Agenda item

Report of the Director of Finance (Treasurer) and Chief Fire Officer (DSFRA/19/3) attached.

The Authority considered a joint report of the Director of Finance (Treasurer) and Chief Fire Officer (DSFRA/19/3) on the proposed revenue budget and associated Council Tax levels for 2019-20.

A provisional local government settlement for 2019-20 of £21.961m had been announced on 13 December 2018, the last year of the four-year grant settlement accepted by the Authority. The Settlement Funding Assessment represented a reduction for 2019-20 of 2.91% over 2018-19 and an overall reduction of 25.34% by when compared to the settlement for 2015-16. 

The government had also announced a threshold of 3% for Council Tax increases for the 2019-20, beyond which local authorities would be required to hold a referendum.  The proposed budget contained provision for a 2% pay award for all staff.  Each 1% pay award equated, for this Authority, to a cost of £0.540m which was greater than the income that an additional 1% Council Tax increase would generate (£0.510m). The report also identified, however, the view of the Director of Finance (Treasurer) that, in light of an indicative cost of £2.3m to hold a referendum, consideration of a Council Tax increase in excess of 3% was not a viable option for this Authority.

A core spending requirement of £77.482m (representing a 4.89% [£3.611m] increase over the 2018-19 budget) for 2019-20 had been identified and, in light of the referendum threshold, two associated Council Tax options were proposed:

Option A – freeze Council Tax at the 2018-19 level (£84.01 for a Band D

property); and

Option B – increase Council Tax by 2.99% above the 2018-19 level (£86.52

for a Band D property) – an increase of £2.51pa (21p a month).

The report identified savings of £2.340m to be delivered in 2019-20 which would be sufficient to balance the budget should Option B be approved.  Should Option A (Council Tax freeze) be approved, however, then an additional £1.525m savings would be required to balance the budget.  It was proposed that this be met by reducing the revenue contribution to capital.  In the event that Option B was approved (2.99% Council Tax increase), then it was proposed that the revenue contribution to capital be increased to £2.614m, of which £0.300m would be earmarked contribution from Red One Ltd.  This would be in line with the Authority’s strategy to reduce reliance on borrowing to fund investment in asset infrastructure.

While a balanced budget (inclusive of savings) for 2019-20 was proposed, the report also identified that the Medium Term Financial Plan indicated that additional savings would be required beyond 2019-20 to plan for a balanced budget.  These savings ranged from, cumulatively, £7.3m by 2022-23 (assuming a 2.99% Council Tax increase for each financial year in question) to £12m (assuming a Council Tax freeze).

As required by the Local Government Finance Act 1992, non-domestic rate payers had been consulted on the proposals for Council Tax levels. Additionally, public consultation had also taken place. The consultation had been conducted by telephone surveys and by using social media. The results of the consultation, which ran throughout November and December 2018, were, in summary:

·        for the telephone survey, the majority of business respondents (65%) and the public (67%) felt that it would be reasonable for the Authority to increase its precept;

·        70% of on-line responses were supportive of increasing the precept; and

·        the largest proportion of business respondents (45%) and the public (41%) supported a flat-rate £5 precept increase, with this also being supported by the largest proportion (46%) of the respondents to the online survey.

The report also featured a statement on the robustness of the budget estimates and adequacy of the level of the Authority’s reserves prepared by the Proper Financial Officer in accordance with the requirements of the Local Government Act 2003.

The 2019-20 revenue budget and Council Tax levels and been considered by the Resources Committee (Budget) meeting held on 7 February 2019 which had resolved (Minute RC/20 refers)

“that it be recommended to the Authority that the level of Council Tax in 2019-20 for a Band D property be set at £86.52, as outlined in Option B of report RC/19/4(a), representing a 2.99% increase over 2018-19”.

Councillor Coles MOVED, with Councillor Drean seconding that, as recommended by the Resources Committee, a Council Tax in 2019-20 for a Band D property be set at £86.52, representing a 2.99% increase over 2018-19.

The majority of those present then requested, in accordance with Standing Order 25(2), that a roll call vote on this issue be taken after which it was

RESOLVED

       (i)                that, as recommended by the Resources Committee meeting held on 7 February 2019 (Minute RC/20 refers), the level of Council Tax in 2019-20 for a Band D property by set at £86.52, as outlined in Option B of report DSFRA/19/3, representing a 2.99% increase over 2018-19;

      (ii)                that, accordingly, a Net Revenue Budget Requirement for 2019-20 of £75,141,900 be approved;

    (iii)                that, as a consequence of the decisions at (i) and (ii) above:

(A).       the tax base for payment purposes and the precept required from each billing authority for payment of a total precept of £52,554,377 (Option B), as detailed in page 3 of the respective budget booklet (circulated separately with the agenda for the meeting) and reproduced in the following table, be approved:

(B).       that the Council Tax for each property band A to H associated with the total precept of £52,554,377 (Option B), as detailed I page 3 of the respective budget booklet and reproduced in the table below, be approved:

    (iv)                that the Treasurer’s “Statement on the Robustness of the Budget Estimates and the Adequacy of the Authority Reserve Balances”, as set out at Appendix B to report DSFRA19/3 and reproduced at Appendix A to these Minutes, be approved.

(NOTE:  In accordance with Standing Order 25(2), a roll-call vote was taken in this issue with all Members present and voting [as listed at the commencement of these Minutes] voting in favour)

(SEE ALSO MINUTE DSFRA/36(c) ABOVE)