Cabinet Member for Finance
BCa/18/62 - GENERAL FUnD BUDGET 2019/20 AND FOUR YEAR OUTLOOK
It was RESOLVED:-
That Cabinet recommends to Council:-
1.1 That the General Fund Budget proposals for 2019/20 and four year outlook set out in the report be endorsed for recommendation to Council on 19 February 2019.
1.2 That the General Fund Budget for 2019/20 is based on an increase to Council Tax of £5 per annum (10p per week) for a Band D property, which is equivalent to 3.15%, to support the Council’s overall financial position.
1.3 That a further £25m be invested in CIFCO as set out in paragraph 8.20 of the report.
1.4 That a discretionary Care Leavers Council Tax discount of up to 100% be introduced from the 1 April 2019 as set out in section 11 of the report.
1.5 That the second empty property premium is increased as per the regulations set out in paragraph 12.9 of the report.
Reason for Decision: To bring together all the relevant information to enable Cabinet Members to review, consider and comment
Alternative Options Considered and Rejected:
The General Fund Budget for 2019/20 and four-year outlook is an essential element in achieving a balanced budget and sustainable medium-term position. Setting a balanced budget for the coming year is a statutory requirement, therefore no other options are appropriate in respect of this.
Any Dispensation Granted: None
116.1 Councillor Ward introduced the report and informed Cabinet that this was the first year that the General Fund and Housing Revenue Account (HRA) were being taken as separate reports, to allow for the HRA to be examined and debated separately.
116.2 Councillor Ward highlighted that the setting of the General Fund should never be seen as just a short- term exercise, rather, that it was part of producing a four-year medium-term outlook that was sensible and sustainable. The projections for this were detailed in section 8 of the report. The accumulative deficit to the end of this period was predicted to be £954K if all the New Homes Bonus was used and £2.97m excluding these receipts.
116.3 Given the uncertainty surrounding the New Homes Bonus, Councillor Ward stressed the importance of maximising income streams and the continued need to make efficiencies and savings.
116.4 Councillor Ward informed Cabinet that there was a compelling case for the need to increase council tax. This year the intention was to increase council tax to the maximum level that was 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 taken in the context of an average CPI inflation rate of 2.5%for 2018 along with a 1.64% growth rate of the Band D equivalent number of properties for 2019/20 and 1.5% per annum thereafter. This would ensure that the Council could grow its council tax revenues to help offset the ongoing cost pressures.
116.5 Councillor Ward also stated that the Council would need to take action during 2019/20 to replace reserves with more sustainable funding as the reserves were declining rapidly. To this end there was a need for greater self sufficiency and that was why the recommendations included a further £25m investment in CIFCO. The details of the projected income from this investment were detailed in the report.
116.6 Finally, Councillor Ward drew attention to the proposal to introduce a discretionary Care Leavers council tax discount of up to 100% to be introduced from the 1st April 2019 as set out in Section 11 of the report.
116.7 Councillor Davis raised concerns about the burden to the council tax payer with regard to the proposal to increase council tax to the maximum amount, however he welcomed the proposal for care leavers to be able to claim up to a 100% discretionary council tax discount. He also queried the proposals for a year on year council tax increase for the next four years and asked whether this was an aspiration as he believed the Council could only agree council tax rates yearly?
116.8 In response the Leader confirmed that this was an aspiration, however who ever would be responsible for setting next year’s budget could still make changes.
116.9 Councillor Ridley asked whether the “Stress Test” that was recommended by Overview and Scrutiny had been carried out and whether it would be available for the Council meeting.
116.10 In response the Section 151 Officer confirmed that the “Stress Test” was currently being worked on and would be available for full Council.
116.11 Councillor Hinton asked if the proposal to invest a further £25m in CIFCO was “pushing things” a bit too far, he also queried why there was no predicted increase in business rates growth?
116.12 In response the Leader stated that the Council had received very good investment advice. The Council was making very sound investments which were bringing in much needed income. In terms of business rates -this was an unpredictable part of the Council’s income. Following the pilot that was undertaken last year and the new pilot that was taking place this year, eventually there would be an increase in business growth that would come to the Council on a long-term basis. However currently it was not possible to make those predictions.
116.13 The Section 151 Officer also added that the Council was also being cautious because of the proposed government changes that were coming in 2021 as it was not known what the impact of those changes would be.
116.14 Councillor Ward MOVED the recommendations in the report which Councillor Simon Barrett SECONDED.
That Cabinet recommends to Council:-
(i) That the General Fund Budget proposals for 2019/20 and four year outlook set out in the report be endorsed for recommendation to Council on 19 February 2019.
(ii) That the General Fund Budget for 2019/20 be based on an increase to Council Tax of £5 per annum (10p per week) for a Band D property, which is equivalent to 3.15%, to support the Council’s overall financial position.
(iii) That a further £25m be invested in CIFCO as set out in paragraph 8.20 of the report.
(iv) That a discretionary Care Leavers Council Tax discount of up to 100% be introduced from the 1 April 2019 as set out in section 11 of the report.
(v) That the second empty property premium be increased as per the regulations set out in paragraph 12.9 of the report.
Reason for Decision: To bring together all the relevant information to enable Cabinet Members to review, consider and comment.