Agenda item

The budget proposals had been set during a truly unprecedented period for local government. Councils across the country had to continue to support residents and businesses in exceptional ways. The Government had provided substantial funding to assist with Covid test and trace, enforcement and business grants as well as EU transition, but these challenges caused by the pandemic and EU Transition had placed a tremendous strain on the council’s workforce, which itself has been diminished by Covid.

The challenges also placed a strain on local government finances, and Thanet was no exception. Not all Covid losses have been compensated, and there continued to be pressure on the council budgets. Expenditure was higher, to compensate residents and businesses and to protect people through enforcement and temporary housing. Income was lower, in respect of council fees and charges as well as council tax and business rates. The current national lockdown only added to this pressure.

Cabinet observed that it was difficult to assess the full impact of Covid and Brexit on next year’s budget. There should be a reduction in Covid infection rates, nationally and locally, once the vaccines have been rolled out. The worst local effects of Brexit with the impact of Manston being used as a lorry park and latterly, as a testing station should be passing away. However the national and local economic impact will remain for a while longer. Some businesses will struggle to survive as they built up debt and a significant number of people will have lost their jobs. It was unlikely that Thanet will bounce back to its pre-Covid state, at least in the short term.

Despite all this, Thanet was not as worse off as some other councils. Whilst the reserves were relatively low before Covid, council had built up a degree of resilience. A decision had been made not to invest in commercial ventures which are typically dependent on commercial rent. The reserves had gradually grown over the previous five years, and the balance sheet showed a reduction on overall borrowing. Those authorities that were not in a similar position before Covid were now facing much larger budget gaps than TDC’s £840,000.

Cabinet recommended to Council budget proposals that require savings. When considering these savings the priorities would be to minimise the impact on services, especially front line services and to minimise redundancies. Unfortunately, there are up to eight posts that will be deleted from the organisation structure and the staff occupying those posts will be going through a restructuring process. Although it was too early to say, some of those might be subject to compulsory redundancy. Every effort will be made to find alternative council employment for them.

Another objective of the Cabinet was to adopt a transparent approach to setting the budget. As part of the budget build up process, ten budget briefings for small groups of members, as well as two all-member briefings were conducted. Regular sessions were held with Shadow Cabinet.

Cabinet proposed an increase in Council Tax, at £4.99, which represented an increase of less than 10p a week for each household.

Cabinet had acted to address the legacy of poor management by East Kent Housing. The service was successfully brought in house and a substantial investment plan in the HRA capital programme was now in place. Cabinet was aware that the Government’s housing rent policy stipulated an increase of CPI plus 1%, which represents a 1.5% rent increase for council tenants. The majority of this would be covered by benefit or Universal Credit, but to help ease the burden on those of our tenants not in receipt of benefit, council elected to freeze affordable rents this year.

The average rent in 2021-22 is set to be £1.98 higher than the average rent in 2020-21, not £1.89 as stated in paragraph 13.6.1 in the report.

Members thanked staff for hosting briefing sessions on the budget. This kept Members informed throughout the budget process.

Councillor Yates proposed, Councillor Albon seconded and Cabinet agreed to recommend to Council that:

1.  The General Fund revenue budget estimates for 2021-22 be approved, assuming a £4.99 increase in the band D equivalent for Council Tax;

2.  The HRA budget estimates for 2021-22 be approved, assuming a CPI+1% increase in social rents and a freeze in affordable rents;

3.  The General Fund and Housing Revenue Account capital programmes for 2021-25 be approved;

4.  The Flexible Use of Capital Receipts Strategy for 2021-22 be approved

5.  The Section 151 Officer’s Assurance Statement be noted.