Agenda item

BUDGETING PACK 2022/23

Reports by Section 95 Officer

1. Introductory Report and Recommendations for Budget Papers

2. Revenue Pack

a. Revenue Budget Overview

b. Covid 19 Financial Position

c. Fees and Charges

d. Financial Risks Analysis 2022-23

e. Reserves and Balances – Updated for Budget Pack 2022-23

3. Capital Plan

a. Capital Plan Summary

b. Corporate Asset Management Strategy

c. Corporate Asset Management Plan including Asset Group Summaries

Minutes:

The Council considered the Revenue Budget and Capital Budget papers as contained within the budgeting pack, considered such other appropriate resolutions in relation to these papers and fixed the Council Tax for the year to 31 March 2023 which had been referred without recommendation by the Policy and Resources Committee held on 17 February 2022.

Motion

Argyll and Bute Council:

1) Approves the revenue budget for 2022/23 as set out in the Revenue Budget Overview Report and subject to the decisions outlined below and set out in the Administration’s Budget Model provided at Appendix 1.

2) Approves a base allocation to the Health and Social Care Partnership of £69.005m for 2022/23. Approves indicative base allocations for 2023/24 and 2024/25 to be £69.005m. The level of future years funding is subject to the level of Scottish Government funding and the Council’s overall financial position in future years.

3) Agrees to defer the proposed 3% reduction to the Live Argyll management fee, resulting in a total management fee for 2022/23 of £4.075m. Notes that this will be applied in 2023/24 and will be subject to any future budget decisions. Agrees to engage in early discussions with Live Argyll management in relation to future approach to support effective longer term financial planning.

a) Rejects policy savings option R104 - Burials and Cremations, totalling £80k;

b) Accepts all other policy savings options proposals, set out in Appendix 6 of the Revenue Budget Overview report, totalling £279.5k.

c) Endorses the management/operational savings, set out in Appendix 5 of the Revenue Budget Overview report, totalling £2.442m.

5) Agrees the following additional investments in line with Argyll and Bute Council’s Priorities, as set out in the table below and also in the Administration Budget Model at Appendix 1:

Keeping Argyll and Bute Connected - £3.153m			One-off or Recurring	Funded From
£2.653m	Roads	Continuing a multi-million pound investment programme over the life of this council by providing an additional £2.653m to maintain and improve Argyll and Bute’s rural, remote, island and urban roads network, to guarantee an overall Roads Reconstruction Budget of £8m for 2022/23.	One-off	General Fund/COVID Monies
£0.5m	Active Travel	In support of the council’s agreed priorities, allocates an additional £0.5m for active travel, including further improvements for footpaths and pavements and supporting safer routes to schools across Argyll and Bute. Requests that officers bring forward a report setting out scheme proposals to the Environment, Development and Infrastructure Committee.	One-off	General Fund
Investing in Our Places - £0.537m
£300k	Street Lighting	Allocates £300k to deliver a programme of street lighting column replacement and improvement across Argyll and Bute, prioritised based on condition, with funding for at least 260 lighting columns.	One-off	General Fund
£100k	Litter Bin Replacement Programme	Invests £100k in Argyll and Bute’s litter bin replacement programme and infrastructure, providing almost 200 new/better bins across the area where required due to condition/need and with a focus on town centres and prominent locations, to support cleaner communities. Requests that officers explore options for use of new and innovative litter disposal solutions for future consideration.	One-off	General Fund
£100k	Staycation Boost	Augments the 2021/22 £0.5m staycation initiative with an additional investment of £100k, including support for community groups and partners in the provision of facilities which can support increasing staycation visitor numbers during the 2022/23 season.	One-off	From Recovery and Renewal Fund
£17k	Seasonal public toilets	Agrees provision of £17k to allow all seasonal public toilets to remain open all year round. These facilities are at Kilchattan Bay, Ulva, Ganavan, Crinan, Sandy Beach and Glenmorag. This means that, going forward, all public toilets will be open all year round.	Recurring (to be baselined)	Revenue Budget
£20k	Festive parking	Agrees that, going forward, all off-street parking charges will be suspended across Argyll and Bute for the two-week period prior to Christmas Day, to encourage residents to support local shops in the lead-up to Christmas, noting that in 2022 this will be from 9^th to 24^th December inclusive.	Recurring (to be baselined)	Revenue Budget
Safeguarding Our Future - £1.5m
£1m	Learning Estate Investment Programme	Allocates £1m to help safeguard and support future funding for Argyll and Bute’s Learning Estate Investment Programme.	One-off – put into provision	General Fund
£0.5m	Climate Change Projects	Provides additional funding of £0.5m, building on previous £1.1m investments, for climate change, including projects within Argyll and Bute’s schools.	One-off	General Fund
Supporting Growth in Partnership - £0.165m
£75k	Argyll and the Isles Tourism Co-operative	In recognition of the importance of effective marketing of Argyll and Bute to maximise staycation opportunities and boost recovery and growth, approves the funding request from AITC and, to support future targeted/strategic activity as part of the overall focus on recovery, requests that officers engage with AITC to put in place a programme of regular evaluation and update reporting.	One-off	Existing Staycation Earmarking
£75k	CHArts	Agrees to the request to provide investment of £75k for 2022/23 to support the organisation in delivering targeted support, in communities, to the culture, arts and heritage sector as part of its plans to contribute to overall economic recovery.	One-off	From Recovery and Renewal Fund
£15k	Our Isles and Oceans	Agrees the request for a contribution of £15k to assist the organisation in delivering a second round of sailing-focused youth development programmes based in Argyll and Bute.	One-off	Existing Staycation Earmarking
Total investment in Argyll and Bute Priorities - £5.355m

6) Notes the announcement of the Scottish Government's £80m Local Authority Covid Economic Recovery (LACER) Fund, to support local economic recovery and cost of living impacts on low income households, and which will be distributed to local authorities to deliver in ways which best meet local needs. In order to ensure that this support reaches communities as quickly as possible, agrees to delegate the arrangements for Argyll and Bute's allocation of this funding to the Leader, Depute Leader and Leader of the largest Opposition Group.

7) Agrees £90,000 base funding for Strategic Events and Festivals for 2023/24, in order that the application process can commence during 2022/23, and this fund to be augmented by any underspend remaining from the current financial year.

8) Approves that the remaining surplus of £2.481m on the revenue budget is transferred to the General Fund.

9) Agrees that should the Council be permitted by the Scottish Government to apply the service concession flexibility, that this is used in preference to the loans fund principal repayment holiday.

10) Approves the 2021/22 revenue cost changes as detailed in section 2.2 of the COVID-19 Financial Position Report.

11) Approves the use of unallocated COVID-19 balance to fund the one-off payment of £0.372m in relation to backdated pay for the period January 2021 to March 2021.

12) Approves the 2022/23 revenue cost pressures as detailed in section 2.5 of the COVID-19 Financial Position Report amounting to £0.413m.

13) Approves the use of uncommitted COVID-19 funding to set aside £3.9m funding for capital contract increases which, in addition to the recommended sum, includes emerging pressures such as the Campbeltown Flood Scheme and delegates to the Environment, Development and Infrastructure Committee approval of spend of up to £1.2m from this provision in relation to the Campbeltown Flood Scheme.

14) Approves the following in relation to fees and charges with effect from 1^st April 2022 unless otherwise noted:

a) Approve the proposals for the fees and charges inflationary increase of 3% and approve the charges that are over and above inflation. Note that this would generate additional income of £0.390m in total.

b) Approve the changes proposed to the Social Work fees and charges.

c) Approve all other charges as noted within the Fees and Charges Schedule.

15) Notes the financial risks analysis.

16) Approves the contingency level for the General Fund balance at a level of 2% of net expenditure, equivalent to £5.256m and note the report on reserves and balances.

17) Approves the revenue estimates for 2022/23 and that consequently the local tax requirement estimated at £55.262m is funded from Council Tax. Approve the following rates and charges for the year, 2022/23:

a) Council Tax to be paid in respect of a chargeable dwelling in Band “D” of £1,408.76, representing a 3% increase.

b) Council Tax to be paid in respect of a chargeable dwelling in each of the other valuation bands in accordance with Section 74(1) of the Local Government Finance Act 1992 as amended.

c) Business Rates as determined by Scottish Ministers.

18) Approves the capital plan as set out in Appendix 3 of the capital plan summary report, and agrees to fund the £0.992m gap through borrowing. Notes that this will result in an annual revenue cost pressure of £0.064m per year from 2022/23. In light of the impact of reducing capital funding year on year, agrees to represent to the Scottish Government the challenging circumstances faced by the council in relation to capital infrastructure needs, calling for commensurate capital funding which will help the local authority to better meet such significant pressures and specifically seeking additional funding to cover the extraordinary £1m-plus damage sustained to the A844 Ardbeg Road, Isle of Bute, during Storm Barra in December 2021.

19) Approves the Corporate Asset Management Strategy.

20) Notes the Corporate Asset Management Plan and the Asset Group Summaries.

21) Notes that the Unallocated General Fund balance is £0.566m.

Appendix 1

Revenue Model

	2022/23 £000	2023/24 £000	2024/25 £000	2025/26 £000	2026/27 £000

Budget Surplus/(Gap) as Per Budget Pack	2,784	(7,593)	(13,730)	(20,985)	(26,055)

Defer Live Argyll 3% reduction (para 3)	(122)

Reject Policy Saving RI04 (para 4a)	(80)	(80)	(80)	(80)	(80)

Opening of Seasonal Public Toilets (para 5)	(17)	(17)	(17)	(17)	(17)

Suspension of festive off-street car parking charges (para 5)	(20)	(20)	(20)	(20)	(20)

To Fund Borrowing for Capital Plan (para 18)	(64)	(64)	(64)	(64)	(64)

Transfer to General Fund	(2,481)

Revised Budget Surplus/(Gap)	0	(7,774)	(13,911)	(21,166)	(26,236)

Capital Plan/Unallocated General Fund/COVID Funding

	Capital Plan £000	Unallocated General Fund £000	COVID Funding £000

As Per Budget Pack	(992)	1,979	6,937

Transferred from in-year revenue surplus		2,481

Transferred to contingency to maintain 2% provision		(6)

Funded by Borrowing (para 18)	992

One-off Investments (para 5):
Roads Reconstruction programme		(1,488)	(1,165)
Active Travel		(500)
Street Lighting		(300)
Bin Replacement Programme		(100)
Climate Change Programme		(500)

Provision for Learning Estate Investment Programme (para 5)		(1,000)

Provision for Capital Contract Increases			(3,900)

Retain Recovery and Renewal Fund (see notes below)			(1,872)

Revised	0	566	0

Note:

The £100k staycation investment and £75k Investment in CHARTS will be funded from the Recovery and Renewal Fund reducing the balance from £1.872m to £1.697m. Following an allocation of £150K by the Policy and Resources Committee on 17^th February 2022 to support Levelling Up Fund bids, the final balance is now £1.547m.

The investments in Argyll and Isles Tourism Co-operative and Our Isles and Oceans will be funded from the remaining funds within the Staycation

Moved by Councillor Robin Currie, seconded by Councillor Mulvaney.

Amendment

Argyll and Bute Council …

Revenue Expenditure

a. Approves the revenue estimates for 2022-23 and that consequently the local tax requirement estimated at £55.262m is funded from Council Tax. Approve the following rates and charges for the year, 2022-23:

i. Council Tax to be paid in respect of a chargeable dwelling in Band “D” of £1,408.76 representing a 3% increase.

ii. Council Tax to be paid in respect of a chargeable dwelling in each of the other valuation bands in accordance with Section 74(1) of the Local Government Finance Act 1992 as amended.

iii. Business Rates as determined by Scottish Ministers.

b. Approve the revenue budget for 2022-23 as set out in the revenue budget overview report, subject to the decisions as noted within this budget proposal.

c. Approve a base allocation to the Health and Social Care Partnership of £69.005m for 2022-23. Approve indicative base allocations for 2023-24 and 2024-25 to be £69.005m. The level of future years funding is subject to the level of Scottish Government funding and the Council’s overall financial position in future years.

d. Rejects the proposed 3% reduction to the Live Argyll Management Fee.

e. Approve the following in relation to fees and charges with effect from 1 April 2022 unless otherwise noted:

i. Approve the proposals for the fees and charges inflationary increase of 3% and approve the charges that are over and above inflation. Note that this would generate additional income of £0.390m in total.

ii. Approve the changes proposed to the Social Work fees and charges.

iii. Approve all other charges as noted within the Fees and Charges Schedule

f. Endorses the new management/operational savings as outlined in Appendix 5 of the revenue budget overview report

g. Rejects the following policy savings options amounting to £143,000

R&I 04 Burials and Cremations +8% Increase - £80,000

CS 01 Climate Change & Resource Efficiency - £63,000

Accepts all other policy savings outlined in Appendix 6 of the revenue budget overview report.

h. Makes a permanent provision for the employment of an Environment Warden based in the MAKI area at a cost of £40,000.

i. Approves a base funding of £90,000 for Strategic Events and Festivals in 2023-24, in order that the call for applications can proceed in 2022-23, noting that this amount will be augmented by the underspend in the current year previously agreed.

j. Approve that the surplus on the revenue budget is transferred into the Unallocated General Fund and used as outlined in this budget proposal.

COVID-19 Fund

k. Approve the 2021-22 revenue cost changes as detailed in section 2.2 of the COVID-19

Financial Position Report.

l. Approve the 2022-23 revenue cost pressures as detailed in section 2.5 of the COVID-19 Financial Position Report amounting to £0.413m.

m. Approve the use of unallocated COVID-19 balance to fund the one-off payment of £0.372m in relation to backdated pay for the period January 2021 to March 2021.

n. Approve the use of uncommitted COVID-19 funding to set aside £3.5m funding for capital contract increases, recognising the post-Covid experience on projects such as the Campbeltown Flood Scheme.

p. Make specific provision from the capital contract increases fund as noted in item (l) for an unbudgeted project cost increase in the delivery of the Campbeltown Flood Protection Scheme, at a cost of £1.135m and delegates to EDI approval of this spend.

q. Approves the provision of £40,000 of grant support to each of Argyll and Bute CAB, Alienergy and Bute Advice Centre in recognition of the substantial and increasing demand for consumer advice services arising from the compound effects of lockdown debt, escalating costs of fuel and the rising cost of living; at a cost of £120,000.

r. Approve the award of a one-off £100,000 Covid support payment to Live Argyll.

s. Approve the creation of an Entrepreneur Business Improvement Fund to be administered by Business Gateway. The purpose of the Fund; to provide financial support for SMEs through the Council’s Digital Skills/Boost programme, small scale capital grants, etc.; at a cost of £250,000. This is subject to a report by the Executive Director to the Policy and Resources Committee regarding the details for operation of the scheme.

t. Agrees to the funding requests in respect of CHARTS and AITC work to re-establish community arts and tourism in Covid recovery, at a cost of £150,000.

u. Agree the suspension of Council car park charges during the period leading up to Christmas from 10^th-24^th December, at a cost of £20,000, in support of the Shop Local initiative and retail business recovery.

v. Approve the transfer of the balances provided for Future Years and those, as yet unallocated to the Unallocated General Fund, leaving a balance of £426k in the Recovery and Renewal Fund.

w. Approve that should the Council be permitted by the Scottish Government to apply the service concession flexibility, that this is used in preference to the loans fund principal repayment holiday.

x. Further to the announcement of the Scottish Government’s Covid Economic Recovery Fund, the prospect of some £1.4m new funding presents the Council with an opportunity, not only to support local businesses through its’ recovery, but importantly to help communities and individuals.

Notwithstanding the £150 discount on energy bills to households in Scotland in council tax bands A to D, Officers are asked to prepare a report for the next meeting of the Policy and Resources Committee on how the Council can use this opportunity:

a. to further help low income families, and

b. to extend support to local businesses.

Capital Expenditure

y. Approve the capital plan as set out in Appendix 3 of the capital plan summary report, noting the deficit of £0.992m in funding and approve the use of borrowing to fund the deficit within the capital programme, noting the consequent revenue cost pressure of £64,000 per annum from 2023-24.

z. Agrees the following new expenditure on to augment the current capital resources available to the Roads and Infrastructure Service, for the following purposes, subject to a report to the Environment, Development and Infrastructure Committee by the Executive Director regarding the details for expenditure under these headings:

Roads Reconstruction and Repair – £4,500k

Pavement Improvements and Repair, inc. drop kerbs - £100k

Roadside Scrub Removal and Maintenance - £100k

Surface Water Drainage Improvement and Maintenance - £100k

Cemetery Development and Improvement - £1m

Unallocated General Fund

x. Approve the contingency level for the General Fund balance at a level of 2% of net expenditure, equivalent to £5.257m and note the report on reserves and balances.

y. Agrees to the funding request from Isles and Oceans, at a cost of £15,000.

z. Note the financial risks analysis.

aa. Approve the Corporate Asset Management Strategy.

bb. Note the Corporate Asset Management Plan and the Asset Group Summaries.

AMENDMENT MODEL


	Revenue Budget £000	Capital Plan £000	Unallocated General Fund £000	COVID Monies £000

As Per Budget Pack	2,784	(992)	1,979	6,937

Reject Live Argyll 3% reduction	(122)

Reject Policy Saving RI04	(80)
Reject Policy Saving CS01	(63)

MAKI Environment Warden post	(40)

To Fund Borrowing for Capital Plan	(64)

Transfer Revenue Surplus to General Fund	(2,415)		2,415

Funded by Borrowing		992

For Capital Resources in Roads and Infrastructure:
Roads Reconstruction and Repair			(4,500)
Pavement Improvements and Repair inc drop kerbs			(100)
Roadside Scrub Removal and Maintenance			(100)
Surface Water Drainage Improvements and Maintenance			(100)
Cemetery Development			(1,000)

Provision for Capital Cost Increases				(3,500)

Advice Services				(120)

Live Argyll COVID Recovery Support				(100)

Entrepreneur Business Improvement Fund				(250)

AITC & Charts Recovery Support				(150)

Council Car Park Charges Festive Season				(20)

Retain Balance in Recovery and Renewal Fund				(426)

Isles and Oceans			(15)

Transfer to General Fund Contingency to Maintain 2% Level			(7)

Transfer between COVID and General Fund			2,371	(2,371)

Revised Budget Surplus/(Gap)	0	0	943	0


REVENUE MODEL	2022-23 £000	2023-24 £000	2024-25 £000	2025-26 £000	2026-27 £000

Budget Surplus/(Gap) as Per Budget Pack	2,784	(7,593)	(13,730)	(20,985)	(26,055)

Reject Live Argyll 3% reduction	(122)	(122)	(122)	(122)	(122)

Reject Policy Saving RI04	(80)	(80)	(80)	(80)	(80)
Reject Policy Saving CS01	(63)	(63)	(63)	(63)	(63)

MAKI Environment Warden post	(40)	(40)	(40)	(40)	(40)

To Fund Borrowing for Capital Plan	(64)	(64)	(64)	(64)	(64)

Transfer to General Fund	(2,415)


Revised Budget Surplus/(Gap)	0	(7,962)	(14,099)	(21,354)	(26,424)

Moved by Councillor Lynch, seconded by Councillor Forrest.

Councillor Freeman having moved a further amendment which failed to find a seconder requested his dissent to be recorded.

The Provost requested the Section 95 Officer to confirm that the Motion and Amendment before the Council, containing budget proposals were competent and balanced. The Section 95 Officer confirmed this was the case.

As the meeting was being held on a virtual basis the vote required to be taken by calling the Roll and Members voted as follows –

Motion	Amendment	No Vote
Councillor Anderson	Councillor Armour	Councillor Freeman
Councillor Colville	Councillor Blair
Councillor Currie	Councillor Douglas
Councillor Devon	Councillor Findlay
Councillor Good	Councillor Forrest
Councillor Green	Councillor Horn
Councillor Hardie	Councillor Lynch
Councillor Kinniburgh	Councillor McKenzie
Councillor MacMillan BEM	Councillor Moffat
Councillor McCabe	Councillor Paterson
Councillor McCuish	Councillor Philand
Councillor Sir McGrigor	Councillor Taylor
Councillor McNeilly	Councillor Trail
Councillor Morton
Councillor Mulvaney
Councillor Penfold
Councillor Redman
Councillor Reid
Councillor Robertson
Councillor Vennard

Decision

The Motion was carried by 20 votes to 13 with one no vote and the Council resolved accordingly.

(Ref: Reports and Budget Pack by Section 95 Officer dated 24 February 2022, submitted)

Supporting documents:

Budget Pack 2022-23, item 5. PDF 11 MB