Babergh and Mid Suffolk District Councils
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Meeting: 21/02/2019 - Mid Suffolk Council (Item 95)

95 MC/18/38 GENERAL FUND BUDGET 2019/20 AND FOUR-YEAR OUTLOOK pdf icon PDF 604 KB

Cabinet Member for Finance

 

In accordance with Council Procedure Rule 18.3, immediately after any vote is taken at a budget decision meeting of the Council the names of Councillors who cast a vote for the decision or against the decision or who abstained from voting shall be recorded in the Minutes of that meeting.

 

At its meeting on 4February 2019, Cabinet considered Paper MCa/18/60, together with amendments to the General Fund Budget.  Paper MC/18/38 now includes all the relevant updated information, together with the necessary recommendations, with the exception of one Parish precept notification which remains outstanding.  Further details will be reported at the meeting.

 

Additional documents:

Minutes:

95.1 Councillor Whitehead introduced his report and informed Council that the  General Fund Budget for 19/20 along with the 4-year outlook had been reviewed by the Overview and Scrutiny Committee on the 17 January 2019 and all Members had been given the opportunity to attend the  detailed briefing on the budget in January as well as opposition briefings.

 

95.2 The Budget had also been debated at Cabinet in January and February.  Councillor Whitehead believed that this was an important part of the budget setting process that the annual budget went through these various forums before coming to full Council for approval.

 

95.3 Councillor Whitehead stated that by law, the Council must produce a balanced general fund budget for the coming year, but he also firmly believed that there was also a further duty, to ensure that there was a sustainable medium term four- year financial outlook for the Council.

 

95.4 Councillor Whitehead continued by saying that taken in isolation the 2019/20 position was remarkably healthy.  However, two matters created the need for caution.  Firstly, 2019/20 was the last year of the 4-year comprehensive spending review where Councils had some certainty about their funding levels. Therefore, the position from 20/21 onwards, remained more difficult to forecast and secondly, the government had tinkered with New Homes Bonus over the past few years, to such an extent that the Council could not rely on it as core funding for the future. These reasons were why the Council was proposing to increase its share of the Council tax by 2% or approximately 6 pence a week for a Band D equivalent. This was to build up a robust Council tax base for the more uncertain future and to help the Council’s ambitious plans for the district, which involved significant capital expenditure to develop several strategic areas of land that the Council owned in the district for residential use as well as some significant acreage of land for business and economic development situated to the east of Stowmarket.

 

95.5 Despite having in place robust management and governing processes and the engagement of experienced external advisors, these brownfield and greenfield developments were not risk-free and Councillor Whitehead therefore strongly believed it was prudent to set aside a £1m reserve whilst these developments progressed towards fruition.  He wanted Members to be quite clear as to the prime mover behind the creation of this new reserve which was supported by the Council’s Section 151 Officer.

 

95.6 Councillor Whitehead then turned his attention to CIFCO and informed Council that there was a recommendation for a further £25m investment into CIFCO matched by Babergh Council. Councillor Whitehead stated that he was mindful that some genuine concerns have been expressed regarding this policy. This was a long-term investment to provide a robust and diverse stream of rental income to help fund the Council’s core services for many years ahead. The CIFCO Board had a life time of experience in the commercial property field and the Council had recruited a professionally qualified  ...  view the full minutes text for item 95


Meeting: 19/02/2019 - Babergh Council (Item 102)

102 BC/18/39 GENERAL FUND BUDGET 2019/20 AND FOUR YEAR OUTLOOK pdf icon PDF 575 KB

Cabinet Member for Finance

 

In accordance with Council Procedure Rule 18.3, immediately after any vote is taken at a budget decision meeting of the Council the names of Councillors who cast a vote for the decision or against the decision or who abstained from voting shall be recorded in the Minutes of that meeting.

 

At its meeting on 6 February 2019, Cabinet considered Paper BCa/18/62, together with amendments to the General Fund Budget.  Paper BC/18/39 now includes all the relevant updated information, together with the necessary recommendations, with the exception of one Parish precept notification which remains outstanding.  Further details will be reported at the meeting.

 

Additional documents:

Minutes:

102.1 Councillor Ward presented the 2019/20 General Fund Budget and four- year outlook report to Council.

 

102.2 In his opening speech, he informed Council that the first draft of the report was considered at Cabinet last month and the finalised position was approved at Cabinet earlier this month. Unlike in previous years, the report did not combine both the General Fund and the HRA Budgets.  Councillor Ward thought that it was proper that the Housing Revenue Account was examined and debated separately, therefore this year the HRA had its own separate budget report.

 

102.3 Councillor Ward told Council that the General Fund budget setting should never be seen as just a short-term exercise.  Rather, it must be part of producing a medium-term outlook for the Council’s finances which were both sensible and sustainable.  That was why, during the lengthy budgeting process, the Council had spent a considerable amount of time working on projecting the four-year outlook. The projections for this were detailed in Section 8 of the report. The cumulative deficit at the end of this period was £954k if all the NHB receipts were used and £2.976M excluding these.

 

102.4 Councillor Ward informed Council that the General Fund budget in front of them, required all of the anticipated 2019/20 New Homes Bonus (NHB) receipts of £683k and reliance on reserves amounting to £615k to achieve a balanced budget.  However, given the uncertainties regarding future NHB cashflows, the Council must continue with its efforts to become self-sufficient through maximising income streams, continuing to make efficiencies and productivity savings and continuing to find new ways of working.  It also behoves the Council to have a strong core council tax base and so, from the perspective of the four-year outlook through to 2023, the numbers produced a compelling case for the need for council tax increases each year.  The Council would continue to do this at the maximum level allowed without requiring a referendum, i.e. £5 per year for a Band D property for the next two years and 3% for the following two years. This should be seen in the context of an average CPI inflation rate of 2.5% for 2018. Along with a 1.64% growth in the Band D equivalent number of properties for 2019-20 and 1.5% p.a. thereafter, this will ensure that the Council can grow its council tax revenues to help offset the ongoing cost pressures that it faces.

 

102.5 Commenting further, Councillor Ward said as already mentioned, the Council was reliant on reserves to balance the budget and that it would need to take action during 2019/20 to replace this funding with more sustainable options because the reserves were declining. The reserve levels were detailed in paragraph 7.5 table 3 of the report. The figures had improved from the initial assessment in the Autumn, due to a number of factors, including the provisional finance settlement of £273k outlined in paragraphs 4.9 to 4.11 of the report so that the Council had now been able to leave the  ...  view the full minutes text for item 102