Agenda item

The Director of Corporate Services presented the report which set out the draft revenue budget for 2020/21-2024/25 and the resultant council tax implications.

The report detailed changes to budget requirements, taking account of known/anticipated changes, incorporating current year-end forecast projections, and forecast vacancy factors based on anticipated recruitment. The most significant unknowns were: -

·         Future pay awards; assumed at 2% each year;

·         The additional cost associated with making various allowances pensionable, an extra £600k had been allowed for this;

·         It was unclear what impact the McCloud judgment would have on the budget, (such as increased employer contributions, transfer of personnel between schemes, retirement profiles and hence vacancy factors, whether a new pension scheme will be introduced and if so what contribution rates will be set). None of these changes had been factored into the budget;

·         Section 31 Grant in respect of the additional pension costs had been confirmed for 20/21 and would be incorporated into the subsequent Spending Review, and it had therefore been assumed that this continued throughout the Medium Term Financial Strategy.

The Local Government Finance Settlement resulted in a funding increase of 1.6% for 2020/21 and a council tax referendum limit of 2%. 

The report set out the implications of increasing council tax by 2%, 1% or of freezing this.  Allowing for a 2% increase in council tax and a gross budget of £57.8m the report identified a funding shortfall of £0.4m. It was therefore proposed either identifying additional in-year savings, or drawing down reserves, to deliver a balanced budget.  This gave a net budget of £57.3m, resulting in a council tax of £70.86 per Band D property, an increase of 1.99% (£1.38 per annum, less than 3p per week).

Until such time as the outcome of next year’s Spending Review was published it was impossible to provide any meaningful funding forecast, however for the purpose of medium-term financial planning it was assumed that funding was increased by 1.5%, and the 2% council tax referendum principle continued to apply. Based on this the Authority was still faced with a funding gap of up to £0.6m in subsequent years.

Looking at the medium-term plans it was clear that the key variables remained pay awards, pension costs and funding. As such additional scenarios were presented showing the potential impact of these ranging from a £1.4m to a £3.8m loss of funding or a £2.4m increase in costs.

Currently the Authority remained in a good financial position with reserves able to offset the financial challenges next year. The position became more challenging thereafter however by that time the Authority should have greater certainty on future funding, pay awards and future referendum limits, which would enable it to deliver more reliable medium term financial plans in order to address any gap that exists.

Members considered the report in detail.

County Councillor O’Toole asked that the good relationship with the local Fire Brigade Union be acknowledged.

The proposal based on a council tax increase of 1.99%, £1.38, resulting in a council tax of £70.86 for a Band D property was MOVED by County Councillor Frank De Molfetta and SECONDED by County Councillor Miles Parkinson. 

The Clerk held a recorded vote and the names of Members who voted for or against the Motion and those who abstained are set out below:

For (24)

L Beavers, S Blackburn, P Britcliffe, I Brown, S Clarke, F De Molfetta, J Eaton, N Hennessy, S Holgate, D Howarth, F Jackson, A Kay, H Khan, M Khan, Z Khan, T Martin, D O’Toole, M Parkinson, A Riggott, J Shedwick, D Smith, D Stansfield, G Wilkins and T Williams.

Against (0)

No Members voted against the motion.

Abstained (0)

No Members abstained.

The motion was therefore unanimously CARRIED and it was:

RESOLVED: - That the Authority: -

1. noted the Treasurer’s advice on the robustness of the budget
2. noted the Treasurer’s advice on the appropriate level of reserves/balances
3. agreed the revised budget requirement of £57.339m for 2020/21
4. noted the section 31 grant of £1.246m due in respect of the business rate reliefs
5. noted the level of Business Rates Retention Top Up Funding £11.295m
6. noted the level of Local Business Rates Retention Funding £4.340m
7. noted the business rate tax collection fund surplus of £0.122m
8. noted the council tax collection fund surplus of £0.363m
9. agreed the council tax requirement, calculated in accordance with Section 42A(4) of the Localism Act of £31.450m
10. noted the council tax base of 443,827 determined for the purposes of Section 42B of the Local Government Finance Act 1992
11. agreed a council tax band D equivalent of £70.86, an increase of £1.38 (1.99%), calculated by the Authority under Section 42B of the Local Government Finance Act 1992 agreed, on the basis of the fixed ratios between valuation bands set by the Government, council tax for each band as follows:

12. agreed, based on each district and unitary councils share of the total band D equivalent tax base of 443,827, the share of the total LCFA precept of £31.450m levied on each council as follows: