Issue - meetings

Budget Book 2020/21 (attached).  (NOTE: A copy of the report that was considered by the Strategy and Resources Committee on 3^rd February 2020 is attached).

Council received a presentation by the Head of Resources regarding the Revenue Budget 2020/21, Capital Programme and Medium Term Financial Strategy 2020/24 and highlighted the following:

·         Government settlement December 2019.  The confirmed 2020-21 settlement (included the Rural Services Delivery Grant) was £3.317m.  In cash terms this was £48,000 more than 2019/20 (1.5% increase) in line with last year.  The Fair Funding Review had been delayed by one year until April 2021.  The New Homes Bonus in-year allocation had been allocated for 2020/21 only.  There were no legacy payments on the 2020/21 allocation.  The Government was intending to consult on the future of housing incentive in Spring 2020 to move towards a new, targeted approach.  The Rural Services Delivery Grant matched the 2019/20 level.  Council Tax levels for District Councils could be increased by up to 2% or £5 whichever was higher.  The referendum in relation to Council Tax levels for Town and Parish Councils had been deferred.  

·         The reduction in Government funding for 2012/13 to 2020/21.  Funding had reduced from £28.1bn to £18.5bn (34%) to 2019/20.  There were potential significant changes to core funding from the Government from 2021/22 onwards and the Council needed to put plans in place to become more commercial and improve efficiencies across the whole Council.

·         Medium Term Financial Plan (2019-23) approved by Council in February 2019 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 saving plans, and contributions to and from reserves (e.g. vehicle replacement).  The forecast budget gap as at this time last year from 2021/22 onwards was outlined. 

·         New Homes Bonus changes introduced in 2017 and potential changes for 2021/22 year onwards.

·         New Homes Bonus provisional level of funding to 2020/21.  The level of funding for 2019/20 was £1,445,670.  The Medium Term Financial Plan assumed £1.446m, therefore there was an additional £391,000. It was recommended that £250,000 be placed into a reserve for transformation and delivery of the corporate plan.  For 2021/22 the projected income was £814,531, therefore was a potential reduction of over £1m funding on the current level.  For 2022/23 the projected income was £434,860, therefore was a potential reduction of over £1.4m funding on the current level.  There was uncertainty around future funding and design of the new scheme for 2021/22.       

·         The 2020/21 Business Rate retention forecast income was £1.986m.  The 2020/21 draft budget (above baseline funding) included £1.658m income.  Reform of Local Government funding from 2021/22 onwards.        

·         Local Government Finance funding reforms which included: Spending Review for the period 2021/22; a review of relative needs and resources; Business Rates retention 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 impact on the revenue budget; indicative allocations would be announced in Autumn 2020.          

·         Council Tax levels for 2019/20 Band D properties had been increased by £5.33 (equivalent to 2.99%).  For 2020/21 Rural Councils  ...  view the full minutes text for item 115

Report by Chief Financial Officer (attached).

The Committee considered a report by the Head of Resources (circulated previously) regarding the Revenue Budget 2020-21, Capital Programme and Medium Term Financial Strategy 2020-2024.

The Head of Resources highlighted the following:

·         Government settlement December 2019.  The provisional 2020-21 settlement (included the Rural Services Delivery Grant) was £3.317m.  In cash terms this was £48,000 more than 2019/20 (1.5% increase) in line with last year.  The Fair Funding Review had been delayed by one year until April 2021.  The New Homes Bonus in-year allocation had been allocated for 2020/21 only.  There were no legacy payments on the 2020/21 allocation.  The Government was intending to consult on the future of housing incentive in Spring 2020 to move towards a new, targeted approach.  The Rural Services Delivery Grant matched the 2019/20 level.  Council Tax levels for District Councils could be increased by up to 2% or £5 whichever was higher.  The referendum in relation to Council Tax levels for Town and Parish Councils had been deferred.

·         The reduction in Government funding for 2012/13 to 2020/21.  Funding had reduced from £28.1bn to £18.5bn (34%) to 2019/20.  There were potential significant changes to core funding from the Government from 2021/22 onwards and the Council needed to put plans in place to become more commercial and improve efficiencies across the whole Council.

·         Medium Term Financial Plan (2019-23) approved by Council in February 2019 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 saving plans, and contributions to and from reserves (e.g. vehicle replacement).  The forecast budget gap as at this time last year from 2021/22 onwards was outlined.

·         New Homes Bonus changes introduced in 2017 and potential changes for 2021/22 year onwards.

·         New Homes Bonus provisional level of funding to 2020/21.  The level of funding for 2019/20 was £1,445,670.  The Medium Term Financial Plan assumed £1.446m, therefore there was an additional £391,000. It was recommended that £250,000 be placed into a reserve for transformation and delivery of the corporate plan.  For 2021/22 the projected income was £814,531, therefore was a potential reduction of over £1m funding on the current level.  For 2022/23 the projected income was £434,860, therefore was a potential reduction of over £1.4m funding on the current level.  There was uncertainty around future funding and design of the new scheme for 2021/22. 

·         The 2020/21 Business Rate retention forecast income was £1.986m.  The 2020/21 draft budget (above baseline funding) included £1.658m income.  Reform of Local Government funding from 2021/22 onwards. 

·         Local Government Finance funding reforms which included: Spending Review for the period 2021/22; a review of relative needs and resources; Business Rates retention pilots; Business Rates baseline reset; Fair Funding review; New Homes Bonus review; reforms to Local Government funding would change the level  ...  view the full minutes text for item 95