Agenda item

To consider the Council Finances & Council Tax Resolution 2022/23.

Council considered the Council Finances and Council Tax Resolution for the period 2022-23.

 

The provisional Local Government Finance Settlement was announced on 16 December. The key points from the settlement were noted as:

 

The settlement was for a single year only and further details on proposed funding reform and consultations were due to follow in the new year;

 

·      The £1.6bn additional funding announced at the Spending Review had been distributed as:

o   £0.8bn to a 2022/23 Services Grant, distributed using the 2013/24 Settlement Funding Assessment formula. The statement highlighted that this was a one-off grant and will not be taken into consideration for transitional support when future system changes are made.

o   £0.7bn to social care, with additional Social Care Grant (£0.6bn, distributed using the Adult Social Care Relative Needs Formula, with equalisation for the impact of the 1% social care precept) and an inflationary increase to the Improved Better Care Fund.

o   £0.1bn provided an inflationary increase to Revenue Support Grant;

 

·      In addition, £162m had been allocated to local authorities from the funds raised in the National Insurance Health & Social Care levy;

 

·      Authorities did not receive separately identified funding for the costs to them of the increase in National Insurance Contributions (the funding for this is assumed to be included in the new 2022/23 Services Grant);

 

·      Referendum limits had been confirmed at 2% (or £5 for districts and fire authorities, where this is more than 2%). PCCs would be subject to a £10 referendum limit;

 

·      An additional 1% social care precept for social care authorities (who would also be able to raise any balance of last year’s 3% social care precept);

 

·      The New Homes Bonus had been ‘rolled over’ for another year, with allocations made and the final 2019/20 legacy payment honoured;

 

·      The lower tier services grant has been ‘rolled over’ at £111m nationally, and with a new cash terms funding floor;

 

·      The compensation for under-indexing of the business rates multiplier would continue at RPI, though the settlement figures only include this at CPI;

 

·      No detailed announcements were made on future funding reform.

 

The Council had benefited from additional grant funding from the settlement, although much of it was either ring-fenced or to cover additional costs (such as the 1.25% increase in National Insurance Contributions).

 

Fees and Charges

A review of Fees and Charges had been undertaken as part of the budget setting process to ensure that each charge was appropriate and achieving its objective. Where charges had been intended to either break even or maximise income, analysis had been carried out to look at the total costs of providing the service to understand what the position was.

 

Reserves Position

 

The Council had two types of reserves:-

 

·      earmarked Reserves which were for specific future projects, commitments or risks, both revenue and capital;

 

·      unallocated balance, which was to ensure the Council can manage unexpected financial challenges.

 

The level of unallocated balances at the end of March 2022 was £8.4m, which was the lower end of a prudent level. Part of the budget strategy for 2022/23 had been to restructure reserves to increase the level of unallocated balances and also to create an Invest to Save reserve. This would allow transformational projects to be carried out to both improve the way the Council delivers services to its customers but also enable service to delivery to be provided in a more efficient and effective way.

 

Council Tax proposals

 

The budget assumed a 3.99% increase in Council Tax, made up of 2% ‘core’ increase and 1.99% for Adult Social Care. In 2021/22 all local authorities with responsibility for Social Care were able to apply an Adult Social Care precept of up to 2.99%, spread over two years (21/22 and 22/23). The Council opted to apply 1% in 2021/22 and therefore has the ability to use the remaining 1.99% in 2022/23.

 

The provisional settlement confirmed a referendum principle of 2% for core Council Tax and 1% for the Adult Social Care precept. This meant that the Council could raise Council Tax by a total of 4.99% in 2022/23 which would be made up of:-

 

·      2% core Council Tax

·      1.99% Adult Social Care precept from 2021/22

·      1% Adult Social Care precept for 2022/23

 

 

Each 1% increase in Council Tax raised approximately £1.1m in additional Council Tax income. The draft budget assumption of 3.99% will generate increased income of approximately £4.3m for the Council. Approving the further 1%, to take the total increase to 4.99%, would generate additional income of £1.1m compared to the current draft budget forecast.

 

Furthermore, because of the referendum principles that limited Council Tax increases every year, if the Council opted not to apply the further 1% increase, the Council taxbase would be permanently reduced and the £1.1m additional income would be forgone every year. Over a 5-year period for instance, the taxbase would be around £5.5m lower that it would have been if the additional 1% had been approved for 2022/23.

 

The majority of properties in Sandwell were in Council Tax Bands A and B, with 43% being in Band A and 32% Band B. A Band B property, as an example, currently pays £1,167.43 per year for the Council’s element of the Council Tax.

 

Capital Programme

 

The total Capital Programme for 2022/23 was recommended to be set at £118.3m, of which £69.5 was for the HRA. This was to be funded by a combination of grants, earmarked reserves, revenue contributions, Right to Buy receipts and borrowing.

 

This programme did not yet include the Children’s Services programme as the Basic Need Allocations had not yet been confirmed. A separate report would be brought to Cabinet with proposed schemes once allocations have been announced.

 

In accordance with Standing Order No. 11, Councillor Williams

moved an alternative budget proposal, which was duly seconded by Councillor Anandou:-

 

(1) approve the expenditure level for 2022-23 as set out in Appendix E and the resultant Council Tax as set out in Appendix E including the following amendments:

 

a.) A saving of £130k from an efficiency review of the Museum service, with a 30% saving to be achieved through a combination of reduced opening hours or closures. This is a part year saving to allow time for the required consultation and notice periods.

b.) A saving of £1.25m from a partial recruitment freeze of non-frontline posts. Although this will have an impact on the Council’s capacity in delivering certain services and its Improvement Plans, these cost cuts are deemed necessary to reduce the burden on taxpayers.

c.)  A Council Tax increase of 3.49%, which is a reduction of 1.5% compared to the budget proposals recommended by Cabinet. 

 

The Council’s S151 officer, in compliance with the requirements of the Local Government Act 2003, had confirmed that the alternative proposal put forward enabled the Council to agree a balanced budget.

 

In accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, and Standing Order 12 (4), the amendment relating to Council Finances 2022-23 was put to a named vote as follows:-

For

Councillors Abrahams, Anandou, Chapman, Fisher, W Gill and Williams

 

Against

Councillors Ahmed, Akhtar, Akpoteni, Allcock, Allen, Ashman, Bhullar, Carmichael, Chambers, Chidley, Costigan, Crompton, Dhallu, Fenton, Gavan, E A Giles, L Giles, S Gill, Hackett, Hartwell, Hinchliff, Hughes, M Hussain, Z Hussain, Jalil, O Jones, R Jones, S Jones, Kaur, Kausar, Khatun, McVittie, Melia, Millar, Moore, Owen, C Padda, I Padda, Piper, Randhawa, Rollins, Rouf, Shackleton, Shaeen, Simms, Taylor and Webb.

 

Abstentions

None

 

On being put to the vote, the amendment was lost and Council moved to consider the original budget.

 

In accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, and Standing Order 12 (4), the decision relating to Council Finances 2022-23 was put to a named vote as follows:-

 

For

Councillors Ahmed, Akhtar, Akpoteni, Allcock, Allen, Ashman, Bhullar, Carmichael, Chambers, Chidley, Costigan, Crompton, Dhallu, Fenton, Gavan, E A Giles, L Giles, S Gill, Hackett, Hartwell, Hinchliff, Hughes, M Hussain, Z Hussain, Jalil, O Jones, R Jones, S Jones, Kaur, Kausar, McVittie, Melia, Millar, Moore, Owen, C Padda, I Padda, Piper, Randhawa, Rollins, Rouf, Shackleton, Shaeen, Simms, Taylor and Webb.

 

Against

Councillors Abrahams, Anandou, Chapman, Fisher, W Gill and Williams.

 

Abstentions

None

 

On being put to the vote, the motion was carried and it was

 

Resolved:-

 

(1)          that the expenditure level for 2022-23 as set out in Appendix E and the resultant Council Tax as set out in Appendix E of the report to Cabinet on 23 February 2022 be approved;

 

(2)          that the budget for 2022/23 and provisional budgets for 2023/24 to 2024/25 as shown in Appendix E of the report to Cabinet on 23 February 2022 be approved;

 

 

(3)          that Council note the supporting information on the robustness of the budget process and adequacy of the Council’s reserves as detailed in Appendix G of the report to Cabinet on 23 February 2022;

 

(4)     that the Treasury Management & Investment Strategy, together with prudential indicators outlined in Appendix J of the report to Cabinet on 23 February 2022, be approved;

 

(5)          that the Capital Programme 2021/22 to 2025/26, as set out in Appendix H and the Capital Strategy as set out in Appendix I of the report to Cabinet on 23 February 2022, be approved

 

(6)   that Council note that the amount of 74,858.45 had been approved as its Council Tax base for the year 2022/2023 in accordance with Regulation 3 of the Local Authorities (Calculation of Council Tax Base) Regulations 1992 made under Section 33 (5) of the Local Government Finance Act 1992;

 

(7)          that the following amounts be calculated by the Council for the year 2022/2023 in accordance with Sections 31 to 36 of the Local Government Finance Act 1992: ?

 

(a)    Being the aggregate of the amounts which the Council estimates for the items set out in Section 31A(2) (a) to (f) of the Act;						£1,155,646,739
(b)    Being the aggregate of the amounts which the Council estimates for the items set out in Section 31A(3) (a) to (d) of the Act;						£1,037,678,805
(c)     Being the amount by which the aggregate at 9(a) above exceeds the aggregate at 9(b) above, calculated by the Council, in accordance with Section 31A(4) of the Act, as its Council Tax requirement for the year;						£117,967,934
	(d)    Being the amount at 9(c) above, all divided by the amount at 8 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;							£1575.88
	(e)     Valuation Bands   £   A    1,050.59 B    1,225.68 C   1,400.78 D    1,575.88 E   1,926.08 F   2,276.27 G    2,626.47 H    3,151.76   Being the amounts given by multiplying the amount at 9(d) 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;
	(8)        that it be noted that for the year 2022/2023 the major precepting authorities have stated the following amounts in precepts issued to the Council, in accordance with Section 40 of the Local Government Finance Act, 1992, for each of the categories of dwellings shown below: ?
	Valuation Bands	West Midlands Fire and Rescue  Authority		Police & Crime Commissioner for the West Midlands
		£		£
	A B C D E F G H	45.35 52.91 60.47 68.03 83.14 98.26 113.38 136.05		125.03 145.87 166.71 187.55 229.23 270.91 312.58 375.10
	(9)       that, having calculated the aggregate in each case of the amounts at 9(e) and 10 above, the Council, in accordance with Section 30(2) of the Local Government Finance Act 1992, sets the following amounts as the amounts of Council Tax for the year 2020/2021 for each of the categories of dwellings shown below:?
	Valuation Band		£
	A B C D E F G H		1,220.97 1,424.46 1,627.96 1,831.46 2,238.45 2,645.44 3,052.43 3,662.91

 

                    (10) that the Chief Financial Officer be authorised to take any necessary action to collect revenues and disburse monies from the relevant accounts;

 

                    (11)          that the requirements of any relevant legislation, to consider reports as a consequence of the approval of the Council's Finances 2022/2023 report, be dispensed with on the grounds that in the opinion of the Council the items are urgent.