Agenda item

A report was presented with proposals for a balanced budget and Medium Term Financial Strategy without the use of reserves. This followed consideration by the other policy committees of their respective elements of the budget during January. The report reflected upon recent improvements to the Council’s financial governance and management in light of:

 

(i)      the Tandridge Finance Transformation Programme

 

(ii)      Grant Thornton’s forensic and fact-finding review (the Council had accepted all 15 recommendations)

 

(iii)     the line-by-line review of the 2021/22 budgets

 

(iv)    a detailed review of the Council’s financial management and reporting arrangements undertaken by an external independent professional, Laura Rowley (Appendix A to the report) to ensure a solid foundation on which to launch the finance transformation programme.

 

The outcome of (iii) and (iv) above provided confidence that the 2022/23 budget could be approved. It was also confirmed that the budget setting process had been assessed against a best practice framework, details of which were included within the report.

 

The report explained how organisational and departmental strategies were integral to the budget setting process, with reference to the strategic plan and committee strategies. It also assessed the implications of the single year finance settlement which councils had received from the Department of Levelling-Up, Housing and Communities (DLUHC), together with current macro-economic influences. 

 

An analysis of the main changes to the draft revenue budget submitted to the 2^nd December 2021 meeting (when a £307,000 deficit was forecast) was provided. The current balanced budget position had been achieved mainly via increased funding through the provisional settlement and the 2021/22 business rates pooling gain.

 

The report also included commentary on:

 

·           reassignments of savings to committees since the December 2021 draft budget

 

·           projected funding sources to 2023/24, including an assumed £5 Council Tax increase

 

·           current projections for the 2021/22 budget. i.e.:

 

Ø       a full year deficit of £0.2m against the £11.3 million General Fund revenue budget

Ø       a £7.3 million underspend against the £27.6 million capital programme

 

·           the medium term financial outlook to 2023/24 in light of projected growth pressures, funding reductions and the uncertainties surrounding anticipated national reforms of local government finance (i.e. the fair funding review; business rates reset; and social care reform)

 

·           the development of the Capital Programme for 2022/23 to 2023/24

 

·           the flexible use of capital receipts strategy for 2021/22 and 2022/23

 

·           the adequacy of reserves and a risk mitigation strategy.

 

The Chief Finance Officer and Laura Rowley gave a presentation on the key messages regarding the 2022/23 budget and the review referred to at (iv) above. During the presentation, discussion focused on the Council’s application to DLUHC for a capital dispensation to allow the use of capital to fund extraordinary revenue impacts without revenue implications. It was explained that a response was still awaited and that, if successful, the dispensation would enable greater flexibility to help fund the Future Tandridge Programme and to replenish reserves.

 

 

Laura Rowley’s part of the presentation summarised her 21 findings and associated ‘next steps’, RAG rated according to Green (7), Amber (8) and Red (6). She also acknowledged that the second paragraph of her report should have been amended to correct the false impression that Tandridge had approached Surrey County Council for assistance in 2020. As stated in the minutes of the Committee’s 2^nd December 2021 meeting, Tandridge had, in fact, originally interviewed two candidates for the CFO vacancy, one of which was Anna D’Alessandro who was duly appointed and proceeded to lead the joint working with the County Council.

 

The Chief Finance Officer and Laura Rowley responded to questions following the presentation. This included confirmation that work on the ‘Tranche 3’ savings would begin forthwith and wouldn’t need to wait until June when their budgetary allocation to committees would be considered.

 

Debate focused on the Council’s three-year capital programme to 2024/25 and the current absence of provision for refurbishing public conveniences. It was proposed that £150,000 in each of the three years be added to the programme for this purpose, to be funded from capital receipts. However, Officers advised that such provision could be achieved by carrying forward an unspent £450,000 from the current year into the 2022/23 – 2024/25 programme as slippage, without having to incur additional financing costs. This course of action was agreed, and it was proposed and seconded that an additional recommendation be made to Full Council to that effect. Notwithstanding this amendment to the capital programme, Members confirmed the importance of implementing the previous decisions of the Community Services Committee (18^th January 2022) to:

 

·           pursue the possibility of Surrey County Council providing replacement WC facilities on the A22 Godstone Hill site and taking responsibility for their ongoing maintenance and repair at no cost to TDC; and

 

·           explore opportunities for alternative methods of (public convenience) service delivery in consultation with Surrey County Council, Parish Councils and local businesses.

 

 

COUNCIL DECISIONS

(subject to ratification by Council)

 

            R E C O M M E N D E D – that:

           

A.        the independent report of the Council’s financial management and reporting arrangements be noted;

 

B.        it be noted that, for the purpose of section 52ZB of the Local Government Finance Act 1992, the Council formally determines that the increase in Council Tax is not such as to trigger a referendum (i.e. not greater than £5);

 

C.       it be noted that the Local Council Tax Support Scheme is unchanged for financial year 2022/23;

 

D.       the Parish Councils’ precept requirements for 2022/23 at Appendix G be noted;

 

E.        it be noted that the Council is embarking on the Future Tandridge Programme and £450k savings within the 2022/23 budget are to be distributed in June as tranche 3;

 

F.        the impact of the financial strategy to build the General Fund reserves after 2022/23, via a £0.5m contribution per annum, be noted (prior to a decision from DULHC on the capitalisation dispensation, the General Fund balance at 31st March 2023 is projected to stand at to £3.1m, as per Appendix H);

 

G.       the net revenue budget requirement be set at £11.351million (net cost of services after service specific government grants) for 2022/23 (Appendix I), subject to confirmation of the final local government financial settlement;

 

H.       the final budget envelopes for each Committee for 2022/23 as at tranche 1 (Appendices I and J) be approved;

 

I.         subject to J below, the £35.4 million proposed three-year capital programme at Appendix D to the report be approved (comprising £4.3m General Fund, £3.1m Community Infrastructure Levy and £28.0m Housing Revenue Account) of which £16.0 million is for 2022/23;

 

J.        £450,000 of the current underspend in the Community Services Committee’s 2021/22 capital programme be carried forward to provide provisions of £150,000 per annum in each of the three years 2022/23 to 2024/25 for refurbishments to public conveniences (the revised capital programme at Appendix K to these minutes refers); 

 

K.        the Flexible Use of Capital Receipts Strategy for 2021/22 & 2022/23 at

           Appendix L be approved (to meet the statutory guidelines for the use of such receipts to fund transformation and, if successful, utilisation of the capital dispensation);

 

 L.       the total Council Tax requirement be set at £8.9 million for 2022/23, based on a Council Tax increase of £5 to cover core Council services (Appendix M);

 

M.       the Council sets the precept for Band D Council Tax at £230.98, which represents a £5 uplift. (This is a rise of £0.10 a week from the 2021/22 precept of £225.98.) A full list of bands is as follows: