Whiston Parish Council Clerks Report – Budget 2018-19 (Amended)

Introduction

The current precept for 2017-18 is £77,650.00 together with the Council Tax Support Grant of £3,324.00.

At year end 31st March 2017 the reserves held by the Council were £232.928.57. I understand that this sum represents both general and earmarked reserves, although only the net land sale proceeds of £19,325.00 are legally restricted to capital projects. (This can be set against the hall extension). The 2017-18 Accounts also note £50,000 earmarked for the barn roof with the remainder as general reserves.

The Councils own policy regarding earmarks the reserves as follows:

1. Manorial Barn roof £60,000.00

2. New Office/Extension to Parish Hall £90,000.00

Total £150,000.00

Members do need to have regard to the level of reserves needed for meeting estimated future expenditure when calculating the budget requirement. Members need to bear in mind the Council does not have the power to hold excessive reserves. If the Council is not saving for anything in particular, an acceptable level of reserves is usually equivalent a year’s precept (or expenditure). However, it is acceptable to build up reserves if a Council is saving for a particular project.

General reserves are funds which do not have any restrictions as to their use. These reserves can be used to smooth the impact of uneven cash flows, offset the budget requirement, if necessary or can be held in cases of unexpected events or emergencies.

In respect of income and expenditure for 2017-18, the budget estimates predict the total reserves at year end 31st March 2018 to be in the region of £172,000 although this envisages a total expenditure of £95,000 for the refurbishment of the toilets & main hall and hall extension by the end of this financial year.

If the 2017-18 prediction is accurate it will leave the Council with general reserves (excluding the earmarked reserves for the barn roof and land proceeds) of £92,000 which would be below last years’ expenditure figure (Last years spend being £132.613, although this included the Cowrakes Park refurbishment which meant expenditure was higher than “normal”). This needs to be taken into account therefore when considering any further increase in general reserves when setting the budget for 2018-19. (Please note VAT is not included in the budget, although it has to be born in mind that payments do have to be made up front and are only reclaimed quarterly. All figures are therefore net of VAT in these proposals)

Income 2018-19

I have estimated 2018-19 income to be £122,200, very similar to the 2017-18 figure of £118,684 This is based on a 6.9% increase in the precept (somewhere in line with current inflation plus the loss of the Council Tax Support Grant)

I have estimated hall user & function fees to be at similar levels. although this may be a little conservative. I would hope that additional revenue would be received once the hall has been refurbished although I’ve not budgeted for this at this stage, as the impact on revenue is currently unknown.

The barn rent and insurance and other environmental rents are also likely to be at similar levels although the garage rent will increase to around £1000 per annum from £110 previously.

I have also included a new budget head ‘Income - Events’ and members will need to consider whether this is realistic. I’m aware that new heads of expenditure are required for additional events in 2018-19 (These are noted below) but assume that donations/raffle ticket sales and/or ticket sales may bring in some income streams to offset the costs.

Expenditure 2018-19

The items below I have budgeted at similar levels to this year. I have made moderate adjustments to some based on the expenditure over the last two years i.e. actual figures for 2016-17 and current/anticipated for 2017-18. Members can of course review and make their own evaluation of these suggested changes. They are just suggestions.

- Chairs allowance - Staff and Members travel - Training (reduced) - Elections (slightly reduced) - Subscriptions - Insurances - Telephones (slight reduction for hall phone/broadband with new rates) - Photocopying - Stationery/postage - Audit fees - Licence/Legal fees - Retainer refunds (directly recharged in any event with income) - Rates (although the hall was exempt this year) - Water rates - Gas (increased slightly to allow for some price rise) - Electricity (increased slightly to allow for some price rise) - Waste/sanitary disposal - Hall equipment - Relief cleaning - Newsletter costs - Garage rent - Play inspections - Miscellaneous expenses (increase)

Other Expenditure:

Hall Repairs & Maintenance - I’ve reduced this head on the basis that after refurbishment I would expect annual maintenance to reduce in the short term. Members may prefer to retain a higher budget however for unexpected eventualities.

Office equipment – I have increased this on the assumption that further storage solutions are required for the Clerk and the Events Working Group

Gardening contract – I’ve reduced this from the level in 2017-18 of £9,000 (and £11,000 the previous year) to £6500 as we are not spending the historic amounts now we have reduced the areas we cover. Again, members may want to give a more generous allowance however.

Advertising- Increased to allow for the larger advert now being placed in the Whiston Villager

Salaries- These have varied in the last couple of ears due to staff changes. I have based next year’s figure on a slightly increased wage bill for the hall staff and with an adjustment to pensions. (Employer contributions will rise to 2% in April 2018. This is still a nominal sum. Employee contributions rise to 3% but are deducted from gross pay so do not impact on the Councils expenditure.) Members will need to consider whether the allowance is adequate with views expressed previously that the hall staff should receive a pay increase.

Grants – s137 I’ve reduced this to £2000 but this is based on the Festival of Brass (which is normally fully funded) being council led in future. The reduced figure gives an allowance for other organisations to apply for grant funding.

Christmas – I’ve allowed £10,000 (up from £7000) due to members wish to expand on the lights in forthcoming years. This may not be adequate depending on what is envisaged and some cost estimates should probably be sourced prior to the budget being finalised.

New Heads of expenditure

I’ve added new and specific heads of expenditure for events including, WW1 Commemorations (Remembrance Event), Pantomime, Festival of Brass and Easter. The allowances are modest however, so members will need to decide if they want a more generous budget for these items. They also need to consider if there are other new heads that they require. This avoids expenses falling into “miscellaneous expenditure” which is then harder to monitor. I’ve also added an allowance for the instruction of a Data Protection Officer as the clerk is unable to do this role form May 2018 under the new regulations. Unfortunately, it’ s not yet known how this is to be delivered or the cost. I’ve therefore allowed a sum similar to the costs of an external auditor but the cost could be more.

I’ve added a budget of £10,000 for the provision of a youth club (employee costs and equipment) as this is a new service members have indicated they may want to fund from 2018-19.

I’ve also added a budget for the barn roof as this will need replacing in the next 10 years so an allowance will need to be made annually over this period to ensure the costs are raised.

Council Tax Support Grant

The Council Tax Support Grant (previously £3324) has ceased from the next financial year and therefore this income stream has now gone.

Conclusions - Precept

The purpose of the budget proposals is to deduce the required precept for 2018-19.

I have suggested a precept increase of 6.9%. This is broadly in line with average national increases for parish councils and in particular covers the loss of the support grant together with inflationary increases which are likely to be around 3-4%. Members may of course wish to increase or decrease this figure. However, if accurate this would result in a surplus of just £70 therefore the reserve balance(s) that exist at March 2018 should remain at similar levels by the March 2019. I do not see that we would be looking to increase the precept much further unless there are some other notable expenditure members felt needed to be budgeted for.

The new tax base figure is 1478.63. Slightly up from 2017-18. The purpose of the tax base figure is to enable members to calculate how much any precept change will alter council tax payments for residents. (Normally tested against a Band D property). The slight increase means that even if the precept remained the same the cost to households would reduce next year.

Based on the 2018-19 tax base figure the current Band D equivalent would be £53.13. If the precept is increased to £83,000 (as suggested) this would give a Band D equivalent of £56.13, an annual increase of £3.00.

I have attached a precept calculator so members can see how the suggested change would affect each council tax band. Alternative figures can also be entered for comparison.

Angela Harrison 8th January 2018