Agenda item

The Director of Corporate Services / Treasurer presented the report which set out the draft revenue budget for 2021/22-2025/26 and the resultant council tax implications.

The budget requirement had been re-assessed 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, it had been assumed a freeze in 21/22 and 2% each subsequent year;

·         What impact the McCloud judgement 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 would be introduced and if so what contribution rates would 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 21/22 and would be incorporated into the subsequent Spending Review, and it had therefore been assumed this would continue throughout the Medium-Term Financial Strategy.

The draft Local Government Settlement showed funding increasing by 0.19%. Until such time as a future Spending Review was announced there was no indications of future funding levels, as such the draft budget allowed for a funding increase of 1.5% each year.

Both the council tax base and collection fund, and the business rates collection fund had all been affected by the pandemic: -

·         The council tax base had fallen by 0.25%, predominantly due to an increase in the Local Council Tax Support Scheme. Hence the Government had allocated additional grant of £0.8m to offset the short-term reduction in the tax base;

·         The council tax collection fund was £0.1m in deficit;

·         The business rate collection fund was £1.9m in deficit, but this was offset by anticipated additional section 31 grant in respect of new in-year rate reliefs agreed by the Government in response to the pandemic’s impact on businesses;

·         To offset both the collection fund deficits the Government was allowing any relevant in-year deficits to be spread over 3 years, thus smoothing the impact, and had agreed to provide additional grant equivalent to 75% of the relevant reduction in specific elements of the collection fund deficits. However as billing authorities had not yet calculated this it had been excluded from our estimates.

In terms of council tax, the referendum limit had been maintained at 2%.

Overall the following year’s budget showed a funding shortfall of approx. £0.3m, assuming council tax was increased by 2%.

Looking longer term the key variables remained pay awards, pension costs and funding. There was an increase in the funding gap as no allowance had been made for the Local Council Tax Support Scheme continuing, and hence the estimated funding gap increased to approx. £1m.

However, any pay award in 21/22 or further increases in pension costs would add in further financial pressures, as would a reduction in funding as part of the next Spending Review. As such additional scenarios were presented showing the potential impact of these. As always, the longer the forecast the less accurate it would be.

There were too many uncertainties in the budget to produce meaningful longer-term plans, however it was clear that the Authority remained in a strong position to face these challenges, once future funding became clearer.

The report set out the implications of increasing council tax by 2%, 1% or of freezing this.  The increases equated to 2% was £1.41 per annum, £0.03 per week and 1% was £0.70 per annum, £0.01 per week.

Members considered the report in detail.

The Treasurer confirmed that one consultation response had been received from the Fire Brigades Union: “The FBU reluctantly support an increase in Council Tax as a way of offsetting and lessening the impact of Central Government cuts. Although we prefer to see no reductions The Fire Brigades Union support the small drawdown from reserves to allow for a balanced budget and maintained establishment and response model”. 

The proposal based on a council tax increase of 1.99%, £1.41, resulting in a council tax of £72.27 for a Band D property was MOVED by County Councillor Frank De Molfetta and SECONDED by County Councillor Nikki Hennessy. 

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 (22)

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

Against (1)

D Stansfield.

Abstained (0)

No Members abstained.

The motion was therefore 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 £58.175m for 2021/22;

4.    noted the level of Revenue Support Grant Funding £8.570m;

5.    noted the level of Business Rates Retention Top Up Funding £11.295m;

6.    noted the level of Local Business Rates Retention Funding £4.279m;

7.    noted the section 31 grant of £1.320m due in respect of the business rate reliefs;

8.    noted the business rate tax collection fund deficit of £1.862m, after allowing for the 3-year spread;

9.    noted the section 31 grant of £1.925m due in respect of the additional in-year business rate reliefs for 2020/21;

10.noted the Local Council Tax Support Grant of £0.789m;

11.noted the net council tax collection fund deficit of £0.137m after allowing for the 3-year spread;

12.agreed the council tax requirement, calculated in accordance with Section 42A(4) of the Localism Act of £31.996m;

13.noted the council tax base of 442,730 determined for the purposes of Section 42B of the Local Government Finance Act 1992;

14.agreed a council tax band D equivalent of £72.27, an increase of £1.41 (1.99%), calculated by the Authority under Section 42B of the Local Government Finance Act 1992 agree, on the basis of the fixed ratios between valuation bands set by the Government, council tax for each band as follows:

15.agreed, based on each district and unitary councils share of the total band D equivalent tax base of 442,730, the share of the total LCFA precept of £31.996m levied on each council as follows: