Agenda item

To consider the report.

Following consideration of the officer report, appendices and discussion, the Executive:?? 

a.    Recognised that Council Tax in Somerset is low compared to other similar councils due to historical factors and formally requests from DLUHC the option of allowing an increase in Council Tax by an additional 5%, 9.99% in total, to £1,810.48 for the Somerset Council proportion of a Band D charge in order to set the 2024/25 budget.

b.    To consult the Corporate & Resources Scrutiny Committee on the latest 2024/25 budget proposals including the savings proposals and Council Tax increases at their meeting on 01 February 2024 and receive their feedback at the next Executive meeting on 07 February 2024.

c.     To receive the business case for the creation of a sustainable Somerset Council through ’re-sizing’ of the council and creating a sustainable workforce transformation programme, including the estimated costs and saving from this at the next Executive meeting on 07 February 2024.

d.    Noted that the Section 25 Statement from the Section 151 Officer on the robustness of the budget proposals and adequacy of reserves will be a separate report to the 20 February 2024 Council.

The Leader of the Council, Cllr Bill Revans, invited the Deputy Leader and Lead Member for Resources and Performance, Cllr Liz Leyshon, to introduce the report. 

The Deputy Leader and Lead Member for Resources and Performance, Cllr Liz Leyshon, introduced the report, highlighting: the very stark and challenging financial position faced by the Council,  with the cost of delivering services increasing significantly faster than the income it receives, particularly in relation to social care; the unprecedented position and  that the funding mechanism for local government is broken and needs urgent reform nationally; the need to set a balanced budget and the potential consequences of not doing so; Council tax base rates, charges, referendum limits and comparisons with local Councils; that the Council’s finances have been significantly impacted by national factors outside of its control, including the impact of the full rebase of the Adult Services budget;  Covid 19 pandemic, high inflation and interest rates, energy cost increase, cessation of Government Covid 19 grants, increase in homelessness, nutrient neutrality situation; the impact of the cost of social care to non-statutory services; the one somerset business case savings and the changed times and greater challenges; the consideration of the report, including the list of pressures and savings and the need for the Council to take difficult decisions; High Needs Block and the impact of what will happen when the statutory override ends where Somerset is facing a deficit of up to £45m by the end of this financial year; and that this is a national problem that requires a national solution, the need for one voice to look for a fairer funding mechanism so that we can continue to maximise opportunities in Somerset while taking care of those most in need of support.

The Executive Director for Resources and Corporate Services, Jason Vaughan, added to the above points, highlighting: that the report updates Executive on the latest budget position and will form the basis of the budget consultation with the Corporate and Resources Scrutiny Committee (1 February 2024); that the Scrutiny Committee consultation response will inform the budget report to 7 February 2024 Executive which has the responsibility for recommending the 2024/25 budget to Council on 20 February 2024; the extremely complex budget and unique circumstances affecting the budget, including high inflation and interest rates, the financial settlement, the reduction in Government grants and funding,  low Council tax and the impact on the income and Adult Social Care precept and that Somerset Council’s income is not enough to cover the increase in costs; the positive impacts of the actions taken by Somerset Council on the forecast overspend - £26.8 million in month 3 being reduced down to £18.3m at month 7;  the work on the medium-term financial plan and summarised the changes to the budget, pressures and savings, making clear that saving options had been put forward by officers on the basis of trying to avoid section 114, identifying any savings that could be delivered for the next financial year; summarised the reserves position; the significant impact of the repayment of High Needs Block and Dedicated school Grants and the need for a national solution; the three meetings with Department for Levelling UP, Housing & Communities (DLUHC) and the application made for a capitalisation direction, the next steps in finalising the budget proposals, including the consultation and engagement process.

The Leader of the Council, Cllr Bill Revans, invited comments from other Members present, questions and points raised included: the DLUHC decision regarding rural services delivery grant and the services grant; the helpful detail of table one, page 143 of the agenda report pack in understanding the Council core spending power, and that most of the money is generated within Somerset; Council Tax, including the low tax base, rates, national and local comparators, the cumulative impact of the council tax freeze, communication with the Government from Somerset Council and the Government mandated scheme for those of state pension age; the financial and funding decisions subject to Central Government control and the limits Somerset Council on making decisions for a sustainable future; the untenable situation of the repayment high needs block overspend and SEND funding, including lobbying Government and the recognised national situation; the officer proposed savings proposals within appendix 7 of the report, including working with partners for solutions, the timings and start of the savings, Yeovil Recreation Centre, including grants and working with Yeovil Town Council, the potential close of five household waste recycling sites or centres, extension of opening hours and the Council statutory requirements,  the RNLI and concerns around lifeguard coverage and options to work with partners; CCTV provision, partnership models and potential financial contribution and consultation; the number of jobs at risk, the resilience and capacity and resizing of the Council and equality impact assessments, communication and engagement with City, Town and Parish Councils, including the rurality and diversity of communities of Somerset, precepting, protecting services, the importance of local knowledge, working in partnerships, Somerset Council link officers and the response to asset devolution, finance and social consequences of not closing parks at night, particularly Vivary Park, the exploration of options and solutions not about withdrawing the service but withdrawing the finding; the complexities of asset ownership; the business case for a sustainable Somerset next steps, including the scope and development of core components for assurance to be considered at the 7 February 2024 Executive meeting; the timescales and Government correspondence in setting a balanced budget without issuing a Section 114 notice; the timing of the budget, the full year effect Section 25 Statement from the Section 151 Officer on the robustness of the budget proposals and adequacy of reserves will be a separate report to the 20 February 2024 Council; the reduction in highway services and the Highway Steward programme option; the budget consultation results and availability for Scrutiny Committee and Full Council review.

The Leader of the Council, Cllr Bill Revans, emphasised that the list of proposed savings is not a final or definitive list of options, that there is still more work to do and there would be no decisions made today. The Leader further added that through openness Somerset Council can have conversations with communities and consider and explore all points when the budget is proposed through the Democratic process to Council.

The Chief Executive, Duncan Sharkey, clarified that the Council is not proposing to shut down the Yeovil Recreation Centre, but that the Council cannot afford to fund it anymore, and advised of conversations currently taking place with many local partners and local residents for alternative solutions.

The Executive proceeded to vote on the recommendations, which were agreed unanimously.???

Following consideration of the officer report, appendices and discussion, the Executive:????

a.        Recognised that Council Tax in Somerset is low compared to other similar councils due to historical factors and formally requests from DLUHC the option of allowing an increase in Council Tax by an additional 5%, 9.99% in total, to £1,810.48 for the Somerset Council proportion of a Band D charge in order to set the 2024/25 budget. 

b.        To consult the Corporate & Resources Scrutiny Committee on the latest 2024/25 budget proposals including the savings proposals and Council Tax increases at their meeting on 01 February 2024 and receive their feedback at the next Executive meeting on 07 February 2024.

c.        To receive the business case for the creation of a sustainable Somerset Council through ’re-sizing’ of the council and creating a sustainable workforce transformation programme, including the estimated costs and saving from this at the next Executive meeting on 07 February 2024.

d.        Noted that the Section 25 Statement from the Section 151 Officer on the robustness of the budget proposals and adequacy of reserves will be a separate report to the 20 February 2024 Council.

ALTERNATIVE OPTIONS CONSIDERED: As set out in the officer report.??

?

REASON FOR DECISION: As set out in the officer report.?