Agenda item

Annex 1 - Budget Adjustment

 

Adjustment to the 2021/22 Budget Proposal

 

The budget recommendation to Full Council included the most up to date information at the time of writing, and as part of this included funding projections based on the provisional financial settlement that was announced on 17^th December 2020. 

 

1. The Final Settlement 2021/22

 

The final settlement was announced on 4^th February 2021.  The settlement included confirmation of various grants generally in line with the provisional settlement. 

 

2. Business Rates

 

On reviewing the final settlement business rates information in conjunction with the information received from the City and Borough Councils, the business rates forecast for 2021/22 is showing a small pressure compared to those figures included in the report to Full Council. 

 

The impact of this adjustment is for one-year only, as from 2022/23 we would expect to achieve baseline funding and we are also forecast to move to a new model for business rates (75% retention).

 

The impact on the MTFS presented to Full Council is as follows:

 

Table 1

	2021/22 £m	2022/23 £m	2023/24 £m
Full Council Report	-4.322	35.034	47.591
Full Council Adjustment	0.349	0.000	0.000
Financial Gap	-3.973	35.034	47.591

 

 

 

 

 

 

 

 

 

 

 

This gives an overall position of:

 

 

 

 

County Councillor Geoff Driver CBE,

Leader of the County Council,

11 February 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex 2 - Conservative Group Amendment

 

BUDGET COUNCIL: 11th FEBRUARY 2021

 

AMENDMENT PROPOSED BY THE CONSERATIVE GROUP TO THE 2021/22 BUDGET

 

 

 

(1)  Proposed amendments to the revenue budget

£m

 

Increase Council Tax by 3.99% rather than 4.99% within

the proposed 2021/22 budget    5.197

 

Additional investment in Youth Workers  (Recurrent)  0.400

 

Increase the book fund (21/22 only)  0.500

 

Investment in Museums web pages (21/22 only)  0.050

 

Investment in Environment and Climate Change Programme  0.496

(From 22/23 – full year recurrent costs - £0.973m)

 

Additional borrowing costs(Recurrent)  1.190

 

 

Total cost of proposed amendments:  7.833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue Budget 2021/22

 

 

 

 

	Band D Council Tax	Council Tax income
Adult Social Care Precept increase at 2%	£28.01	£10.390m
General Council Tax increase at 1.99%	£27.86	£10.334m

 

 

 

 

 

 

 

 

 

 

Council Tax on the basis of a budget requirement of £881.413m and the  Council Tax base for each property valuation band:

 

Council Tax Band	£
Band A	970.79
Band B	1,132.59
Band C	1,294.39
Band D (basic)	1,456.19
Band E	1,779.79
Band F	2,103.39
Band G	2,426.98
Band H	2,912.38

 

 

 

 

 

 

 

The share for each district council of the net total raised from the council tax of £540,158,127:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2)  Proposed additions to the capital programme

    £m

 

Additional funding for highways  10.000

 

Additional investment in flood defences  5.000

 

Additional funding for walking and cycling schemes  2.000  

 

Total Additions to Capital Programme:  17.000

 

 

(3)  Proposed amendments to the funding of the Capital Programme

 

£m

 

Additional borrowing for additional capital expenditure  -17.000

 

 

Total amendments to the funding of the Capital

Programme:  -17.000

 

 

 

County Councillor Geoff Driver CBE,

Leader of the County Council,

11^th February 2021

 

 

View of the Chief Executive and Director of Resources (S151)

 

The proposals have been validated as being deliverable financially in 2021/22.

 

In validating the proposals, I have been mindful that:

 

• The amendment to council tax will be a permanent reduction in the council tax base and hence increase the underlying structural deficit by £5.197m per annum if the flexibility to include the remaining 1% adult social care precept is not levied in 2022/23.

 

• The additions to the revenue budget in 2021/22 of £7.833m can be funded from a combination of the previously identified budget surplus of £3.973m and £3.860m from the transitional reserve.  The recurrent costs would then be built into the MTFS from 2022/23 increasing the structural deficit. 

 

 

• Some of the adjustments have a larger financial impact in 2022/23 and beyond.

 

Over the term of the financial strategy, the proposals would increase the structural funding gap by £2.457m to £50.048m in 2023/24. Unless further savings were found in advance of this, this would be an additional call on the transitional reserve.

 

The additional call on the transitional reserve (which is currently forecast to be £159.420m at 31^st March 2021) will be £12.751m over the period 2021/22 – 2023/24. The transitional reserve will continue to be sufficient to support the structural deficit for 2021/22 – 2023/24 following this amendment with a forecast level of £67.325m at 31^st March 2024.

 

In the intervening period the council will need to take steps to address the structural deficit to ensure it can maintain a sustainable financial position.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex 3 - Labour Group Amendment

 

BUDGET COUNCIL: 11th FEBRUARY 2021

 

AMENDMENT PROPOSED BY THE LABOUR GROUP TO THE 2021/22 BUDGET

 

 

 

(4)  Proposed amendments to the revenue budget

£m

 

Increase Council Tax by 1.99% rather than 4.99% within

the proposed 2021/22 budget    15.583

 

Reinstatement of HWRC Provision (SC001)  0.734

 

Reinstatement of Welfare Rights Service (SC608)  0.380

 

Investment in Healthier Living Programmes  0.500

 

Reduce the winter gritting trigger temperature level  0.110

 

Reinstatement of Highways – Gully Emptying (SC029)  0.283

 

Strengthen Flooding Resilience  2.500

 

Feasibility Study - Midgehall Railway Station  0.050

 

Feasibility Study - Coppull Railway Station  0.050

 

Total cost of proposed amendments:  20.190

 

The additions to the revenue budget to be funded from the treasury management reserve in 2021/22. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue Budget 2021/22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Council Tax on the basis of a budget requirement of £871.027m and the  Council Tax base for each property valuation band:

 

Council Tax Band	£
Band A	952.13
Band B	1,110.81
Band C	1,269.50
Band D (basic)	1,428.19
Band E	1,745.57
Band F	2,062.94
Band G	2,380.32
Band H	2,856.38

 

 

 

 

 

 

 

The share for each district council of the net total raised from the council tax of £529,771,827:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)  Proposed additions to the capital programme

  £m

 

Highways; Faster Response Potholes programme  5.000

 

Residents Parking Schemes kick-start funding  0.500

 

The Greening of Lancashire County Council  2.000

 

Colne Skipton Railway- Pump Priming  0.500

 

Poulton to Fleetwood Rail link- Pump Priming  0.500

 

Fleetwood Power Barrage- Pump Priming  0.500

 

A56 Villages Bypass - Pump Priming  0.500

 

Skelmersdale Rail Link & Station - Pump Priming  0.500

 

Lancaster Station HS2 Prep - Pump Priming  0.500

 

Preston Station HS2 Prep - Pump Priming  0.500

 

Burscough curves reinstatement - Pump Priming  0.500

 

Rawtenstall to Manchester rail link - Pump Priming  0.500

 

Eden of the North – Transport Planning – Pump Priming  0.500

 

Morecambe –Blackpool rail link – Pump Priming  0.500

 

Nursery Schools – Emergency funding  1.000

 

Total Additions to Capital Programme:  14.000

 

 

The additions to the capital programme to be funded from the Transitional Reserve.

 

 

 

 

 

 

 

 

 

 

 

View of the Chief Executive and Director of Resources (S151)

 

The proposals have been validated as being deliverable financially in 2021/22.

 

In validating the proposals, I have been mindful that:

 

• The amendment to council tax will be a permanent reduction in the council tax base and hence increase the underlying structural deficit by £15.583m per annum if the flexibility to include the 3% adult social care precept is not levied in 2022/23.

 

• The additions to the revenue budget in 2021/22 of £20.190m can be funded from a combination of the previously identified budget surplus of £3.973m and £16.217m from the treasury management reserve. The recurrent costs would then be built into the MTFS from 2022/23 increasing the structural deficit. 

 

• Some of the adjustments have a larger financial impact in 2022/23 and beyond.

 

• The funding to support the capital programme can be met from the transitional reserve, as a one-off contribution of £14.000m.

 

Over the term of the financial strategy, the proposals would increase the structural funding gap by £21.154m to £68.745m in 2023/24. Unless further savings were found in advance of this, this would be an additional call on the transitional reserve.

 

The additional call on the transitional reserve (which is currently forecast to be £159.420m at 31^st March 2021) will be £59.684m over the period 2021/22 – 2023/24. The transitional reserve will continue to be sufficient to support the structural deficit for 2021/22 – 2023/24 following this amendment with a forecast level of £20.392m at 31^st March 2024.

 

In the intervening period the council will need to take steps to address the structural deficit to ensure it can maintain a sustainable financial position.

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex 4 - Liberal Democrat Group Amendment

 

BUDGET COUNCIL: 11th FEBRUARY 2021

 

AMENDMENT PROPOSED BY THE LIBERAL DEMOCRAT GROUP TO THE 2021/22 BUDGET

 

 

 

(6)  Proposed amendments to the revenue budget

£m

 

Increase Council Tax by 1.99% rather than 4.99% within  15.583

the proposed 2021/22 budget

 

Reinstate seven-day opening at Household Waste   0.230

Recycling Centres

 

Provide funding for street light energy costs to allow   0.500

more flexible policy on times of dimming in locations

where there are community safety concerns

 

Fund additional maintenance for highway drainage, with   0.318

delegation to districts where there is local capacity to

carry out work (including drainage schemes in capital

programme) 

 

Contribution to Ribble Rivers Trust Woodland Connect   0.050

Programme

 

Fund replacement tree planting  0.050

 

Fund programme of establishing wildflower verges    0.100

 

Capital financing    0.814

 

Total cost of proposed amendments:  17.645 

 

(2) Funding of the revenue amendments

 

Reduce budget for mileage and other costs due to new ways  1.000

of working 

 

Reduce agency staff costs  1.000

 

Cease provision of Member Champion grants  0.050

 

Increase staff vacancy factor by a further 0.5%  1.721

 

Reduce Special Responsibility Allowance of Leader of   0.063

County Council (with pro-rata adjustments to SRAs geared

to that level) by 10% and cease SRAs for Member

Champions

 

Total funding of revenue adjustments:  3.834

 

Net additional budget pressure  13.811

 

 

Revenue Budget 2021/22

 

 

 

 

 

 

 

 

 

 

 

 

Council Tax on the basis of a budget requirement of £871.027m and the  Council Tax base for each property valuation band:

 

Council Tax Band	£
Band A	952.13
Band B	1,110.81
Band C	1,269.50
Band D (basic)	1,428.19
Band E	1,745.57
Band F	2,062.94
Band G	2,380.32
Band H	2,856.38

 

 

 

 

 

 

 

The share for each district council of the net total raised from the council tax of £529,771,827:

 

 

 

(7)  Proposed additions to the capital programme

  £m

Road and pavement repairs  15.000

 

Increase drainage maintenance budget  1.282

 

 

Total Additions to Capital Programme:  16.282 

 

(3) Amendments to the capital programme 

 

• Invest £3m of unallocated Green Energy Fund for Renewable Energy projects. 

 

 

 

 

 

 

 

 

 

 

 

View of the Chief Executive and Director of Resources (S151)

 

The proposals have been validated as being deliverable financially in 2021/22.

 

In validating the proposals, I have been mindful that:

 

• The amendment to council tax will be a permanent reduction in the council tax base and hence increase the underlying structural deficit by £15.583m per annum if the flexibility to include the 3% adult social care precept is not levied in 2022/23. 

 

• The additions to the revenue budget in 2021/22 of £17.645m can be funded from a combination of the previously identified budget surplus of £3.973m, additional savings identified of £3.834m and £9.838m from the transitional reserve.  The recurrent costs would then be built into the MTFS from 2022/23 increasing the structural deficit. 

 

• Some of the adjustments have a larger financial impact in 2022/23 and beyond.

 

Over the term of the financial strategy, the proposals would increase the structural funding gap by £14.725m to £62.316m in 2023/24. Unless further savings were found in advance of this, this would be an additional call on the transitional reserve.

 

The additional call on the transitional reserve (which is currently forecast to be £159.420m at 31^st March 2021) will be £42.664m over the period 2021/22 – 2023/24. The transitional reserve will continue to be sufficient to support the structural deficit for 2021/22 – 2023/24 following this amendment with a forecast level of £37.412m at 31^st March 2024.

 

In the intervening period the council will need to take steps to address the structural deficit to ensure it can maintain a sustainable financial position.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex 5 - County Councillor Dowding Amendment

 

BUDGET COUNCIL: 11th FEBRUARY 2021

 

AMENDMENT PROPOSED BY CLLR DOWDING TO THE 2021/22 BUDGET

 

 

Aim 

 

To support new projects which support decarbonisation of energy use and food production;  and promote long term sustainable solutions to energy and food poverty in these key sectors which  require public support for urgent transition to meet 2030 goals for decarbonisation of the economy. This would support the work of the County Council in developing its Biodiversity, Climate and Decarbonisation strategy with specific projects.

 

Through: Allowing flexibility of spend of uncommitted monies (approx. £3m) of the £5m Green Energy Fund which was set up as a result of Lancashire Poverty  Commission in 2015.

 

1.  To direct the remaining £3 million from the Green Energy Fund to  projects which:

 

1. Reduce domestic fuel poverty through retrofit schemes at scale.

 

2. Increase domestic renewable energy. (Large parts of Lancashire’s rural villages are reliant on oil. A range of projects that could be developed to help Lancashire homes move to low carbon heating systems.  Cambridge County Council is developing the Swaffham Prior low carbon heat network project that removes the village dependency on oil. Locally – a project funded by the Rural Community Energy fund grant looking at the feasibility of getting Chipping village off oil and onto low carbon heat infrastructure- an infrastructure project which could be replicated for other villages).

 

3. Installation of solar panels on housing.  (There are now examples led by other county Councils https://solartogether.co.uk/landing which emulated in Lancashire could provide free or subsidised panels for people at risk of fuel poverty).

 

4. Investment of large scale solar on landfill or other land to create an income or fuel poverty fund and/or invest in community renewable schemes (As examples: Devon County Council developed a Synthetic Power Purchase Agreement enabling it to purchase renewable electricity generated from community owned schemes for 15 years.  Warrington BC used Community Municipal Bonds to raise finance for a 5MW solar project).

 

5. Provide community and small-medium scale agro-ecological food growing and agroforestry projects.

 

2.  To create a £100k decarbonisation budget to support development of projects above;

 

In the developmental project stages such as to assist in identification and installation projects for renewable energy generation, retrofit of old housing stock and increase in local food growing.

 

The budget would facilitate more and faster development of local exemplar decarbonisation projects in the renewable energy generation and local food growing in Lancashire though:

 

 

 

 

 

 

 

 

 

 

Background

 

A £5m Green Energy Fund was agreed on 12 Feb 2015 at budget Full Council as a result of the Lancashire Poverty Commission recommendations. To date of the £5m only £1.385m has been spent with another £570k potentially committed as local match funding if the County are successful in a recent bid to Salix for grant funding to support public sector decarbonisation in some of our buildings.

 

The split is as follows:

• £1m to individuals for reducing energy bills and fuel poverty - this has been fully spent. 
• £3m to renewable energy schemes

LCC buildings - spent £384,948 - on small parts of other schemes e.g. boiler replacements in care home refurb

• £1m for energy fund support for businesses - none spent yet.

 

 

View of the Chief Executive and Director of Resources (S151)

 

The proposals have been validated as being deliverable financially in 2021/22.

 

In validating the proposals, I have been mindful that:

 

• The first proposal is a reallocation of resources within the existing capital programme and there will be no additional costs.

 

• The second proposal would reduce the budget surplus in 2021/22 by £100k to £3.873m.

 

Over the term of the financial strategy, the proposals would not impact on the structural funding gap, and this would therefore remain at £47.591m by 2023/24.

 

The additional call on the transitional reserve (which is currently forecast to be £159.420m at 31^st March 2021) will be £100k over the period 2021/22 – 2023/24. The transitional reserve will continue to be sufficient to support the structural deficit for 2021/22 – 2023/24 following this amendment with a forecast level of £79.976m at 31^st March 2024.

 

In the intervening period the council will need to take steps to address the structural deficit to ensure it can maintain a sustainable financial position.