Agenda item

Draft General Fund Budget and Medium Term Financial Strategy Update (Decision: 110544)


Councillor Hebb introduced the report and stated that in May 2016, the Conservative minority administration had inherited a £30million deficit forecast over a three year period, but had managed to balance this budget through entrepreneurial ideas, and not simply service cuts. He stated that the investment approach had been started before the Conservatives had taken power, and had been built on since then, including during a time when there had been three party leadership. He stated that Members continued to be involved in the investment strategy, and highlighted that rainy day reserves had initially increased by 40%, but had now been tripled. He stated that this was partly due to the investment strategy, but also partly due to more structured services, such as children’s centres and the policy of ‘fewer buildings, better services’, which had seen children’s centre uptake increase from 70% to 95%. He stated that because of these policies, the Council had been able to fund lots of different additional areas, such as increased policing, increased use of technology, and the Clean It, Cut It, Fill It strategy.

Councillor Hebb stated that because of COVID-19 the Council were now entering a new world, with the majority of people working from home, increased numbers of people in care homes, increased numbers of benefits claimants, and another national lockdown. He stated that because of the impact of the pandemic, the Council would be deferring £19million of capital projects, and would have to make other savings too. He stated that as individuals were affected by COVID, the Council were also affected, such as through loss of income because of temporary leisure centre closure and a reduction in the payment of business rates. He stated that the investment strategy remained resilient, as Thurrock had invested in solar energy, which was both good for the environment and not affected by the global pandemic. Councillor Hebb stated that although current investments continued to do well, the investment strategy had now been paused. He stated that due to COVID-19 pressures, there had been reduced levels of new investment compared to what had been anticipated, so Thurrock would reduce its borrowing forecast by over £300million, and would take stock of future infrastructure projects that had been planned.

Councillor Hebb stated that many peoples’ lives had been changed by the pandemic, but individuals had been supported through government schemes such as furlough, homelessness support and business grants. Councillor Hebb stated that the government had also supported Thurrock through the pandemic, by giving £10million to close budget deficit gaps. He stated that this government support would have to end eventually, both on an individual level and a Council level, which would affect people in numerous ways, such as through loss of income or loss of jobs. He stated that this individual impact would have a knock-on effect for the Council, as the Council would continue to see increased numbers of people unable to pay business rates, or applying for local council tax support. He stated that currently Thurrock had not seen a large rise in the number of people applying for local council tax support, but felt that this would increase dramatically in 2021/22, due to the end of the furlough scheme and other COVID impacts. He stated that government support received by Thurrock would not continue indefinitely, and therefore only deferred the budget deficit gap, and did not solve it, but Thurrock would continue to support those most vulnerable residents.

Councillor Hebb stated that Thurrock Council would ask the same questions that residents were currently asking such as, what savings were available and how spend could be reduced. He stated that because of the pandemic, service reviews would be accelerated and the Council were also proposing a 3% adult social care precept increase and a 1.99% council tax increase. He stated that this increase would equate to roughly £1 per week for 70% of residents, and £2 per week for people in higher council tax bands. He explained that these increases needed to happen to ensure that the Council could continue with vital services. Councillor Hebb also stated that some reserves would be partly used to help close the budget gap. He urged residents to seek support if they needed it, and encouraged residents to reach out if they felt they could not afford council bills. He stated that enforcement action on those who had missed council payments would also be slower. He summarised and stated that the Council would rise to the challenge that COVID-19 had created, and although it would be difficult, could be achieved if everybody worked together.

Councillor Halden thanked Councillor Hebb and the finance team for their report, and stated that this was a budget being put together during a global crisis, which had instigated the need for a council tax rise. He felt proud that over half of the budgets agreed in previous years under a Conservative administration had frozen or not increased council tax by the maximum. He felt that this was an unprecedented crisis and £1 per week would not impact the majority of local residents. He stated that for those most vulnerable residents who would be impacted by this rise, support would be made available. He highlighted that in the 11 months since the start of the pandemic, the number of people needing adult social care places had increased by £11million, and the majority of these people were extremely vulnerable. He added that Thurrock’s adult social care market needed to remain competitive with the private sector and other local authorities, to retain the best care workers, as market pressures increased and morale decreased.

Councillor Johnson also thanked the finance team and Councillor Hebb for their report, and felt that it was easy to understand, honest and trustworthy. The Leader summarised and stated that the crisis needed to be managed, and although the Council were still seeing investment returns, due to local headlines this had decreased slightly. He stated that the rainy day fund would be used to help tackle the financial impact of the pandemic, and felt pleased that the Council had increased reserves over recent years, which helped deal with the crisis currently being faced.

RESOLVED: That Cabinet:

1. Noted the proposed updates to the Medium Term Financial Strategy and the remaining deficits in future years.
2. Noted the updated Medium Term Financial Strategy forms the basis of the 2021/22 budget.

3. Supported the proposed council tax increase of 1.99%.

4. Supported a 3% adult social care precept increase.

5. Commented on the draft budget proposals within the report to inform the consultation with Corporate Overview and Scrutiny Committee, with the final budget proposals to be presented to Cabinet on 10 February 2021.

Reason for decision: as outlined in the report.
This decision is subject to call-in.

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