Agenda item

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

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.

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 3^rd 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 due to take place on 6 November.  This had subsequently been cancelled with not future date announced. 

-       Without a national budget it would be difficult for TWBC to plan its own budget. 

-       The Report did however include some local economic data:

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

o   The highest earners in Kent lived within the Borough of Tunbridge Wells – average salaries of just under £34,000.

o   The unemployment rate for the Borough was 1.4% as at the end of September 2019.

o   The Borough had 7,000 businesses registered for VAT.

o   The percentage of employees in the Knowledge Economy was 23.5% - second only to Sevenoaks.

o   The 3 year new business survival rate was 62%.

o   The Borough had the highest level of NVQ level 4 or above at 50%.

-       The council would continue to partake in the Kent Business Rate Pool. 

-       The Report included a break down of the biggest cost changes for next year:

o   Employment Costs (including a manager for the Amelia).

o   An increase in the demand for temporary accommodation.

o   An additional subsidy for the Assembly Hall Theatre.

o   Payment of Business Rates for the Councils own stock.

o   An increase in  Grounds maintenance costs and utility costs.

o   An increase in car parking revenue (Great Hall car park remaining in operation).

o   £5 increase in Council Tax (assumed).

o   Garden waste income.

o   The cessation of the Calverley Square scheme meant the savings set aside would be put back into the base budget.

-       The 4 year Capital Programme would be rolled over for another year.

-       In terms of consultation, an article had already been published in Local Magazine.  A survey was also being undertaken. 

-       The revenue budget was balanced but was subject to a number of uncertainties.  The capital cost of additional schemes had a revenue impact of £116,000. 

-       Subject to approval at Cabinet, the draft budget would be placed on the Council’s website for consultation, with a closing date of 17 January 2020. 

Discussion and responses to member questions included the following:

-       The knowledge sector included businesses with digital technology that provided services for other businesses to become more efficient.

-       The take up for the new garden waste service was high with households continuing to sign up. 

-       Within the Council’s calculation of reserves there was an approval request for £1.65m for the Capital programme.  Capital could only be spent once, so it was important that the reserves were replenished.  The method for replenishment included money from New Homes Bonus, Business Rate growth proceeds and any capital receipts.  

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.