Agenda item - Budget and Council Tax Setting 2017/2018 and Medium Term Financial Strategy 2017-2021

Agenda item

Budget and Council Tax Setting 2017/2018 and Medium Term Financial Strategy 2017-2021

Report No:   CAB/SE/17/009

Portfolio Holder: Ian HoulderLead Officer: Rachael Mann

 

Decision:

RECOMMENDED TO COUNCIL: (21 February 2017)

That:

 

(1)     the revenue and capital budget for 2017-2021 contained in Attachment A to Report No: CAB/SE/17/009 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)’s 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/SE/17/009, Cabinet recommends a 1.96% increase (equates to £3.51 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 £182.16. (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; and

 

 (4)   the Discretionary Business Rates Relief awarded for local newspapers, as detailed in paragraph 1.4.2.1 to 1.4.2.3 to Report No: CAB/SE/17/009, be approved.

Minutes:

The Cabinet considered Report No: CAB/SE/17/009, which presented the proposals for Budget and Council Tax Setting in 2017/2018 and the Medium Term Financial Strategy 2017-2021. 

 

Councillor Ian Houlder, Portfolio Holder for Resources and Performance drew relevant issues to the attention of the Cabinet, including that Report No: CAB/SE/17/009 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 to the Borough 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 New Homes Bonus.  Further details and the implications of these particular matters were detailed in the report. 

 

Alongside these cuts, 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, such as housing.  Whilst the Government had maintained the 2% or £5 threshold (whichever was the higher) for council tax increases for 2017/2018 for shire districts, this local tax raised only one fifth of the Council’s income for local services.  Bridging the gap between income and demand was the single biggest challenge facing local government across the country.

 

St Edmundsbury Borough Council had been working in partnership with Forest Heath District Council (the West Suffolk councils) since 2010 and had saved in excess of £4 million annually through sharing 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.

 

The Council Tax Freeze Grant, which incentivised councils to freeze their council tax levels 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 Sections 1.5 to 1.13 of the report for securing a balanced budget for 2017/2018 and over the medium term to 2020/2021, which was based on an assumption of a 1.96% increase in council tax for 2017/2018.  This equated to an increase in £3.51 for an average Band D property, therefore the level of Band D council tax for 2017/2018 would be set at £182.16; however it was noted that the level of council tax beyond 2018 would be set in accordance with the annual budget process for the relevant financial year.

 

The Assistant Director (Resources and Performance) also informed that an updated National Non-Domestic Rate (NNDR)1 form had been submitted to the Department of Communities and Local Government  (DCLG) which stated that since the publication of the Cabinet report, the anticipated business rate income had increased.  This would not, however, affect the net position of the 2017/2018 budget and the updated figures would be presented to Council on 21 February 2017.

 

Given the financial challenges facing the Council, the Cabinet supported the proposed modest increase which would help support the closure of the budget gap in 2017/2018 and assist financial planning in the medium to longer term.

 

All staff and Members were recognised for showing dedication and commitment in making the Council more efficient in delivering the necessary savings and generating income whilst maintaining the delivery of services. 

 

 

RECOMMENDED TO COUNCIL:

That:

 

(1)    the revenue and capital budget for 2017-2021 contained in Attachment A to Report No: CAB/SE/17/009 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)’s 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/SE/17/009, Cabinet recommends a 1.96% increase (equates to £3.51 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 £182.16. (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; and

 

 (4)   the Discretionary Business Rates Relief awarded for local newspapers, as detailed in paragraph 1.4.2.1 to 1.4.2.3 to Report No: CAB/SE/17/009, be approved.

 

(Councillors Sarah Broughton, John Burns and Diane Hind left the meeting at the conclusion of this item.)

Supporting documents:

 

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