Agenda item

The Director of Finance submits a report on the Departmental Draft Revenue Budget and Capital Programme.

The Director of Finance submitted a report setting out the City Mayor’s proposed budget for 2023/24.  The Commission was recommended to consider and comment on the Neighbourhood Services element of the report. The Commission’s comments would be forwarded to the Overview Select Committee as part of its consideration of the report before presentation to the meeting of Council on 22^nd February 2023.

Amy Oliver, Director of Finance, presented the item, it was noted that:

·       The main issues affecting the budget were the decade of austerity, two year stop gap to get through the Covid-19 Pandemic and the recent rise in inflation.

·       There were expectations of further grant cuts in 2025/26, as the government hinted at a new period of austerity.

·       Experiencing above inflationary cost pressures in adult social care as a consequence of growth of those in need and increases in the national living wage paid to the staff employed as care providers. The overall impact had been 50% increase on cost of providing care packages since 2016/17 which reached £142 million in 2021/22 with the trend expected to continue.

·       The impact of austerity had seen the grant fall from £289 million to £179 million on a like for like basis between 2010 and 2020. 

·       Due to the rise in inflation, £10 million of budget was being set aside for energy costs.

·       A significant factor was staff pay, in 2022/23 saw 6.4% added to the pay bill. This was £7.4 million above what had been budgeted.

·       The managed reserve strategy noted in the report showed that there was an estimated £55 million in reserve. This meant that the £33 million budget gap would be managed through that reserve.

·       A 5% increase was proposed for Council Tax.

·       The Capital Budget was a limited programme on a one year budget.

·       A £2.6 million provision was set out for parks and play areas, of which £2.5 million was proposed for investment into multiuse games areas (MUGA) program across the city.

·       £1 million had been proposed for investment into a policy provision for the library service.

In response to Member’s questions, it was noted that:

·       The City Mayor would continue to make cost saving decisions throughout the financial year as they were identified and any savings made would go into reserve. 

·       Approximately £6 million in revenue would be generated from the rise in Council Tax.

·       A local council tax support scheme would be available for people receiving benefits. The 5% increase was based on an average for band D properties and most Leicester residents would pay less.

·       Work was being done to help support residents that identified as vulnerable,

·       The district heating scheme was still a work in progress and had been revised since previously  discussed and would be kept under review until Full Council meeting.

·       The £4 million provided to support the capital maintenance program would be used for general works on council properties and maintaining them to keep to the standard required. It was a priority area of work that looked at asset condition and risk survey.

·       The multiuse games program phase one was expected to be on site in the spring 2023, reports were being finalised. The Library program would be later on in the financial year.

AGREED:

1.     That the reports be noted.

2.     That the comments made during discussion be taken into account by officers.