The Mayor and the Director of Finance submitted a report for the Executive’s consideration. The purpose of the report was to present the recommended Revenue Budget of £118,328,934, Council Tax increase of 2.99% (see paragraphs 71 to 91 of the submitted report) and Capital Strategy Report for 2022/23 (see paragraphs 151 to 162).
Following on from the previous report presented to Council on 24 November 2021, the submitted report also provided a refreshed Medium Term Financial Plan (MTFP) for the period 2022/23 to 2024/25 to reflect the 2022/23 Local Government Finance Settlement (see paragraphs 17 to 29).
The Medium Term Financial Plan update in the report was integrated with the £207.3 million Investment Strategy for Middlesbrough for the period from 2021/22 to 2024/25, supported by £102.4 million of the Council’s own resources. The updated Investment Strategy was shown in Appendix 4.
The budget continued to support the Mayor’s commitment to invest in Middlesbrough and transform service delivery for residents. It was intended that through the strategy the Council could achieve the challenging financial targets faced in the Medium Term Financial Plan period whilst ensuring that there was a minimum impact on the level of service delivered to the public.
In preparing the 2022/23 revenue budget and Medium Term Financial Plan, the principles set out at paragraph 30 of the submitted report, which were consistent with budget strategies in previous years and statements made by Executive, had been adopted.
In terms of the revenue budget, budget assumptions had been applied in respect of:
· pay awards (see paragraph 32 of the submitted report);
· additional employers National Insurance contributions (see paragraph 33);
· the Living Wage (see paragraph 34), inflation (see paragraphs 35 to 37);
· additional inflation contingencies (see paragraphs 38 to 40);
· spending pressures in Children’s Social Care (see paragraphs 41 and 42);
· Covid-19 ongoing pressures (see paragraphs 43 to 48);
· other spending pressures (see paragraphs 49 to 51);
· additional income (see paragraph 52); and
· additional investment (see paragraphs 53 to 57).
The report contained information on the determination of Council Tax (see paragraphs 71 to 91 of the submitted report). A number of factors had been considered in respect of the level of Council Tax increase including the current level of Council Tax, minimising the effect of Council Tax increases to residents, the current levels of inflation, pressures from caring for vulnerable people, the level of any budget reductions required, and the medium to long term implications of the Local Government Finance Settlement 2022/23.
In terms of the Medium Term Financial Plan to 2025, the following assumptions had been applied in refreshing the Council’s plan:
· national context (see paragraphs 100 to 103 of the submitted report);
· government funding changes (see paragraphs 104 to 109);
· local funding increases (see paragraphs 110 to 116);
· pay awards (see paragraph 117);
· inflation (see paragraphs 118 to 121);
· living wage (see paragraphs 122 to 124);
· spending pressures in Children’s Social Care (see paragraphs 125 to 131);
· Adult Social Care (see paragraphs 132 and 133);
· Covid-19 ongoing pressures (see paragraph 134);
· other spending pressures (see paragraph 135);
· additional income (see paragraphs 136 and 137);
· additional investment (see paragraphs 138 to 141);
· use of reserves and balances (see paragraphs 142 and 143);
· contingency (see paragraph 144); and
· the Investment Strategy (see paragraphs 145 to 150).
Appendix 5 of the submitted report set out the proposed capital strategy report (covering the necessary prudential indicators, together with the investment strategy and minimum revenue provision policy) for endorsement. The submitted report explained the context of the Council’s financial plans against the required prudential indicators to assist in drawing conclusions around affordability, sustainability and prudence. Further information was contained at paragraphs 151 to 162 of the submitted report.
1. That the proposed budget strategy for 2022/23, as set out in paragraphs 30 to 70, be endorsed.
2. Having taken into account the matters set out in Section 32 of the Local Government Finance Act 1992 and the items set out within the report, that the budget requirement for 2022/23 to be set at £118,328,934 (as detailed in Appendix 1) be endorsed.
3. That the actual amount of Council Tax (Band D) for areas without parish precepts (excluding Fire and Police), to be set at £1,809.67, be endorsed. That represented a total increase of 2.99%. That comprised a 0% increase in general Council Tax, and an additional precept of 2.99% for Adult Social Care (which included 1% relating to 2022/23 and 1.99% of unused remaining allowable allocation from 2021/22), which had been continued by the Government to contribute towards the shortfall of funding for Adult Social Care.
4. That the actual amount of Council Tax (Band D) for areas with parish precepts (excluding Fire and Police) to be set at:- Nunthorpe Parish £1,819.10 Stainton and Thornton Parish £1,818.98 167 be endorsed. That the amounts of Council Tax for each category of dwelling, set in accordance with table 4 of Appendix 3 within the report, be endorsed.
5. That the refreshed Medium Term Financial Plan position for 2022-25, set out in the report in paragraphs 90 to 142, be noted.
6. That the updated Investment Strategy for the period to 2024/25 as outlined in paragraphs 145 to 150 (detailed in Appendix 4) be endorsed.
7. That the Capital Strategy Report (Prudential indicators, Investment Strategy and Minimum Revenue Provision) 2022/23 as outlined in paragraphs 151 to 162 (detailed in Appendix 5), and the Authorised Limit for external borrowing of £356 million for the Council for 2022/23 as set out in paragraph 161, be endorsed.
To enable the Council to meet its statutory responsibility to set a balanced revenue budget for the financial year 2022/23 and to ensure that a proper framework was in place for the medium term financial management of the Council.