Issue - meetings

Draft Budget 2020/21 and Medium Term Financial Strategy Update

Meeting: 05/12/2019 - Cabinet (Item 110)

110 Draft Budget 2020/21 and Medium Term Financial Strategy Update pdf icon PDF 596 KB

To consider and decide on the recommendations as set out in the attached report.

Additional documents:

Decision:

RESOLVED – That the Draft Budget be agreed for public consultation.

 

REASON FOR DECISION:

To commence a public consultation on the Council’s proposed budget for 2019/20.

Minutes:

Lee Colyer, Director of Finance, Policy and Development introduced this Report that outlined the assumptions that have been built into the draft budget for 2020/21 and included the following:

 

-       The Report outlined the assumptions that had been built into the draft budget for the next financial year.  This was the 3rd report in the budget setting process. 

-       Since the last Report the Ministry for Housing, Communities and Local Government (MHCLG) had issued a technical consultation that included areas such as the New Homes Bonus. 

-       The New Homes Bonus was introduced by Government as a powerful, predictable, permanent incentive to reward the delivery of housing growth.  It was funded from £900m that was top sliced from the revenue support grant.  The technical consultation made clear that any new allocation for the next financial year would not result in legacy payments.  It also suggested an intent to look again at New Homes Bonus to explore its effectiveness of incentivising housing growth.  This raised concern and it was therefore prudent to suggest the Council remove its reliance on the New Homes Bonus within its base budget where it could afford to do so.  Any New Homes Bonus that the Council did receive should be put in reserves and used to help fund the Capital Programme.

-       In 2019/20 the Council received £1.143m in New Homes Bonus but only used £921,000 within its base budget.  The remaining £222,000 would be placed in reserves.

-       For 2020/21 the Council was only guaranteed 4 years of funding  - 3 years of which would be £589,000.  £300,000 had been estimated for next years allocation, but this had yet to be confirmed.

-       New Homes Bonus had been operating for 9 years, by comparison Tonbridge and Malling had received £23m, TWBC had received £14m less. 

-       The other part of the consultation dealt with the Council Tax cap.  In 2015 the Government introduced a £5 deminimus which had not changed.  In recent years the Police had increased theirs initially to £12 and then £24.  The average increase per household in the Borough was £100, but only £5 could be attributed to the Council. 

-       The Council would not know the outcome of the Council Tax cap until receipt of the Local Government Settlement.

-       The date of settlement was traditionally sometime in December which was not conducive to planning future expenditure.  Government commissioned The Hudson Review to look into this.  The Report had one main recommendation – to provide Local Councils with their settlement by 5 December each year – which was accepted by Government.  However due to the impending election MHCLG had written to the Council stating that this deadline would not be met, and no date could be given. 

-       An email had been received from Civil Servants on 5 December 2019  (the date of the meeting) it was their understanding that following the General Election the Local Government Finance Settlement would a priority for Ministers. 

-       The Budget for 2019 was  ...  view the full minutes text for item 110


Meeting: 12/11/2019 - Finance and Governance Cabinet Advisory Board (Item 68)

68 Draft Budget 2020/21 and Medium Term Financial Strategy Update pdf icon PDF 596 KB

To consider and provide a recommendation to Cabinet on the proposals set out in the attached report.

Additional documents:

Minutes:

Lee Colyer, Director of Finance, Policy and Development introduced this Report that outlined the assumptions that have been built into the draft budget for 2020/21 and included the following:

 

-       This was the 3rd Report in the process of setting the budget.

-       Since the last Report the Ministry Housing, Communities and Local Government (MHCLG) had issued a technical consultation in advance of the provisional settlement. 

-       New Homes Bonus – Any new allocation for next financial year would not result in legacy payments. This was a complete change in how the system used to work.  Of more concern was the Government’s intention to review this scheme and explore the most effective way to incentivise housing growth – this suggested that the Government were minded to bring the scheme to an end. It was therefore prudent to suggest the Council remove its reliance on the New Homes Bonus within its base budget where it could afford to do so. Any New Homes Bonus that the Council received could then be placed into the reserves to help fund the Capital Programme.

-       2019/20 the Council received 4 years of New Homes Bonus allocation, a total of £1.1m.  £921,000 was used in the base budget, the remaining £222,000 was put in reserves.  

-       The New Homes Bonus had not worked for TWBC having received only £9m (Tonbridge and Malling received £23m). 

-       Central Government continued to restricted the ability for Local Councillors to take decisions on the level of Council Tax needed.  The £5 deminimis limit introduced in 2015 had not changed.  This was at odds with the Policy Authority who in 2018/19 raised theirs to £12 and to £24 in 2019/20.  Details of the cap would not be known until the provisional Local Government Settlement was announced.

-       Following concerns from Local Government that the Settlement was not received in time to plan for future expenditure, Central Government commissioned The Hudson Review to look into this issue.  The Report had one main recommendation – to provide Local Councils with their settlement by 5 December each year. The Council was notified last week by MHCLG that this deadline would not be met and no date could be given for the provisional settlement due to the impending General Election.

-       The Budget for 2019 was due to take place on 6 November – but had been cancelled with no future date announced.

-       This meant there would be no context or national data that would help plan TWBC’s budget.

-       Economic data for Tunbridge Wells was available, in summary:

o   The Borough had the highest level of gross disposal household income in Kent.

o   The highest earnings in Kent lived within the Borough of Tunbridge Wells.

o   The unemployment rate for the Borough was 1.4% as at the end of September 2019 – significantly lower than the Kent and National average.

o   There were 7,000 businesses registered for VAT in the Borough.

o   The percentage of employees in the Knowledge Economy was  ...  view the full minutes text for item 68