Agenda item

To consider and make any appropriate recommendations to Cabinet on:-

·         The Draft Medium Term Financial Strategy, Draft General Fund Budget 2020/21 and Draft Capital Programme 2020-2023 for consultation.

Members considered the Revised General Fund Budget and Capital Programme 2019/20; Draft General Fund Budget Estimates 2020/21 and Draft Medium Term Financial Strategy (MTFS) 2020/21 to 2024/2; Capital Programme 2020-2023 report, presented by Councillor Boden.

Members asked questions, made comments and received responses as follows;

1.    Councillor Yeulett asked a question on behalf of Councillor Booth. He stated that the MTFS shows an increase to the Net Service Expenditure to 2024/25 of £1.448m. He highlighted that page 58 of the agenda pack states that there is a 0% general inflation rate for this period and asked what the increases represent. He added that if the Council are to be more ‘business like’ in how they run, the Council should work to not automatically increase budgets each year and absorb increases such as pay rises and pension contributions within the budget setting process. He stated that this would assist in helping the Council find the savings required. Councillor Boden disagreed with the some of the points raised in Councillor Booth’s question and said focus should not be on the increase in net service expenditure but instead on the gross service and corporate expenditure. He drew member’s attention to page 57 of the agenda pack and highlighted that the forecast spend for coming years shows a lower spend. He explained that the MTFS shows less expenditure for coming years however each year’s expenditure is boosted by the spending of unaccounted for government grants. These cannot be budgeted for however they are shown as an increase in expenditure. Councillor Boden explained that the primary reason for increases are due to salary increases and their related costs and these must be reflected in the MTFS as they are a known change.

2.    Councillor Yeulett asked for confirmation that the Fair Funding Review will consider the income generated by Councils from car parking charges and as the Council currently does not charge for parking, if this could have a detrimental impact on the Council’s future funding level. Councillor Boden explained that the consultation proposals so far indicate that income generated by Councils through ‘fees and charges’ will be a factor in the resources element of the review however it is not possible to forecast at this time the overall impact this will have on the Council.

3.    Councillor Yeulett asked what impact changes to the New Homes Bonus (NHB) could have on the Council. Councillor Boden explained that the NHB is a significant resource for authorities nationally and the new housing incentive proposals will be subject to intense scrutiny. Until these are exemplified, it is not possible to forecast the impact on the Council. He explained that the Council currently receives ‘Legacy Payments’ and will continue to receive these however the amounts under the new incentive scheme are unknown. He added that the MTFS prudently shows a reduction in these over the next four years.

4.    Councillor Yeulett asked if consideration would need to be given to increasing Council Tax as a result of the potential impact these schemes could have. Councillor Boden explained that currently a surplus is being generated by the Council and whilst it would be imprudent to make a commitment to not increase Council Tax, the assumption of a 0% increase has been included in the budget. He explained that as Leader of the Council his aim is to not increase this however this will be reconsidered if required. He stated that currently, he feels confident that there will be no need to increase Council Tax.

5.    Councillor Cornwell highlighted that Internal Drainage Board (IDB) levies are collected via Council Tax and not via Business Rates and this could be seen as a funding imbalance. He asked for further information on this. Councillor Boden said it was incorrect to say that IDB levies are collected via Council Tax. IDB levies form part of the Council’s net budget requirement which is then funded by Council Tax and Business Rates. There is no hypothecated funding, Council Tax and Business Rates fund all Council services to some degree so it is not possible to say which services are funded by Council Tax and which by Business Rates. He explained that the district has a large number of IDBs and this can be a significant financial burden to the Council. Reforms to the current system have been discussed over a number of years as IDBs tend to generate and retain large balances due to the possibility of future high-cost capital expenditure.

6.    Councillor Miscandlon highlighted that many IDBs raise their precept annually and asked if the Council ever challenge this. Councillor Boden confirmed that not all IDBs increase their precepts but the current system promotes drainage boards to do this in order to build reserves but agreed that this is open to scrutiny.

The Overview and Scrutiny Panel considered the draft budget proposals for 2020/21 and the updated capital programme.