Report of the Corporate Director (Resources, Environment and Cultural Services) presenting the budget proposals for 2020/21 as considered by the Cabinet on 6 January 2020.
(Note: The above report was considered by the Cabinet on 6 January 2020. Members are requested to retain their copies of the report for this Committee meeting. Documents can be viewed on the following link: Cabinet Documents 6 January 2020 )
Members considered the report of the Corporate Director (Resources, Environment and Cultural Services) on the budget setting for 2020/21. The report noted that on the 6 January 2020, Cabinet had considered the proposed General Fund Budget, Capital Programme, Housing Revenue Account Budget, Fees and Charges, Medium Term Financial Strategy and Governance Framework for financial years 2020/21 – 2022/23.
In accordance with the Council’s budget and policy framework rules, the Resources and Overview Scrutiny Committee was formally invited to consider the proposals as part of the budget setting process and make comments to the Special Cabinet meeting on 21 January 2020.
Officers summarised the Budget 2020/21 proposals and advised on the savings, together with the current financial status of the Council.
During discussion the following points were raised and addressed:-
1. Increase in earmarked reserves for Climate change initiatives (Council’s commitment) from £50k to £150k for 2020/21.
2. Following the Peer Review, an exercise was undertaken which proved successful; it generated around £800k of efficiencies. This followed the positive outturn on the 2018/19 financial position.
3. Pension Reserves – it was noted that £1.2m was set aside into earmarked reserves from the General Fund for its share of future deficit lump sum payments. The HRA share would be charged directly to the HRA.
4. New Homes Bonus – Council received £1.028m and this will partly be used to support budget expenditure. Noted that no legacy payment associated with the 2020/21 grant award. Government will consult in Spring 2020.
5. Officers clarified the situation in respect of Hertfordshire Business Rates Pool – this has been accepted and includes the County Council and five districts/boroughs.
1. Officers clarified the position on Asset Conditions Survey and confirmed that it was just for one year. Officers confirmed that this does not include housing stock – mainly commercial asset portfolio.
2. Housing Benefit Grant reductions – This grant is from DWP for administration of benefits and will be reducing as housing benefit claimants move to universal credit.
1. Reduction in GLL fees – savings were being made through the merger with Finesse Leisure in 2018, Officers advised that this was on target and were set to increase in 2020/21 in line with the planned programme of savings.
1. A full time Parking Services Officer has been added – this officer is required for the demanding improvements to parking in all areas of the Borough.
2. Concern was expressed in respect of the reduction in AFM funding. It was noted that the reduction of £50k was a share of the reduction based on the County Council’s budget savings. It was noted that Officers had written to the County to voice our concerns in respect of reduction levels for recycling, and that Officers would share these letters with the Committee.
3. Private Sector Housing stock condition survey - £50k is the cost of the survey. This survey is carried out once every five years. Members asked if they had concerns on property conditions, if they could influence the sample selected. Members were advised that a briefing note could be circulated on the project, and whether/how Members may be able to influence the sample selection process.
1. Members considered the fees and charges and concern was raised in respect of some substantial increases – for example, the car parking charges; a question was raised whether the increase destroys businesses in the local areas? Officers advised that it was only the day rates increasing, the other rates were remaining the same. This increase would be felt by the commuters rather than the shoppers so retailers should not see a decline in trade.
2. Estate management fees, it was confirmed that these fees relate to legal fees for extensions to property leases. This covers the Council’s estate. These fees do not concern the Estate Management Scheme of the Borough.
3. Concern was expressed in respect of (HCC) DBS checks – it was confirmed the fees were paid by the taxi drivers; initially the Council pays for the checks but the funds are reimbursed by the taxi drivers.
Housing Revenue Account
1. A Member sought clarification on the maintenance and supervision cost for the Housing Revenue Account budget. This was provided by Officers.
2. A Member sought clarification on the special services costs for the Housing Revenue Account budget. This was provided by Officers - these services covered community lighting, laundry, CCTV and grounds maintenance.
3. A Member queried the rent increase and whether it would impose additional burden of hardship? The increase was explained. Officers set out that there was discretionary support available, and also that the Council worked closely with CAB (budget 95k) to provide support to the public.
4. Questions were raised on the actual impact of the increases; how these affect the Borough’s residents. The increase for this year was noted as 2.7%. With the introduction of the rent reduction policy there has been an end to rent convergence. Officers explained that neighbouring tenants, with identical properties sometimes pay different rent levels, the reason for this is that legislation does not allow the Council to make changes to current tenancies in order to continue with convergence. It was clarified that once the property becomes vacant and it is re-let; it is then let at the target rent level. This maximises the Council’s income from assets.
5. The cost of housing repairs was considered together with the cost of individual house maintenance, along with the type of repair e.g. gas boilers. Officers to provide further information on the types of repairs and breakdown of costs.
6. Members queried if Officers had considered the total impact of the Council tax and housing rent increase, and what the maximum cost would be. Officers stated they would come back on this point.
1. The appendix was noted.
1. Members sought clarification of the increases to community bus hire and the Jim McDonald Centre. It appeared that the increases had been rounded up. Officers explained that for some time these services had been frozen and were now being brought in line with the fees being charged elsewhere, and to take into account inflation and longer term sustainability of the services. It was suggested that perhaps fees should be increased each year therefore not creating a high increase after a few years. It was agreed to recommend to Cabinet that a little and often increase; to avoid irregular increases.
2. Members requested further clarification on the follow:
a) Why was there a rent increase for Howlands House, as these dwelling were being closed down? Officers to revisit the increases proposed for Minster and Howlands Houses’ programme; it may be that these could be removed. Officers to clarify.
b) Why is the rent for Inspire House studio (new dwelling) same as a one bedroom property in Howlands House?
Officers to provide information on the two questions raised at the meeting.
1. A question was raised in respect of the rephasing of capital expenditure – it was explained that certain works had not been carried out in the current year therefore money had been moved to the following year.
1. The Executive Member for Resources explained the situation regarding
borrowing to lend to the new housing company to increase income.
1. The Appendix was noted.
Medium Term Financial Strategy and Governance Framework
1. The Medium-Term Financial Strategy and Financial Governance Framework document was a result of merging three documents.
2. Members were advised that there is significant amount of economic uncertainty but the Council had a healthy financial position, which is monitored.
3. The Council has already set a business plan and priorities for the period 2018 to 2021.
4. Members were advised of the typographical error on Appendix L for Revenue Contribution to Capital, which should read £7,383.
5. A 30 year business plan has been developed.
6. A question was raised in respect of ‘right to buy’, why there is a decline in the number of properties being purchased. Officers explained that there had been a general reduction since the start of the reinvigoration programme. The Executive Member for Resources explained that the majority of people who wished to purchase had done so already therefore there has been a drop in the number of people applying.
7. Parking improvements – Officers explained that funds were set aside for improvement and parking bays within the Parking programme budget for the term of the capital programme.
8. The budget process was explained as follows: ROSC comments would be presented to Special Cabinet on 21 January 2020 for consideration and these would be presented to Council on 3 February 2020.
1. That the Committee recommends to Cabinet to increase Council set fees and charges annually in future years. This is to avoid Council set fees and charges falling behind the market rates and general inflation, which can lead to sudden large increases at irregular intervals.
2. That Cabinet consider making a budgetary provision for more youth diversionary services to reduce anti-social behaviour.
3. That the Committee’s comments on the Council’s budget proposals for 2020/21 be submitted to the Special Cabinet meeting on 21 January 2020 for consideration following which the budget would be presented to Council meeting 3 February 2020.