Issue - meetings

The recommendations set out in the report on the General Fund Budget and Council Tax for the coming years were agreed as follows: 

(i)      Council considers and acknowledges the Section 151 Officer’s s25 report on the robustness of the proposed budget and the adequacy of the Council’s reserves, as set out in Appendix 8 to the report, including the factors which underpin the budget and specifically the need for exceptional financial support to balance the budget;

(ii)     it be noted that the financial position has been based on the final Local Government Finance Settlement announced on 5 February 2024 together with any further announcements at that date;

(iii)     it be noted that the Council was granted permission to raise council tax by an extra 9.99% without the need for a local referendum and that the report assumes a council tax increase of 9.99%;

(iv)    it be noted that the net cost of services position includes previously agreed savings and pressures included in the ‘Business as Usual Budget’ approved by Council on 8 February 2024, as updated in the report (link provided in background papers);

(v)     the final changes to the budget set out in paragraphs Section 5 and Table 4 of the report, be approved;

(vi)    the flexible use of capital receipts to support transformation activity under the Improvement and Recovery Plan set out in Appendix 7 be approved;

(vii)    the position of the Business Rates and Council Tax Collection Fund, and the Council Tax and Business Rates bases for 2024/25 as set out in Section 11 be noted;

(viii)   it be noted that Exceptional Financial Support (EFS) is required to balance the 2023/24 budget and that discussions with Central Government are ongoing, as per Appendix 2 to the report;

(ix)    it be noted that the budget has been set based on the assumption that the request for Exceptional Financial Support in respect of the 2024/25 budget deficit is granted;

(x)     it be noted that the projected revenue impact of the Minimum Revenue Provision (MRP) historic and 2024/25 requirements under the revised MRP policy agreed as part of the Treasury Management report elsewhere on the agenda and that the draft MRP guidance has been applied to the treatment of MRP in the report as set out in Appendix 2;

(xi)    the Council’s position on Reserves, recognising the unique situation the Council faces, be noted;

(xii)    it be noted that work on the budget will continue during 2024/25 on a medium-term financial position, with more savings likely to be required to Council services;

(xiii)   the full net cost of services requirement for 2024/25, including the impact of the historic borrowing position is £189m as per Table 3, be agreed;

(xiv)   the revised Business Rates Discretionary Policy and its application for 2024/25 as set out in Appendix 4 to the report, be approved;

(xv)   the overall Hardship Policy and associated costs as set out in Appendix 5 to the report, including the revised Council Tax Hardship scheme, which is set out in  ...  view the full decision text for item 7

Councillor Forster, Deputy Leader of the Council, introduced the report on the General Fund Budget and Council Tax for the coming years, noting that the Portfolio for Finance, Councillor Roberts, who had led on the work, had unfortunately been unable to attend.  The exceptional support recently confirmed by the Government, without which the Authority would not have been able to achieve a balanced budget,  was highlighted.  The support represented a package of up to £785million for the following year. 

Attention was drawn to a recent letter from the Minister for the Department of Housing, Levelling Up and Communities (DHLUC) which provided additional context around the proposals before the Council.  A copy of the letter had been published on the Council website.  It was clear that the Council’s assets were not worth more than the debts held by the Authority.

In regard to Council Tax, the budget proposed an increase of 10% on the Borough Council’s element of Council Tax bill for residents, a level that was to be expected of a Council under Government intervention.  Efforts to negotiate a lower increase had been made with the Government but the Council’s arguments had not been supported.  Although the Borough Council’s element of Council Tax would increase by 10%, the impact on the overall Council Tax level would be 1%, representing approximately 50p per week increase for a Band D property. 

Support would be provided to residents hardest hit and the sum of £50,000 had been set aside to provide hardship advice in the community.  A further £25,000 would be available through the household support fund.

Reference was made to second and empty homes.  Within the report, it was noted that, under the Levelling Up and Regeneration Bill, from 1 April 2024 the Council would be able to apply a 100% premium (i.e. double charge) on unoccupied and unfurnished (empty) properties after one year, updated from two years.  This was estimated to generate an additional £42,000 in the coming year.  The same Bill, from 1 April 2025, would allow the Council to apply a 100% premium to unoccupied and furnished properties second homes, generating an additional £68,000 each year.

The Housing Infrastructure Fund project, which would have required additional borrowing of £55m, had been ended, and the Sheerwater Regeneration Scheme had been revised and would be aimed at delivering what the residents wanted.

The Mayor thanked the Deputy Leader for his introduction and invited comments from Members of the Council.  Although it was noted that efforts had been made to negotiate a lower increase in Council Tax, concern was expressed over the impact the increase would have on local residents.  However, the Council was advised that the support package from the Government hinged upon the Council agreeing a 10% increase in Council Tax.  Despite this, a number of Councillors advised that they would not be able to support the proposed Council Tax increase. 

The Leader of the Council took the opportunity of the Right to Reply to thank the Councillors for the  ...  view the full minutes text for item 7

Reporting Person: Eugene Walker

The Section 151 Officer introduced the item.

The Council was expecting to receive confirmation of a capitalisation directive from Government which would allow the Council to set a balanced budget.

The Council currently had negative reserves.  The General Fund Budget included provision for a reserve of £5 million for 2024/25 to help the Council respond to unexpected costs.  The reserve was higher than might be set by other Councils, typically 10% of a Council’s net budget, due to the relative increased level of risk facing the Council from its historic investments.  There were additional earmarked reserves of £11 million.

It was a statutory requirement for the Section 151 Officer to produce a Section 25 statement indicating the robustness of the budget and adequacy of reserves.

The Government had placed an expectation on the Council to raise its proportion of Council Tax by 10%, an increase of 1.2% on a household’s overall Council Tax bill.  The increase equated to £1 million additional revenue for the Council which alleviated the need to find an equivalent saving.

The Council operated a 100% Council Tax relief scheme for those on low incomes, which was not operated by all Councils. £100,000 of the additional revenue was being directed to relief schemes; £50,000 would be provided to Citizens Advice Woking to provide support to the community; £25,000 would be used to extend the Council Tax relief scheme; and £25,000 to replicate the household support fund.

The hardship fund would be carefully rationed and monitored.

In response to a query, the Strategic Director of Communities confirmed that the Service Level Agreement between the Council and Citizens Advice Woking (CAW) would be amended to ensure the additional funds were used for the purposes of hardship support.  It was anticipated that CAW would operate a linking service connecting support services across the sector.

It was not possible to determine what Government would direct for Council Tax increases in future years.

If the historic debt issues were excepted from the budget, the Chief Finance Officer considered that the Council would be setting a truly balanced budget.

The Section 151 Officer confirmed that Community Infrastructure Levy funds would be honoured.

The Council received a very high amount of commercial income, relative to its overall budget and compared with similarly sized Councils.  It was yet to be determined what would be an appropriate size but it was recognised that it should be reduced.  This would consequentially lead to a drop in income.  As such, discussions with Government would necessarily need to include sustainability of revenue as well as repayments of debt.

Historically, the Council did not operate proper profit and loss accounts for its commercial assets, this was now being brought in.  A provision of £20 million had been approved at the previous Council meeting under the Capital Programme.

The Committee requested that recommendation (xviii) have the wording ‘per annum’ added to make clear that the £26.31 Council Tax increase for a Band D property was the additional cost for the whole  ...  view the full minutes text for item 9