Agenda item

Report FSD21008

A key part of the financial strategy was to highlight the budget issues that will need to be addressed by the Council over the coming financial years, by forecasting the level of available resources from all sources and budget pressures relating to revenue spending. Details of the capital programme were set out in a separate report.

The Provisional Local Government Finance Settlement 2021/22, which covered 2021/22 only, provided the second year (following 10 years of austerity) of real increases in funding although this was mainly reliant on the utilisation of the ASC precept to support cost pressures in social care. The settlement also provided funding towards the cost of the Covid pandemic continuing in part of 2021/22.

Although the settlement was to be welcomed there remained uncertainty around the level of Government funding for 2022/23 and beyond, particularly as the Government would need to address the significant increase in public debt due to the pandemic. The longer-term Spending Review had been postponed for a further year (until 2022/23) together with the outcome of the Fair Funding Review and Devolution of Business Rates.

The report identified the final issues affecting the 2021/22 revenue budget and sought recommendations to the Council on the level of the Bromley element of the 2021/22 Council Tax and Adult Social Care precept. Confirmation of the final GLA precept would be reported to the Council meeting on 1^st March 2021. The report also sought final approval of the ‘schools budget’. The approach reflected in the report was for the Council to not only achieve a legal and financially balanced budget in 2021/22 but to have measures in place to deal with the medium term financial position (2022/23 to 2024/25).

With the Government reductions in funding since austerity measures began, the burden of financing increasing service demands fell primarily on the level of council tax and share of business rate income. The financial forecast assumed that the level of core grant funding would remain unchanged in future years.

The Director of Finance circulated additional technical recommendations before the meeting, and confirmed that the proposed council tax increase of 4.99% was below the threshold requiring a referendum to be held. He also reported that details of the Public Health Better Care Fund were still awaited and would be reported to Council.

The Resources, Commissioning and Contract Management Portfolio Holder, Councillor Graham Arthur, stated that the one-year settlement from central Government was understandable, but made planning difficult. It was essential that the Council continued to live within its means and that the savings from the transformation programme were achieved. He also praised Council staff and announced that there would be a 2% salary increase, and a doubling of the merit payment pot to £400k.

(Councillor Simon Fawthrop declared an interest as his wife was employed by the Council.)

The report had been scrutinised by the Executive, Resources and Contracts

PDS Committee on 3^rd February 2021 and the Committee supported the recommendations.

RESOLVED that Council be recommended to -

(1)  (a) Approve the schools budget of £79.506m which matches the estimated level of Dedicated Schools Grant (DSG) after academy recoupment;

(b) Approve the draft revenue budgets (as in Appendix 2) for 2021/22;

(c)  Agree that Chief Officers identify alternative savings/mitigation within their departmental budgets where it is not possible to realise any savings/mitigation reported to the previous meeting of the Executive held on 13^th January 2021;

(d) Approves a revised Central Contingency sum of £14,925k (see Section 6);

(e)  Approves the following provisions for levies for inclusion in the budget for 2021/22:

   *  Provisional estimate at this stage 

(f)  Notes the latest position on the GLA precept, as above, which will be finalised in the overall Council Tax figure to be reported to full Council (see section 12);

(g) Sets a 4.99% increase in Bromley’s council tax for 2021/22 compared with 2020/21 (1.99% general increase plus 3% Adult Social Care Precept) and notes that, based upon their consultation exercise, the GLA are currently assuming a 9.5% increase in the GLA precept;

(h) Approves the revised draft 2021/22 revenue budgets to reflect the changes detailed above;

(i)  Approves the approach to reserves outlined by the Director of Finance (see Appendix 4);

(j)  Executive agrees that the Director of Finance be authorised to report any further changes directly to Council on 1^st March 2021.

(2)  Council Tax 2021/22 – Statutory Calculations and Resolutions (as amended by the Localism Act 2011).

  Subject to 2.1 (a) to (j) above, if the formal Council Tax Resolution as detailed below is approved, the total Band D Council Tax will be as follows:

* The GLA Precept may need to be amended once the actual GLA budget is set.

(#)  in line with the 2021/22 Council Tax Referendum Principles, the % increase applied is based on an authority’s “relevant basic amount of Council Tax” (£1,264.77 for Bromley) – see paragraph 6 below.  Any further changes arising from these Principles will be reported directly to Council on 1^st March 2021.

(3)  Council is recommended to formally resolve as follows:

1.  It be noted that the Council Tax Base for 2021/22 is 132,026 ‘Band D’ equivalent properties.

2.  Calculate that the Council Tax requirement for the Council’s own purposes for 2021/2022 is £175,312k.

3.  That the following amounts be calculated for the year 2020/21 in accordance with Sections 31 to 36 of the Local Government Finance Act 1992, as amended (the Act):

(a)  £586,568k being the aggregate of the amounts which the Council estimates for the items set out in Section 31A(2) of the Act.

(b)  £411,256k being the aggregate of the amounts which the Council estimates or the items set out in Section 31A(3) of the Act.

(c)  £175,312k being the amount by which the aggregate at 3(a) above exceeds the aggregate at 3(b) above, calculated by the Council in accordance with Section 31A(4) of the Act as its Council Tax requirement for the year.

(d)  £1,327.86 being the amount at 3(c) above, divided by (1) above, calculated by the Council in accordance with Section 31B of the Act, as the basic amount of its Council Tax for the year. 

4.  To note that the Greater London Authority (GLA) has issued a precept to the Council in accordance with Section 40 of the Local Government Finance Act 1992 for each category of dwellings in the Council’s area as indicated in the table below (NB. the GLA precept figure may need to be amended once the actual GLA budget is set).

5.  That the Council, in accordance with Sections 30 and 36 of the Local Government Finance Act 1992, hereby sets the aggregate amounts shown in the table below as the amounts of Council Tax for 2021/22 for each part of its area and for each of the categories of dwellings.

6.  That the Council hereby determines that its relevant basic amount of council tax for the financial year 2021/22, which reflects a 4.99% increase (including Adult Social Care Precept of 3%), is not excessive.  The Referendums Relating to Council Tax Increases (Principles) (England) Report 2021/22 sets out the principles which the Secretary of State has determined will apply to local authorities in England in 2020/21.  Any further changes arising from these Principles will be reported directly to Council on 1^st March 2021.  The Council is required to determine whether its relevant basic amount of Council Tax is excessive in accordance with the principles approved under Section 52ZB of the Local Government Finance Act 1992.