This report sets out the 2022/23 General Fund and Housing Revenue Account budgets, Capital Programme and Medium Term Financial Strategy for recommendation to Full Council.

(Items 73-75 were considered together for recommendation to the full Council meeting on 23 February 2022.)

Further to Minute 55 of the meeting held on 13 December 2021, the Director of Finance submitted a report setting out for recommendation to full Council the 2022/23 Budget and 2022/23-2024/25 Medium-Term Financial Strategy and updating the Committee on the results of the budget consultation exercise, changes arising from the publication of the Local Government Finance Settlement (LGFS) as well as other changes that had arisen.  The following documents were attached to the report:

·       Appendix 1 – The Medium-Term Financial Strategy (MTFS) 2022/23 – 2024/25

·       Appendix 2 – Summary of the General Fund (GF) budget proposals 2022/23 – 2024/25

·       Appendix 3 – General Fund Revenue Budget by Service 2022/23 – 2024/25

·       Appendix 4 – Detailed General Fund Budget Changes 2022-23 to 2024-25

·       Appendix 5 – The Housing Revenue Account (HRA) budget proposals 2022/23 – 2024/25

·       Appendix 6 – The Dedicated Schools Budget proposals 2022/23 – 2024/25

·       Appendix 7 – The General Fund and HRA Capital Programmes 2022/23 – 2024/25

·       Appendix 8 – The Flexible Use of Capital Receipts Strategy 2022/23 – 2024/25

·       Appendix 9 – Fees and Charges proposals from April 2022

·       Appendix 10 – Equality Impact Assessment of the budget proposals

·       Appendix 11 – Summary of the Response to the Budget Consultation

·       Appendix 12 – Summary of the Results of the Residents Survey 2021

The report explained that the underpinning rationale of the Medium-Term Financial Strategy was to deliver a balanced and affordable 2022/23 budget and ensure that the Council’s finances were robust and sustainable over the medium term, and that in the longer term the Council’s finances were not reliant on the unsustainable use of one-off reserves or funding. The Strategy was informed by the Council’s Vision: “to ensure that Reading realises its potential – and that everyone who lives and works in Reading can share in the benefits of its success” and the Corporate Plan themes of Healthy Environment, Thriving Communities and Inclusive Economy.

The report set out the budget assumptions which included: Council Tax increases of 1.99% plus an Adult Social Care precept of 1.0% for all three years of the MTFS (2022/23 to 2024/25); delivery of £19.940m efficiencies and increased income across the period; a contingency provision over the three years (£3.6m 2022/23; £4.8m 2023/24; and £6.3m 2024/25) to mitigate possible slippage or non-achievement of higher risk savings and/or income targets over the period; a housing rent increase of 3.1% (Sept 21 CPI only) in 2022/23, returning to a rent increase in line with approved policy of CPI + 1% in subsequent years; General Fund capital investment of £171m and Housing Revenue Account (HRA) capital investment of £140m over the period 2022/23 to 2024/25; and £5.706m of transformation funding (over the period 2022/23 to 2024/25) to support delivery of efficiency savings assumed within the MTFS.

The report noted that preparation of the 2022/23 Budget and MTFS 2022/23 – 2024/25 had again been challenging due to the continuing uncertainty caused by the wide-ranging implications of the Covid-19 pandemic and, despite a multi-year Spending Review announcement, another one-year Local Government funding settlement from Central Government.

Resolved –

That, taking due regard of the results of the budget consultation exercise and residents survey (as outlined in Appendices 11 and 12), the Committee recommend that Council approve the 2022/23 General Fund and Housing Revenue Account budgets, Capital Programme and Medium-Term Financial Strategy as set out in Appendices 1-10, noting the following:

a)       the Council’s General Fund Budget Requirement of £149.990m for 2022/23 and an increase in the band D Council Tax for the Council of 1.99% plus an additional 1.00% Adult Social Care Precept, or £84.44 per annum, representing a band D Council Tax of £1,829.72 per annum, excluding precepts from Police and Fire, as set out in paragraph 4.3;

b)       the proposed efficiency and invest to save savings of £6.471m together with additional income of £1.682m in 2022/23 required to achieve a balanced budget for that year as set out in Appendices 2 and 3;

c)       the overall savings proposed within the MTFS of £19.940m (of which increases to income, fees and charges was £3.853m) and three-year growth changes to service budgets of £25.186m as set out in Appendices 3 and 4;

d)       the budgeted contribution to earmarked reserves totalling £0.695m, as set out in paragraph 3.25 of Appendix 1;

e)       the Housing Revenue Account budget for 2022/23 of £46.033m as set out in Appendix 5 and the average increase of 3.1% in social dwelling rents from April 2022;

f)        the allocation of Dedicated Schools Grant (DSG) as set out in Appendix 6;

g)       the General Fund and Housing Revenue Account Capital Programmes as set out in Appendices 7a and 7b;

h)       the Strategy for the use of flexible capital receipts to deliver future transformation and ongoing savings as set out in Appendix 8;

i)        the Fees and Charges set out in Appendix 9 of the report; and

j)        the Equalities Impact Assessment as set out in Appendix 10.