Agenda item

Executive Summary	This report presents for approval the budget for 2024/25 and to make statutory calculations in accordance with the Local Government Finance Act 1992 to set the Council Tax for 2024/25. The report also includes the Chief Finance Officer’s report on the robustness of the estimates and adequacy of reserves.
Options considered	It is a statutory requirement to set the budget each year, whilst there are options around the content of the budget presented for approval, the budget now recommended reflects the recommendations made by Cabinet at its meeting on 5 February 2024.
Consultation(s)	The proposed budget has been presented to the Overview and Scrutiny Committee for pre-scrutiny at its meeting on 24 January and again at its meeting for post-scrutiny at its meeting on 14 February. A business engagement event took place on 30 January and the businesses that attended were consulted about the proposed budget for 2024/25. Public consultation has also taken place on the Council’s website and on all the Council’s other social media platforms.
Recommendations	That having considered the Chief Finance Officer’s report on the robustness of the estimates and the adequacy of the proposed financial reserves, the following be approved:   1)            The 2024/25 revenue budget as outlined at Appendix A;   2)            The statement of identified savings as detailed in Appendix B,   3)            The statement of and movement in the reserves as detailed at Appendix C;   4)            The updated Capital Programme and financing for 2023/24 to 2027/28 as shown in Appendix D;   5)            The new capital bids recommended for approval as detailed at Appendix E;   6)            That Members note the current financial projections for the period 2025/26 to 2027/28 that form the Medium Term Financial Strategy and as detailed in paragraphs 3.10 to 3.14 and Appendix A.   7)            That Members note and consider the results of the Budget Consultation exercise which are contained in the paper circulated to Members and which will be included as an Appendix to the meeting’s minutes when published.   8)            The Policy Framework for the Earmarked Reserves and the Optimum Level of the General Fund Reserve of £2.1m for 2024/25 to 2026/27 as detailed in paragraphs 3.35 to 3.72 and in Appendix G;   9)            The Local Council Tax Support Scheme (LCTS) for 2024/25 as set out in paragraphs 3.16 to 3.23;   10)         That Members undertake the Council Tax and statutory calculations set out at Appendix F, and set the Council Tax for 2024/25;   11)         The demand on the Collection Fund for 2024/25 is as follows: a.    £6,995,942 for District purposes b.    £3,129,194 for Parish/Town Precepts;   This reflects the recommended Council Tax increase of £4.95 for the district element for a Band D equivalent property.   To approve the 2024/25 budget for revenue and capital and to make the statutory calculations in respect of the 2024/25 Council Tax.
Reasons for recommendations	It is a statutory requirement to set the budget each year. To enable the Council to set a balanced budget.
Background papers	Budget reports and briefings, precepts (NCC, Police and Parishes) Draft Revenue Budget Report for 2024/25 presented to Cabinet on 5 February 2024

 

Wards affected	All
Cabinet member(s)	All
Contact Officer	Tina Stankley Director of Resources and s151 Officer tina.stankley@north-norfolk.gov.uk

 

Links to key documents:
Corporate Plan:	Strong Responsible & Accountable Council.
Medium Term Financial Strategy (MTFS)	The setting of a balanced budget for 2024/25 provides the base position for reviewing the following years of the Medium-Term Finance Plan.
Council Policies & Strategies	Budget Setting & Medium-Term Finance Strategy

 

 

The Chairman outlined the process to Members, explaining that there would be a number of recorded votes. She then invited the Chief Financial Officer to explain the robustness of the estimates and the adequacy of the reserves, as required to do by statute.

 

The Chief Financial Officer (Director for Resources and Section 151 Officer) began by referring members to pages 147, section 3 of the agenda, which provided details of the process which had been carried out in preparing the Budget for presentation to Full Council. She explained that in formulating her opinion, she had considered the 2022/2023 Outturn position, the current forecast outturn position for 2023/2024 and the Medium-Term Financial Strategy (MTFS) and funding available and the budgets required for future years. She had also looked at the cashflow which had been monitored throughout the year. The details in Appendix G listed all the considerations and the assessments taken into account to maintain the optimum level of reserves. In conclusion, she said that she was satisfied that that the proposed Budget for 2024/2025 was robust and that the level of reserves were adequate.

 

The Chairman then invited the Portfolio Holder for Finance & Assets, Cllr L Shires to introduce the Budget for 2024/2025. Cllr Shires began by saying that the main priority when setting the budget had been to maintain key services to residents and she was pleased to present a balanced budget for working families. She then drew members’ attention to the investments that the Council had made for its residents, including £12.7m in the Reef Leisure Centre, £2m on public conveniences, £4.9m on new refuse collection vehicles, £2.5m on providing temporary accommodation and £560k on a solar car port. Cllr Shires said that there had been many external factors which had a significant impact on the Council’s finances in the last year such as the ongoing legacy of the Covid pandemic, labour shortages, rising inflation and a surge in demand for council services which had caused a £600K shortfall in the temporary accommodation budget.

 

Cllr Shires spoke about the new Corporate Plan and said that all members had been invited to attend workshops to ensure that there was cross-party engagement and input. She then thanked the Overview & Scrutiny Committee for their work in shaping the budget. There had been a £1.8m gap when the budget was first presented to the committee in December 2023. The delay in the progress of the Levelling Up Bill through Parliament had added to this as it meant that the 100% premium on second homes council tax could not be introduced until April 2025, instead of the expected date of April 2024, effectively increasing the deficit by £550k for the forthcoming year.

Cllr Shires thanked officers for their support in rising to the challenges presented to them in achieving considerable savings to ensure that the Council could present a balanced budget. Many of the income generating proposals that had been proposed were now being brought forward, together with savings suggestions which together totalled £975k. She said that that there was £250k of savings yet to be identified but that the S151 Officer was confident that these could be achieved.

 

Further funding had been announced by the Government, following significant lobbying by local authorities. This meant that the amount that would need to be taken from reserves was lower than initially anticipated. The Local Government Finance Settlement (LGFS) indicated that District Councils were expected to increase council tax by the highest amount. The budget included an increase of £4.95 for a Band D property. She explained that for each £1 collected, only 8 pence went to the district. Cllr Shires said that further capital investment of over £3m was being committed. This included £1.75m to ‘our greener future’, with projects at Holt Country Park and Victory Leisure centre benefitting from considerable investment. She outlined other key projects that would benefit from significant funding and reiterated the Administration’s commitment to supporting local communities. She then highlighted the recent funding awarded by the Levelling Up programme which was in addition to the agreed capital programme and said it would bring much needed leisure facilities to Fakenham.

 

In conclusion, Cllr Shires said that the Council faced considerable financial uncertainty in the coming years and the base budget for 2024/2025 and the following year showed a considerable deficit. Action was already underway through a series of service reviews in the coming financial year to achieve further savings. She assured everyone that these would be navigated very carefully. She thanked the S151 Officer and the Finance Team for their hard work and support.

 

The Budget 2024/2025 was proposed by Cllr L Shires. Cllr T Adams seconded the proposal.

 

The Chairman then invited the Leader of the main Opposition Group, Cllr C Cushing to respond. He began by thanking the S151 Officer and her team for their hard work in preparing the budget and for meeting with his Group to answer questions. He then congratulated Cllr Shires on her budget presentation.

 

Cllr Cushing said that the Administration had been complacent about the Council’s financial situation. It had been forecast in 2020 that there would be a deficit and when he had asked at the time about plans to address the shortfall and was told not to worry as there had always been predicted shortfalls and they had not materialised. Cllr Cushing had suggested then and at every budget setting meeting since that a wise administration would prepare for the best and plan for the worst. He added that what was particularly striking about this Budget was that there was still no strategy to address future deficits.

 

Cllr Cushing said that everyone agreed that a long-term solution was needed for local government funding to provide certainty in the years ahead. It was widely acknowledged that demands on council resources had increased considerably due to the global pandemic and international financial pressures and it was likely that this squeeze would continue for the foreseeable future. He accepted that the Council had to deal with the challenges presented by demands for temporary accommodation but said that first tier authorities had huge additional pressures to respond to.

 

Cllr Cushing then referred to the £250k of savings that were yet to be confirmed. He said that this was the first time the Council had been asked to approve unquantifiable savings and this caused considerable concern as all savings proposals should be fully costed and considered by members.

 

Referring to council tax, he said that his group would once again oppose any increase. He accepted it was a necessity for the County Council to seek an increase but did not believe that taxpayers should be asked to pay any more at district level.

Cllr Cushing then spoke about the Medium Term Financial Strategy (MTFS) and said that a good one would aim to pull together in one place all of the factors affecting the financial position of the council in the medium term. It should be a living document that goes into some depth, however, it just covered one page within the Budget report. He said that it was not the responsibility of the Overview & Scrutiny Committee to set out everything that should be included in the MTFS, the Cabinet should be able to prepare a comprehensive document, as had been done in the past. He went onto say that a deficit of £1.8m was forecast for 2025/26 and £3m for 2026/2027. Such estimates should be faced with dread and he was astonished that financial sustainability was not a core theme within the Corporate Plan and it was an abdication of responsibility.

 

Cllr Cushing said that the Opposition had put forward several suggestions in the past to improve the budget, including working with the other districts across the County on shared ventures. To date, only the waste contract operated on this basis. He referred to the savings made by Broadland and South Norfolk District Councils when they joined forces. Cllr Cushing said that sharing of IT support and services could bring huge benefits and he believed there must be many more examples.

 

Moving onto the capital programme, he said that there were now 84 items listed and this was too large. Some had been carried over year after year with no real challenge. He said that the new addition of Holt Country Park stood out, with almost £0.5m due to be spent and he questioned how this was justifiable. He said that the Council should be prioritising mandatory services not those that were discretionary and ‘nice to have’. He added that once again, there was a heavy focus on Cromer and Sheringham and said that the approach should be more equitable, with Stalham in particular, needing more investment as did rural communities across the district.

 

In conclusion, Cllr Cushing said that this was an administration that had become complacent about budget setting and the poorly developed MTFS showed that there were no plans to address the huge challenges ahead.

 

The Chairman invited Cllr Fitch-Tillett, leader of the Independent Group to respond to the Budget. She said that she had been ill in recent weeks and had not had the opportunity to study it in detail and therefore had no comment to make at this time but that she was impressed by Cllr Cushing’s response. 

 

The Chairman then invited the Portfolio Holder for Finance, Cllr Shires to respond to the Opposition Leaders’ comments. Cllr Shires began by saying that when the Budget for 2018 – 2019 had been presented there had also been forecast deficits and that was during a Conservative Administration. Regarding the MTFS, she said it was not clear what members wanted. She had always offered to work with the Overview & Scrutiny Committee and welcomed their input. Cllr Shires said that just 6 years ago, opposition members had been in exactly the same position, facing a deficit and having to consider an increase in council tax. The Government strongly encouraged local taxation and it was one of the limited options available to raise income when there was so little support from central government.

 

The Chairman invited Cllr Cushing to reply. He said that the last Conservative administration had increased the Council’s reserves considerably as they had the foresight to see the financial challenges ahead and the current administration was now benefitting from this. Referring to the Overview and Scrutiny Committee, he said that 95% of the analysis and work undertaken was done by the Opposition members, adding that Cabinet should have ideas about what should be included in an MTFS.

Cllr Fitch-Tillett said that she did not wish to make a further response.

 

The Chairman advised members that an amendment to the Budget had been submitted. The S151 Officer confirmed that she had reviewed it and it was valid. The Chairman invited Cllr Dr V Holliday, proposer of the amendment to introduce it.

 

Amendment - Sustainable Communities Fund

 

This amendment proposes that the Sustainable Communities Fund is retained with an annual funding of £130,000. The funding for this will need to be found either from future revenue or the Reserves.

 

The Sustainable Communities Fund, which was previously known as the Big Society Fund, has existed for several years. The aim of this fund is to help build strong and sustainable communities and ensure the long term future and wellbeing of our communities here in North Norfolk.

 

Sustainable Communities is defined as places in which people want to live and work, now and in the future. They meet the diverse needs of existing and future residents, are sensitive to their environment, and contribute to a good and sustainable quality of life.

 

The fund helps communities to develop new and innovative projects which will improve their environment as well as their health and social wellbeing. The fund assists communities in meeting their needs, with funding available for both capital and revenue projects that meet the fund’s criteria.

The grants are administered by a Grants Panel made up of seven elected members, that meet four times a year to award grants of between £1,000 and £15,000.

The fund particularly benefits smaller communities which find it hard to raise funds for projects. Small parishes make a large proportion of our district, and unlike the market towns, tend not to benefit from capital spending projects.

 

It is understood that there is significant pressure on council finances this year. However, this is a relatively small sum in the context of the whole budget, yet it delivers a disproportionately large benefit to our residents. Over the last few years, dozens of payments have been made which have totalled hundreds of thousands of pounds which have done an enormous amount of good for many people. In addition, it is harder to resurrect the fund once it is closed’.

 

Cllr Holliday said that in the previous financial year, grants totalling £115k had been awarded to a diverse range of organisations. She urged members to support the amendment.

 

Cllr T FitzPatrick seconded the amendment and reserved his right to speak.

 

The Chairman invited the Portfolio Holder for Finance, Cllr Shires to respond. She said that she had sympathy with Cllr FitzPatrick’s desire to keep the Fund going and she really would have liked to continue the Fund and she thanked Cllr Holliday for highlighting the worthiness of the grants that had been awarded. Unfortunately, as the amendment was not fully funded and a specific reserve had not been identified, she could not support it, adding that she would very much like to see it reinstated in the future.

 

Cllr S Penfold, Chairman of the North Norfolk Sustainable Communities Fund Grants Panel. He thanked Cllr Holliday for the amendment which outlined the great work of the Fund. He thanked all members who had served on the Panel and its predecessor, the Big Society Fund. He thanked the officers who had supported the Fund from the beginning for their hard work. Cllr Penfold said that the problem with the amendment was that it was not fully funded and therefore it was difficult to support. He added that the Big Society Fund had initially been funded by second homes council tax money that was returned to NNDC by the County Council (NCC). This was later withdrawn by NCC and he suggested that one way forward would be for the Group Leaders to jointly sign a letter to Norfolk County Council requesting the retention of this money.

 

Cllr J Punchard said that he remembered the establishment of the original Big Society Fund (BSF) and that he had been concerned so see the removal of the Local Area Partnership (LAPs). However, he was pleased to say that he was wrong and that the Administration at the time had delivered on its promise to residents to provide funding directly to local projects via the BSF. He was therefore concerned to see the loss of the NNSCF Grants Fund.

 

Cllr P Heinrich said that funding for the NNSCF had been taken from the UK Shared Prosperity Fund in the last year. Regrettably there were other areas that had to be covered by the UKSPF to ensure the funding criteria were met. However, the Rural Prosperity Fund (RPF) provided specific capital funding for community group infrastructure projects and heritage groups. The range was between £10 – 15k and it was administered via the Local Enterprise Partnership (LEP). In addition, there was funding for communities affected by cable laying for the wind farms which was provided by the wind farm operators such as Vattenfall. He concluded by saying that there was funding available for small communities but agreed that he was supportive of the NNSCF being brought back at a future date.

 

Cllr N Dixon said that the NNSCF helped to fill an equality gap. It was a modest but highly effective scheme and if there was any way it could be continued then the Council should do so.

 

Cllr L Withington said that no one wanted to see the NNSCF go. She reiterated that it had been funded by second homes council tax initially and that there had been a push for a sliding scale of reduction. She added that the UKSPF provided larger sums of funding and said that she too was hopeful of the NNSCF returning in the future.

 

Cllr E Vardy said that it was time the Administration had a vision and made a commitment to the smaller communities in the district.

 

Cllr J Toye spoke said that the NNSCF had already been maintained for a considerable number of years, despite the drop in funding from NCC. He said that he agreed that the amendment was uncosted and therefore he could not support it.

 

Cllr T Adams said that as soon as a source for the funding of the NNSCF could be identified it would be reintroduced. In the meantime, the Council would promote other sources of grant funding available. He agreed with Cllr Penfold that the Council needed to retain a share of the second homes council tax and he was willing to work cross-party to achieve this.

 

Cllr C Cushing said that he had been trying to obtain information on how UKSPF and the RPF funds were allocated but it was not clear what the criteria were. In addition, the NNSCF awarded small sums of money which achieved a large amount of good. The national funds focussed on awarding larger amounts.

 

Cllr T FitzPatrick seconded the amendment. He said that the S151 Officer had advised that there were adequate reserves in place to continue to fund the NNSCF. Like Cllr Punchard, when former member, Trevor Ivory, proposed establishing the Big Society Fund, he had been sceptical and had been proven wrong. He reiterated Cllr Cushing’s comment that there was money available elsewhere but it was aimed at larger projects not smaller, community based schemes. The NNSCF gave benefit across the whole of the district, it was not just about the money, it also provided community cohesion.

 

Cllr FitzPatrick went onto say that the share of second homes council tax funding from NCC had been £1m in 2013/14 confirmed until 2017/18. Unfortunately, pressure from parish councils to have a share of this money resulted in it being taken away from the Districts. He urged all members who represented smaller communities across the district to support the amendment.

 

Cllr L Shires said that the cessation of funding was temporary and it was hoped that it could get up and running again at some point. She reiterated that she could not support the amendment as it had no clear indication of where the funding would come from.

 

A recorded vote was taken for the amendment. Fourteen members voted in favour and twenty against. The amendment was therefore not supported.

 

The Chairman then opened the debate on the Budget 2024/2025:

 

Cllr J Toye said that this was a tough budget, however, no alternatives had been put forward and members now needed to work collaboratively to achieve the best outcomes for residents.

 

Cllr M Taylor said that he wanted to focus on Stalham. Yet again it had been overlooked and residents were tired of it not being valued or invested in. In the capital programme, Stalham was allocated £20k which indicated the disregard in which it was held. He said that recently, following closure of the high street for resurfacing works, he had asked the Administration to provide free parking during the duration of the closure, which had been refused. He said that if they weren’t willing to pay just £700 to do this, then they clearly didn’t care.

 

Cllr N Dixon said that the budget for 2024/2025 was a product of long-term complacency which was based on a past reliance of central government funding to close any forecast gaps. He commented on the huge list of capital bids, specifically the significant amount allocated to Holt Country Park and said that there was still much to be defined and refined.

 

Cllr K Bayes said that he fully endorsed Cllr Taylor’s earlier comments regarding Stalham being overlooked.

 

Cllr T FitzPatrick said that the proposal to help small rural communities had been knocked out and the capital bids, including the one for Holt Country Park, were all for larger communities. It wasn’t good enough and should be reviewed.

 

Cllr L Withington said that the level of financial commitment to Holt Country Park was a result of the lack of investment made by previous administrations. She added that it was important to provide safe, clean facilities for staff to use.

 

Cllr E Vardy said that as the Local Member for Holt, he was a frequent visitor to the country park and regularly spoke to residents. He said that none of them had ever mentioned the need to upgrade the facilities there and he was not supportive of spending such a huge amount of money.

 

The Chairman, Cllr S Butikofer, said that in 2019 an equal share of funding for the seven market towns was delivered via the Market Towns Initiative (MTI) to be used as seed-funding for larger projects, however, not all of the towns used the money to its full potential. She then said that there had been a £2.4m deficit when there was a change of Administration in 2019, so it was not a new situation to deal with. In conclusion, she added that sharing services with neighbouring local authorities had been explored before and it had not gone well.

 

Cllr Cushing said that the Chairman should remain impartial throughout the debate and not make political comments.

 

Before moving to the vote, the Chairman invited the Chairman of the Overview & Scrutiny Committee to speak about the committee’s assessment of the Budget. Cllr Dixon began by explaining that the Budget had come to the committee for pre-scrutiny on 24^th January. At that time the committee made reference to the need for a public consultation on the proposals, the importance of contingency funding and the need to start the budget planning process much earlier in the year.

 

Then, on 14^th February, the Budget was presented to the committee again. This time there was reference to £250k of savings that were yet to be agreed and the meeting had to go into closed session to consider them. The following recommendations were made:

(A) the Overview and Scrutiny Committee considered the list of proposed savings, the use of reserves and the setting of a savings target and made no additional recommendations to full Council on the combination to include in the Budget for 2024/25 for full Council to consider when it meets on 21 February 2024 to set a balanced budget for 2024/25, subject to noting that due to an additional £305,000 being received from the Government in its final Local Government Finance Settlement for 2024/25, the additional use of reserves to balance the budget for 2024/25 would now be £111,000 and not £416,000,

(B) the Overview and Scrutiny Committee reviewed the proposed Capital Programme and new capital bids and made no changes to the list set out in the report

 

The Chairman then asked the seconder of the Budget, Cllr T Adams to speak.

 

Cllr Adams began by saying that he was keen to develop projects in Stalham but the Council could not be expected to cover the cost of the impact of NCC works. He said that he did not accept the comments regarding Holt Country Park. The diesel generator was reaching the end of its life and an energy efficient replacement would help towards achieving Net Zero. He went onto say that there had been no amendments to the capital programme which did not reflect the concerns being raised about it tonight. He said that the proposed Budget had been to Overview & Scrutiny Committee three times now, with no major recommendations coming forward.

 

Cllr Adams said that the £600k of additional temporary accommodation costs, together with rising inflation had presented a challenge in financial terms but the Council remained free from external debts and this was to be applauded. Regarding reserves, he said that the Government had been clear that councils should be drawing on them where that was feasible. In conclusion, Cllr Adams said that the allegation of complacency just wasn’t true. If that was the case then every council across the country was also complacent. So many councils were spending huge amounts of money on dealing with homelessness. Consequently nearly every council was raising council tax and he urged the Government to properly fund local government and recognise how relevant it is to the provision of local services.

 

The Chairman then asked Cllr Shires to conclude the debate. She began by thanking members for their contributions and said that she was pleased to propose a balanced budget that had the ultimate goal of providing high quality services whilst maintaining financial responsibility. The Council continued to face stark external challenges but she was confident in its ability to move forwards, whilst remaining fully committed to supporting residents.

 

The Chairman advised members that there would be a recorded vote. Cllr Cushing requested that the votes were split as follows: recommendations 1,2,3,6,8 and 9 en bloc and then recommendations 4 and 7 together and recommendation 5 separately.

 

The outcome of the votes was as follows:

-       Recommendations 1,2,3,6 ,8 and 9 - 32 members voted in favour and two against. The recommendations were therefore carried.

-       Recommendations 4 and 7 - 21 members voted in favour, 2 against and 11 abstained. The recommendations were therefore carried.

-       Recommendation 5 – 21 members voted in favour and 13 against. The recommendation was therefore carried.

 

It was proposed by Cllr L Shires, seconded by Cllr T Adams and

 

RESOLVED

 

That having considered the Chief Finance Officer’s report on the robustness of the estimates and the adequacy of the proposed financial reserves, the following be approved:

 

1)            The 2024/25 revenue budget as outlined at Appendix A;

 

2)            The statement of identified savings as detailed in Appendix B,

 

3)            The statement of and movement in the reserves as detailed at Appendix C;

 

4)            The updated Capital Programme and financing for 2023/24 to 2027/28 as shown in Appendix D;

 

5)            The new capital bids recommended for approval as detailed at Appendix E;

 

6)            That Members note the current financial projections for the period 2025/26 to 2027/28 that form the Medium Term Financial Strategy and as detailed in paragraphs 3.10 to 3.14 and Appendix A.

 

7)            That Members note and consider the results of the Budget Consultation exercise which are contained in the paper circulated to Members and which will be included as an Appendix to the meeting’s minutes when published.

 

8)            The Policy Framework for the Earmarked Reserves and the Optimum Level of the General Fund Reserve of £2.1m for 2024/25 to 2026/27 as detailed in paragraphs 3.35 to 3.72 and in Appendix G;

 

9)            The Local Council Tax Support Scheme (LCTS) for 2024/25 as set out in paragraphs 3.16 to 3.23;

 

The Chairman invited the Section 151 Officer to outline the different elements of the Council tax recommendations. She explained that Appendix F to the report set out the statutory calculations for the council tax bases.

 

The Chairman advised members that, at the request of Cllr Cushing, two recorded votes would be taken – for recommendations 10 and 11b en bloc and 11a separately.

 

A recorded vote was taken for recommendation 10 and 11b, with members unanimously voting in favour.

 

A recorded vote was then taken on recommendation 11a, with 21 members voting in favour and 13 against. The recommendation was therefore supported.

 

It was proposed by Cllr L Shires, seconded by Cllr T Adams and

 

RESOLVED

 

10)         That Members undertake the Council Tax and statutory calculations set out at Appendix F, and set the Council Tax for 2024/25;

 

11)         The demand on the Collection Fund for 2024/25 is as follows:

a.    £6,995,942 for District purposes

b.    £3,129,194 for Parish/Town Precepts;