Agenda item

Revenue & Capital Budget 2020/21 and Medium Term Financial Strategy to 2023-24

To consider the recommendations of the Finance and Partnerships Committee meeting on 13 February 2020 as set out in Appendix A attached (with reference to the Budget Pack circulated as a separate document to all Members on 23 January 2020).

Minutes:

To enable the Council to approve the budget and set the Council Tax for 2020/21, the Council considered a report (at Appendix A of the agenda), in association with the ‘Budget Report 2020/21 to 2023/24’ pack which had been published and circulated separately to Members on 22 January. 

The Budget Report pack included detailed information in the following Annexes:

Annex 1 - 2020/21 Budget risks summary

Annex 2 - Reconciliation between original budget 2019/20 and proposed budget 2020/21

Annex 3 - Formal Council Tax Calculation and Resolution 

Annex 4 - On-Street Parking Account, Bus Lane Enforcement and Moving Traffic Contraventions Accounts

Annex 5 - Budget Growth 2020/21 to 2023/24

Annex 6 - Budget Reductions (Savings) 2020/21 to 2023/24

Annex 7 - Summary of budget by Service / Function

Annex 8 - Summary of budget by expenditure type

Annex 9 - Flexible use of capital receipts strategy

Annex 10 - Housing Revenue Account Budget for 2020/21

Annex 11 - Capital Strategy 2020/24

Annex 12 - Treasury Management Strategy Statement and Annual Investment Strategy 2020/21 - including four enclosures (Enclosure 1 - Statutory Prudential & Statutory Treasury Management Indicators; Enclosure 2 - Minimum Revenue Provision Policy Statement; Enclosure 3 – Maturity Debt; and Enclosure 4 – Schedule of Approved Instruments) 

Annex 13 - Pay Policy Statement 2020/21

Annex 14 – Schools Budget 2020/21 including three enclosures (Enclosure 1 -  Dedicated Schools Grant Block allocations; Enclosure 2 - Schools Block Local Formula Rates; and Enclosure 3 - School level delegated budgets 2020/21)

 

Key features of the 2020/21 Budget proposals were:

·           £6.598m growth and investment in services to meet key priorities and demand pressures

·           identification of £7.185mof revenue savings

·           an average council tax at band D of £1,613.08, a 1.99% increase in the Council Tax set by Kingston Council and a 2% increase in the Adult Social Care precept.

·           an increased general fund reserve of £19.633mfor 2020/21, an increase of £3.5m on this year’s figure of £16.133m to ensure prudent cover for managed risks

·           a Capital Programme to provide infrastructure investment in Kingston. The general fund capital programme over four years from 2020/21 will be £135.7m.

·           a Budget designed to support the Council in meeting the significant challenges it faces in ensuring that services for residents and some of our most vulnerable communities are protected against a backdrop of increasing demand in terms of volume and complexity and decreasing resources available to fund those services.

The Council noted that the structural overspend and shortfall of funding within the Dedicated Schools Grant (DSG) for children with special educational needs or disabilities gives rise to its most significant financial challenge. This challenge is not unique to Kingston, but the scale of the deficit combined with the low level of reserves held locally, requires the Council to be tackling it with a greater degree of rigour and speed than many others. The cumulative deficit on Kingston’s DSG reserve is estimated to be over £20million by 31 March 2020 which places a considerable strain on the Council’s balance sheet. There is a clear national intention that the schools budget is ring-fenced and the Council has therefore not ‘topped up’ the DSG from general fund resources. However, in order to be able to demonstrate financial sustainability the Council has to continue to make contributions to reserves from the general fund to mitigate the growing DSG deficit on its balance sheet.

In accordance with the Local Government Act (2003) Section 25, the report includes the report of the Council’s Chief Financial Officer (as defined by section 151 of Local Government Act 1972) on the “robustness” of the financial estimates which have been used in calculating the Council Tax for 2020/21 and the adequacy of the level of reserves.  The Section 151 Officer advised that analysis of potential scenarios shows that for 2020/21 the Council continues to face a significant and material level of budget risk but had concluded that the General Fund balance is considered sufficient and the level of reserves is adequate in line with Section 25 of the 2003 Act.

 

Service specific budget proposals had been discussed at the Children’s & Adults’ Care & Education Committee (30 January 2020), the Community and Engagement Committee (4 February 2020), the Strategic Housing and Planning Committee (6 February 2020), and the Environment and Sustainable Transport Committee (11 February 2020), with consideration of the overall draft budget by the Finance and Partnerships Committee (on 13 February 2020) which had made the appropriate recommendations to Council.  

The report to the Finance and Partnerships Committee was attached to the report to Council as Annex 1, which in turn had one Annex – Annex A – Formal Council Tax Calculation and Resolution (an updated version of Annex 3 in the Budget Pack).

Attached at Annex 2 to the report to Council was the late material which had been reported to the Finance and Partnerships Committee, including comments from service Committees; information about the online consultation with Business Ratepayers (undertaken between 24 January and 10 February 2020); an update on levies and on the final Local Government Finance Settlement; and (attached as Enclosure 1 to Annex 2) an amended version of the Minimum Revenue Provision Policy (which had originally been attached as  Enclosure 2 to Annex 12 of the Budget Pack).

The Executive Director, Corporate and Communities had been authorised by the Finance and Partnerships Committee to make any necessary changes to the GLA precept in the Council Tax Calculation (Annex A) (which might arise from the GLA Budget meeting on 24 February) prior to submission to Budget Council.  However, Late Material circulated prior to the Council meeting reported that, in the event, the GLA budget had been approved without amendment and therefore no amendments to the Council Tax calculation in Annex A were necessary.  The Late Material also confirmed that the final local government finance settlement for 2020/21 (as approved on 24 January 2020) had included no changes to the provisional figures which had been included in the budget report pack (circulated on 22 January).

 

(1) In order for the proposals to be presented in detail at the Council meeting by the Portfolio Holder for Finance, Councillor Alison Holt (in place of the Leader of the Council), in accordance with Procedure Rule 16 (1), it was resolved that Procedure Rule 10 (12) be suspended to allow the Portfolio Holder to speak for longer than 4 minutes.

 

(2) Councillor Alison Holt proposed and the Leader of the Council, Councillor Liz Green, seconded the recommendations to the Council set out in the report at Appendix A to the agenda.

 

(3) Councillor Sharron Falchikov-Sumner proposed an amendment (for which accompanying Section 151 comments from the Executive Director of Corporate and Communities and background information on the work based parking levy in Nottingham were circulated to the Council at the meeting), which was seconded by the Leader of the Opposition, Councillor Kevin Davis, as follows:

‘Council calls for:

1.     A freeze on councillor allowances in 2020/21

2.     A freeze on senior officer pay for 2020/20201– defined as officers holding the rank of assistant director and above.

3.     £28,000* is to be allocated for a feasibility study into the introduction of a Work Based Parking Levy (please refer to the accompanying presentation on Work Based Parking Levies) for the Royal Borough of Kingston, with the aim of reporting back by the end of the Calendar year with the overall aim of implementing the scheme from April 2021/2022.’ [*’It is my understanding that the Council states that the freeze of council allowances and senior officer pay would take 6 months to implement generating a saving of £6,500 in members’ allowances and £21,500 in senior officer pay.  The total saving would be £28,000.’]

 

(4) The Mayor adjourned the meeting from 8:30pm – 8:40pm to allow the Council to consider the amendment.  On the Council reconvening, the Mayor exercised discretion to waive the limit to allow more than 10 speakers in the ensuing discussion. 

 

(5) After debate, the amendment was put to the vote and was declared defeated –

 

Voting:

For: Councillor Sharron Falchikov-Sumner

Against: 35 Members of the Council (The Mayor, Councillor Margaret Thompson, and Councillors Zain Abbas, Sushila Abraham, Stephanie Archer, Kim Bailey,

Mark Beynon, Fiona Boult, Olivia Boult, Tim Cobbett, Emily Davey, Lorraine Dunstone, Mark Durrant, Simon Edwards, Sam Foulder-Hughes, Hilary Gander,

Dennis Goodship, Liz Green, Jaesung Ha, Lesley Heap, Alison Holt, Caroline Kerr, Andreas Kirsch, Katrina Lidbetter, Rebekah Moll, Dave Ryder-Mills, Anita Schaper, Malcolm Self, John Sweeney, Thay Thayalan, Jon Tolley, Olly Wehring, Diane White, Annette Wookey, Yogan Yoganathan and Sharon Young.)

Abstaining: 7 Members of the Council (Councillors Roy Arora, Rowena Bass,

David Cunningham, Kevin Davis, Ian George, Maria Netley and Nicola Sheppard)

 

(6) The recommendations set out in the report at Appendix A to the agenda were put to the meeting and, after further debate, it was:

 

Resolved that:

 

[References to ‘the report’* are to the report at Annex 1 to Appendix A in the Council agenda pack.  Other references are to the Budget Report Pack.]

 

1.            the budget proposals and Council Tax for 2020/21 as set out in the Budget Report Pack report and its annexes (with any updates) be approved;

2.            the relevant officers be authorised to take necessary action to deliver the agreed budget and service changes, including increasing relevant fees and charges in line with inflation;

3.            in accordance with the requirements of the Local Government Act 2003, the comments of the Executive Director, Corporate and Communities be noted in regard to the robustness of estimates and the level of reserves and balances (as set out in the section “Comments of the Director of Corporate and Commercial (S151 Officer) ” in paragraphs 24 to 32 of the Budget Report Pack);

4.            the amounts in the statutory Council Tax calculation (as set out in Annex A to the report*) (an amended version of Annex 3 in the Budget Pack) be calculated for the financial year 2020/21 as set out below, in accordance with sections 32 to 36 of the Local Government Act 1992;

5.            the Capital Strategy including the detailed capital programme for 2020/21 to 2023/24 (as set out in Annex 11 to the Budget Report pack) and the Treasury Strategy including the Annual Investment Strategy, prudential indicators (as set out in Annex 12 to the Budget Report pack) and the amended Minimum Revenue Provision (MRP) policy as set out in Enclosure 1 to Annex 2 of the report* be approved;

6.            the pay policy at Annex 13 to the Budget Report Pack be approved;

7.            the Schools Budget for 2020/21 be approved in line with paragraph 17 and Enclosure 1 of Annex 14 to the Budget Report pack;

8.            the proposals outlined for the Central School Services Block including the transfer of £16k to the High Needs Block (ref. paras 26-28 of Annex 14 to the Budget Report pack) be approved;

9.            the proposals outlined for the Early Years Block, including the transfer of £121k to the High Needs Block (ref paragraphs 29-24 of Annex 14 of the Budget Report pack) be approved;

10.         the proposals outlined for the High Needs Block (outlined in paragraphs 35-38 of Annex 14 of the Budget Report pack ) be approved; and

11.         the proposals outlined for the Schools Block (ref. paragraphs 20-25 of Annex 14 of the Budget Report pack) and the Schools Funding Formula outlined in Enclosure 2 of Annex 14 and the Schools Allocations in Enclosure 3 of Annex 14, including a Minimum Funding Guarantee of +0.5% per pupil (ref. paragraphs 22-23 of Annex 14 of the Budget Report pack) be approved; and

12.         the continued participation within the Business Rates Pool across London be approved.

 

 

£

a)

The aggregate of the amounts which the Council estimates for the items set out in Section 31A(2) of the Act, taking into account the total of special items included in e) below.

 

438,874,567.00

 

b)

The aggregate of the amounts which the Council estimates for the items set out in Section 31A(3) of the Act

335,873,282.00

 

c)

The amount by which the aggregate at a) above exceeds the aggregate at b) above, calculated by the Council in accordance with Section 31A(4) of the Act as its Council Tax requirement for the year. [Item R in the formula in Section 31A(4) of the Act].

 103,001,285.00

 

 

d)

The amount at c) above [Item R], all divided by Item T (1 above), calculated by the Council, in accordance with Section 31B(1) of the Act, as the basic amount of its Council Tax for the year

           1,613.08

 

e)

The expenses of meeting the levy issued to it by the Wimbledon and Putney Commons Conservators shall be the aggregate of all special items referred to in Section 34(1) of the Act.

 

         48,926.63

 

f)

The amount at d) above less the result given by dividing the amount at e) above by Item T (1 above), calculated by the Council, in accordance with Section 34(2) of the Act, as the basic amount of its Council Tax for the year for dwellings in those parts of its area to which no special items relate

           1,612.32

 

g)

The amount given by adding the amount at f) above to the result of the amount at e) above divided by the council tax base for the part of the Council’s area defined by the Wimbledon and Putney Commons Act 1871, calculated by the Council, as the basic council tax for dwellings in those areas to which the special items relate.

 

           1,642.73

 

h)

 

 

Valuation Bands

 

 

 

Part of the Council’s Area

 

Part of the Council’s Area to which special items as defined in (e) above relate

 

£

 

 

All other parts of the Council’s Area

 

 

£

A

1,095.15

1,074.88

B

1,277.68

1,254.03

C

1,460.20

1,433.17

D

1,642.73

1,612.32

E

2,007.78

1,970.61

F

2,372.83

2,328.91

G

2,737.88

2,687.20

H

3,285.46

 

3,224.64

being the amounts given by multiplying the amounts at f) and g) above by the number which, in the proportion set out in Section 5(1) of the Act is applicable to dwellings listed in a particular valuation band divided by the number which in that proportion is applicable to dwellings listed in valuation band D, calculated by the Council in accordance with Section 36(1) of the Act as the amounts to be taken into account for the year in respect of categories of dwellings listed in different valuation bands.

 

i)

That it be noted that for the year 2020/21, the Greater London Authority has stated the following amounts in precepts issued to the Council in accordance with Section 40 of the Act for each of the categories of dwellings shown below:

 

 

Valuation Bands

 

A

B

C

D

E

F

G

H

 

GLA Precept

£

221.38

258.28

295.17

332.07

405.86

479.66

553.45

664.14

 

j)

That having calculated the aggregate in each case of the amounts at (h) and (i) above, the Council in accordance with Section 30(2) of the Act hereby sets the following amounts of Council Tax for the year 2020/21 for each of the categories of dwelling shown below:

 

 

Part of the Council’s Area

 

 

 

Valuation Bands

 

 

A

B

C

D

E

F

G

H

 

 

Part of the Council’s Area to which special items as defined in e) above relate

£

1,316.53

1,535.96

1,755.37

1,974.80

2,413.64

2,852.49

3,291.33

3,949.60

 

 

All other parts of the

Council’s Area

 

£

1,296.26

1,512.31

1,728.34

1,944.39

2,376.47

2,808.57

3,240.65

3,888.78

k)

To note that, in accordance with Section 52ZB of the Local Government Finance Act 1992, the Council’s relevant basic amount of Council Tax for 2020/21 is not

excessive in accordance with principles approved by the Secretary of State under

Section 52ZC

 

 

Voting:

For: 35 Members of the Council (The Mayor, Councillor Margaret Thompson, and Councillors Zain Abbas, Sushila Abraham, Stephanie Archer, Kim Bailey, Mark Beynon, Fiona Boult, Olivia Boult, Tim Cobbett, Emily Davey, Lorraine Dunstone, Mark Durrant, Simon Edwards, Sam Foulder-Hughes, Hilary Gander, Dennis Goodship, Liz Green, Jaesung Ha, Lesley Heap, Alison Holt, Caroline Kerr, Andreas Kirsch, Katrina Lidbetter, Rebekah Moll, Dave Ryder-Mills, Anita Schaper, Malcolm Self, John Sweeney,

ThayThayalan, Jon Tolley, Olly Wehring, Diane White, Annette Wookey,

Yogan Yoganathan and Sharon Young.)

Against: Councillor Sharron Falchikov-Sumner

Abstaining: 7 Members of the Council (Councillors Roy Arora, Rowena Bass,

David Cunningham, Kevin Davis, Ian George, Maria Netley and Nicola Sheppard)

 

 

 

[The Council briefly adjourned at 21:55 and reconvened at 22:10.]

 

Supporting documents: