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Revenue Budget 2021/22, Capital Programme and Medium Term Financial Strategy 2021-2025

Meeting: 24/02/2021 - Council (Item 212)

212 Revenue Budget 2021/22, Capital Programme and Medium Term Financial Strategy 2021-2025 pdf icon PDF 2 MB

Budget Book 2021/22 (attached).  (NOTE: A copy of the report that was considered by the Strategy and Resources Committee on 1 February 2021 is attached).

Additional documents:

Minutes:

Council received a presentation by the Head of Resources regarding the Revenue Budget 2021/22, Capital Programme and Medium Term Financial Strategy 2021-2025 (circulated previously).

 

The Head of Resources highlighted the following:

 

·         Government settlement December 2020.  The 2021-22 settlement of £3.3m was the same level as 2020-21.  The Fair Funding Review had been delayed by a further year until April 2022.  The New Homes Bonus in-year allocation had been allocated for 2021/22 only.  There were no legacy payments on the 2021/22 allocation and the Government was intending to consult on future of the housing incentive during 2021/22.  The Rural Services Delivery Grant matched the 2020/21 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 Council would receive a lower tier services grant and Covid 19 support grant as one off payments.  The Council would receive 75% reimbursement on sales, fees and charges losses for the period April to June 2021.

·         Core Spending Power for England.  This had increased by 4.5% overall; however 87% of this increase came from Council Tax compared to 56% in 2020/21.

·         Urban/rural funding differences.  Analysis by the Rural Services Network indicated that local authorities serving predominately urban areas receive

·         “higher” level of central funding compared to those in rural areas: paying over £96 per head more in Council Tax (in rural Devon £138 per head more); receive £107 (61%) per head less from Settlement Funding Assessment (rural Devon, £120 less); receive £28 per head of Social Care Grant, compared to £32 per head in urban areas (rural Devon, £28); and receive over £112 (42%) per head less in Government Funding Spending Power, excluding Council Tax (rural Devon, £113).

·         Core Spending Power - included a new (one off) Lower-Tier Services Grant 2021-22.  Without this grant, six of eight Devon districts would be faced with reduction in Core Spending Power.

·         Total Core Spending Power per head of population 2021/22.

·         Outside of urban and rural differences, there were four points of common concern: concentration of cuts in public spending on local government; over reliance on Council Tax in general (assumption that areas with higher Council Tax could continue to sustain increases); time limited payments from incentive scheme as core funding (e.g. New Homes Bonus); and allocation of lower tier services grant on a one off basis.

·         The Medium Term Financial Strategy (MTFS) (2020-2024) model had been refreshed in October 2020 based upon: increased recent pay award (2.75%) continuing for medium term; borrowing costs and Capital Programme reprofiled; assumed Covid 19 impact on sales, fees and charges income continuing into 2021-22; and Government fair funding review delayed 12 months to 2022-23; collection fund deficit (Council Tax and Business Rates) spread over next 3 years.  A £2m funding gap was projected for 2021/22 in advance of the financial settlement announced on 17 December 2020.

·         New Homes Bonus provisional level of funding of £1,354,430  ...  view the full minutes text for item 212


Meeting: 11/02/2021 - Policy Development Committee (Item 87)

87 Revenue Budget 2021/22, Capital Programme and Medium Term Financial Strategy 2021-2025 pdf icon PDF 618 KB

Report by the Chief Financial Officer to Strategy and Resources on 1st February 2021 (attached), and

 

(a)  the Minute Extract of Strategy and Resources on 1st February 2021 (to follow).

 

Additional documents:

Minutes:

The Committee considered a report by the Head of Resources (circulated previously) regarding the Revenue Budget 2021/22, Capital Programme and Medium Term Financial Strategy 2021-2025.

 

The Head of Resources highlighted the following:

 

·       Government settlement December 2020.  The provisional 2021-22 settlement of £3.3m was the same level as 2020-21.  The Fair Funding Review had been delayed by a further year until April 2022.  The New Homes Bonus in-year allocation had been allocated for 2021/22 only.  There were no legacy payments on the 2021/22 allocation and the Government was intending to consult on future of the housing incentive during 2021/22.  The Rural Services Delivery Grant matched the 2020/21 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 Council would receive a lower tier services grant and Covid 19 support grant as one off payments. 

·       The Council would receive 75% reimbursement on sales, fees and charges losses for the period April to June 2021.

·       Core Spending Power for England.  This had increased by 4.5% overall; however 87% of this increase came from Council Tax compared to 56% in 2020/21.

·       Urban/rural funding differences.  Analysis by the Rural Services Network indicated that local authorities serving predominately urban areas receive “higher” level of central funding compared to those in rural areas: paying over £96 per head more in Council Tax (in rural Devon £138 per head more); receive £107 (61%) per head less from Settlement Funding Assessment (rural Devon, £120 less); receive £28 per head of Social Care Grant, compared to £32 per head in urban areas (rural Devon, £28); and receive over £112 (42%) per head less in Government Funding Spending Power, excluding Council Tax (rural Devon, £113).

·       Outside of urban and rural differences, there were four points of common concern: concentration of cuts in public spending on local government; over reliance on Council Tax in general (assumption that areas with higher Council Tax could continue to sustain increases); time limited payments from incentive scheme as core funding (e.g. New Homes Bonus); and allocation of lower tier services grant on a one off basis.

·       The Medium Term Financial Strategy (MTFS) (2020-2024) model had been refreshed in October 2020 based upon: increased recent pay award (2.75%) continuing for medium term; borrowing costs and Capital Programme re-profiled; assumed Covid 19 impact on sales, fees and charges income continuing into 2021-22; and Government fair funding review delayed 12 months to 2022-23; collection fund deficit (Council Tax and Business Rates) spread over next 3 years.  A £2m funding gap was projected for 2021/22 in advance of the financial settlement announced on 17 December 2020.

·       New Homes Bonus provisional level of funding of £1,354,430 for 2021/22.  The level of funding 2020/21 was £1,836,820.  The Medium Term Financial Plan assumed £815,000, therefore, there was an additional £539,000 compared to the MTFS.  The forecast level for 2022-23 for the projected New Homes  ...  view the full minutes text for item 87


Meeting: 01/02/2021 - Strategy and Resources Committee (Item 253)

253 Revenue Budget 2021/22, Capital Programme and Medium Term Financial Strategy 2021-2025 pdf icon PDF 618 KB

Report by Chief Financial Officer (attached)

Additional documents:

Minutes:

The Committee considered a report by the Head of Resources (circulated previously) regarding the Revenue Budget 2021/22, Capital Programme and Medium Term Financial Strategy 2021-2025.

 

The Head of Resources highlighted the following:

 

·         Government settlement December 2020.  The provisional 2021-22 settlement of £3.3m was the same level as 2020-21.  The Fair Funding Review had been delayed by a further year until April 2022.  The New Homes Bonus in-year allocation had been allocated for 2021/22 only.  There were no legacy payments on the 2021/22 allocation and the Government was intending to consult on future of the housing incentive during 2021/22.  The Rural Services Delivery Grant matched the 2020/21 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 Council would receive a lower tier services grant and Covid 19 support grant as one off payments.  The Council would receive 75% reimbursement on sales, fees and charges losses for the period April to June 2021.

·         Core Spending Power for England.  This had increased by 4.5% overall; however 87% of this increase came from Council Tax compared to 56% in 2020/21.

·         Urban/rural funding differences.  Analysis by the Rural Services Network indicated that local authorities serving predominately urban areas receive “higher” level of central funding compared to those in rural areas: paying over £96 per head more in Council Tax (in rural Devon £138 per head more); receive £107 (61%) per head less from Settlement Funding Assessment (rural Devon, £120 less); receive £28 per head of Social Care Grant, compared to £32 per head in urban areas (rural Devon, £28); and receive over £112 (42%) per head less in Government Funding Spending Power, excluding Council Tax (rural Devon, £113).

·         Core Spending Power - included a new (one off) Lower-Tier Services Grant 2021-22.  Without this grant, six of eight Devon districts would be faced with reduction in Core Spending Power.

·         Total Core Spending Power per head of population 2021/22.

·         Outside of urban and rural differences, there were four points of common concern: concentration of cuts in public spending on local government; over reliance on Council Tax in general (assumption that areas with higher Council Tax could continue to sustain increases); time limited payments from incentive scheme as core funding (e.g. New Homes Bonus); and allocation of lower tier services grant on a one off basis.

·         The Medium Term Financial Strategy (MTFS) (2020-2024) model had been refreshed in October 2020 based upon: increased recent pay award (2.75%) continuing for medium term; borrowing costs and Capital Programme re-profiled; assumed Covid 19 impact on sales, fees and charges income continuing into 2021-22; and Government fair funding review delayed 12 months to 2022-23; collection fund deficit (Council Tax and Business Rates) spread over next 3 years.  A £2m funding gap was projected for 2021/22 in advance of the financial settlement announced on 17 December 2020.

·         New Homes Bonus provisional level of  ...  view the full minutes text for item 253