(NOTE: A copy of the report that was considered by the Strategy and Resources Committee on 7 February 2022 is attached). Budget Book 2022/23 (attached).

Councillor Worden, provided an introduction to the Revenue Budget 2022/23, Capital Programme and Medium Term Financial Strategy 2022-23 to 2027/28 to Council which had been considered by the Strategy and Resources Committee and Policy Development Committee.  He thanked the Director of Resources and the Finance Team for producing a balanced budget.

Council received a presentation by the Director of Resources regarding the Revenue Budget 2022/23, Capital Programme and Medium Term Financial Strategy 2022-23 to 2027/28 (circulated previously).

The Director of Resources advised Council that a copy of the presentation had also been circulated to all Members via email.

·       Government Finance Settlement December 2021.  The Revenue Support Grant and baseline funding was predominantly the same as for 2021/22. The Rural Services Delivery grant was same as for 2021/22. The New Homes Bonus (Medium Term Financial Strategy refresh assumed £812,000 which was legacy payment of £435,000 plus approximately £400,000 for 2022/23.  The actual New Homes Bonus award was £1.45m. Lower Tier Services grant of £134,000 had been retained in the funding.  The Government had previously advised that this grant would only be received for 2021/22.  New “Services” grant had been provided of £206,000 for a one year period only.  All Covid 19 additional grant support had been removed.  

·       In relation to Council Tax, a referendum was required for Shire Districts if the Authority set an increase of 2% (or more than 2%), or more than £5, whichever was greater. The draft revenue budget for 2022/23 assumed an increase of £5.  The overall council Tax income would increase by £244,000 of which £172,000 came from the additional £5 and £72,000 from the increase in Council Tax base.

·       The draft budget factored in £1.750m for retained income growth for Business Rates.  The Medium Term Financial Strategy (MTFS) assumed £1.8m which was made up of £1.2m National Non Domestic Rates growth, Renewable Energy schemes of £400,000 and Devon pool retained income of £200,000.       

·       Analysis of national Local Government funding from 2012/13 to 2022/23.  Funding had reduced from £28.1billion in 2012/13 to £18.5billion in 2019/20 which was a 34% cut. There had been rises in funding since 2019/20, the largest in 2021/22 to 2022/23 of £2.1billion which reduced the overall cut to 20%.

·       Core Spending Power analysis by region and authority type for England.  

·       The MTFS model had been refreshed in October 2021 based upon: the Fair Funding Review which had been planned for 2022/23 had now slipped by one year to 2023/24 and the New Homes Bonus Review that had been planned for 2022/23 which had now slipped to 2023/24.  The MTFS refresh had not included: any financial net benefit of further reviews to service areas; income generation and net revenue gains through projects form the Commercialisation Strategy; any new Business Rates growth following the 2023/24 Fair Funding Review; and review and/or price increases to income streams. 

·       New Homes Bonus provisional level of funding of £1,451,083 for 2022/23.  The level of funding 2021/22 was £1,354,430.  The MTFS assumed £812,000 for 2022/23, therefore, there was  ...  view the full minutes text for item 111

Report by the Chief Financial Officer to the Strategy and Resources Committee on 7^th February 2022 (attached), and

(a) Minute Extract of Strategy and Resources on 7^th February 2022 (attached).

The Committee considered a report by the Director of Resources and Deputy Chief Executive (circulated previously) regarding the Revenue Budget 2022/23, Capital Programme and Medium Term Financial Strategy 2022-2028 together with Minute Extract of Strategy and Resources on 7th February 2022.

The Director of Resources and Deputy Chief Executive highlighted the following:

·       Government Finance Settlement December 2021. The Revenue Support Grant and baseline funding was predominantly the same as for 2021/22. The Rural Services Delivery grant was same as for 2021/22. The New Homes Bonus (MTFS refresh assumed £812,000 which was legacy payment of £435,000 plus approximately £400,000 for 2022/23. The actual New Homes Bonus award was £1.45m. Lower Tier Services grant of £134,000 had been retained in the funding. The Government had previously advised that this grant would only be received for 2021/22. New “Services” grant had been provided of £206,000 for a one year period only. All Covid 19 additional grant support had been removed. In relation to Council Tax, a referendum was required for Shire Districts if the Authority set an increase of 2% (or more than 2%), or more than £5, whichever was greater. The draft revenue budget for 2022/23 assumed an increase of £5. The overall council Tax income would increase by £244,000 of which £172,000 came from the additional £5 and £72,000 from the increase in Council Tax base. The draft budget factored in £1.750m for retained income growth for Business Rates. The MTFS assumed £1.8m which was made up of £1.2m National Non Domestic Rates growth, Renewable Energy schemes of £400,000 and Devon pool retained income of £200,000.

·       Analysis of national Local Government funding from 2012/13 to 2022/23. Funding had reduced from £28.1billion in 2012/13 to £18.5billion in 2019/20 which was a 34% cut. There had been rises in funding since 2019/20, the largest in 2021/22 to 2022/23 of £2.1billion which reduced the overall cut to 20%.

·       Core Spending Power analysis by region and authority type for England.

·       The MTFS model had been refreshed in October 2021 based upon: the Fair Funding Review which had been planned for 2022/23 had now slipped by one year to 2023/24 and the New Homes Bonus Review that had been planned for 2022/23 which had now slipped to 2023/24. The MTFS refresh had not included: any financial net benefit of further reviews to service areas; income generation and net revenue gains through projects form the Commercialisation Strategy; any new Business Rates growth following the 2023/24 Fair Funding Review; and review and/or price increases to income streams.

·       New Homes Bonus provisional level of funding of £1,451,083 for 2022/23. The level of funding 2021/22 was £1,354,430. The MTFS assumed £812,000 for 2022/23, therefore, there was an additional £639,000 compared to the MTFS. In 2023/24 the projected New Homes Bonus income was £506,000, potential reduction of over £945,000 funding on the current level. There was uncertainty regarding future funding and the scheme design.

·       Business Rates Retention and forecast levels of income for 2022/23 year.

·       Reform of Local Government  ...  view the full minutes text for item 49

Report by Director of Resources and Deputy Chief Executive (attached)

The Committee considered a report by the Director of Resources (circulated previously) regarding the Revenue Budget for 2022/23, Capital Programme and Medium Term Financial Strategy (MTFS) 2022/23 to 2027/28.

The Director of Resources highlighted the following:

·       Government Finance Settlement December 2021.  The Revenue Support Grant and baseline funding was predominantly the same as for 2021/22. The Rural Services Delivery grant was same as for 2021/22. The New Homes Bonus (MTFS refresh assumed £812,000 which was legacy payment of £435,000 plus approximately £400,000 for 2022/23.  The actual New Homes Bonus award was £1.45m. Lower Tier Services grant of £134,000 had been retained in the funding.  The Government had previously advised that this grant would only be received for 2021/22.  New “Services” grant had been provided of £206,000 for a one year period only.  All Covid 19 additional grant support had been removed.  In relation to Council Tax, a referendum was required for Shire Districts if the Authority set an increase of 2% (or more than 2%), or more than £5, whichever was greater. The draft revenue budget for 2022/23 assumed an increase of £5.  The overall council Tax income would increase by £244,000 of which £172,000 came from the additional £5 and £72,000 from the increase in Council Tax base. The draft budget factored in £1.750m for retained income growth for Business Rates.  The MTFS assumed £1.8m which was made up of £1.2m National Non Domestic Rates growth, Renewable Energy schemes of £400,000 and Devon pool retained income of £200,000.

·       Analysis of national Local Government funding from 2012/13 to 2022/23.  Funding had reduced from £28.1billion in 2012/13 to £18.5billion in 2019/20 which was a 34% cut. There had been rises in funding since 2019/20, the largest in 2021/22 to 2022/23 of £2.1billion which reduced the overall cut to 20%.

·       Core Spending Power analysis by region and authority type for England.

·       The MTFS model had been refreshed in October 2021 based upon: the Fair Funding Review which had been planned for 2022/23 had now slipped by one year to 2023/24 and the New Homes Bonus Review that had been planned for 2022/23 which had now slipped to 2023/24.  The MTFS refresh had not included: any financial net benefit of further reviews to service areas; income generation and net revenue gains through projects form the Commercialisation Strategy; any new Business Rates growth following the 2023/24 Fair Funding Review; and review and/or price increases to income streams.

·       New Homes Bonus provisional level of funding of £1,451,083 for 2022/23.  The level of funding 2021/22 was £1,354,430.  The MTFS assumed £812,000 for 2022/23, therefore, there was an additional £639,000 compared to the MTFS. In 2023/24 the projected New Homes Bonus income was £506,000, potential reduction of over £945,000 funding on the current level. There was uncertainty regarding future funding and the scheme design.

·       Business Rates Retention and forecast levels of income for 2022/23 year.

·       Reform of Local Government funding for 2023/24 onwards.

·       In 2021/22 Council Tax levels Band D properties had been increased by £5  ...  view the full minutes text for item 106