Issue - meetings

(NOTE: A copy of the report that was considered by the Executive on 4^th February 2019 is attached).

Council received a presentation by the Head of Resources regarding the Revenue Budget 2019/20, Capital Programme and Medium Term Financial Strategy 2019-2023 and highlighted the following:

·         Government settlement December 2018.  The final 2019-20 settlement (including the Rural Services Delivery Grant) was £3.269m (Year 4).  In cash terms this was £363,000 less than 2018-19 (10% reduction) in line with the Medium Term Financial Plan.  75% Business Rate Pilot bid for Devon had been unsuccessful.  There were no new changes announced for the New Homes Bonus for 2019/20, however potential changes for 2020/21.   The Rural Services Delivery Grant matched the 2018/19 level.  Council Tax levels for District Councils could be increased by up to 3% or £5 whichever was higher.  The referendum in relation to Council Tax levels for Town and Parish Councils had been deferred.  The Government had awarded one off funding for Brexit over a 2 year period of £17,500 for 2018/19 and £17,500 for 2019/20.  This grant would be placed in an earmarked reserve.

·         Government settlement change in funding by class of Authority.  The Shire Districts and County Councils had received the largest reduction in funding from 2015/16 to 2019/20.

·         Medium Term Financial Plan (2018-22) approved by Council in February 2018 was based on a number of financial assumptions about the future which included funding from Central Government, retained Business Rates income and future Council Tax levels, cost pressures and savings plans and contributions to and from reserves (e.g. vehicle replacement).  The forecast budget gap from 2019/20 to 2021/22, as at February 2018 was outlined.

·         New Homes Bonus changes introduced in 2017. 

·         New Homes Bonus provisional level of funding to 2019/20.  The level of funding for 2018/19 was £1,313,520.  The Medium Term Financial Plan assumed £1.3m for 2019/20 therefore there was an additional £146,000.  £100,000 from the New Homes Bonus would be placed into a reserve for one off capital projects.

·         Business Rates Retention.  100% Business Rate Pilot had been accepted for Devon for 2018/19.  The pilot programme was for one year.  The estimated additional one-off business rates gain was £0.750m.  This gain had been placed into earmarked reserves 2018/19 for future year projects.  The Government had invited bids for 2019/20 pilots, however Devon had been unsuccessful and would revert back to the Devon Pool (50% scheme).

·         The 2019/20 Business Rate retention forecast was £1.690m.  The 2019/20 draft budget (above baseline funding) was £1.502m. 

·         Local Government Finance funding reforms which included: Spending Review for the period 2020/21; a review of relative needs and resources; Business Rates Retentions pilots, business rates baseline reset, Fair Funding review, New Homes Bonus review, Reforms to Local Government funding would change the level of resources available and have an impact on revenue budget; indicative allocations would be announced during the Autumn 2019.

·         Council Tax levels for 2018/19 Band D properties had been increased by £5.16 (equivalent to 2.99%).  Rural Councils could increase levels by up to 3% or £5 whichever higher.  By increasing the level by 2.99% for 2019/20 would increase NDC’s proportion of  ...  view the full minutes text for item 93

Report by Chief Financial Officer (attached).

The Executive considered a report by the Chief Financial Officer (circulated previously), the options and/or alternatives and other relevant facts set out in the report regarding the Revenue Budget 2019/20, Capital Programme and Medium Term Financial Strategy 2019-2023.

The Head of Resources highlighted the following:

·         Government settlement December 2018.  The provisional 2019-20 settlement (including the Rural Services Delivery Grant) was £3.269m (Year 4).  In cash terms this was £363,000 less than 2018-19 (10% reduction) in line with the Medium Term Financial Plan.  75% Business Rate Pilot bid for Devon had been unsuccessful.  There were no new changes announced for the New Homes Bonus for 2019/20, however potential changes for 2020/21.   The Rural Services Delivery Grant matched the 2018/19 level.  Council Tax levels for District Councils could be increased by up to 3% or £5 whichever was higher.  The referendum in relation to Council Tax levels for Town and Parish Councils had been deferred.  The Government had awarded one off funding for Brexit over a 2 year period of £17,500 for 2018/19 and £17,500 for 2019/20.  This grant would be placed in an earmarked reserve.

·         Government settlement change in funding by class of Authority.  The Shire Districts and County Councils had received the largest reduction in funding from 2015/16 to 2019/20.

·         Medium Term Financial Plan (2018-22) approved by Council in February 2018 was based on a number of financial assumptions about the future which included funding from Central Government, retained Business Rates income and future Council Tax levels, cost pressures and savings plans and contributions to and from reserves (e.g. vehicle replacement).  The forecast budget gap from 2019/20 to 2021/22, as at February 2018 was outlined.

·         New Homes Bonus changes introduced in 2017. 

·         New Homes Bonus provisional level of funding to 2019/20.  The level of funding for 2018/19 was £1,313,520.  The Medium Term Financial Plan assumed £1.3m for 2019/20 therefore there was an additional £146,000.  £100,000 from the New Homes Bonus would be placed into a reserve for one off capital projects.

·         Business Rates Retention.  100% Business Rate Pilot had been accepted for Devon for 2018/19.  The pilot programme was for one year.  The estimated additional one-off business rates gain was £0.750m.  This gain had been placed into earmarked reserves 2018/19 for future year projects.  The Government had invited bids for 2019/20 pilots, however Devon had been unsuccessful and would revert back to the Devon Pool (50% scheme).

·         The 2019/20 Business Rate retention forecast was £1.690m.  The 2019/20 draft budget (above baseline funding) was £1.502m. 

·         Local Government Finance funding reforms which included: Spending Review for the period 2020/21; a review of relative needs and resources; Business Rates Retentions pilots, business rates baseline reset, Fair Funding review, New Homes Bonus review, Reforms to Local Government funding would change the level of resources available and have an impact on revenue budget; indicative allocations would be announced during the Autumn 2019.

·         Council Tax levels for 2018/19 Band D properties had been increased by £5.16 (equivalent to 2.99%).  Rural Councils could increase levels by up  ...  view the full minutes text for item 103