Agenda item

Cabinet Member: Finance

Forward Plan Ref: 2021/136

Contact: Kathy Wilcox, Head of Financial Strategy Tel: 07788 302163

 

Report by Director of Finance (CA6).

 

Cabinet proposes 2022/23 revenue budget, MTFP and capital programme for recommendation to Council in light of comments from the Performance & Corporate Services Overview & Scrutiny Committee and consultation feedback. Includes the Review of Charges.

 

NB Annex C and Section 2.1 to follow

 

RECOMMENDATIONS

 

1.            In relation to the draft strategic plan (Section 2);

 

Cabinet is RECOMMENDED to RECOMMEND Council to:

 

a)    adopt the strategic plan.

 

2. In relation to the Revenue Budget and Medium Term Financial Strategy (Section 4);

 

Cabinet is RECOMMENDED to:

 

b)   approve the Review of Charges for 2022/23 and in relation to the Registration Service, charges also for 2023/24 (Annex A);

c)    approve the final schools funding formula for 2022/23 subject to the decision by the Secretary of State for Education regarding permission to transfer 0.5% (£2.2m) from the Schools block to support High Needs expenditure (Annex B)

d)   Receive and thank the Performance and Corporate Services Overview and Scrutiny Committee for their Budget Scrutiny report and note the response as set out in Annex C (to follow);

e)    approve the Financial Strategy for 2022/23 (Section 4.5);

f)     approve the Earmarked Reserves and General Balances Policy Statement 2022/23 (Section 4.6);

g)   and to note that the Leader of the Council will, following consultation with the Director of Finance and the Cabinet Member for Finance,

make any appropriate changes to the proposed budget following receipt of information relating to the outstanding matters at paragraph 9 of this report

 

Cabinet is RECOMMENDED to RECOMMEND Council to:

 

h)   approve a Medium Term Financial Strategy for 2022/23 to 2025/26 as set out in Section 4.1 (which incorporates changes to the existing Medium Term Financial Strategy as set out in Section 4.2);

i)     agree the council tax and precept calculations for 2022/23 set out in Section 4.3 and in particular:

 

                                                       (i)    a precept of £435,816,475;

                                                      (ii)    a council tax for band D equivalent properties of £1,651.61.

                                                    (iii)    approve a revenue budget for 2022/23 as set out in Section 4.4

 

3. In relation to the Capital and Investment Strategy and Capital Programme (Section 5);

 

Cabinet is RECOMMENDED to recommend Council to:

 

j)     approve the Capital and Investment Strategy for 2021/22 - 2031/32 (Section 5.1) including;

                                                       (i)    the Minimum Revenue Provision Methodology Statement (Section 5.1 Annex 1);

                                                      (ii)    the Prudential Indicators (Section 5.1 Annex 2)

                                                    (iii)    the updated Pupil Place Plan (Section 5.1 Annex 3) and

k)    approve the Treasury Management Strategy Statement and Annual Investment Strategy for 2022/23 (Section 5.2); and

                                                       (i)    continue to delegate the authority to withdraw or advance additional funds to/from external fund managers to the Director of Finance;

                                                      (ii)    approve that any further changes required to the 2022/23 Treasury Management Strategy be delegated to the Director of Finance in consultation with the Leader of the Council and the Cabinet Member for Finance;

                                                    (iii)    approve the Treasury Management Prudential Indicators; and

                                                    (iv)    approve the Specified Investment and Non Specified Investment instruments as set out in Section 5.2 paragraphs 55 to 60;

l)     approve the Investment Strategy for Property Investment (Section 5.3);

m)  approve the Property Strategy (Section 5.4);

n)   approve the new capital proposals for inclusion in the Capital Programme (Section 5.5)

o)   approve the capital programme (Section 5.6);

 

Cabinet had before it proposals for the Strategic Plan and related revenue budget for 2022/23, medium term financial strategy to 2025/26 capital programme to 2031/32 plus supporting policies, strategies and information.  Before discussing the report, the Chair had agreed to hear a number of speakers.

 

Councillor Eddie Reeves, Chair of the Performance & Corporate Services Overview & Scrutiny Committee, reported the views of the scrutiny committee’s discussions over two meetings.  The points were agreed cross-party.

 

Their meeting on 10 December agreed recommendations which were outlined in the supplementary document attached to the Agenda.  These included:

·         the administration’s priorities should be more clearly defined

·         there should be Key Performance Indicators to ensure ongoing monitoring.

·         the Corporate Plan should provide greater clarity around its environmental ambitions at strategic and measurable levels

 

It was unfortunate that the Committee’s discussion on the capital programme had only taken place the day before this meeting however he summarised the nine main points agreed by that meeting:

·         Climate Change and decarbonisation needed to be mainstreamed in the Capital Programme;

·         Maximising social value should be part of the procurement policy;

·         More to tackle economic and gender inequalities and possibly a future generations policy

·         Consider allocation of unused borrowing and use of capital resources to improve SEND provision.

·         Assess deliverability of capital projects before committing to them.

 

Councillor Michael O’Connor, Deputy Chair of the Performance & Corporate Services Overview & Scrutiny Committee, added that there would be a written report produced on the Committee’s views on the Strategic Plan.

 

The Chair agreed that Cabinet would consider that report before finalising the proposals for Council on 8 February.

 

Councillor David Bartholomew, Shadow Cabinet Member for Finance, expressed disappointment that the papers for this item included a report from the Cabinet Member for Finance in the same standard format as officer reports which he described as a political and subjective document that should be clearly identified as such.

 

Councillor Bartholomew in particular noted the comment that the administration had ‘inherited underfunding’.  He stated that the universal expectation at the time of his administration had been that the pandemic would result in deflation and unemployment whereas the opposite had been the case.

 

He stated that he had a long record of drawing attention to financial concerns around the Kennington Bridge project. He welcomed the proposed re-assessment of major projects and hoped that the Cabinet would be consistent in its approach between its own projects and those it had inherited.  Councillor Bartholomew also asked where the costs in unpicking the partnership with Cherwell District Council were taken account of in the budget.

 

Councillor Yvonne Constance stated that she wanted to correct the record in relation to comments in the report from the Cabinet Member for Finance on the previous administration in which she was Cabinet Member for Environment (including Transport) and which she believed implied incompetence.

 

Councillor Constance described the way in which costs on Kennington Bridge escalated as significant changes were made to the bridge design and the funding arrangements.  An outline business case, such as that produced in Summer 2020, was expected to change.  This was not due to over-optimism.

 

On the HIF1 project (Housing Infrastructure Fund), an increase in scope, uncertainty and delays led to increases in costs.  She wanted to make it clear that officers were diligent and complete in their work at all stages.  The previous Cabinet had always anticipated having to put some funding from the County Council into completing that project.

 

Bernadette Evans addressed the meeting on behalf of Jericho Traders Association in opposition to the proposal to increase the charge for 3 hours parking in the area to £18.  She believed that this would be the most expensive parking in Oxford and possibly the most expensive in the UK outside of London. She noted that parking for three hours in Summertown is £3.50, in Worcester Street £9.50, St Clements £4 and the Westgate £5.  Putting up parking to £18 for three hours in Jericho

 

Jericho was probably the only high street in Oxfordshire with no empty shops If this charge went ahead there would be economic consequences.  It put the Westgate hospitality businesses at a huge commercial advantage over Jericho for day time custom.  She asked Cabinet to delay this decision until it had a chance to discuss it properly.

 

Graham Jones stated that many businesses in Oxford had disappeared due to the pandemic. Those remaining need all the help they can get.  Public transport, cycling and walking may be the main effective modes of transport but they cannot cover all needs.  Use of these parking places had dropped significantly already because of the existing exorbitant charges.  Further excessive charges will reduce, not increase the revenue from parking as customer resistance grows.

 

At the Westgate, primarily a location for multi chain shops, the parking charge for up to 2 hours was £4.00. Yet elsewhere in the city centre, the on street car parks, serving mainly the independent shopping, restaurant and cultural quarters, were more expensive already.

 

He asked Cabinet to defer a decision and come up with alternatives that will help businesses and jobs in Oxford and, possibly, improve the County’s income at the same time.

 

Councillor Calum Miller, Cabinet Member for Finance, introduced the reports.  This was the first budget for the Fair Deal Alliance and followed a consultation process that drew 1392 responses – more than twice last year.  He thanked officers for all the work on the budget and consultation.

 

He had participated in the scrutiny committee discussions and a response to the recommendations from the first meeting was published just before this meeting.  The Strategic Plan was being developed alongside the budget process and he believed that the links between priorities and spending will be made clear.

 

Councillor Miller added that the impact of the pandemic meant that it was a very hard time to set a budget.  It had been hoped that the central government in its budget would respond, in particular to the challenges facing adult social care, but the Chancellor instructed that there be an increase in council tax and the adult social care precept.  This will come through to residents next April.

 

Councillor Miller stated that the report in his name was intended to provide a narrative to accompany the more technical budget papers and explain the administration’s intentions more clearly.  In response to criticism of his comments that they had inherited underfunding, he stated that there were significant liabilities and debts left so that they inherited a negative position.

 

The new administration had ideas on how capital funding might be used to improve the situation for residents of Oxfordshire but instead they were going to have to provide extra funding for existing projects.

 

Councillor Miller drew attention to an improvement in the budget outlook of £6.8m as a result of grants and revenue updates however he emphasised that this was a one-off situation and these funds could not be used on anything that involved recurrent expenditure.

 

Councillor Glynis Phillips moved recommendation 1 a) emphasising that the version of the Strategic Plan in front of this meeting was a draft.  She welcomed the engagement of the Performance & Corporate Services Overview & Scrutiny Committee and looked forward to seeing the written report on their comments.  She would like to ensure that their comments were reflected in the version of the Plan put to Council on 8 February 2022.

 

The Chair proposed that recommendation 1a) be approved on that basis.

This was agreed.

 

Councillor Tim Bearder thanked speakers for their comments on parking charges.  He reminded Cabinet that they were committed to reducing car journeys in the city by 25% by 2030.  However, he could understand the concerns raised in this case and was open to debate on the matter.

 

Councillor Pete Sudbury proposed an amendment to Annex A: on Agenda Page 63, the second set of charges under Oxford City Centre – Central Area to increase to £5 per hour and £15 for three hours instead of £6 and £18.  This was seconded by Councillor Mark Lygo.

 

Councillor Miller responded that he did not have an estimate as to the financial effect of the amendment but he was happy to accept it.

 

The Chair further proposed that the Council engage in discussions with Oxford City Council who are responsible for setting many of the parking charges in the city.  This and the amended charges were agreed.

 

Councillor Miller proposed recommendations 2 b) to 2 i) individually and they were agreed.  He then proposed recommendations 3 j) to o) and they were agreed,

 

RESOLVED:

1.            In relation to the draft strategic plan (Section 2);

 

To RECOMMEND Council to:

 

a)    adopt the strategic plan.

 

2. In relation to the Revenue Budget and Medium Term Financial Strategy (Section 4);

 

To:

 

b)    approve the Review of Charges for 2022/23 and in relation to the Registration Service, charges also for 2023/24 (Annex A – as amended);

c)    approve the final schools funding formula for 2022/23 subject to the decision by the Secretary of State for Education regarding permission to transfer 0.5% (£2.2m) from the Schools block to support High Needs expenditure (Annex B)

d)    Receive and thank the Performance and Corporate Services Overview and Scrutiny Committee for their Budget Scrutiny report and note the response as set out in Annex C (to follow);

e)    approve the Financial Strategy for 2022/23 (Section 4.5);

f)     approve the Earmarked Reserves and General Balances Policy Statement 2022/23 (Section 4.6);

g)    and to note that the Leader of the Council will, following consultation with the Director of Finance and the Cabinet Member for Finance,

make any appropriate changes to the proposed budget following receipt of information relating to the outstanding matters at paragraph 9 of this report

 

to RECOMMEND Council to:

 

h)    approve a Medium Term Financial Strategy for 2022/23 to 2025/26 as set out in Section 4.1 (which incorporates changes to the existing Medium Term Financial Strategy as set out in Section 4.2);

i)     agree the council tax and precept calculations for 2022/23 set out in Section 4.3 and in particular:

 

                                 (i)       a precept of £435,816,475;

                                (ii)      a council tax for band D equivalent properties of £1,651.61.

                               (iii)       approve a revenue budget for 2022/23 as set out in Section 4.4

 

3. In relation to the Capital and Investment Strategy and Capital Programme (Section 5);

 

to recommend Council to:

 

j)     approve the Capital and Investment Strategy for 2021/22 - 2031/32 (Section 5.1) including;

                                 (i)          the Minimum Revenue Provision Methodology Statement (Section 5.1 Annex 1);

                                (ii)          the Prudential Indicators (Section 5.1 Annex 2)

                               (iii)          the updated Pupil Place Plan (Section 5.1 Annex 3) and

k)    approve the Treasury Management Strategy Statement and Annual Investment Strategy for 2022/23 (Section 5.2); and

                                 (i)          continue to delegate the authority to withdraw or advance additional funds to/from external fund managers to the Director of Finance;

                                (ii)          approve that any further changes required to the 2022/23 Treasury Management Strategy be delegated to the Director of Finance in consultation with the Leader of the Council and the Cabinet Member for Finance;

                               (iii)          approve the Treasury Management Prudential Indicators; and

                               (iv)          approve the Specified Investment and Non Specified Investment instruments as set out in Section 5.2 paragraphs 55 to 60;

l)     approve the Investment Strategy for Property Investment (Section 5.3);

m)  approve the Property Strategy (Section 5.4);

n)    approve the new capital proposals for inclusion in the Capital Programme (Section 5.5)

o)    approve the capital programme (Section 5.6);