Agenda item

Revenue Budget 2021/22, Capital Strategy 2021/22 to 2025/26, and Treasury Management Strategy Statement 2021/22

The report is presented by the Director of Finance and Support Services.  The draft budget for 2021/22 is presented to the Committee for preview and endorsement ahead of the agreement and approval of the Budget at Cabinet on 22 January 2021 and County Council on 12 February 2021.  Any issues or concerns raised by the Committee will be considered by the Cabinet ahead of approval at County Council.


The Committee is asked to consider the report and appendices and make any comments to Cabinet to take into account when it considers the draft Revenue Budget 2021/22, draft Capital Strategy 2021/22 to 2025/26, and draft Treasury Management Strategy Statement for 2021/22.


101.1  The Committee considered the Revenue Budget 2021/22, Capital Strategy 2021/22 to 2025/26, and Treasury Management Strategy Statement 2021/22 report by the Director of Finance and Support Services (copy appended to the signed minutes).


101.2  The Leader introduced the report and highlighted the challenge in budget setting for all local authorities with the backdrop of the Covid pandemic.  The Budget is presented in the context of the Reset Plan and aims to deliver its priorities.


101.3  The Cabinet Member for Finance introduced the report and highlighted the work that has gone into balancing the budget and supporting residents in unprecedented times.  Thanks was offered to the Finance team for their hard work in a challenging timeline, and Members for their understanding of the financial limitations faced by the council.  The predicted budget shortfall in November has been mitigated by savings identified by the services, and now the provisional Government settlement has been received some of the proposed savings measures can be removed.  The revenue spend has been increased year on year by 5.2% which supports key services for residents.  Spending has been re-profiled to allocate extra funding to two priority areas, highway maintenance and supporting the council’s aim to be carbon neutral by 2030.  The funding challenge is expected to continue in 2022/23.


101.4  The Director of Finance and Support Services outlined key information to note in the budget.  Key concerns in setting the budget include the uncertainty of Government funding streams, uncertainty in long term funding of adult social care, and the ongoing effects of responding to the Covid pandemic, however the budget for 2021/22 is balanced without relying on reserves which gives strength to the council’s financial position.


101.5  The chairmen of the service scrutiny committees were asked to update the committee with any recommendations or comments from their scrutiny discussions on the budget proposals, as follows:

·       Children and Young People’s Services Scrutiny Committee (CYPSSC) chairman welcomes increased financial support for the service. Proposals for reductions in the Early Help service are out for consultation and will be further scrutinised at the appropriate time.

·       Health and Adult Social Care Scrutiny Committee (HASC) chairman noted a Task and Finish Group will be established to look at the savings in adult social care.  The committee noted concern regarding reductions to respite services and the resulting effect on families.

·       Environment and Communities Scrutiny Committee (ECSC) chairman welcomed the removal of four key savings proposals and the committee supported the business as usual savings. 

·       Fire & Rescue Service Scrutiny Committee (FRSSC) chairman noted the Fire & Rescue Service were allowed to offset their savings against the deferment of investment required to facilitate crewing arrangements.  The Cabinet Member for Fire & Rescue and Communities confirmed that this was due to significant savings having been made over the last decade and acknowledged the service requires investment to facilitate improvement.


101.6  The Committee made comments in relation to the Revenue Budget 2021/22 proposals including those that follow. It:

·       Expressed concerns regarding the significant external risks to the council’s budget, particularly the Comprehensive Spending Review, and the long term impact on the economy as a consequence of Covid and Brexit.

·       Recognised the exceptional difficulty of setting a balanced business as usual budget given the ongoing financial uncertainty around the Government’s Fair Funding Review and levelling up agenda. 

·       Expressed disappointment at the ongoing lack of clarity from the Government on future funding of adult social care and the funding freeze of the Public Health Grant.  Highlighted the need to continue investment in prevention and encouraging residents to live healthy lives given the effects of Covid. 

·       Urged continued lobbying of Government and West Sussex MPs for improved certainty and additional funding. The Cabinet Member for Finance confirmed the council continues to lobby the Government, MPs and via the County Council Network.

·       Commented that the Reset Plan prioritises and focuses resource towards vulnerable residents but other residents may receive reduced services.  The Cabinet Member for Finance stated vulnerable residents and statutory services must be protected, and reiterated that assistance is available via District and Borough councils for residents experiencing general hardship during the pandemic.

·       Raised concerns on the impact to families from the proposed redesign of Early Help and the preventative services provided.  The Cabinet Member for Children and Young People confirmed the proposal will be considered following the public consultation taking place this summer.

·       Queried the deferred investments in the Fire & Rescue Service budget and the resulting impact.

·       Welcomed the additional investment in highway maintenance.

·       Supported the inclusion of the Fees and Charges decision within the Budget report.

·       Asked about the measures being taken to improve economic restoration and mitigate against employment risks.  The Cabinet Member for Economy and Corporate Resources confirmed the Economic Reset Plan has been improved and work is being undertaken to manage the economic situation.  Government help for particular economic sectors has been requested i.e. aviation and tourism.

·       The attendance of Cabinet Members at the meeting was welcomed as this resulted in questions being largely answered during the meeting.


101.7  The Executive Director of Place Services introduced the Capital Strategy 2021/22 to 2025/26 report which outlines the principles, priorities, delivery and governance of the programme.  A thorough review of the Capital Strategy has been undertaken and highlighted the extra investment in highway improvements and allocation of funds to climate change initiatives to support the council’s priorities.


101.8  The Committee made comments in relation to the capital strategy, including those that follow. It:

·       Expressed concern that little progress has been made with managing the council’s surplus assets and that the council’s property portfolio could be better utilised.  Commented that PropCo projects should make progress with more pace and encouraged extra resource be provided to the property team.  The Cabinet Member for Finance confirmed PropCo projects are moving forward to maximise returns and best value for money at the right time.  A number of assets are due to complete shortly, and some have been used to support housing and intentionally homeless initiatives.  Suitable assets have been identified to go into the proposed Joint Venture (JV) in due course, and the JV will come to this committee for pre-decision scrutiny at its March meeting.

·       Queried if the council will be able to bid for funds from the National Infrastructure Strategy in order to reduce the use of Capital Programme funding.  The Executive Director for Place Services confirmed an update will be provided on the Fund once the Government decision on the allocation of funds is known.

·       Queried in relation to the flexible use of Capital Receipts Strategy whether this is the capitalisation of salaries for the Transformation projects.  The Director of Finance and Support Services explained that an element is capitalisation of salaries but it includes a number of other projects as outlined in Appendix E.

·       Queried the £1m included for climate change and what this will be used for.  The Executive Director of Place Services confirmed the money would be used to implement measures included within the Carbon Management Plan and also to enhance buildings to be more environmentally friendly.


101.9  The Financial Reporting Manager introduced the Treasury Management Strategy Statement 2021/22 report and outlined key information on debt, investments, external and internal borrowing, and use of short-term money market funds.


101.10  The Committee made comments in relation to the Treasury Management Strategy Statement, including those that follow. It:

·       Queried the counterparty risk associated with borrowing in relation to money laundering mentioned at 6.5 in the report.  The Financial Reporting manager confirmed this is generic wording and there is  no risk to the council as risky lenders are avoided.

·       Thanked Treasury officers for a comprehensive and high quality report, and for their hard work during the year.


101.11  Resolved – That the Committee:


1)   Note the significant external risks to the budget, particularly the Comprehensive Spending Review and the impact on the economy as a consequence of Covid;


2)   Recognise the exceptional circumstances and challenges in setting this budget and support the continued lobbying and challenge of central government to secure additional funding, particularly for adult social care funding and the Public Health grant;


3)   Raise a number of concerns about the proposed provision of services, including particular concerns on the Early Help redesign; and


4)    In relation to the Capital Strategy, highlight the need to appropriately manage the surplus county assets in the property portfolio.

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