Agenda item

Draft 2021/2022 Budget and Medium Term Financial Plan


Committee consideration based on the draft budget issued 7 January 2021.

Mr P Oakford, Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services; Mrs Z Cooke, Corporate Director of Finance and Mr D Shipton, Head of Finance Policy, Planning and Strategy were in attendance for this item.


1.    Mr Oakford provided a verbal overview of the budget and noted its progression through the Cabinet Committees. He stressed the fiscal significance of the past 10 months on County Council finances and noted the high level of uncertainty. Mr Oakford added that a possible adjustment of services and risks may be required, especially related to children’s services expenditure, when considering a future return of pupils to school as an example.


2.    Mr Shipton gave a presentation which provided a detailed overview of consultation feedback, the revenue budget and capital programme, schools budgets, financial risks, resilience, and medium-term planning. He noted that the provisional 2021-22 Local Government Finance Settlement (LGFS) had been greater than expected. Council Tax increases were outlined as a 1.99% general precept increase and a 3% Adult Social Care precept increase. Mr Shipton added that confirmation of Kent’s ringfenced Public Health grant was still pending. Net spending increases were cited at £98m, £80.7m for business-as-usual operations and £17.3m directly related to Covid-19 operations, savings of £23.2m were delineated. Budget risks were addressed, Members were informed that financials risks had been considerably greater during the 2020-21 financial year as a result of the pandemic and that the trend would continue into 2021-22, assurances were given that reserves were to be bolstered to mitigate risks associated with in-year service demands. Kent’s financial resilience was compared with other upper tier authorities, it was noted that the authority had comparatively low levels of reserves and relatively high levels of debt than other county councils.


3.    The Chairman commended Mr Oakford, Mrs Cooke, Mr Shipton and all Officers within the Finance division for their efforts in producing a resilient budget given the challenges presented by the Covid-19 pandemic.


4.    A Member appealed to the Monitoring Officer with a request for additional information concerning the County Council’s revenue variation statements. Sections 4(a), 4(h), 7.1(b), 8.10(b), 17.68, 21.9 and 21.10 of the Constitution were cited by the Member.  POST MEETING NOTE:  A written response, from the Monitoring Officer, to the requests made by the Member was circulated to the Committee on 3 February 2021.


5.    The Committee scrutinised the Draft 2021/2022 Budget and Medium Term Financial Plan on a page-by-page basis, the following questions were asked:


a.    In relation to the national fiscal and economic context, a Member asked to what extent above inflation Council Tax increases were sustainable for Kent’s taxpayers. Mr Oakford reassured Members that KCC had continued to lobby central government, directly and through the LGA and CCN for greater and longer-term financial settlements. Mr Shipton added that central government had published the 2021-22 Core Spending Power index, which analysed the resources available to local authorities to fund service delivery and set out its assumptions of Council Tax increases. It was confirmed that Kent’s proposed increase was in line with the Government’s assessment.


b.    A Member requested a statement of confidence from the Deputy Leader regarding the figures outlined for Capital Receipts. Mr Oakford stated his confidence in the Capital Receipt figures and his expectation that the projected figures would be achieved despite the associated risks.


c.    Mr Oakford was asked whether the future use and possible sale of KCC owned properties to provide additional capital had been considered. He noted that properties had been sold to fund capital projects over past 10 years and that the current focus of Infrastructure had been on analysing building use, especially when leasehold properties were considered. A Member requested that future capital demands and the use of KCC’s estate be added to the Work Programme, this would be added to the agenda for a future Scrutiny Committee meeting.


d.    A Member requested clarification on future Member renumeration. Mr Oakford confirmed that the independent Member Remuneration Panel would make a recommendation on the appropriate level of Member remuneration for decision by County Council in May and that a 2% rise in allowances had been budgeted to reflect the existing scheme.


e.    A Member asked whether the capitalisation of mobile classrooms on school sites was possible or had been considered whilst schools were closed. Mr Oakford noted that the grounds for using mobile classrooms had been short term and to permit the continuation of construction projects. Mr Shipton confirmed that mobile classrooms could not be capitalised as they do not meet the requirement of enhancing an asset. When asked to confirm whether mobile classrooms were rented by the authority and to disclose the total spent by KCC on mobile classrooms, Mr Shipton agreed to circulate the relevant information to the Committee following the meeting.


f.     In relation to the contribution to reserves outlined in the 2021-22 Revenue Growth Proposals, a Member asked whether when the impact of Council Tax increases on economically vulnerable taxpayers was considered, what the rationale for reserve contributions had been. Mr Oakford confirmed that the increase in reserves were to mitigate the risks associated with increased service demands during the financial year, he cited the future easing of social restrictions and return to school as an example of key drivers of demand, in particular for children’s social care and home to school transport.


g.    A Member asked whether the Community Warden service would be evenly distributed across the county given the proposal to maintain the current number of staff posts. Mr Oakford reassured the Committee that he had worked with the Cabinet Member for Community and Regulatory Services and the Corporate Director of Growth, Environment and Transport to ensure that the service had the appropriate level of resources to provide coverage across the county.


6.    The draft capital and revenue budgets were not noted by Dr Sullivan.

RESOLVED that the Scrutiny Committee note the draft capital and revenue budgets including the responses to the budget consultation.

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