Agenda item

Budget Update 2018/19

Minutes:

The Portfolio Holder for Finance presented the report which updated the information Members had considered at Cabinet on 7 December 2017.  It contained several changes including those resulting from the Provisional Local Government Finance Settlement which was announced on 19 December 2017.

 

He highlighted two items.  First of all the Council Tax increase.  He advised that at the last Cabinet meeting Members had supported increases of 2.44% in 2018/19 and 2.38% in 2019/20 as it was expected that these would be the maximum increases possible without holding a referendum. In the draft settlement, the Minister had announced that Council Tax for Districts could be increased by the higher of 3% or £5 for a Band D property in 2018/19 which was linked to inflation.  The report proposed the higher 3% increase in 2018/19 but reducing the 2019/20 increase to 2%, which would result in a £6.03 increase for a Band D property in 18/19.

 

Secondly he highlighted the Council Tax Base increase which was the lowest in Kent in 2018/19 and also over the last 5 years. The continuing low increase hindered the Council’s ability to raise extra income and therefore improve services for residents.

 

He advised that if the budget agreed in February was the same as the one proposed in the report before Members, then the Council would remain financially self-sufficient from direct Government funding and once again have a balanced 10-year budget, and remain in a much stronger financial position than the vast majority of other councils.

 

The Chief Finance Officer reported that the Provisional Local Government Finance Settlement was published on 19 December 2017 and further detail had been announced since.  Due to reporting deadlines and the further details, a supplementary agenda which includes updated Appendices B and D and additional SCIAs for Appendix E had been circulated earlier in the week.

 

In the provisional settlement, the most relevant elements for the Council were the increase to the Council Tax referendum limit, which Cllr Scholey had explained, and that the Kent and Medway Business Rates Retention Bid for 2018/19 was successful.  Many County areas had put in bids and the original intention was for 5 to be approved but eventually the Government had approved 10, and it should result in significant additional income in 2018/19 only.  There remained uncertainties over the future impact of Business Rates Retention (BRR), with the negative Revenue Support Grant (RSG) for 2019/20 still included in the provisional settlement and the new scheme not now due to commence until 2020/21.  Therefore the report showed BRR having no overall impact on the 10-year budget period with the balance being transferred to the Budget Stabilisation Reserve.

 

Other amendments to the 10-year budget included:

  • Updating the Pay Award Assumption for 2018/19 and 2019/20 from 1% to 2%;
  • Council Tax – the opportunity to reduce empty property discounts from 19/20 (a separate report explaining the details of this would be presented to Members in due course);
  • Collection fund surplus – due to collection rates being higher than anticipated there was a one off surplus to be distributed;
  • Superannuation Fund Deficit – a growth amount of £200,000 which was included from 2020/21, had been reduced to £100,000 based on more positive recent information; and
  • 11 new growth and savings SCIAs (9-19).

 

All of the changes resulted in the 10-year budget being in the same position as when the budget process started and a Budget Stabilisation Reserve that could support the budget past the 10 year horizon.

 

Members ran through each SCIA 9-19, asking questions of clarification.  Members expressed concern over potential negative RSG, however it was speculated other adjustments may be found such as 75% business rates retention rather than 100% as previously discussed by government. 

 

Public Sector Equality Duty

 

Members noted that consideration had been given to impacts under the Public Sector Equality Duty.

 

Resolved:  That

a)     The growth and savings SCIAs 9-19 as contained in Appendix E to the report be noted and agreed; and

b)     the Council Tax increase assumption for 2018/19 be increased from 2.44% to 2.97% (£4.95 to £6.03 pa for a Band D equivalent property) and for 2019/20 be reduced from 2.38% to 2% (£4.95 to £4.18 pa for a Band D equivalent property).

Supporting documents:

 

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