Agenda item

LIST OF BACKGROUND PAPERS AS REQUIRED BY LAW

(Papers relied on to write the report, which do not contain exempt information and which are not published elsewhere)

Contact Officer, telephone number and email:

Lucy Hume, lucy.hume@north-norfolk.gov.uk, 01263 516246

Cllr E Seward – Portfolio holder for Finance and Assets introduced the report and informed Members that the budget remained a work in progress whilst financial settlements figures remained outstanding. He added that whilst some figures could be subject to change, at present there was a balanced budget for the 2021/22 financial year. Cllr E Seward referred to future years in appendix A, and stated that rather than an increase in the net cost of services, forecasted deficits were predominantly caused by the ongoing uncertainty of financial support from Central Government, which had been deferred as a result of Covid-19.

Questions and Discussion

   i.          The Chairman sought clarification that the MTFS had been combined with the budget report, and noted that there was only limited references to the MTFS. The CTA replied that the MTFS would be presented in full alongside the main budget report in February. She added that it would focus on future year forecasts and the risks to those figures, as well as the proposals for addressing future deficits.

  ii.          Cllr C Cushing noted that Covid-19 was mentioned as a risk within the report, but suggested that there was no clear plan identified to continue to address the financial impact of the pandemic going forward. He added that there had been a significant depletion of reserves from £18.8m to £14.5m, and that there were no detailed savings or invest to save proposals outlined within the report. Cllr C Cushing stated that whilst in previous years substantial deficits had been resolved once financial settlement figures were confirmed, he had concerns that relying on this could lead to complacency. Cllr E Seward replied that he would not be complacent with the Council’s finances, and was aware of the risks facing the Council in the future. He added that once the budget was complete, work would begin to review the costs of all departments, making an early start on the followings year’s budget to identify savings. Cllr E Seward stated that once there was more certainty on the level of Central Government support available in the comings years, then it would be easier to plan the level of savings required. In response to comments on the depletion of reserves, Cllr E Seward stated that he was comfortable with this spending, and suggested that the Council should not be holding reserves indefinitely, as they were earmarked for specific expenditure. He added that the Council was in a comfortable position with its reserves, and as a result, was happy to use them to improve services for residents.

iii.          The CTA referred to comments regarding the ongoing financial risks of Covid and stated that whilst Government support had been forthcoming, it was not yet expected to continue beyond the first quarter of the 2021/22. On savings proposals, the CTA stated that the budget was already balanced without having to implement savings, though a number of proposals had been put forward that the Finance Team were evaluating. She added that as soon as this work was complete, the proposals would be shared for discussion. On reserves, it was noted that the spending related to earmarked reserves, which was expected for the completion of projects. The CTA stated that the general reserve remained above the minimum recommend figure, which was a good sign for the Council. Future deficits were discussed, and the CTA noted that significant efforts had been made to outline these figures, which gave the Council time to mitigate the risks.

iv.          The Chairman noted that though the budget presented was a draft, the ongoing financial implications of Covid meant that the Council had to identify savings proposals as a contingency, especially if Government support was expected to end in the 2021/22 financial year. Cllr E Seward replied that it could be expected that many Council’s would apply pressure to Central Government if financial support was still required in the second quarter of 2021/22. He added that work would also start early to identify savings in the next financial year, which could be implemented to help mitigate and deficit or impacts. The Chairman suggested that it would be helpful to have contingencies in place and ready if this situation were to occur.

 v.          Cllr N Housden referred to national commentary that suggested Council Tax increases should be deferred until next year, and asked to what extent requests for Council Tax support increased during the pandemic. He then referred to potential growth in unemployment following the end of the furlough scheme, and suggested that when combined with Council Tax increases, this could create a further drain on Council resources that would require savings proposals to address. On Council Tax increases Cllr E Seward replied that in previous years Central Government had provided a grant to Councils to avoid increases, and suggested that if something similar was offered, then the Council would take it. He added that the District’s rise in Council Tax of 1.99% was less than both the Police Authority and County Council, and noted that Central Government had allowed Council’s to spread recovery costs for the loss of collection rates over several years. The CTA stated that Council Tax support had risen significantly over the past year, and this was expected to increase further, along with the potential for increased bad debts once the furlough scheme came to an end. She added that changes to the tax base had been taken into consideration, with reductions made to account for the losses caused by increased Council Tax support and missed payments. It was noted that the Council was also part of a national benchmarking scheme to monitor these impacts. The CTA stated that Central Government expected Council’s to implement tax rises to increase core spending powers, though the alternative option of using reserves remained available.

vi.          Cllr A Brown referred to food waste collection services, and asked whether it would be possible, given the requirement to increase the Council’s recycling figures, for a report to be prepared to consider potential implementation of this service. The CE noted that food waste collection had been included as a costed option within the original waste contract, and added that in response to the Government’s new waste strategy, significant representations had been made from rural authorities on the costs of food waste collection in relation to the benefits. Cllr A Brown noted that in other districts collections had been trialed in areas of higher population density first, which could help to determine viability.

vii.          Cllr L Withington said she was encouraged to see that a balanced budget had been presented under the current circumstances, and added that she was confident that savings would be made. She stated that it was important that services were retained for local residents, and raised concerns that a significant reduction in core spending power for local authorities would have to be covered by tax rises. Cllr L Withington encouraged Members to lobby for greater support from Central Government to avoid these increases. She added that it was encouraging to see earmarked reserves being spent to deliver important projects.

viii.          Cllr G Mancini-Boyle referred to food waste collection and noted that Broadland District Council had placed service over cost to implement their own scheme.

ix.          Cllr W Fredericks asked how much income NNDC received from Council Tax, to which Cllr E Seward replied that the Council received 10p per pound, with approximately 75% going to NCC. It was noted that a number of Town and Parish Councils had also recently requested significant increases to their precepts.

 x.          The Chairman sought clarification of the extent to which the budget would be balanced by the use of reserves. Cllr E Seward replied that there was no money being taken from the general reserve, and that any reserves being used were for earmarked programmes such as the infrastructure fund or the sustainable communities fund. He added that there was no intention to use reserves to balance the budget, unless absolutely necessary. The Chairman noted an approximate £96k reduction in reserves and asked for clarification on how this would be spent. The CTA replied that the £86k was to fund a specific project and was not being used to plug a budget funding gap.

xi.          Cllr C Cushing proposed that it would be helpful if more detail and information could be provided on the impact of Covid-19 on the budget and reserves, as well as identifying savings proposals and investment opportunities for future years.

xii.          Cllr W Fredericks proposed that the Council continue to lobby Central Government for greater certainty of future funding arrangements. Cllr C Cushing reminded Members that the District had two MPs that could provide greater lobbying power.

xiii.          Cllr N Housden suggested that the Committee should recommend that savings plans are clearly identified. Cllr L Withington added that it could be helpful to add a timescale to this request, with plans to be included in the more detailed MTFS expected in February.

xiv.          The recommendations were proposed by Cllr C Cushing and seconded by Cllr W Fredericks.

RESOLVED

1.     To recommend to Cabinet that the Council continues to lobby for greater certainty on future levels of funding support from Central Government.

2.     To recommend to Cabinet that efforts are continued to identify potential savings options within the 2021/22 budget and the Medium Term Financial Strategy.

ACTIONS

1.     That food waste collection be added for discussion under item 8 on the next meeting’s agenda.