Issue - meetings

Report of the Director of Finance

The Cabinet considered a report of the Director of Finance, which set out the proposals for the Council’s final revenue and capital budget for 2021/22.

The report followed on from the Pre-Budget Report approved by Cabinet on 15th December 2020, which had since been subject to a period of public consultation.  The proposals within the report now formed the basis of the Council's final revenue and capital budget for 2021/22 incorporating the following details:

·  Gross budgeted spend of £774m (£30m increase from 2020/21)

·  Net budgeted spend of £244m (£5m and 2% higher than 2020/21) funded from Council Tax and Business Rates less a tariff payment of £19.8m due to Government.

·  A Council Tax Requirement of £146.3m (£4.9m and 3% higher than 2020/21); reflecting a City Council Tax increase of 4.9% detailed in the separate Council Tax Setting report on today’s agenda.

·  A number of new expenditure pressures and technical savings proposals.

·  A Capital Strategy including a Capital Programme of £220.4m including expenditure funded by Prudential Borrowing of £32.2m.

·  The Council’s Medium Term Financial Strategy and an updated Treasury Management Strategy, Capital Strategy and a Commercial Investments Strategy.

The financial position set out in the Budget Report is based on the Final 2021/22 Local Government Finance Settlement.  The core funding position broadly matched that of 2020/21 although there were several new one-off funding streams, linked in the main to the effects of COVID-19.  The position after 2021/22 remained uncertain and would be subject to the Government’s medium-term spending decisions and decisions about any revised local government financial allocation model and a new Business Rates retention model.  As a result it was impossible to provide a robust financial forecast at this stage and the Council had included some prudent planning figures.  Initial assumptions indicated the likelihood that there would be a substantial gap for the period following 2021/22.  The view of the Director of Finance was that the Council should be planning for such a position.

The Pre-Budget Report was based on an increase in Council Tax of 4.9% and this position had been maintained for the final proposals in the report now submitted.  This incorporated an increase of 1.9%, which was within the Government’s limit of 2% above which a referendum would need to be held plus a further 3% Adult Social Care (ASC) Precept in line with Government expectations.  The Precept was trailed in the 2020 Spending Review and included in the Local Government Settlement as the means for councils to maintain their “core spending power”.  Pending the delayed ASC Green Paper – the policy document which it was hoped would set out future funding arrangements for ASC – the precept was essential to enable councils including Coventry to manage increases in the costs of care.  In total, the rise in Council Tax bills would be the equivalent of around £1.25 or less a week for a typical Coventry household.

The Local Government Finance Settlement was announced as having broadly maintained local government funding, supplemented with new grant funding to  ...  view the full minutes text for item 76