Agenda item

Joint report of the Treasurer and the Chief Fire Officer (DSFRA/17/1) attached.

The Authority considered a report of the Treasurer (DSFRA/17/1) on the proposed revenue budget and associated Council Tax levels for 2017-18.

A provisional local government settlement for 2017-18 of £23.883m had been announced on 15 December 2016, together with details of the figures for 2018-19 and 2019-20 as part of the four-year grant settlement.  The Settlement Funding Assessment (SFA) represented a reduction for 2017-18 of 11.1% over 2016-17 and an overall reduction of 24.6% by 2019-20.  This was the seventh worse settlement when compared to other fire and rescue authorities.  In addition to the settlement, the Authority had also been awarded the following to be paid as Section 31 grants (i.e. not included in base budget funding):

·         Rural Service Delivery Grant of £0.340m in 2017-18, £0.261m in 2018-19 and £0.340m in 2019-20; and

·         a share of transitional grant (payable to those authorities suffering the most severe grant reductions in the first two years of the four year settlement) of £0.188m in 2017-18.

The amount of these two grants had been included as income in the proposed draft budget.

The government had also announced a threshold of 2% for Council Tax increases, beyond which local authorities would be required to hold a referendum.  For this Authority, the cost associated with holding such a referendum was estimated to be in the region of £2.3m.  A core budget requirement of £75.516m (representing a 2.08% [£1.539m] over the 2016-17 budget) for 2017-18 had been identified and, in light of the referendum threshold, three associated Council Tax options were proposed:

Option A – freeze Council Tax at the 2016-17 level (£79.98 for a Band D property);

Option B – increase Council Tax by 1.00% above the 2016-17 level (£80.78 for a Band D property); and

Option C – increase Council Tax by 1.99% above the 2016-17 level (£81.57 for a Band D property).

Even at the highest optional increase, the core budget requirement exceeded available funding.  Consequently, the report identified savings of £2.341m and also indicated that, depending on the level of Council Tax increase, to set a balanced budget in 2017-18 would require use of funding from the £4.9m Comprehensive Spending Review (CSR) Earmarked Reserve as indicated:

Option A (Council Tax freeze)                    -           £1.518m;

Option B (1.00% Council Tax increase)     -           £1.046m;

Option C (1.99% Council Tax increase)     -           £0.579m.

While the four-year settlement afforded greater certainty for future funding, the Authority’s Medium Term Financial Plan (MTFP) indicated that further savings would be required beyond 2017-18 to deliver a balanced budget, with the actual level of savings ranging between £4.2m (1.99% Council Tax income) to £8.2m (Council Tax Freeze).

As required by the Local Government Finance Act 1992, non-domestic rate payers had been consulted on the proposals for expenditure.  Additionally, as previously agreed by the Authority, public consultation had also taken place.  The consultation had been conducted via telephone surveys.  The results, as summarised in the report, indicated that a significant majority of businesses and members of the public felt it would be reasonable for the Authority to consider increasing its precept for 2017-18.  Of those who expressed support for an increase, 80% of business respondents and 88% of public respondents felt an increase of 2% or more to be reasonable.

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

Following a debate on the issue, Councillor Burridge-Clayton MOVED, with Councillor Bown seconding, that the recommendations of the Resources Committee be approved whereupon it was

RESOLVED, unanimously

(i)         that, as recommended by the Resources Committee at its meeting on 8 February 2017 (Minute RC/17 refers), the level of council tax in 2017-18 for a Band D property be set at £81.57, as outlined in Option C in report DSFRA/17/1, representing a 1.99% increase over 2016-17;

(ii)        that, accordingly, a Net Revenue Budget Requirement for 2017-18 of £72,595,600 be approved;

(iii)       that, as a consequence of (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 £48,146,368 as detailed on page 3 of the relevant budget book (circulated separately with the agenda for the meeting) and summarised overleaf be approved:

(B)      the council tax for each property bands A to H associated with the total precept of £48,146,368, as detailed on page 3 of the relevant budget book (circulated separately with the agenda for the meeting) and summarised below be approved; and

(iv)      that, given that the budget is approved on the basis of the provisional local government settlement, the Treasurer be delegated authority:

(A)      in the event of the final settlement being less than the provisional settlement, to meet from Authority reserves any funding difference required to set the balanced budget as approved at the meeting; OR

(B)      in the event of the final settlement exceeding the provisional settlement, to transfer any resulting amount over and above the balanced budget as approved at the meeting into Authority reserves;

(v)       that the Treasurer’s ‘Statement of the Robustness of the Budget Estimates and the Adequacy of the Authority Reserve Balances’, as set out at Appendix A to report DSFRA/17/1 and attached as Appendix A to these Minutes, be endorsed;

(vi)      that the Treasurer be authorised:

(A)      to respond on behalf of the Authority to the recently-published consultation by the Department for Communities and Local Government on the design of the reformed system for 100% business rates retention; and

(B)      to make representations to the Prime Minister and the Department for Communities and Local Government (with copies to be sent to local Members of Parliament) to seek assurances that, given the rurality of the area served by the Devon & Somerset Fire & Rescue Authority, appropriate safeguards will be put in place to ensure that the move to 100% business rates retention does not result in any financial detriment to this Authority.

(SEE ALSO MINUTE DSFRA/48(c) ABOVE).