tax next year would mean that the Council would lose access to approximately £4.5m of resources from its base budget capacity going forward, however, it was considered the right thing to do at this time.

 

In terms of reserves, the Cabinet had taken the opportunity to undertake a comprehensive review of all of earmarked and other reserves and the report set out the outcome of that review at sections 140 to 147, alongside details of the Councils reserves policy.

 

A number of these reserves had been re-prioritised and redirected to meet priorities, investing these funds in meeting those priorities and bolstering the budget support reserve balance and the ERVR reserve.  £10m of one off and non-recurring investments were factored into this budget from the utilisation of these reserves, initiatives that would make a huge difference to many people’s lives.

 

Applying an Adult Social Care precept increase next year was not a decision that should be taken lightly, particularly in light of the current squeeze on living standards, but in exercising fiduciary responsibilities for the management of the Council’s budgets, was a decision borne out of a financial necessity to help to fund the significant budget pressures in Social Care and ensure continued to support vulnerable people and the market in Durham.

 

Not increasing council tax at all was not a sustainable or prudent strategy to adopt and the Council’s financial resources must be carefully managed.

 

Those on low incomes continued to be afforded protection through the Council Tax Reduction Scheme.  The Council retained Discretionary Housing Payments Grants.

 

The report also included details of the various Dedicated Schools block funding allocations and the Leader concluded by Moving the recommendations of both reports.

 

Councillor R Bell, Deputy Leader and Portfolio Holder for Finance Seconded the reports and recommendations under Items 9 and 10 and reserved the right to speak until the end of the debate.

 

Councillor C Martin, Chair of Corporate Overview and Scrutiny Management Board (COSMB) informed Council that it was a priority for the COSMB to scrutinise the MTFP and Revenue and Capital Budget and he was pleased to report the COSMB had been able to do this diligently and constructively.

 

COSMB had received four Cabinet reports on the development of the MTFP and Budget and had fed back views to Cabinet on each occasion.  The COSMB meeting held on 10 February 2022 was a single item agenda to enable a detailed scrutiny of Cabinet’s final proposals.  All points raised by the Board were set out at paragraphs 92 and 93 of the report.

 

Councillor R Crute informed Council that these were exceptional times, a once in a generation period of financial hardship and this needed to be borne in mind.  There was a unique and ongoing cost of living crisis which was having a severely damaging impact on household income and living standards across County Durham and beyond.  Council supported a Labour Motion at its last meeting which called on the Government to take immediate measures to mitigate its impact.

 

The headline to the budget proposals before Council was that despite claims that council tax was being held to a zero percent increase the Joint Administration was raising its council tax demand as a whole by 3% at a time of severe financial crisis while at the same time the government was imposing an increase in taxes nationally.

 

The proposed council tax increase this year was higher than last years under the previous Labour administration.  Both the Joint Administration and the government were proposing to increase the tax burden to pay for a social care crisis which the Deputy Leader of the Council some three months ago stated did not exist in County Durham.

 

It was completely unacceptable that at a time when households were struggling more than ever before to make ends meet they were being held back further by Members of the Joint Administration.

 

It was acknowledged that in normal times council tax rises were almost inevitable because of the way central government was de-funding local council services.  In 2010 austerity was introduced and since then local authority budgets had seen savage cuts year after year with government effectively ordering councils to make up the funding shortfall locally by raising council tax.  But these were not normal times.  Under these specific circumstances, and in these almost unprecedented times of hardship, the Joint Administration needed to react accordingly when setting council tax levels if it wanted to alleviate the pressure on hard pressed family budgets.

 

County Durham residents were already struggling from the effects of 12 years of government imposed austerity and a Motion agreed at Council last month urged the government to take whatever actions were necessary to alleviate the additional financial burden of a potential financial catastrophe.  The Motion reminded Council that the value of wages in real terms was falling, household disposable income in County Durham lagged way behind the national average, central government imposed taxes were set to increase from April 2022, Universal Credit benefit payments had been cut by £20 a week, energy prices were set to soar and inflation was at an almost 30 year high.

 

The Joint Administration proposed to increase council tax by 3%.  The prevailing circumstances as outlined would mean that this years budget and council tax setting process was exceptional in terms of how the Joint Administration could help residents where central government had failed to do so.  The normal process for setting a Council Budget was not relevant this year, these were exceptional times, and if the Joint Administration wanted to alleviate the pressure on household finances it would need to adopt an exceptional approach to setting council tax levels for the coming year.

 

For the reasons set out the Labour Group could not support the proposed budget in its current form and urged Members to support it in rejecting the Joint Administration’s proposal to increase council tax by 3%.

 

Councillors Surtees, Hovvels, Deinali, Gunn, P Atkinson, Charlton-Lainé, Henig, C Marshall and Tinsley spoke in support of rejecting the proposed budget.

 

Councillors A Shield, Jopling, T Henderson, Wilkes, Rowlandson, Howey, Sexton, Walton, J Quinn, Shuttleworth, Coult spoke in support of the proposed budget.

 

Councillor R Bell, Portfolio Holder for Finance thanked officers for a through and comprehensive report and Members who had contributed to it through the scrutiny process.

 

The report was a culmination of months of work and set out proposals which Councillor Bell commended to the Council.  The budget proposals had largely been made possible through a better than expected increase in government funding being made available and also through the prudent management of finances.

 

The budget included significant investment in frontline services and an ambitious capital programme and had redeployed reserves to fund one-off investments.

 

The Joint Administration had avoided increasing council tax by the maximum 5% permissible and was proposing a nil increase in core council tax and a 3% increase in the adult social care precept.

 

The budget was sustainable and did not rely on reserves to balance the books, despite the £45m of unavoidable inflationary and demand based budget pressures which had to be accommodated.  This represented prudent financial management of the pubic finances which would always be the bedrock of the Joint Administration’s approach.

 

The capital programme included £113m of new investments including further significant investment in leisure centres, in schools including new builds, in the levelling up agenda and in the highways infrastructure which would see record levels of investment.  The investments in front line services would produce physical and noticeable improvements in service delivery.

 

Councillor A Hopgood reminded Council that in 2011, 2012 and 2013 the Council did not increase council tax but accepted a government grant to freeze council tax.  No Member of the Labour Group who had attended scrutiny meetings over the last three months had raised the issue of council tax nor had they asked questions on the MTFP at Cabinet and no alternative budget amendments had been submitted by the Labour Group.

 

Votes were then taken on the main Motions which were the recommendations contained within the reports.

 

Medium Term Financial Plan 2022/23 to 2025/26 and Revenue and Capital Budget 2022/23

 

For the Motion

Councillors B Bainbridge, A Bell, C Bell, R Bell, J Blakey, D Brown, L Brown, J Cairns, J Charlton, I Cochrane, J Cosslett, B Coult, M Currah, T Duffy, J Elmer, D Freeman, P Heaviside, T Henderson, L Holmes, C Hood, A Hopgood, J Howey, C Hunt, G Hutchinson, A Jackson, N Jones, P Jopling, C Lines, L Maddison, C Martin, E Mavin, L Mavin, B McAloon, S McDonnell, M McGaun, B Moist, P Molloy, J Nicholson, D Oliver, R Ormerod, E Peeke, R Potts, J Quinn, A Reed, G Richardson, S Robinson, K Robson, K Rooney, J Rowlandson, E Scott, P Sexton, A Shield, J Shuttleworth, M Simmons, A Simpson, M Stead, W Stelling, D Stoker, T Stubbs, D Sutton-Lloyd, M Walton, A Watson, M Wilkes and S Zair.

 

Against the Motion

Councillors E Adam, R Adcock-Forster, V Andrews, J Atkinson, P Atkinson, A Batey, K Batey, G Binney, R Charlton-Lainé, R Crute, S Deinali, L Fenwick, C Fletcher, O Gunn, C Hampson, A Hanson, S Henig, J Higgins, L Hovvels, M Johnson, C Kay, B Kellett, R Manchester, C Marshall, D McKenna, M McKeon, I McLean, S McMahon, J Miller, D Mulholland, D Nicholls, P Pringle, J Purvis, S Quinn, I Roberts, K Shaw, T Smith, A Surtees, P Taylor, F Tinsley, S Townsend, C Varty, E Waldock, M Wilson, S Wilson, D Wood and R Yorke.

 

Abstentions

None

 

 

Resolved:

That the report and its recommendations be adopted in full

 

 

Council Tax Setting in Order to Meet the County Council's Council Tax Requirement for 2022/23

 

For the Motion

Councillors B Bainbridge, A Bell, C Bell, R Bell, J Blakey, D Brown, L Brown, J Cairns, J Charlton, I Cochrane, J Cosslett, B Coult, M Currah, T Duffy, J Elmer, D Freeman, P Heaviside, T Henderson, L Holmes, C Hood, A Hopgood, J Howey, C Hunt, G Hutchinson, A Jackson, N Jones, P Jopling, C Lines, L Maddison, C Martin, E Mavin, L Mavin, B McAloon, S McDonnell, M McGaun, B Moist, P Molloy, J Nicholson, D Oliver, R Ormerod, E Peeke, R Potts, J Quinn, A Reed, G Richardson, S Robinson, K Robson, K Rooney, J Rowlandson, E Scott, P Sexton, A Shield, J Shuttleworth, M Simmons, A Simpson, M Stead, W Stelling, D Stoker, T Stubbs, D Sutton-Lloyd, M Walton, A Watson, M Wilkes and S Zair.

 

Against the Motion

Councillors E Adam, R Adcock-Forster, V Andrews, J Atkinson, P Atkinson, A Batey, K Batey, G Binney, R Charlton-Lainé, R Crute, S Deinali, L Fenwick, C Fletcher, O Gunn, C Hampson, A Hanson, S Henig, J Higgins, L Hovvels, M Johnson, C Kay, B Kellett, R Manchester, C Marshall, D McKenna, M McKeon, I McLean, S McMahon, J Miller, D Mulholland, D Nicholls, P Pringle, J Purvis, S Quinn, I Roberts, K Shaw, T Smith, A Surtees, P Taylor, F Tinsley, S Townsend, C Varty, E Waldock, M Wilson, S Wilson, D Wood and R Yorke.

 

Abstentions

None

 

Resolved:

That the following be adopted:

 

(a)         It be noted that the council tax base 2022/23 for:

 

(i)     the whole council area is 143,695.8 Band D equivalent properties [Item T in the formula in Section 31B of the Local Government Finance Act 1992 (as amended)] and

 

(ii)   dwellings in those parts of its area to which a parish precept relates is set out in the attached Appendix 3.

 

(b)         The Council Tax Requirement for the Council’s own purposes for 2022/23 (excluding Parish precepts and the Charter Trustees for the City of Durham precept) is £252,141,583.

 

(c)          Agree the following amounts in accordance with Sections 30 to 36 of the Act being the:

 

(i)        aggregate of the gross expenditure which the council estimates for the items set out in Section 31A(2) of the Act taking into account all precepts issued to it by parish councils is £1,326,980,522.

 

(ii)      aggregate of the gross income which the council estimates for the items set out in Section 31A(3) of the Act is £1,060,642,039.

 

(iii)     amount by which the aggregate at (c) i) above exceeds the aggregate at (c) ii) above in accordance with Section 31A(4) of the Act as its Council Tax requirement for the year [Item R in the formula in Section 31B of the Act] is £266,338,483.

 

(iv)     amount at (c) iii) above (Item R), all divided by Item T ((a) i) above), in accordance with Section 31B of the Act as the basic amount of its council tax at Band D for the year (including parish precepts) is £1,853.49.

 

(v)      aggregate amount of all special items referred to in Section 34 (1) of the Act: (total of all parish precepts including Charter Trustees) is £14,196,900.

 

(vi)     amount at (c) iv) above less the result given by dividing the amount at (c) v) above by Item T ((a) i) above), in accordance with Section 34(2) of the Act, as the basic amount of its Council Tax at Band D for the year for dwellings in those parts of its area to which no Parish precept relates is £1,754.69.

 

(d)         It be noted that for 2022/23, the County Durham and Darlington Fire and Rescue Authority has recommended the following amounts be in the precept issued to the County Council, in accordance with Section 40 of the Act, as shown in the table below:

 

COUNTY DURHAM AND DARLINGTON FIRE AND RESCUE AUTHORITY

 

A	B	C	D	E	F	G	H
£	£	£	£	£	£	£	£
73.13	85.31	97.50	109.69	134.07	158.44	182.82	219.38

 

(e)         It be noted that for 2022/23, the Durham Police, Crime and Victims’ Commissioner has recommended that the following amounts be in the precept issued to the County Council, in accordance with Section 40 of the Act, as shown in the following table:

 

DURHAM POLICE, CRIME AND VICTIMS’ COMMISSIONER

 

A	B	C	D	E	F	G	H
£	£	£	£	£	£	£	£
160.16	186.85	213.55	240.24	293.63	347.01	400.40	480.48

 

(f)           That the Council, in accordance with Sections 30 and 36 of the Local Government Finance Act 1992 (as amended) hereby sets the aggregate amounts shown in the tables below as the amounts of council tax for 2022/23 for each part of its area and for each of the categories of dwellings.

 

DURHAM COUNTY COUNCIL

 

A	B	C	D	E	F	G	H
£	£	£	£	£	£	£	£
1,027.75	1,199.05	1,370.34	1,541.63	1,884.21	2,226.80	2,569.38	3,083.26

 

DURHAM COUNTY COUNCIL – ADULT SOCIAL CARE

 

A	B	C	D	E	F	G	H
£	£	£	£	£	£	£	£
142.04	165.71	189.39	213.06	260.41	307.75	355.10	426.12

 

 

AGGREGATE OF COUNCIL TAX REQUIREMENTS

(excluding Parish, Town Council and Charter Trustees)

 

A	B	C	D	E	F	G	H
£	£	£	£	£	£	£	£
1,403.08	1,636.92	1,870.78	2,104.62	2,572.32	3,040.00	3,507.70	4,209.24

 

(g)         The Council has determined that its relevant basic amount of council tax for 2022/23 is not excessive in accordance with principles approved under Section 52ZB Local Government Finance Act 1992 (as amended) and that the increase in council tax is not excessive in accordance with the principles approved under Section 52ZC Local Government Finance Act 1992 (as amended).

 

(h)         As a billing authority the Council has not been notified by County Durham and Darlington Fire and Rescue Authority and Durham Police, Crime and Victims’ Commissioner, as major precepting authorities, that their relevant basic amount of council tax for 2022/23 is excessive and that the billing authority is not required to hold a referendum in accordance with Section 52ZK Local Government Finance Act 1992 (as amended).

 

(i)           The Council set a 0% discount for Second and Empty Furnished Homes, in accordance with Section 11A (3) of the Act.

 

(j)           The Council set a 0% discount for dwellings defined in classes C or D, in accordance with Section 11A (4A) of the Act.

 

(k)          The Council set premium charges for long term empty homes, in accordance with Section 11B (1b) of the Act: 100% premium for properties which have been empty between two and five years and 200% premium for properties empty for longer than five years.

 

(l)           The Chief Executive be instructed to publish a notice in accordance with Section 38 (2) of the Act, relating to the amounts of council tax set.

 

(m)        The Chief Executive be instructed to publish a notice in accordance with Section 11A (6) and 11B (6) of the Act, relating to the discount set.