Issue - meetings

Report No: CAB/FH/17/008

Portfolio Holder: Stephen Edwards            Lead Officer: Rachael Mann

RECOMMENDED TO COUNCIL: (22 February 2017)

That:-

1.           The revenue and capital budget for 2017-2021 contained in  Attachment A to Report No: CAB/FH/17/008 and as detailed in Attachment D, Appendices 1-5 and Attachment E, be approved.

2.           Having taken into account the conclusions of the Assistant Director (Resources and Performance) report on the adequacy of reserves and the robustness of budget estimates (Attachment C) and the Medium Term Financial Strategy (MTFS) (Attachment D), particularly the Scenario Planning and Sensitivity Analysis (Attachment D, Appendix 5) and all other information contained in Report No: CAB/FH/17/008, Cabinet recommends a 3.6% increase (equates to £4.95 for an average Band D property) in Council Tax for 2017/2018 .  The level of Band D Council Tax for 2017/2018, therefore, be set at £142.38. 

          (Note: the level of Council Tax beyond 2018 will be set in accordance with the annual budget process for the relevant financial year.).

3.           The Assistant Director (Resources and Performance), in consultation with the Portfolio Holder for Resources and Performance, be authorised to transfer any surplus from the 2016/2017 revenue budget to the Invest to Save Reserve as detailed in paragraph 1.11.4, and to vire funds between existing Earmarked Reserves (as set out at Attachment D, Appendix 3) as deemed appropriate throughout the year.

4.           The Discretionary Business Rates Relief awarded for local newspapers as detailed in paragraphs 1.4.2.1 to 1.4.2.3 to Report No: CAB/FH/17/008, be approved.

(Report No: CAB/FH/17/008)

Councillor Stephen Edwards, Portfolio Holder for Resources and Performance presented this report which presented the proposals for budget and Council Tax setting in 2017/2018 and the Medium Term Financial Strategy 2017/2021.

Councillor Edwards drew relevant issues to the attention of the Cabinet, including that Report No: CAB/FH/17/008 provided details of the Council’s proposed revenue and capital budgets for 2017/2018 and the Cabinet was required to consider the 2017/2018 budget for the authority and recommend to Council the level of Council Tax required to help fund this budget.

In light of the significant transformation in the funding of local services, the Council continued to face considerable financial challenges in the short, medium and longer term.  Changes included reductions in Government grant funding, including the pending removal of the Revenue Support Grant which was expected not to be available for the District by 2019/2020; more business rates being retained locally (and the uncertainty around how that was going to work); plus the introduction and then reduction of the New Homes Bonus.  Further details and the implications of these particular matters were detailed in the report.

Alongside this, was the lowest bank base rate for years (resulting in the Council’s income from interest being significantly reduced) and increased demand in some services.  Whilst the Government had maintained the 2% or £5 threshold (whichever was the higher) for Council Tax increases for 2017/2018 for Shire districts, any rise above this  would trigger a local referendum, thus giving the local electorate the opportunity to approve or veto the increase.

Forest Heath District Council had been working in partnership with St Edmundsbury Borough Council (the West Suffolk councils) since 2010 and had saved in excess of £4 million annually through the sharing of services.  However, it was recognised that, whilst the income received by the West Suffolk councils must be maintained, projects in which investment had been made, must be delivered in order to bridge the budget gap in the medium to longer term.

Some projects would require considerable investment through borrowing, but that investment would build a more financially resilient and self-sufficient Council, with less reliance on uncertain Government or other funding.  That focus on income generating projects, which may span several years before making any returns, meant that the Council was unable to simply balance a budget for one year.  Section 1.6 of the report provided details on how the Council intended to support these projects and its investment in growth agenda.

Between 2011 and 2016, the Government awarded Council Tax Free Grants to those councils that agreed to free their Council Tax levels.  This incentive had not been included in the settlement since 2016/2017 onwards and any previous awards were now included within the Revenue Support Grant and phased out accordingly.

Having acknowledged the issues highlighted above, including the introduction of two new business rate reliefs for 2017/2018, announced in the December 2016 Autumn Statement, as detailed in Section 1.4 of the report, the Cabinet noted the position in Section  ...  view the full minutes text for item 289