Agenda item

a)  2023/2024 Revenue Budget and Council Tax

To consider the report of the Chief Officer (Financial Services) on the proposals for the City Council’s Revenue Budget for 2023/2024 and the Leeds element of the Council Tax to be levied in 2023/2024. 

b)  Capital Programme Update 2023 – 2027

To consider the report of the Chief Officer (Financial Services) on the Capital Programme for the period 2023 – 2027 and which also includes a specific update on the 2022/2023 programme.

c)  Treasury Management Strategy 2023/2024

To consider the report of the Chief Officer (Financial Services) presenting the Treasury Management Strategy for 2023/2024, whilst also providing an update on the implementation of the 2022/2023 strategy.

Further to Minute No. 91, 14th December 2022, the Chief Officer Financial Services submitted a suite of reports regarding: proposals for the City Council’s Revenue Budget for 2023/24 and the Leeds element of the Council Tax to be levied during the same period; proposals regarding an updated Capital Programme for 2023 – 2027 and also a proposed updated Treasury Management Strategy for 2023/24.

The Board was advised that the budget proposals as detailed within the submitted report were based upon the provisional Local Government Finance Settlement. However, it was noted that following the publication of the submitted agenda papers, the final Local Government Finance Settlement had been received, which was consistent with the initial Settlement in all but two areas:

1)  Regarding the Services Grant, it was noted that the Council would be in receipt of a further £253,000 in 2023/24, and that the intention was for this sum be allocated to the Strategic Contingency Reserve balance; and

2)  Regarding the surplus on the Business Rates Levy Account, it was noted that the surplus was to be allocated to Local Authorities, and as a result, Leeds would receive £1.3m in the current financial year which would therefore contribute towards the currently projected overspend. It was also noted that the next financial health monitoring report would reflect the updated position.

In addition, it was noted that a correction was required within the submitted 2023/24 Revenue Budget and Council Tax cover report, specifically section 3(j) (page 241 of the agenda pack) should read: ‘Looking ahead, Appendix 1 presents Provisional Revenue Budgets for 2024/25 and 2025/26. These update the position set out in the Medium-Term Financial Strategy received in September 2022, with latest forecast gaps of £43.0m in 2024/25 and £28.7m in 2025/26’.

(A)  2023/24 Revenue Budget and Council Tax

RESOLVED –

(a)  That the Council be recommended to note the recommendation of the Council’s statutory officer (the Chief Officer – Financial Services) that the Budget proposals for 2023/24 are robust and that the proposed level of reserves is adequate, as set out at Part 7 of Appendix 1 to the submitted report;

(b)  That, subject to the inclusion of the updated position and correction as referenced above, the Council be recommend to adopt the following:-

(i)  That the revenue budget for 2023/24 totalling £573.4m be approved. This means that the Leeds element of Council Tax for 2023/24 will increase by 2.99% plus the Adult Social Care precept of 2.00%. This excludes the police and fire precepts which will be incorporated into the Council Tax report to be submitted to Council on 22nd February 2023;

(ii)  That approval be given to grants totalling £69.6k to be allocated to parishes, as shown at Appendix 5 to the submitted report;

(iii)  That approval be given to the strategy at Appendix 9 of the submitted report in respect of the flexible use of capital receipts - specifically the additional planned use in 2022/23 of £2.7m and planned use in 2023/24 of £19.0m;

(iv)  That in respect of the Housing Revenue Account, the budget be approved with:-

·  An increase of 7% in dwelling rents;

·  An increase of 7% in garage and travellers site rent;

·  An increase of 12.6% (RPI) for the standing charges in district heating schemes and the district heating unit rate will increase to 10p per kwh;

·  A 30% increase in heat consumption charges in sheltered complexes;

·  An increase in service charges for low/medium rise flats to £4.83 per week and for multi-storey flats £11.40 per week;

·  A decrease in the charge for tenants who benefit from the sheltered support service to £8.51 per week;

·  An increase in the Retirement Life charge for the provision of additional community facilities to £11.40 per week for services within complexes and £4.83 per week where they are within a standalone community centre;

·  An increase in the service charges for Wharfedale extra care scheme to £47.41 per week, in addition the support charge will increase by 9%.

(v)  That in respect of the Schools’ Budget, the High Needs Block budget for 2023/24, as set out in paragraph 4.4 of the Schools’ Budget Report at Appendix 8 to the submitted report, be approved, with specific reference to the table at paragraph 4.4.6 of the submitted report;

(c)  That Executive Board approval be given to the updated Revenue and Capital Principles, as detailed at Appendix 11 to the submitted report;

(d)  That Executive Board’s thanks be conveyed to Scrutiny Boards and all those who took part in the public consultation for their comments and the observations made in consideration of the Council’s Proposed Budget for 2023/24.

(B)  Capital Programme Update 2023 – 2027

RESOLVED –

(a)  That Executive Board recommends to Council:-

(i)  the approval of the Capital Programme for 2023-2027, totalling £1,978.5m, including the revised projected position for 2022/23, as presented in Appendix A to the submitted report;

(ii)  the approval of the MRP policy statements for 2023/24, as set out in Appendix C to the submitted report; and

(iii)  the approval of the Capital and Investment Strategy, as set out in Appendix D to the submitted report; with it being noted that as part of the Capital and Investment Strategy, the Council is required to set prudential limits for the total value of its non-treasury investments and, specifically, limits for the total value of service investments and the total value of commercial investments that it holds; and as such, Council be recommended to approve, as detailed within Appendix D, that:-

·  the prudential limit for service investments be set at £80m; and

·  that a limit of £200m should be set for the carrying value of assets which are classed as commercial investments.

(b)  That Executive Board approval be given to the following net injections totalling £420.7m into the Capital Programme, as set out in Appendix A(iii) to the submitted report:-

·  £95.6m of Corporate Borrowing to address Capital Programme Review budget pressures as listed at Appendix A(iv) to the submitted report;

·  £92.5m of annual programme injections (£45.4m of Corporate Borrowing, £11.9m of Flexible Use of Capital Receipts and £35.2m of External Funding) as listed at Appendix A(v) to the submitted report;

·  £9.8m of Community Infrastructure Levy (CIL) Strategic Fund monies;

·  £7.8m of Flexible Use of Capital Receipts injection for the Core Business Transformation Programme; and

·  £215.0m of other injections, primarily relating to the roll forward of the HRA Programme, annual capital grant allocations and other secured external grant funding.

(c)  That it be noted that the above resolutions to inject funding of £420.7m will be implemented by the Chief Officer (Financial Services).

(C)  Treasury Management Strategy 2022/2023

Thanks was extended to those in the Treasury Management team for the effective way in which such matters continued to be managed.

RESOLVED –

(a)  That the Treasury Strategy for 2023/24, as set out in Section 8.5 of the submitted report, be approved by Executive Board and that the review of the 2022/23 strategy and operations, as set out in Sections 8.3 and 8.4 of the submitted report, be noted;

(b)  That full Council be recommended to approve that the borrowing limits for the Authorised Limit and Operational Boundary for 2022/23, 2023/24 and 2024/25 be confirmed as set in February 2022; and that new limits for 2025/26 be approved at £3,200m for Borrowing and £530m for other Long term liabilities for the Authorised limit. For 2025/26, full Council be recommended to approve that the Operational Boundary be set at £2,950m for Borrowing and £510m for Other Long-term Liabilities, as detailed at Section 8.6 of the submitted report;

(c)  That full Council be recommended to approve the Treasury Management indicator for the maturity structure of the Council’s borrowing as detailed in Section 8.7 and Appendix B to the submitted report; with the only change to this Indicator being to increase the maximum percentage of debt maturing within 12 months from the previous 15% to 25% in response to the change required to the underlying calculation of this indicator from fixed rate debt only to include all debt including short term and variable rate debt;

(d)  That full Council be recommended to set the investment limits for periods greater than 364 days for 2022/23, 2023/24, 2024/25 at £150m, and that a new limit for 2025/26 be set at £150m. Also, full Council be recommended to approve that the limit of £15m which can be placed with the Debt Management Account Deposit Facility (DMADF) be removed. (The DMADF is an arm of the Debt Management office of HM Treasury). Finally, full Council be recommended to agree that all other Investment limits remain as set in February 2022, which are explained in Section 8.8.9 of the submitted report;

(e)  That full Council be recommended to approve that the Treasury Management Policy Statement be updated in line with the revised codes of practice, as shown at Appendix E to the submitted report; and that full Council be recommended to note that updated Treasury Management Practices and new Investment Management Practices (a new requirement, relating to non-treasury management investments), which are detailed operational documents, will be approved before the start of the 2023/24 financial year by the Chief Officer Financial Services, as required under the CIPFA Codes.

(The matters referred to in Minute Nos. 110 (A)(a) – 110(A)(b)(v) and 110 (A)(d) (Revenue Budget and Council Tax); 110(B)(a)(i) – 110(B)(a)(iii) (Capital Programme) and 110(C)(b) – 110(C)(e) (Treasury Management Strategy), given that they were decisions being made in accordance with the Budget and Policy Framework Procedure Rules, were not eligible for Call In)

(Under the provisions of Council Procedure Rule 16.5, Councillors Carter and Golton required it to be recorded that they both respectively abstained from voting on the decisions referred to within this minute)