Agenda item

To consider a report from the Interim Section 151 Officer (copy enclosed).

Members considered a report from the Finance Portfolio Holder, which set out the proposed financial disaggregation and aggregation process from a funding, revenue cost and balance sheet perspective to give initial potential funding envelopes for the Unitary Councils and Cumbria Fire and Rescue Service (CFRS).

As part of the LGR Implementation Plan, a strategic planning process had been proposed that enabled the two new Unitary Councils and CFRS to determine how they will deliver services to achieve their Council Plan priorities and deliver them within a balanced budget.

The Finance Portfolio Holder noted that although a draft budget might have been expected at this stage, there was still a significant amount of detailed work to be done in order to produce this and that the Council was required to provide a balanced budget by statute in 2023/24. He added that the financial plan would build off 2022/23 baselines and that the financial disaggregation and aggregation process could not be conducted in isolation from other elements of the Strategic Planning process, particularly interdependencies with:-

·         Commissioning and procurement work on contracts and grants;

·         Assets and capital programme work; and

·         Disaggregation of staff principle being developed.

The report noted that there was no additional funding for Cumbria for LGR, with all spend for delivery of the LGR programme and the costs of delivering services needing to be achieved within the existing Cumbria funding envelope.

The Finance Portfolio Holder noted that council tax was set based on the council tax base multiplied by the council tax for the year with two main issues effecting the council tax for 2023/24 which were:-

·         a difference in the levels of council tax being set for each of the three billing authorities, with specific rules on how this would be harmonised for 2023/24 onwards as part of LGR; and

·         the tax base being reduced for reliefs and increased by premiums with each billing authority setting its own reliefs and premiums which needed to be aligned for 2023/24 onwards.

Options around harmonisation, reliefs and premiums were being prepared with final decisions required by each Unitary Council.

The report highlighted the starting point for the 2023/24 budgets as the aggregation, disaggregation and integration of the existing Council revenue budgets, with officers combining the 2022/23 detailed budgets for district and county with internal charging being removed to create the baseline budgets comparable across all authorities. The overall baseline net revenue budget for 2022/23 for all seven authorities was just over £0.5 billion, with a gross budget of circa £1.2 billion.

The Finance Portfolio Holder noted that further work was required which was reflected in the timetable set out in the report. He thanked officers for the significant amount of work already undertaken.

The Portfolio Holder raised a minor amendment to the recommendation 2 set out in paragraph 2.1 of the report to change the wording from “approve” to “note” to read as

(2)        note the proposed disaggregation principles for allocation of the Funding for all three organisations as set out in the report.

Councillor Jarvis then moved the recommendation, which was seconded by Councillor Brook.

This recommendation was then put to a vote, which was unanimous

RESOLVED,  that

(1)        the progress to date be noted;

(2)        the proposed disaggregation principles for allocation of the Funding for all three organisations be noted as set out in the report; and

(3)        the next steps in preparing budgets for 2023/24 be noted.