Agenda item

Report of the Treasurer and Chief Fire Officer (RC/16/3) attached.

The Committee considered a report of the Treasurer and Chief Fire Officer (RC/16/3) on options for the Authority’s revenue budget and associated council tax level in 2016-17.  It was a legislative requirement for the Authority to set a balanced budget and determine an associated council tax level prior to 1 March each year and this report set out the necessary financial background on which to consider the appropriate way forward for this Authority.

The Treasurer advised that the Department for Communities and Local Government had announced on 17 December 2015 that the council tax level which, if exceeded, would trigger the need for the Authority to hold a referendum, would be 2%.  Reference was made to the point that the Department for Communities and Local Government had been requested to consider the implementation of an alternative set of principles for fire and rescue authorities that would apply a cash value of £5 on council tax increases for the purposes of the referendum limit rather than a set percentage.  Whilst this had been applied to some police and crime commissioner areas and district councils, it had not been applied to fire and rescue authorities.  Thus, given that the administrative costs associated with holding a local referendum were estimated to be in the region of £2.3million, this report did not include any proposal to go beyond the 2% limit.

The provisional Settlement Funding Assessment for this Authority for 2016-17 was £26.873m, representing a reduction of 8.6% (£2.540m) on 2015-16.  This was broadly in line with the figures already included within the Authority’s Medium Term Financial Plans.  The Government had also provided settlement figures for a four year period to 2019-20 should the Authority accept an offer of a four year settlement. These figures showed a reduction in funding of 24.9% by 2019-20 (£7.333m) over 2015-16, representing the 7^th worst settlement of all fire and rescue authorities.

The Treasurer reported that the final Settlement had now been received and, whilst the base funding figures had not changed,  the Authority had been allocated an amount of £466k additional Section 31 grants in 2016-17 relating to Rural Services Delivery Grant (£317k) and transitional funding (£149k).  Alongside this, however, the Authority had been advised that the Business Rate income would be £61k less than had been anticipated, resulting in a net gain of £405k in funding in 2016-17 overall, although this was not available to be added to the base budget in future years.

The report therefore set out two options for consideration by the Committee, namely:

·        Option A – to freeze council tax at 2015-16 level £78.42 for a Band D property);

·        Option B – to increase council tax by 1.99% above 2015-16 (£79.98 for a Band D property).

Each of these options would result in a reduction in the amount of revenue funding for 2016-17 and the report also set out a summary of the reductions associated with each option including additional precept income. 

Reference was made in particular to the budget savings that had been included within the proposed net revenue budget requirements for 2016-17 which totalled £3.222m. This had been achieved by a combination of stringent budget management measures, an anticipated reduction in retained activity together with the Corporate Plan proposals (to reduce support staff, senior management and remove 149 operational posts). 

In terms of the £405k of additional revenue funding that had now been made available in the final Settlement Funding Assessment, Councillor Greenslade suggested that this money should be transferred into the Earmarked Reserve to contribute towards future capital expenditure.

Following a debate in respect of the options presented, Councillor Thomas MOVED and was seconded by Councillor Yeomans:

“that, subject to the inclusion of an additional recommendation that the additional £405k of Section 31 grant funding be added to the amount to be transferred into the Earmarked Reserve for future capital expenditure, it be recommended to the Authority that Option B as set out within report RC/16/3 be approved”.

The motion was then put to the vote and CARRIED unanimously.

RESOLVED that it be recommended to the Authority:

(a)             that the level of council tax in 2016-17 for a Band D property be set at £79.98, as outlined in Option B of report RC/16/3, representing a 1.99% increase over 2015-16; and

(b)             that the additional £405k of Section 31 grant funding be added to the amount to be transferred into the Earmarked Reserve for future capital expenditure.

NB. Minute RC/12 above also refers.