Agenda item

Report of the Chief Operating Officer (Section 151 Officer)

The Cabinet considered a report of the Chief Operating Officer (Section 151 Officer) which outlined a set of new revenue budget proposals for 2023/24 to 2025/26 as a basis for consultation.  Consultation views were also being sought on the potential level of Council Tax and Adult social care Precept increases for 2023/24.  The final Budget proposals and the Council Tax and Adult Social Care Precept increases would be subject to Council approval in February 2023.

The need to deliver the Council’s overall future strategy continues to be the focus of the Pre-Budget proposals. The strategy was contained within the draft “One Coventry Plan” which set out key priorities including: improving the economic prosperity of the city and region; improving outcomes and tackling inequalities within communities; and tackling the causes and consequences of climate change. Implicit within the plan was the Council’s commitment to delivering a range of core services to everyone in the city. Following an extensive period of engagement, the Plan would be brought for approval in 2023.

The Council’s financial plans were heavily dependent on both the allocation of Government grant resources and Government decisions which dictated councils’ tax-based income streams.  The turmoil in national politics through 2022 had made it more difficult than usual to anticipate the key decisions that the Government would make on these matters.  As a result, a number of key elements of the Council’s financial plans were subject to some uncertainty with a degree of risk that the position presented within the report could be subject to change once the details of the Local Government financial settlement were published. The Provisional Local Government Settlement for 2023/24 was expected to be published in the week beginning 19th December, and this would provide a stronger indication of the likely position.

The Chancellor of the Exchequer set out the Government’s Autumn Statement on 17th November 2022. The Statement provided a two year Department Expenditure Limit position for the Department of Levelling Up Housing and Communities (DLUHC) which indicates an increase in its budget compared with the previous position. The estimated impact for Coventry, if this movement was reflected in the resources made available to local government, was included within Appendix 1. The largest single change was the flexibility to use an estimated £5m of additional grant in 2023/24 which was earmarked previously by Government for Adult Social Care charging reforms that have now been postponed. Additional flexibility had also been provided with regard to the maximum permissible increase in Council Tax. As a result, this report recommended that the Council should consult on the basis of increasing the Adult Social Care Precept by 2%, and the Council Tax for other services by just under 3%, an overall combined rise of just under 5%.

The financial measures in the report included some service savings or additional income proposals although only a very small number affect services to the public.  This had been achieved due to the combination of the overall impact of the Autumn Statement plus the proposed implementation of a range of technical measures. Depending on the final outcome of the Local Government Settlement this could include using one-off resources (in the form of reserves) to meet one-off pressures, if required, although no such measures were proposed at this stage.  The Council was keen to avoid the need to reduce vital services and would seek to explore all possible avenues to do this. The report included sufficient measures to set a balanced budget in 2023/24 albeit with financial gaps in future years.

A Medium Term Financial Strategy was intended to be presented alongside the final Budget Report in February 2023.  This would include the dramatically changed economic and financial landscape facing the Council and would include approaches informed by the draft One Coventry Plan.  This may include: delivering some services flexibly across roles, services and organisations; investing resources with other public sector partners; and actively seeking new opportunities and cultivating new relationships.  This was expected to form an increasing focus of the Council’s activity in the future to improve the manner and cost effectiveness with which the Council would be able to deliver and facilitate the provision of services to its citizens.

The proposals in the report were made as a basis for public consultation and the results of the consultation would be reflected in the final Budget Report in February and considered as part of the final decisions recommended in that report.  Further work would be undertaken to confirm all the financial assumptions included, between now and the final Budget Report in February.

An outline of the resources and the spending and savings proposals were provided in Section 2 and on a line by line basis in Appendix 1. The Council’s Council Tax assumptions and the basis on which it is consulting was set out within Section 2.

The report included an indicative outline of the Council’s prospective Capital Programme for 2023/24 based on current knowledge. This would be updated in the February Budget Report, reflecting the most up to date programme information available. The draft programme was based overwhelmingly on pre-existing decisions and patterns of expenditure.

RESOLVED that the Cabinet, approve as a basis for consultation, the revenue spending and savings options in Section 2 and Appendix 1 of the report; the broad Capital Programme Proposals in Sections 2.6 to 2.9 of the report; the approach in relation to Council Tax and the Adult Social Care Precept in Section 1.8 of the report, including a Council Tax rise of just under 3% and an Adult Social care Precept of 2%.