Agenda item

Report of the Treasurer and Chief Fire Officer (RC/17/2) attached.

The Committee considered a report of the Treasurer and Chief Fire Officer (RC/17/2) 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 15 December 2016 that the Council Tax level which, if exceeded, would trigger the need for the Authority to hold a referendum, would be 2%.  Unlike in the previous Spending review period, the Government had not overtly laid down any expectation that local authorities should freeze council tax and therefore, there was no offer of a Council Tax Freeze Grant to those authorities to freeze or reduce council; tax in 2017/18.  It was, of course, still appropriate for an authority to set a level of Council Tax that was appropriate to its funding position.  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 set.

The provisional Settlement Funding Assessment for this Authority for 2017-18 was £23.883m, representing a reduction of 11.1% (£2.990m) on 2016-17.  This was broadly in line with the figures already included within the Authority’s Medium Term Financial Plans.  The Authority had also accepted the offer of a four year settlement for the period 2017/18 to 2019/20. These figures showed a reduction in funding of 24.6% by 2019/20 (£7.225m) over 2015-16, representing the 7^th worst settlement of all fire and rescue authorities against an average of 21%.

The Treasurer reported that the provisional Settlement had been received and the Authority had been allocated an amount of £528k additional Section 31 grants in 2017-18 relating to Rural Services Delivery Grant (£340k) and transitional funding (£188k). 

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

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

·        Option B – to increase Council Tax by 1.0% above 2016-17 (£80.78 for a Band D property);

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

Each of these options would result in a reduction in the amount of revenue funding for 2017-18 and the report also set out a summary of the reductions associated with each option including additional precept income.  The Service had been awaiting the figures from some billing authorities, however, relating to the amount of estimated business rates income in 2017-18 which it had now been confirmed would be £258k less than had been anticipated.

Reference was made in particular to the budget savings that had been included within the proposed net revenue budget requirements for 2017-18 which totalled £2.341m. For the first time, however, the Treasurer reported that there was a shortfall to achieve a balanced budget which, with the reduction in business rates income, would now be £0.579m.  It was proposed that this be taken from the Earmarked Reserve that had been set up specifically to cover this eventuality – the Comprehensive Spending Review (CSR) Strategy Reserve.  The intention of this reserve had always been to provide a smoothing mechanism of the impact of grant reductions during this period of austerity, the current balance on the reserve being £4.9m.

Councillor Healey MOVED (seconded by Councillor Chugg):

            “that it be recommendedto the Authority that the level of Council Tax in      2017-18 for a Band D property be set at £81.57, as outlined in Option  C of        report RC/17/2, representing a 1.99% increase over 2016 -17”.

Upon a vote, this was CARRIED unanimously.

RESOLVED that it be recommended to the Authority that the level of Council Tax in 2017-18 for a Band D property be set at £81.57, as outlined in Option  C of report RC/17/2, representing a 1.99% increase over 2016-17.