The Lead Member for Corporate Services introduced the report and explained that the Policy Advisory Committees (PACs) had each considered the item within their terms of reference and provided comments and feedback. Although the PACs had agreed with the recommendations put forward, there had been discussion on the level of staff salary increases and the available options to fund the increase.

The Executive expressed concern regarding the impact on staff of the rising cost of living, and the increase in inflation since the budget-setting process started. It was requested that further information be provided to model the use of the core spending guarantee to supplement staff salary increases.

The Chief Executive advised that it was important to balance the risk of using the funding guarantee to supplement staff salary, as it was a one-off sum being granted for 2023/24, and not guaranteed for future years. Officers would model the scenario as requested, as well as alternative options for funding staff salary increases. An assessment of the risk for each option would be carried out, and the report presented to the Corporate Services PAC for comment before being considered by the Executive.

The Director for Finance, Resources and Business Improvement added that the risks would be fully assessed for the Executive to consider at its next meeting, and the impact on other areas of using the funding guarantee to supplement staff salaries would be explored.

RESOLVED: That

1.  The revenue budget proposals set out in Appendix A and B to the report be approved and that, given the concerns expressed by the Executive for staff coping with cost-of-living pressures (inflation at 10-11%), the Executive ask that by using additional revenue support provided by the government from the core spending guarantee officers include in the 2023/24 budget report to CS PAC on 6 February 2023 and Executive on 8 February 2023 a further 2% to supplement the budget for pay; and

2.  An hourly rate of £258 for legal services be approved.

See Record of Decision.

The Lead Member for Corporate Services introduced the report and stated that the budget setting process had begun in November 2022, with the intention of identifying £2.5 million in savings for 2023/24. Since then, the Chancellor’s Autumn Statement and Local Government Finance Settlement had been released. From the latter, the Council Tax Referendum Limit had been increased to 3%, alongside the provision of the Funding Guarantee for Local Authorities; the latter was based on the Council’s core spending power and provided additional funding.

The Lead Member for Corporate Services stated that the Medium-Term Financial Strategy (MTFS) had been drafted with the assumption that council tax would be increased up to the 3% limit. A variety of financial scenarios had been modelled as part of the process, with specific attention given to the high-inflation scenario. Over £1 million in savings had been identified for the 2023/24 financial year, with emphasis given to the fact that the MTFS covered a five-year period. The next few years were likely to be challenging for the Council financially, although the Council was likely to achieve a balanced budget for 2023/24. The importance of taking a prudent approach to the Council’s finances was highlighted.

Specific attention was drawn to the Funding Guarantee, which was assumed to be a one-off source of funding; £300,000 had been allocated to strategic planning for the 2023/24 financial year with an assumption that the remainder would be used to support the Affordable Homes Programme. The Committee were asked for its views on using some of the Funding Guarantee, to increase the 5% staff pay increase budgeted for within the budget planning process, without making further savings.

The Director of Finance, Resources and Business Improvement stated that the final settlement would be negotiated and decided by the Head of Paid Service, with Member involvement in the decision being restricted to the allocation of the funds for employee renumeration. The matter would be considered by the Committee in a report due to be presented at its next meeting.

Several Members of the Committee expressed support in principle for an increase in staff salary, with a range of contributing factors referenced including appreciation for the Council’s staff, encouraging retention and the high cost of recruitment. However, the importance of ensuring that any increase provided was sustainable across future years was reiterated following discussion on the use of one-off funding to support an increase, as otherwise this could contribute to the Council’s future financial pressures.  The importance of ensuring services continued to be provided was highlighted. A variety of options were suggested, including higher increases for staff on lower pay grades. Reference was made to the difficulties of improving staff renumeration whilst increasing council tax. The Director of Finance, Resources and Business Improvement stated that any proposed increase in staff pay would be carried forward each year as part of the Council’s budget.

In response to questions, the Director of Finance, Resources and Business Improvement stated that the Communities, Housing and Environment Policy Advisory Committee  ...  view the full minutes text for item 95