(A report by Paul Julian, Chief Finance Officer)
Portfolio Holder: Councillor Martin Howard
That the proposed budget and associated documents be recommended to full Council for approval, specifically:
· The budget setting report and associated policies and strategies 2020/21 – 2024/25.
· The Borough Council Tax for a Band D property in 2020/21 is set at £192.96.
· An increase in Council Tax premium on Long Term Empty Properties to apply the full extent of the provisions of the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018:
o An additional 50% Council Tax premium on Long Term Empty properties from 1 April 2020;
o An additional 100% Council Tax premium on Long Term empty properties longer than 5 years, from 1 April 2020;
o An additional 100% Council Tax premium on Long Term Empty properties longer than 10 years, from 1 April 2021.
The only exceptions to apply to the premium will be in respect of those empty properties that are already exempt under Council Tax legislation.
Portfolio Holder and Officer
REASON FOR DECISION
Councillor Martin Howard introduced a report by the Chief Finance Officer which outlined the 2020/2021 revenue and capital position for the General Fund and the proposals for the setting of discretionary fees and charges, for referral to full Council.
The Local Government Act 2003 introduced a requirement for the Chief Financial Officer to report on the robustness of the budget. The estimates had been prepared in a prudent manner, although it was highlighted that there were a number of elements outside of the Council’s control. These had been identified within the report and would be mitigated through the budget monitoring and risk management processes of the Council.
The financial regime from 2021/22, following the election of a new Government, the conclusion of the 2020 Spending Review, the proposed Fairer Funding review and introduction of further localisation of business rates, would determine the Council’s future financial landscape and constraints/opportunities in future years.
Difficulties facing the economy and the impact on the viability of town centres nationally presented potentially significant risks to future funding levels, which would require careful management and planning. The challenge of delivering balanced budgets remained a key issue and the recent refresh of the Transformation Programme provided a clear framework within which resources would be aligned to continue to deliver valued services to the community. The Council’s risk management processes were robust and alongside the annual budget the quarterly performance monitoring processes provided updates in the impacts being experienced as the situation became clearer.
In developing the Council’s budget proposals for 2020/21, it had managed inflationary pressures on operational costs and pressures on some areas of income collection. Areas where net budget reductions had been delivered to produce a balanced budget included service modernisation initiatives in street cleansing, community safety and finance; increasing garden waste fees; amending council tax levels for long-term empty properties and a review of bad debt provisions.
The Council continued to develop its response to the ‘commercial agenda’ and the role of innovation and development of services to deliver new/increased income an example being the Commercial Waste Service which had delivered income growth and provided learning across all service areas to drive further commercialisation opportunities.
In order to deliver its statutory budgetary duty from 2020/21 and develop proposals for a financially secure medium term, the Council would update its Corporate Plan during 2020/21 and continue to seek innovative opportunities to achieve the anticipated budget reductions necessary to deliver balanced budgets each year without adversely affecting service delivery and compromising its priorities. Reports would be presented for deliberation and approval as projects were developed, using the Transformation Programme as the basis to progress from.
It was noted that the government’s final settlement to councils was still subject to ratification by Parliament. No changes were expected from the figures published in the draft budget but any adjustments would be included in the report to full Council.
The following key proposals contained within the budget report were noted by Cabinet as part of the introduction: -
· A rise in Council Tax of 2.05% with Band D council tax being £192.96;
· Projected budget gap of £1.4m by 2024/25 representing a significant challenge for the Council in maintaining service provision to the most vulnerable;
· Government’s plan to further localise business rates from 2021 would mean the Council’s resources being likely to come solely from council tax, business rates and fees and charges. Whilst this may appear a positive step to self-determinism it also had significant risks and numerous uncertainties remained within the detail of the proposals;
· In 2020/21 the Council would continue to be part of a business rates pool across Lincolnshire;
· Savings target of over £925,000 for 2021/22, an increase from the figure published in the draft budget papers following receipt of new information, including a reduction in replacement bin income and actual Internal Drainage Board levies being formally confirmed. The target would require considerable focus during the year in terms of bringing forward projects in the Transformation Programme and assessing the impact of future funding proposals as they became available;
· Rural Services Delivery Grant had been extended for one year so for 2020/21 the Council would continue to receive support;
· New Homes Bonus tapering down from 2020 to nil in 2023/24;
· 1.94% increase in the Boston Town Area Committee Special Expense Account for 2020/21;
· A sustainable and affordable capital programme had been formulated and the revenue consequences built into the revenue budget;
· The capital programme showed a diminishing programme in future years as resources became scarcer. The programme included spending to renew the refuse fleet in 202/21.
The draft budget had been published on the Council’s website for consultation with all stakeholders, including the local business community. In addition Members had been consulted through various forums including the Corporate and Community Committee, and Audit and Governance Committee on the governance aspects of the budget preparation.
Comments received through the Member forums included the need to ensure that Internal Drainage Boards funding and its impact on district council budgets was included in representation regarding the future funding regime.
During debate at the Corporate and Community Committee two main views were put forward; that the Council should consider increasing council tax as much as possible to safeguard council services and reassure members that the challenge of future savings targets could be met; and that the increase should be as low as possible due to the impact on low income families who were already struggling to pay increasing bills. The final recommendation from the Committee was that the council tax level should be increased as much as possible.
The scrutiny committee was thanked for its detailed consideration of the issues, however it was felt that as the County Council and Police were proposing to increase their council tax levels to the maximum permitted by Government, it was appropriate to temper the Borough Council’s increase for the coming year. The budget as proposed presented a balanced position for 2020/2021.
In response to questions regarding a significant increase in the pension contribution rate from 2020/21 to 2024/25 the Chief Finance Officer confirmed that this was a result of the revised forecast following a recent three yearly actuarial review.
The recommendations in respect of increased council tax premiums for empty properties were welcomed as they would act as a driver to encourage property owners to put their properties back into use.
Cabinet thanked the Portfolio Holder and Officers for a thorough and comprehensive budget report.
OTHER OPTIONS OR ALTERNATIVES CONSIDERED
RECORD OF ANY CONFLICT OF INTEREST
RECORD OF ANY DISPENSATION GRANTED