Agenda item

COUNCIL BUDGET

The Budget Debate will only consider:

(i) the Cabinet’s Budget Recommendations/Minutes, which shall include any additional paragraphs / recommendations (e.g. those relating to precepts), together with any other recommendation(s) / minute(s) from the Cabinet meeting held on 17 February 2020 (and/or any other relevant Cabinet meeting) that require approval by the Council; and

(ii) any objections to the recommendations and those Alternative Budget Proposal(s) or Amendment(s) to the Cabinet’s Budget Recommendations / Minutes referred to at (i) above that are duly lodged with the Director: Governance and Assurance (Monitoring Officer) on or before 12noon on Wednesday, 26 February 2020.

(iii) Budget Debate shall be conducted in accordance with the Budget Debate Process. (attached).

Minutes:

In accordance with the agreed Budget Council Procedure, the Leader of the Council, Councillor Pat Hackett moved, and Councillor Jeanette Williamson seconded, the Cabinet’s recommended Budget to Council set out in Minute 90 (extract) from the meeting of the Cabinet held on 17 February 2020:

90 Council Budget 2020/21 & Medium Term Financial Plan (2021/22 to 2024/25)

A. Councillor Janette Williamson introduced a report which provided an update on the Budget 2020/21 and the Medium Term Financial Plan (MTFP) previously reported to Cabinet on 23 December 2019. It set out the background and the key elements contributing to the preparation of the Budget for 2020/21 and set out recommendations on the budget and council tax for the Council.

The Council continued to face financial constraints and pressures. The medium term financial planning period to 2024/25 was expected to contain further grant funding reductions and increasing financial pressures. The report set out how the Council would balance the budget for 2020/21 and updated the MTFP for the period to 2024/25.

The Cabinet had to recommend a 2020/21 Budget proposal to the Council on 2 March 2020. This included a recommendation on the Wirral Council element of the Council Tax to be applicable for the 2020/21 financial year.

The Council had to agree a Budget and set the levels of Council Tax for 2020/21 by 10 March 2020. The Council tax increase was proposed to be 3.99% (2% Adult Care precept and a 1.99% increase in Council tax). There was growing demand placed on adults’ and children’s care budgets with current pressures of £13m, although the 2% precept would only bring in an additional £2.85m. Nearly £900,000 was proposed for the budget for an automatic reduction in Council tax for the 9,000 poorest households in the borough. She thanked all of her Cabinet colleagues and officers, particularly in the finance team, for all their work on this proposed budget.

Members of the Cabinet reiterated the rising demands and pressures being placed on the Council whilst having to respond to cuts in funding from central Government.

B. Councillor Tom Usher introduced a report which set out the Schools Budget for 2020/21 having previously been considered by the Schools Forum at their meetings on 6 November, 2019 and 15 January, 2020.

The Schools Budget covered education provision for all Wirral Pupils aged up to 18 in Early Years, Primary, Secondary and academy schools and for some pupils up to the age of 25 in Special Schools and High Needs providers.

Most budgets were delegated to schools with some central provision for support services including school admissions and High Needs.

The report proposed several changes to the local funding formula for Schools to allow implementation of the National Funding Formula, following the transition steps taken in 2019/20. There were also changes proposed to High Needs.

The Schools Budget provided resources to support all children and young people pledges, and the proposals within the report resulted in an in-year surplus of £643,900 on the Dedicated Schools Grant (DSG) budget, which it was proposed to transfer to the DSG reserve to partially offset the deficit position expected at the end of 2019/20.

Councillor Usher referred to the Government’s extra 8 pence per pupil, under the changes to the funding formula. He referred to an article published in the Times Education Supplement in 2018, by a local secondary school Head Teacher, regarding the long term real term cuts in schools funding. Having asked the Head Teacher for an update he had commented that pupil funding was now almost 10% lower than in 2009.

Other Cabinet Members concurred with the views expressed regarding the cuts in schools funding.

C. Councillor Janette Williamson introduced a report which provided Cabinet with the draft Capital Programme 2020/25 for consideration and referral to Council for approval. It also included information regarding the revenue implications of this Programme and an update on the latest forecast for capital receipts. The 2020/25 Capital Programme represented a combination of schemes originally approved as part of the 2019/22 Programme, updated through the Capital Monitoring reports in 2019/20 and new bids for inclusion as detailed in the report.

D. Councillor Janette Williamson introduced a report, which stated that the Authority’s treasury management activity was underpinned by CIPFA’s 2017 Code of Practice on Treasury Management (“the Code”), in which there was a new requirement for Council to approve an annual Capital Strategy. The report fulfilled the Authority’s legal obligation under the Local Government Act 2003 to have regard to the CIPFA Code.

E. Councillor Janette Williamson reported that the Authority’s treasury management activity was underpinned by CIPFA’s 2017 Code of Practice on Treasury Management (“the Code”, which required the production of annual Treasury Management Indicators and a Treasury Management Strategy Statement on likely financing and investment activity. The Code also recommended that Members were informed of treasury management activities at least twice a year.

This report fulfilled the Authority’s legal obligation under the Local Government Act 2003 to have regard to the CIPFA Code. It did not cover the requirements of the 2018 Ministry for Housing, Communities and Local Government (MHCLG) Investment Guidance, which mostly referred to non-treasury investments and was the subject of a separate report.

F. Councillor Janette Williamson introduced a report which stated that in February 2018 the Ministry for Housing, Communities and Local Government (MHCLG) published updated ‘Guidance on Local Government Investments’. The previous edition covered only Treasury Management investments. In recent years local authorities had had an increasing focus on commercial activities including but not exclusive to property. Such activity had the potential to bring both increased returns and increased positive and negative risk. The revised Guidance on Local Authority Investments required that a separate Investment Strategy focusing on non-treasury investments was produced and approved annually by Council. The report fulfilled the requirement of the MHCLG to produce an investment strategy that covered non-treasury activities.

In concluding, the Leader thanked all the Cabinet Members and referred to the reduction in the Council’s spending power of £233m over the last decade, with a further £32m reduction to come in the coming year. This was in contrast to those boroughs in the south of England which were receiving budget increases such as Hampshire County Council. He referred to a new funding formula which the Government was introducing which would dramatically reduce the importance of deprivation when calculating funding allocations. He called upon the other political parties on the Council to join with the Labour Group to lobby the Government to get the best deal possible for the Council.

Resolved – That:

A. Revenue Budget 2020/21 and Medium Term Financial Plan (2021/22 to 2024/25)

(1) The Cabinet recommends to the Budget Council a Budget proposal for 2020/21 and MTFS 2021/22-2024/25 based upon:

a. the updated Medium Term Financial Plan (MTFP) 2021/22 – 2024/25, as set out in Appendix 6 of the report;

b. the fees and charges included in Appendix 3 of the report, with delegated authority being:

i) given to the Section 151 Officer to update the Council’s Fees and Charges Directory prior to publication before 1 April 2020;

ii) given to the relevant Director in consultation with the relevant Portfolio Holder and Section 151 Officer to vary existing fees and charges; and

iii) approval of the Pricing and Charging Policy.

c. continued use of the existing Business Rates Discretionary Relief Policy (updated in line with annual legislation), approved by Cabinet on the 18^th February 2019, along with existing reliefs, for 2020/21;

d. maintenance of General Fund Balances at, or above, a level of £10m, based on a locally determined approach and assessment of the financial risks that the Council may face in the future;

e. the Chief Financial Officer Statement regarding the robustness of the estimates made for the purpose of the Budget and the adequacy of the General Fund balances and reserves at Appendix 5.

(2) The Cabinet recommends to the Council that a separate vote be taken in respect of Council Tax levels for 2020/21 and that:

a. for Wirral Council Services, Council Tax is increased by 3.99% for 2020/21; and

b. the overall Wirral Council Tax will also continue to include additional precepts from the Police and Crime Commissioner for Merseyside, from the Merseyside Fire & Rescue Service and from the Liverpool City Region Combined Authority.

B. Schools Budget and Funding Formula Changes 2020/21

(1) The Cabinet recommends to the Council approval of the 2020-21 Schools Budget at £279,960,200, having recognised the following views and formula proposals from the Schools Forum, that:

i) the 2020-21 schools funding formula should adopt the formula factors rates of the National Funding Formula;

ii) a Minimum Funding Guarantee of 1.84% for Wirral mainstream schools in 2020-21 was approved to provide additional protection and stability in funding, and to ensure schools received a minimum 1.84% increase in per pupil funding (as defined by the National Funding Formula) and cannot lose pupil funding unless there was a reduction in pupil numbers, therefore ensuring that no pupil was disadvantaged as a result of the change in formula.

iii) the continuing Contributions to Combined Budgets should be £700,500 in 2020-21;

iv) surplus High Needs funding of £643,900 in 2020-21 is transferred to the DSG reserve to partially offset the DSG deficit expected at the end of 2019-20.

C. Capital Programme and Financing 2020/24

Cabinet:

(1) recommends to Council the approval of the new bids as detailed in Appendix 2 requiring £16.054 million borrowing for inclusion in the Capital Programme;

(2) recommends to Council the approval of any new bids supported by grant funding do not commence until written confirmation had been received from the granting authority;

(3) recommends to Council the approval of the Capital Programme 2020/25 (as detailed in Appendix 3);

(4) recommends to Council the approval that progress on delivering the Capital Programme is presented in accordance with the agreed Capital Monitoring arrangements.

D. Capital Financing Strategy 2020/21

Cabinet:

(1) recommends to Council the approval of the Capital Strategy for 2020/21;

(2) recommends to Council the approval of the associated Prudential Indicators to be adopted;

(3) recommends to Council the approval of the Council’s Minimum Revenue Provision policy;

(4) recommends to Council the approval of the Council’s Flexible Use of Capital Receipts Strategy.

E. Treasury Management Strategy Statement 2020/2023

Cabinet:

(1) recommends to Council the approval of the Treasury Management and Investment Strategy for 2020/2023;

(2) recommends to Council the approval of the Treasury Management Indicators.

F. Investment Strategy Statement 2002/21

Cabinet recommends to Council the approval of the Investment Strategy for 2020//2021, which includes potential investment in the following activity areas:

· Commercial Property

· Service Investments: Loans

· Service Investment: Shares (non-currently held)

· Loan Commitments and financial Guarantees

The Statutory Calculations and Resolution

It be noted that in accordance with Section 31B of the Local Government Finance Act 1992 (as amended), that Cabinet on 25^th November 2019 calculated the Council Tax Base 2020/21 for the whole of the properties in its area as 93,965.9 (Item T in the statutory formula).

That the following amounts be calculated and approved by the Council for the year 2020/21 in accordance with Sections 32-36 of the Local Government Finance Act 1992 (as amended) (“the Act”);

a) £148,861,700 being the amount calculated in accordance with Section 31A (4) of the Act (amended) as the Council Tax Requirement for 2020/21 (item R in the statutory formula). This amount (D) is determined as being the difference between:

i) £833,730,000 this being the aggregate of the amounts calculated in accordance with Section 31A (2) of the Act (as amended), i.e. the aggregate of the amounts that the Council estimates that will be charged to a revenue account for the year in performing its functions, that are required to be set aside for contingencies and reserves and required to be transferred from its General Fund to its Collection Fund in the year and

ii) £684,868,300 this being the amount calculated in accordance with Section 31A (3) of the Act (as amended), i.e. the aggregate of the amounts of income that the Council estimates will be credited to a revenue account for the year in accordance with proper practices, the amount of reserves that are estimated to be used to provide for the items referred to in paragraph (a) above, and required to be transferred from its Collection Fund to its General Fund in the year.

b) £1,584.21 being the amount calculated in accordance with Section 31B (1) of the Act (amended) as the Basic Amount of Council Tax for 2020/21. This amount being calculated as item R divided by item T (as above).

c) That in accordance with section 36(1) of the Act that the following amounts are calculated for each valuation band in the area:

Wirral – Basic Amount of Council Tax per Valuation Band

A	B	C	D
£1,056.14	£1,232.16	£1,408.19	£1,584.21
E	F	G	H
£1,936.26	£2,288.31	£2,640.35	£3,168.42

These amounts being the amounts given by multiplying the amount calculated as the Basic Amount of Council Tax by the number which in the proportion set out in Section 5(1) of the Act is applicable to dwellings in a particular valuation band which is applicable to dwellings listed in valuation Band D.

It be determined that the amount set in (c) above as the Council’s Basic Amount of Council Tax for 2020/21 is not excessive in accordance with the principles determined by the Secretary of State under section 52ZC of the Act (as amended) and that no Referendum to approve the Basic Amount of Council Tax is required. The principles require a Referendum to be held for any increases of 4% or above, as per the Local Government Finance Settlement for 2020/21. The Settlement included provision for local authorities with social care responsibilities to increase the level of Council Tax by 2% for the Adult Social Care precept; and by up to 2% for the Council element. Where Council Tax is increased at or above 4% a local referendum will be required. The overall proposed increase in the Wirral basic Council Tax is 3.99%, including a Council increase of 1.99%, and is therefore within the Settlement’s ceilings.

Wirral – Basic Amount of Council Tax Comparison for Referendum

	2019/20	2020/21	Change	Change
	£	£	£	%
Band D	£1,523.42	£1,584.21	£60.79	3.99

To note that the Police and Crime Commissioner for Merseyside, the Merseyside Fire and Rescue Service and the Liverpool City Region Combined Authority issue precepts 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. This will be as indicated in the tables which when received will be included in updated tables to Council.

Police and Crime Commissioner for Merseyside

A	B	C	D
£141.31	£164.87	£188.42	£211.97
E	F	G	H
£259.07	£306.18	£353.28	£423.94

Merseyside Fire and Rescue Authority

A	B	C	D
£53.60	£62.53	£71.47	£80.40
E	F	G	H
£98.27	£116.13	£134.00	£160.80

Liverpool City Region Combined Authority – Mayoral Precept

A	B	C	D
£12.67	£14.78	£16.89	£19.00
E	F	G	H
£23.22	£27.44	£31.67	£38.00

That having calculated the amounts for Wirral together with the Police, Fire and Liverpool City Region – Mayoral Precept the Council in accordance with Section 30 (2) of the Act hereby sets the following amounts as the total amount of Council Tax for the year 2020/21 for each of the categories of dwellings.

Total Council Tax for Wirral

A	B	C	D
£1,263.72	£1,474.34	£1,684.97	£1,895.58
E	F	G	H
£2,316.82	£2,738.06	£3,159.30	£3,791.16

CONSERVATIVE BUDGET OBJECTION 2019/20

Councillor Ian Lewis moved and Councillor Lesley Rennie seconded the following objection to the proposed budget 2020/21 –

“It is now 12 years since Labour crashed the economy, causing the rate of increase in overall public spending to slow.

It is 10 years since the Coalition Government requested councils to play their part in restoring economic growth and, in return, retain the benefits of that growth in the Council Tax base and Business rates.

During that time, every single budget presented by the Labour Group has failed to adapt to these changes and, instead, used ‘austerity’ as an excuse to virtue signal to their base support.

It is almost one year since the Labour Group changed its Leader, but it has yet to change its rhetoric or its approach on how it spends the taxes it collects.

Wirral’s Conservative Councillors believe the costs of the Chief Officer Team and Senior Directors (as listed on www.wirral.gov.uk) are an excessive burden on the Taxpayer, costing £2,338,455 in 2019/20

Under Reg 3(1) of The Local Authorities (Standing Orders) (England) Regulations 2001 (as amended), Wirral’s Conservative Councillors therefore object to the Labour Cabinet’s Budget Recommendations because there are:

· No proposals to invest in new council housing to start to meet the needs of 8,810 families on the housing waiting list.

· No proposals to tackle the problem of dog fouling across the Borough, almost 12 months after Labour’s contract with Kingdom was ended.

· No proposals to re-entering the ‘market’ for children’s care during 2020/21 by direct provision of children’s homes, to reduce cost pressures from private providers and improving the standard of care provided.

We therefore seek to have the Cabinet’s Budget Recommendations rejected and request Cabinet to submit fresh proposals reflecting these priorities to Council, within no more than five working days.

We welcome the work undertaken by the Audit & Risk Management Committee to identify weak internal financials control – as demonstrated by £28.9 million spent during April – September 2019 without proper authorisation – and look forward to further work by the Committee during the next financial year.”

LIBERAL DEMOCRAT BUDGET AMENDMENT 2019/20

Councillor Phil Gilchrist moved and Councillor Chris Carubia seconded the following amendments to the proposed budget 2020/21 –

“Council notes and approves the Budget 2020/21 recommended by Cabinet and the associated Council Tax rise and, in so doing, asks the Council to take into account and act upon the range of issues referred to herein.

Council notes that this will be the final budget prepared under the ‘Cabinet’ system of governance and looks forward to a more inclusive budget preparation programme under the new ‘Committee’ system when all Members will have greater opportunities to contribute to setting the budgetary priorities of the Council.

Members will take the opportunity to develop priorities in the light of the climate emergency, the emerging local plan and housing needs. Areas of spending that appear perverse in the current financial climate will be investigated in detail, such as the £750,000 being spent on the Communications Team with its nineteen digital, news, creative and content officers.

Council notes that this year’s national Local Government Finance Settlement is for one year only and expresses its concern at the lack of certainty from Government on its policy towards the funding of local government and in particular how it intends to help with the emerging pressures around elderly care services and services for young people.

It is especially troubling that the LGA’s early illustration of the impact of the proposed new Adult Social Care Relative Needs Formulas, which are being considered for implementation in 2021/22 as part of the Government’s review of relative needs and responsibilities, commonly called the ‘Fair Funding Review’, appears very damaging to Wirral. In this regard, Council urges the Leaders of all parties on the Council to cooperate in working up representations to challenge the unfairness of the ‘Fair Funding Review’, if it is found to be detrimental to Wirral.

Council also expresses its concern over the future of the Public Health Grant: should resources be reduced, Council requests officers to analyse the current expenditure areas to determine from an outcome perspective which areas of the grant can secure the best outcomes in the critical areas of mental health and housing/environmental health.

Council, therefore, requests officers to report to the forthcoming Policy and Resources Committee when national policy in these areas is developed and to ensure this Council is able to respond to consultations with evidence-based submissions to maximise funding for Wirral residents.

Having regard to several Motions passed, in most cases unanimously, by the Council this year, Council is concerned that the priorities embedded within those Motions have not yet emerged as part of the medium-term financial plan.

Accordingly, Council requests officers to report to the new Policy and Service Committees and Policy and Resources Committee on the development of a five-year financial plan for Wirral 2021/26 which will reflect the priorities expressed by full Council.

In particular, Council requests early reports in the following areas:

1. The introduction of 20mph zones in residential areas across Wirral to make our streets calmer and safer with particular reference to safety around, and on, routes to schools. (Council Minute 90 Oct 19 refers).

2. Practical schemes that will ensure the Council meets its goal of reducing its CO2 emissions by 60% by 2025, including installing bio and solar roofing on all suitable flat roofing owned by the Council and on all new builds with flat roofs (Council Minute 89 Oct 19 refers).

3. The reintroduction of resources to help to bring empty properties back into use.

4. The feasibility of the Council reopening a Housing Revenue account and once again building affordable houses for rent.

The Statutory Calculations and Resolution

That the following amounts be calculated and approved by the Council for the year 2020/21 in accordance with Sections 32-36 of the Local Government Finance Act 1992 (as amended) (“the Act”);

d) £148,861,700 being the amount calculated in accordance with Section 31A (4) of the Act (amended) as the Council Tax Requirement for 2020/21 (item R in the statutory formula). This amount (D) is determined as being the difference between:

e) £1,584.21 being the amount calculated in accordance with Section 31B (1) of the Act (amended) as the Basic Amount of Council Tax for 2020/21. This amount being calculated as item R divided by item T (as above).

f) That in accordance with section 36(1) of the Act that the following amounts are calculated for each valuation band in the area:

Wirral – Basic Amount of Council Tax Comparison for Referendum

	2019/20	2020/21	Change	Change
	£	£	£	%
Band D	£1,523.42	£1,584.21	£60.79	3.99

Police and Crime Commissioner for Merseyside

A	B	C	D
£141.31	£164.87	£188.42	£211.97
E	F	G	H
£259.07	£306.18	£353.28	£423.94

Merseyside Fire and Rescue Authority

A	B	C	D
£53.60	£62.53	£71.47	£80.40
E	F	G	H
£98.27	£116.13	£134.00	£160.80

Liverpool City Region Combined Authority – Mayoral Precept

A	B	C	D
£12.67	£14.78	£16.89	£19.00
E	F	G	H
£23.22	£27.44	£31.67	£38.00

Total Council Tax for Wirral

A	B	C	D
£1,263.72	£1,474.34	£1,684.97	£1,895.58
E	F	G	H
£2,316.82	£2,738.06	£3,159.30	£3,791.16

LIBERAL DEMOCRAT SCHOOLS BUDGET AMENDMENT 2020/21

“Council approves the proposed Budget but, in so doing, Council recognises the difficult decisions that school governing bodies have been making in recent years.

Council appreciates the steps that the Schools Forum has taken to respond to the new funding formula and its impact.

Council believes that a clear analysis is required so that Members can fully appreciate the pressures on the teaching profession, governing bodies and, above all, the impact on our younger generation.

To this end, Council requests that each governing body provides an overview and summary of the steps they have had to take, albeit from an arbitrarily chosen date of 1 January 2018, so that the reductions in teachers, assistants, learning mentors and educational support staff can be quantified.

It is important that, if at all possible, this view is also collected from academies operating within Wirral to form a complete picture.

Information collected by officers relating to school budget deficits, via the latest monitoring, should also be placed before Members.

Council suggests that this should be brought together in a report for the first appropriate meeting of the new Children, Young People and Education Committee.

The purpose of the report shall be to provide a clear picture of the impact of the new funding formula on the education of young people in Wirral, to provide an authoritative picture to OFSTED and to enable this Council to make representations to local MPs, the LGA and especially the Government.

In the event that the Government’s Budget of 11 March makes changes to the emerging picture, that shall be taken into account to ensure a balanced overview.”

BUDGET DEBATE

A debate ensued on the Labour Budget, Liberal Democrat Budget amendment and Conservative objection as included in the Council agenda papers. Debate included varied references to the budget pressures faced by the Council and actions proposed to maintenance of Council services and the most appropriate use of finances in support of plans for the regeneration of Wirral.

VOTING

Following the debate and Councillors Pat Hackett, Ian Lewis and Phil Gilchrist having replied, the Civic Mayor indicated that recorded votes would be taken in accordance with the Budget Council Procedure.

Councillor Pat Hackett, Leader of the Council informed Members that the Labour Group would accept the Liberal Democrat Amendments regarding the Schools Budget 2020/21 and Council Budget 2020/21. No votes were therefore required in respect of these two specific matters.

The Civic Mayor informed that Council was requested to note the two following matters:

Revenue Monitoring 2019/20 Quarter 3, to December 2019 (Cabinet 17 February 2020, Minute 87 refers)
2020/21 Budget Proposals Scrutiny Report (Cabinet 17 February 2020, Minute 89 refers)

It was:

Resolved that the items be noted.

In respect of the Liberal Democrat Amendment Capital Monitoring 2019/20 Quarter 3, to December 2019 (People’s Pool) the Council divided as follows:

For the motion (9) – Councillors A Brame, C Carubia, A Corkhill, B Davies, P Gilchrist, S Kelly, M McLaughlin, D Mitchell and M Sullivan.

Against the motion (55) - Councillors T Anderson, B Berry, J Bird, D Burgess-Joyce, H Cameron, K Cannon, P Cleary, W Clements, M Collins, C Cooke, T Cottier, T Cox, G Davies, S Foulkes, S Frost, A Gardner, K Greaney, J Green, E Grey, P Hackett, P Hayes, S Hayes, A Hodson, K Hodson, J Johnson, AER Jones, C Jones, S Jones, T Jones, M Jordan, B Kenny, A Leech, I Lewis, J McManus, C Muspratt, Y Nolan, T Norbury, C Povall, L Rennie, J Robinson, L Rowlands, C Spriggs, S Spoor, J Stapleton, P Stuart, T Usher, J Walsh, G Watt, S Whittingham, I Williams, J Williams, S Williams, J Williamson, G Wood and A Wright.