Agenda and draft minutes

Budget, Cabinet - Wednesday, 5th January, 2022 5.30 pm

Venue: Council Chamber - Civic Centre, St Luke's Avenue, Harrogate HG1 2AE. This meeting will be livestreamed here: https://bit.ly/HarrogateYouTube (Copy and paste the link in your browser).. View directions

Contact: Elizabeth Jackson, Democratic Services Manager  Tel: 01423 500600 Email:  democraticservices@harrogate.gov.uk

Items
No. Item

74.

Apologies for Absence:

Minutes:

74/21 – APOLOGIES FOR ABSENCE AND NOTIFICATION OF SUBSTITUTES: There were no apologies for absence.

 

(5.30 pm)

75.

Declarations of Interest:

Members to advise of any declarations of interest.

Minutes:

75/21 – DECLARATIONS OF INTEREST: There were no declarations of interest.

 

(5.30 pm)

76.

Minutes: pdf icon PDF 302 KB

of the meeting of 8 December 2021

Minutes:

76/21 – MINUTES: The Minutes of the meeting of the Cabinet held on 8 December 2021 were approved unanimously as a correct record.

 

(5.31 pm)

77.

Exempt Information:

To determine whether to exclude the press and public during the consideration of any exempt information items.

Minutes:

77/21 – EXEMPT INFORMATION:  Appendix 4 to the report at Minute 78/21 and Appendices 2 and 3 to the report at Minute 81/21 were deemed to be exempt under paragraph 3 of Schedule 12a to the Local Government Act 1972. Discussion on the items took place in open session.

 

(5:31 pm)

78.

2022/23 Draft Budget and 2023/24 Indicative Budget: pdf icon PDF 383 KB

The Head of Finance to submit a written report.

Additional documents:

Minutes:

MATTERS TO BE REFERRED TO COUNCIL

 

78/21 – 2022/23 DRAFT BUDGET AND 2023/24 INDICATIVE BUDGET: The Head of Finance submitted a written report which sought approval of the draft budget for 2022/23 and indicative budget for 2023/24.  The budget would subsequently be forwarded to the Overview and Scrutiny Commission for consideration on 17 January 2022, with any comments to be submitted to Cabinet on 2 February.  The budget would be submitted to Council for ultimate approval on 9 February 2022.

 

The budget report was set in the context of the current Local Government funding environment as outlined in the Medium Term Financial Strategy (MTFS) approved by Council on 6 October 2021 and contained the following key information:

 

1.       The 2022/23 budget setting context

2.       2021 Spending Review and outcomes from the provisional 2022/23 Local Government Finance Settlement

3.       Reasons for changes in the Council Tax, Business Rates and other grant funding

4.       Detailed proposals of changes in expenditure, income and use of the budget transition fund

5.       Proposals following the Reserves Review

6.       Results of the Budget Consultation

7.       Commentary from the Head of Finance on the robustness of the estimates and adequacy of the Council’s reserves

The Government announced in July 2021 that local councils in North Yorkshire would be reorganised to form one council across the whole of the county from April 2023.  The 2023/24 indicative budget would therefore feed into the budget preparations of the new unitary council and support the ongoing provision of services currently delivered by Harrogate Borough Council.

 

The Council has been faced with an unprecedented financial detriment as a result of the COVID-19 pandemic.  The financial impact stemmed from both additional costs incurred in responding to the pandemic and irrecoverable losses in income, as well as a reduction in tax income.  The resultant economic downturn continued to impact on the Council’s finances, with income from commercial property, planning fees and the convention centre not forecast to reach pre-pandemic levels until 2023/24.

 

Since the 2010 Comprehensive Spending Review total local government funding in England had been reduced by approximately 50%.  Since 2010, the Council’s general grant allocation had reduced by £8.2m (69%).  Further to this the 2016/17 Local Government Finance Settlement signalled a change in the way Revenue Support Grant (RSG) reductions were calculated, resulting in the loss of all the Council’s RSG by 2018/19.

 

The MTFS covered the period 2022/23 to 2026/27 and set out the Council’s financial planning framework.  The table at paragraph 11 set out the initial parameters for planning the 2022/23 budget and 2023/24 indicative budget and showed an initial annual budget deficit of -£664k for 2022/23.  Paragraph 12 set out how it was proposed that the Budget Transition Fund would be used to smooth pressures in the medium term plan to give a revised Annual Deficit for 2022/23 of £0k.  This position had since been updated whilst drafting the budget for 2022/23.

 

The 2021 Spending Review was announced on 27 October 2021 covering the three years from 2022/23 to  ...  view the full minutes text for item 78.

79.

Draft Housing Revenue Account Budget 2022/23: pdf icon PDF 269 KB

The Head of Finance to submit a written report.

Additional documents:

Minutes:

79/21 – DRAFT HOUSING REVENUE ACCOUNT BUDGET 2022/23: The Head of Housing and Property (HoHP) submitted a written report which sought approval of the draft Housing Revenue Account (HRA) budget for 2022/23.  The HRA was a ring-fenced account which contained all of the income and expenditure relating to the social housing owned by the Council.  The table at paragraph 5.2 showed the updated forecast outturn figures for 2021/22 and budget figures for 2022/23 and detailed a working balance of £13,904 on 31 March 2023.  Paragraph 5.3 explained the associated variations which included increased capital expenditure funded from revenue primarily due to the purchase of Whinney Lane houses for social rent.  The variations between the budgets for 2021/22 and 2022/23 were largely due to repayment of a £15m loan in 2021/22.

 

A 2.5% rent increase for 2022/23 was also recommended in the report, this was less than the maximum 4.1% allowed by Government policy which was considered to be too high in the current climate.  The HRA business plan was attached at Appendix A and showed income, expenditure and the HRA working balance up to year 35 of the plan. 

 

RECOMMENDED (UNANIMOUSLY):

 

That (1) the draft HRA estimates for 2022/23 are approved; and

 

(2) a 2.5% increase in rent charged is applied for 2022/23.

 

(5.41 pm to 5.45 pm)

80.

Business Rates 50% Retention Pool 2022/23: pdf icon PDF 171 KB

The Financial Services Manager to submit a written report.

Additional documents:

Minutes:

CABINET

HELD ON 5 JANUARY 2022

(FROM 5.30 PM – 5.56 PM)

 

PRESENT: Councillor Richard Cooper in the Chair. Councillors Mike Chambers, Phil Ireland, Stan Lumley, Tim Myatt, Andy Paraskos and Graham Swift.

 

Late Arrivals:         None

 

Early Departures:   None

 

MATTERS DETERMINED BY CABINET

 

80/21 – BUSINESS RATES 50% RETENTION POOL 2022/23 – FORWARD PLAN REF: 48CA21: The Head of Finance submitted a written report in which approval was sought for the Council’s continued involvement in a proposal to be part of a Leeds City Region (LCR) business rates pool in 2022/23.

 

The Council had been part of a business rates pool each year since the current system commenced in 2013/14.  Nationally the standard arrangement for distribution of business rates was that 50% of local business rate income was paid over to the Government.  Although the Council had piloted higher retention shares in previous years for 2021/22 the Council was in a LCR Pool operating at 50% retention.  For 2022/23 the Council would again operate under 50% retention and had the option to join a pool or operate alone.  It was proposed that the Council continue in a proposed LCR pool for 2022/23 as participating in a pool ensured that additional growth income above the ‘business rates baseline’ were retained locally by the pool, rather than being paid to central Government.  The LCR Pool was forecast to generate a reasonable net gain for 2021/22 despite the COVID pandemic.

 

In presenting the report the Head of Finance advised that confirmation had been received that the Secretary of State had designated the LCR pool for 2022/23.  The deadline for authorities to withdraw from the pool was 13 January 2022, and should that happen the pool would be revoked and authorities would operate individually.

 

Attached at Appendix 1 was a copy of the memorandum of understanding for the proposed pool which set out the proposed governance arrangements and was formed of the following authorities: Bradford, Calderdale, Harrogate, Kirklees, Leeds, Wakefield and York.  A clause had been included to ensure that any income due to Harrogate would be paid to the new North Yorkshire Council should payments need to be made after 31 March 2023.  The pool would be led by a Joint Committee and the terms of reference for this were set out at Appendix 2.

 

RESOLVED (UNANIMOUSLY):

 

That   (1) the Council’s proposal to be a member of the Leeds City Region (LCR) business rates pool under 50% Business Rate Retention in 2022/23 be approved;

 

(2) the authority of the Section 151 officer to sign the proposal to the Department for Levelling Up, Housing and Communities (DLUHC) by the LCR authorities to operate as a pool under 50% business rate retention in 2022/23 be confirmed;

 

(3) the memorandum of understanding (Appendix 1) and terms of reference (Appendix 2) for the Leeds City Region (LCR) Business Rates pool for 2022/23 be approved; and

 

(4) the Leader be appointed to the Joint Committee for the LCR Business Rates pool for the 2022/23 financial year.

 

Reasons  ...  view the full minutes text for item 80.

81.

Award of Contract - Electric Vehicle Charging Points - Forward Plan Ref: 51PSEG21: pdf icon PDF 332 KB

The Executive Officer – Economy and Transport to submit a written report.

Additional documents:

Minutes:

81/21 – AWARD OF CONTRACT – ELECTRIC VEHICLE CHARGING POINTS –FORWARD PLAN REF: 51PSEG21: The Executive Officer Economy and Transport submitted a written report in which approval was sought to award a contract for the installation, maintenance and management of electric vehicle charge points.  The Council’s Ultra-Low Emission Vehicle Strategy Phase 1 implementation had been agreed by Cabinet on 31 March 2021 and £280k from the Council Investment Reserve had been approved to fund installation of at least 34 electric vehicle charging points throughout the district in locations detailed in paragraph 5.2 of the report.  A service specification had been developed to support the procurement of the charging network, and this was attached at Appendix A of the report. 

 

The preferred supplier had been selected through the Kent County Supplies Electrical Vehicle Charging Points and Associated Services (KCS) Framework Y21002 framework agreement and exempt Appendices 2 and 3 contained the tender documentation and evaluation for the preferred supplier.

 

In introducing the report the Economy and Transport Officer advised that existing Council charging points would also transfer to the new supplier at the end of their existing agreements to ensure a cohesive network.  As opportunities arose the Council would work with the supplier to apply for external funding to expand the network.  The contract was due to commence on 1 February 2022 for an initial period of five years, and the option to extend for 12 months for a further three years.  Installations were due to start in April and be completed by August 2022. 

 

Cabinet Members welcomed the proposals, which would also provide a boost to tourism as well as supporting residents moving to electric vehicles.

 

RESOLVED (UNANIMOUSLY):

 

That   (1) the contract be awarded to the successful bidder up to a maximum value of £280,000 to install, maintain and manage electric vehicle charge points via the KCS Electrical Vehicle Charging Points and Associated Services Framework Y21002 framework. The initial value of the contract is £280,000 and this may increase to a maximum value of £580,000;

 

(2) authority be delegated to the Director of Economy Environment and Housing to accept the bid of the successful bidder; and

 

(3) it be noted that where the opportunity arises, officers will seek to bid for external funding which will be in addition to the identified £280,000 and enable an increased number of electric vehicle (EV) charge points to be installed.

 

Reasons for decision:

 

The adopted Ultra-Low Electric Vehicle Strategy (ULEV) 2019-24 outlined the Council’s ambition to implement a network of Electric Vehicle (EV) charge points in order to support the high demand for electric vehicles in the district.

 

The successful bidder met the requirements of the published specification for the Council’s EV charging network. Further detail in respect of the procurement process outlining the decision to award the contract is contained within section 5 of the report.

 

An additional contract value of up to £580,000 (an additional 300k) may be granted if an on-street residential charging grant can be secured from the Office  ...  view the full minutes text for item 81.