Agenda item

Members received a report which set out the 2023/24 budget proposal for consultation with the boroughs.

Jay Patel, Finance Director, outlined the background to the budget and advised that the biggest driver of spend was activity levels related to waste transport and disposal so the Authority had little control. Officers did work with boroughs to reduce spend in these areas which were in the boroughs control. The budget report set out the framework for the following financial year and the borough Finance Directors would be requested to submit their comments on it by 5 January 2023 after which the final budget would be submitted to Members.

The Finance Director advised that there were three key messages:-

·       Officers have been responding to feedback from boroughs around the financial challenges they were facing. The Authority was expecting to receive income from the residual waste services contract and proposed to pay boroughs approximately £1m each to assist with their finances and enable Finance Directors to plan and give more predictability to their budgets;

·       The budget was being set in the context of inflation running over 10% which was challenging as a contracting authority. Work to manage the costs was being undertaken.

·       The programme of work that the Authority was looking to undertake in 2023/24 would directly benefit borough budgets and carbon footprint.

The Finance Director advised that the emphasis in the long term was to reduce the residual waste volume.

In terms of contracts and the cost of living crisis, a Member asked whether contractors were putting pressure on for renegotiation of contracts and was advised that the Authority was well mitigated against this.

Members requested an update in terms of what had changed within the budget since the budget challenge panel meeting noting that growth appeared to have reduced. The Finance Director responded that the key change was the commitment to the early payment of approximately £1m to each borough. This was welcomed by the Members given Councils’ budget situations and it was noted that there would potentially be another disbursement at the end of the year. The volatility of electricity prices was however a concern in terms of the reserves position. The electricity generation levy, a tax on energy from waste, was another factor. The Finance Director also noted that there had been a significant reduction in the waste budget since the challenge session and minor reductions in other budgets. The Managing Director confirmed that lobbying by Waste Network Chairs, NAWDO and ADEPT was being undertaken to ensure that local authorities were not accidentally disadvantage for investing in waste disposal and she undertook to take on board the comment that the Authority should write to the government on this issue.

RESOLVED: That (1)the 2023/24 budget for consultation be noted;

(2)   the programme of work to be met from the PPP (that is, electricity) income be noted

(3) the Pay As You Throw (PAYT) rates in section 15 of the report and the PAYT levy made up of two components totalling of £53.1 million be noted;

(4)   the Fixed Cost Levy (FCL) of £14.0 million in section 16 of the report be noted;

(5)  the recommended trade and construction prices in section 17 of the report and delegated authority to the Finance Director to change these in year should the need arise be noted;

(6)  the anticipated PPP income and payment to boroughs of approximately £1.0 million per borough in July 2023 of their share of PPP income be noted;

(7)  the new proposed capital budgets, as set out in section 18 of the report be noted;

(8)  the target level of reserves of £10.3 million to act as a buffer for managing risks (including the risk around the level of PPP income), as set out in section 19 of the report, be noted;

(9)  the Medium and Long Term Financial Plan set out in section 20 of the report be noted.