To consider and decide on the recommendations as set out in the attached report.
Decision:
RESOLVED – That the Draft Budget 2021/22 be agreed for public consultation.
REASON FOR DECISION:. To commence a public consultation on the Council’s proposed budget for 2021/22.
Minutes:
Lee Colyer, Director of Finance, Policy and Development introduced the report that provided details of the Draft Budget for 2021/22 and Mid Term Financial Strategy.
Discussion and responses to Members questions included the following:
- This was the third report in the process of setting the 2021/22 budget.
- There were no surprises in the Government’s Spending Review which was published on 25 November 2020. As such the assumptions made in the draft budget did not need to be amended.
- The Spending Review set out the Governments priorities and funding just for next year.
- The technical financial guidance had yet to be published. Much of the detail required by Local Government would be in the provisional Local Government Finance Settlement which should be released by Parliament during the week commencing 14 December 2020.
- In the absence of detailed Government financial information for next year, the projections were still being made in somewhat of a vacuum against a constantly fluid impact of the Pandemic. The Council’s financial strategy, set at the beginning of the Pandemic continued to hold true.
- The Council was financially self sufficient and received no Revenue Support Grant from the Government.
- To function without Government support had meant the Council operated more as a business and generated more of its own income with which to fund its own services.
- Whilst the Pandemic had created some cost pressures, most notably around housing and community support, the most significant impact was the reduction from sales, fees and charges.
- At the time of writing the report the projected losses were estimated at £250k per month. However, with West Kent being placed into Tier 3 and the prospect of further restrictions being a feature for some time, income would need to be closely monitored.
- The Spending Review did confirm an extension of the compensation scheme for lost income but just for the first 3 months of the next financial year.
- The key changes over the current revenue budget included employment costs increasing by £309k and a small saving in transport costs.
- Under premises costs, the Council was required to pay £1.5m on Business Rates on its properties to Government and was not entitled to claim any of the national reductions.
- The Government also increased Business Rates bills nationally and this added a further £85k to the Council’s costs.
- The Council also spent £1m each year on planned and responsive repairs to its property assets. Some were increasingly expensive to maintain and a further £90k had been added to the budget.
- The Grounds Maintenance contract would increase by inflationary pressures, adding a further £120k to the budget. Similarly the waste contract would increase by £104k. This was due to both additional properties and inflationary pressures on the contracts main cost drivers.
- With staff not using the Town Hall there had been further administrative savings of £24k.
- The draft budget assumed that Council Tax would increase by £5 a year. But rather than raising the usual £300k, only £60k of additional income would result as more residents would be claiming single persons discount or accessing council tax support.
- The garden waste service had experienced high levels of take up which had generated an extra £96k.
- Interest receipts would be £333k lower as reserves would be used to fund the Capital Programme. In addition, planning income was forecast to be £240k lower and car parking income £1.9m lower.
- The cost of providing services exceeded the income available by £3m. The temporary use of reserves would be used to protect local services at this time.
- In addition to the revenue budget, the Council needed to fund the 4 year rolling Capital Programme. The Capital Programme would in part be funded by using £2.2m of reserves. This was in addition to the £1m planned maintenance and the £1m of capital maintenance due to take place this year on the Town Hall and Assembly Hall roof.
- In the light of reduced usage and to ensure they provided value for money the Council would need to review its property assets.
- The draft budget would be subject to further consultation that would test the budget strategy with the public and ascertain their views on how they would adjust the provision of local services to reflect the possibility of income being permanently £3m lower.
- The results of the survey would help inform the final budget which would go through the Cabinet Advisory Boards and Overview and Scrutiny before going to Full Council for adoption in February 2021.
RESOLVED – That the Draft Budget 2021/22 be agreed for public consultation.
REASON FOR DECISION:. To commence a public consultation on the Council’s proposed budget for 2021/22.
Supporting documents: