Agenda item

Cabinet referral; Budget Report

To consider the following referral from Cabinet:                                                                


CA/025/18       13 February 2018       Budget Report



The referral from Cabinet on 30 January 2018 was submitted.  It was moved by Councillor Williams, duly seconded and




That the following be approved:


CA/025/18       Budget Report


Councillor Elliot introduced the report and moved the motion to debate.


Cllr England responded;


I would like to thank Officers for once again managing to perform the task of presenting a balanced budget, in the context of downward income pressure which now sees the end of the RSG in 2018/19.


The Liberal Democrat Opposition Group opted not to submit an alternative budget, as this would have been academic, creating significant extra work for Officers, in circumstances where it would simply have been voted down.

The Central Government corset is getting uncomfortable for all levels of Local Government.


·         Rents are being reduced at the behest of Central Government, by 1% a year.

·         Council Tax setting is closely restrained by Central Govt limits and a Referendum clause (cost £80k), which means that after 2.99% (£345k extra revenue) getting a serious step forward would require at least 5% - at which point it becomes easy to argue that the increase is too steep and cuts result. 

·         The New Homes Bonus is down by £1m this year - nearly 10% of Council Tax. 

Chief Finance Officer James Deane has done well to steward those funds carefully, as we see that Govt reserves the ability to squeeze up the 0.4% baseline in future.


The PR claim that the increase is moderate is risible - The party of low taxation is increasing Dacorum’s Council Tax by the maximum allowed, short of a referendum: 2.99% and all without (since 2015) going to the people in a substantial or truly indicative way, to see what they think of the priorities. The Referendum lock is prohibitive; also, unsurprisingly, controlled by Tories at Westminster.


What we want to hear is a frank acceptance that Local Government is being underfunded at all levels by the Conservative Central Government.


And let’s have a willingness to give real voice to local people over their priorities – earlier in the next budget planning process.


Will it be like this next year in 2019, three months from Borough Election Day? Dacorum has elections only every four years, so next year will be judged more closely than this year. I wonder if the Council Tax will be increased by the maximum next year, when a de-facto referendum follows?


Indeed I propose we ought to address this and inject a proper degree of regular and consistent accountability to each annual budget - by electing Wards in thirds. 

Some local budgetary choices have been made:


It is good to see that The Old Town Theatre (£419k), Adventure Playgrounds (£486k) and Recreation (£1.3m) are at least retaining some funding; In scrutiny I supported the attempts to re-think how the Adventure Playgrounds are used in winter months after and before the half-terms.


Perhaps Neighbourhood Action can use them to co-ordinate better local organising in areas which don’t have Parish or Town Councils?


Also good to see HMO Licences going up 18.6%.


I see that Weddings and Funerals are getting expensive in 2018/19, well above inflation. Maybe the Forum Register Office will be quieter than usual?


Is the Vehicle Replacement Reserve going to invest in Electric Vehicles? (£345k)

Is there a commitment to scrap Diesel fleet for clean air?




What is the authenticity of the Government’s virtue-signalling localism agenda if Central Govt holds the purse strings even when it professes not to?


The envelope is set by Government is so many ways – really it is hard to believe there was a Localism Act in 2011!  


Even from 2018/19 when we are allowed to keep the Business Rates it is potentially able to be manipulated by Central Government.


DBC already has one of the highest Tax Bases at £11.1m vs £6.7m and Govt assesses DBCs Core Spending Power at almost 50% above the average for Districts, making the Borough a target for future squeeze?


When we have opportunities to increase revenue (and reduce costs) we should always consider them; however when something looks too good to be true - it usually is!


What if commercialism tightens budgets such that we outsource local jobs to places like Leicester?  Yes I am talking about Sportspace.


In the short term - which is all we know for sure - ditching DST doesn't even save money. The £225k saved in 2018/19 is outweighed by a (reserve-funded) spend of £375k. Not to mention the contract breakage costs. And of course we've also seen £200k on the flawed tender process, in which over half of all Councillors were unimpressed. Only 24 turned up to vote for it.


The Sportspace example has already shown that it is possible for decisions to be shrouded in Part II confidentiality/sensitivity such that the technicalities cannot be debated before decisions are planned. This weakens decision-making and public trust.


An interesting footnote:

On top of the decision we can see that Health & Safety Compliance is being beefed up by £50k - presumably ongoing? Is this because DBC realised it no longer has Leisure experts who can ensure our swimming pools are safe?


Cllr Taylor commented that as Chairman of Audit he has seen a lot of what goes into the prep of budget.  The amount of time, energy and effort that has gone into our budget is considerable, it had some very hard decisions to make, such as how many times do we clean A41.  I am very proud of what the Council achieves and continues to achieve, I think the budget we are presenting is appropriate today, it’s not appropriate to a thesis of factors outside of Dacorum but is for residents in Dacorum.  I strongly recommend and I will certainly be voting for it.


Cllr P Hearn congratulated the Porfolio Holder for his presentation and noted her support of the budget.


Cllr Adeleke stated that he would like to join colleagues in congratulating officers for time and effort put into the budget, also the Portfolio Holder for a fantastic presentation.  Cllr Adeleke went on to confirm his support of the budget, the figures presented outlined significant investment in front line services which are very welcome.  Two areas for clarification, one is question of interest rate; if the Bank of England does go ahead with increase in interest rate, will there be any negative impact on plans?  Also, not sure of number of foreign business we have in Dacorum, but will Brexit effect our plans if any business decide to pull out of the area?


Cllr Anderson responded to the general debate and stated that the bottom line is, there is no such thing as a ‘free lunch’; we are under pressure and I too would like to congratulate my Portfolio Holder colleague for his presentation tonight.  Cllr Anderson when on to state that he understands the reason why the opposition were not able to present an alternate budget, but feels it wrong to criticise others if you are not prepared to do something yourself.  Referring to the suggestion that rotating elections every year would improve democracy and the budget process associated; I couldn’t disagree more, it is not useful to not know who is on the Council from one year to another.  I will be supporting the budget and am grateful for the effort put into it.


Cllr Douris commented that we’ve heard a great deal of numbers from Cllr Elliot, we haven’t heard any alternative numbers from Cllr England or any other opposition group, so I assume when it comes to the vote, as they will not be offering an alternate, they will be supporting our numbers.  DBC is a careful, prudent and forward thinking Council, we have maintained our frontline services, we have given good value for money and we will continue to do that.  The increase in Council Tax equates to 1.5p per day over a year; how does that compare, I wonder, with other councils in the area.  Some Council’s, due to timing, haven’t got to set their budget yet, so I had a look to see how we compared to last year.  Our Band D was £189.83, another local Council to the South West of us was £196.44, then another to the South of us, where they have revolving elections, have a Band D of £254.88.  Bottom line is that Dacorum gives good value for money and we are prudent with our money, we care for our residents, we look after them, shame on the opposition for not giving your residents an opportunity to see your budget as alternate to ours.


Cllr Ransley advised that they didn’t produce an alternate budget for the reasons referred to by her colleague; it was not fair to get officers to produce more figures when we knew this would not go through.  I think Dacorum does very well for the money it has to spend, but I would ask about consultation.  My colleague mentioned that 30 people were consulted, that is out of 150,000, and of those consulted 26 people agreed with it, I wonder why we bothered?


CWyatt Lowe commented that she is proud to congratulate the Portfolio Holder about the production of a balanced budget.  I can remember how we have struggled to cope with changes in government positions, but we have coped.  The last time we had Labour council here, the budget they brought forward was an increase in CT of (approx.) 19%.  We are a prudent financially responsible and imaginative authority, we look at things in different ways.  I wish the Lib Dems had put forward some alternate proposals, it is always good to get officers to look at things from a different angle, there may have been things in it we could use, and we cannot do that if no alternates are proposed.  I would like to recommend this budget to you and long may we continue to run this Borough.


Cllr Marshall commented that the exposition on Localism is very well thought out, but with respect it has been a regular whinge of Local Authorities, regardless of the colour of government.  It is the role of National Government to run the macro economy and Local Authorities have to accept that.  Cllr England referred to the transfer of the leisure facilities and termed it as outsourcing; the transfer of facilities to SLM has been vastly debated by this Council and the advantages of this transfer were crystal clear, as were the financial advantages.  We have to look at the whole length of the contract, not just the first year.  It is worth noting that SLM have been awarded contracts to run facilities in many authorities, including Lib Dem controlled ones such as Watford.


Cllr Andrews picked up a couple of points, in response to the questions posed by Cllr Adeleke, we will not be impacted by any interest rate increase as we are on fixed rates.  With regard the question around Brexit; while the government is committed to localisation of business rates, it has not been set out as a scheme.  If it gets to the point there is a scheme, it is likely it will protect us against drop in the local area.  Referring to Cllr Wyatt Lowe’s comments about the increase in CT and the last budget that Labour was in charge, it was actually 28%.  Referring to Cllr England’s comments on consultation; the 30 people that were consulted was the same format as undertaken every  year, not just a case of us sending out form, but instead sitting in a room having detailed discussion; that cannot be done with a wide audience.  I have led this Council since 1999, I did so then as a Leader of the group that had taken control that year with 26 members out of 52.  We have always over those years set out our priorities to Dacorum every 4 years, how this is received is reflected by the election results during that time.  We have not shy’d away from making decisions about finances, cannot keep kicking the ball down the line, you have to bite the bullet and say we cannot provide these services without the income.  We provide great income. Our MTFS states we intend to continue to increase our Council Tax.  We have been very prudent in terms of New Homes Bonus, we have taken the view that we should not rely on it to deliver our key services, and we use some of it to provide Capital investment in facilities across the Borough.  I am confident we have set a budget that preserves front line services and I fully commend this budget to Council.




Names of those voting


For: Adeleke, Anderson, Banks, Barrett, Bassadone, Birnie, Chapman, E Collins, Douris, Elliot, England, Griffiths, Guest, Harden, P Hearn, Hicks, Howard, Imarni, Maddern, Mahmood, Marshall, Mclean, Mills, Peter, Riddick, Ritchie, Silwal, G Sutton, Taylor, Timmis, Williams, C Wyatt-Lowe (31)


Against: None


Abstained: D Collins (Mayor), R Sutton (Deputy Mayor), England, Fethney, Fisher, Link, Ransley (7)


The Mayor declared the motion to be carried.




General Fund Revenue Estimate


a)    set a Dacorum Borough Council General Fund Council Tax requirement of £11.094m, and of £11.872m for the combined Borough Council and Parish Councils’ requirement for 2018/19;

b)    an increase of 2.99% in Council Tax for Dacorum Borough Council, taking Band D Council Tax to £195.51 for 2018/19;

c)    base estimates for 2018/19, as shown in Appendix A1, and the indicative budget forecasts for 2018/19 – 2021/22, as shown in Appendix A2;

d)    the forecast balances of Revenue Reserves as shown in Appendix J, and approve section 10 of this report as the updated Reserves Strategy;

e)    increases in Fees and Charges for 2018/19 as set out in Appendices C3, D3, and E3;

f)     adopt the Treasury Management Strategy for 2018/19, attached at Appendix K;

g)    adopt the Treasury Management Principles and Practices for 2018/19, attached at Appendix L;

h)    note that this budget paper will form part of the Medium Term Financial Strategy.


Capital Programme


i)      the revised Capital Programme for 2017/18, and for 2018/19 to 2022/23, as detailed in Appendix I;

j)      the financing proposals in Appendix I subject to an annual review of the financing options by the Corporate Director (Finance & Operations), in consultation with the Portfolio Holder for Finance and Resources, during the preparation of the Statement of Accounts.


Housing Revenue Account (HRA)


k)    reduce dwelling rents by 1% in accordance with government legislation, resulting in an average rent of £101.22 per week (based on 52 weeks);

l)      the HRA estimate for 2018/19 as shown in Appendix F.



Terms & Conditions


m)   the continued application of a living wage supplement for all affected employees, in accordance with the rates of the Living Wage Foundation, for 2018/19 (to be reviewed annually thereafter).


Statement by Chief Finance Officer

the statement by the Chief Finance Officer regarding the robustness of the budget estimates and level of reserves as set out in Appendix M.


Supporting documents: