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Council Budget and Council Tax 2017-18 and Medium-Term Financial Strategy 2017-18 to 2020-21

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Council Budget and Council Tax 2017-18 and Medium-Term Financial Strategy 2017-18 to 2020-21 Council Budget and Council Tax 2017-18 and Medium-Term Financial Strategy 2017-18 to 2020-21 Member are requested to retain this report for use in the following meetings: Overview and Scrutiny Committee – 1st February 2017 Cabinet – 6th February 2017 Council – 22nd February 2017 This report is available on the Council’s website: http://braintree.cmis.uk.com/braintree/Meetin gs/tabid/70/ctl/ViewMeetingPublic/mid/397/Meeting/54 3/Committee/3/Default.aspx Nicola Beach Chief Executive 1 2 CABINET 6 th February 2017 Council Budget and Council Tax 2017/18 and Medium- Agenda No: 9a Term Financial Strategy 2017/18 to 2020/21 Portfolio Finance and Performance Corporate Outcome: A high performing organisation that delivers excellent and value for money services Delivering better outcomes for residents and businesses and reducing costs to taxpayers Report presented by: Cllr. David Bebb Report prepared by: Trevor Wilson, Head of Finance Background Papers: Public Report Council Budget and Council Tax 2016/17 and Medium-Term Key Decision: No Financial Strategy 2016/17 to 2019/20 report to Cabinet 4th February 2016 and Full Council 22nd February 2016 Medium-Term Financial Strategy 2017/18 to 2020/21 Update report to Cabinet 29th November 2016 Executive Summary: 1. Background and Purpose 1.1 The annual process of reviewing and rolling the strategy forward by one year commenced with a report to Cabinet on 12th September 2016. 1.2 On 29th November 2016, the Cabinet received a report providing details of the progress with the updating of the Financial Profile and the Medium-Term Financial Strategy 2017/18 to 2020/21. This included detail of unavoidable cost pressures and the work on identifying options for revenue savings/additional income to meet the anticipated funding shortfalls over the next four years. The Cabinet agreed that the Revenue Budget and Capital Programme for 2017/18, as presented, constitutes the initial Budget proposals and that views are sought as appropriate. 1.3 The Council received, on 15th December 2016, detail of the provisional Local Government Settlement Funding Assessment figures for 2017/18 together with indicative figures for the two following years. In addition, Cabinet Members and Senior Management have reviewed the Council’s discretionary fees and charges and the Council’s earmarked reserves. 1.4 This report consolidates all of this information, including final refinements to the assumptions, resulting in: proposed budgets for revenue and capital; the level of council tax (Band D) for 2017/18; and a financial profile and Medium-Term 3 Financial Strategy for 2017/18 to 2020/21. 2. Government Funding 2.1 The Financial Settlement for local government was announced by the Secretary of State for Communities and Local Government on 15th December 2016. The proposed 2017/18 settlement is designed in the context of the overall Spending Review announced in 2015, and confirms the figures made in the offer of a four- year settlement for those authorities publishing an Efficiency Plan. 2.2 The Council’s Efficiency Plan covering the period 2016/17 to 2019/20 was agreed by Cabinet on 12th September 2016. Confirmation of acceptance of the Efficiency Plan was received from the Minister for Local Government on 16th November 2016. 2.3 The Council’s provisional allocation of Settlement Funding Assessment (SFA) for 2017/18 is £4,033,678. This represents a reduction of £759,997 or 15.85% compared to the SFA for 2016/17. 2.4 Indicative SFA figures for the following two years were also received: £3,633,575 for 2018/19 and £3,189,168 for 2019/20. The reduction in SFA between the current year and 2019/20 is £1.605million or 33.5%. 2.5 In addition to publishing SFA allocations the Government provides Core Spending Power figures for each council. Core Spending Power (CSP) for district councils consists of: Settlement Funding Assessment; Council Tax; New Homes Bonus; Rural Services Delivery grant and Transition grant. This Council’s CSP is £14.95million for 2017/18 which is £1.04million lower (6.5%) than the figure for 2016/17. The CSP for 2019/20 reduces to £14.252million and represents a reduction of 10.1% over the four-year Spending Review period. 2.6 The SFA includes an assessment of the business rates baseline (£3.256million) which the Government expects the Council to retain under the Business Rates Retention scheme. An estimate of the amount of business rates to be retained in 2017/18 is £4.179million: which is net of discounts and exemptions; and an allowance for rateable valuation reductions determined by the Valuation Office following appeal. This is an estimated benefit over the baseline of £923,000. 2.7 The Council has agreed to participate with ten other Essex authorities in the Business Rates Pooling arrangement, which it is anticipated will bring additional resources to the County and be shared between the authorities. The decision to join is based on the assessment that estimated business rates income for 2017/18 will exceed the baseline amount. Under the sharing arrangement the Council could receive an additional amount of business rates of approximately £360,000. However the determination and receipt of the actual amount of the share will not be made until 2018/19; i.e. after year-end returns have been collated from each of the authorities in the Essex Pool. 2.8 The Council has been allocated Rural Services Delivery Grant of £17,754 and a Transition Grant of £52,661 for 2017/18. Whilst provisional allocations of Rural Services Delivery Grant have been received for 2018/19 and 2019/20 the Transition Grant ceases after 2017/18. 4 2.9 The Government published, on 15th December 2016, its response to the consultation ‘New Homes Bonus: Sharpening the Incentive’ and has determined that it will implement: a move to 5 year payments for both existing and future Bonus allocations in 2017/18 and then to 4 years from 2018/19 (the current scheme provides for 6 year payments); and the introduction of a national baseline of 0.4% for 2017/18 below which allocations will not be made. 2.10 Based on the new criteria above, the Council’s entitlement for year 7 of the scheme is £328,712 and the total amount receivable in 2017/18 will be £2,129,211. 2.11 The response from the Government also indicates that it will revisit the case for withholding New Homes Bonus from 2018/19 from local authorities that are not planning effectively, making positive decisions on planning applications and delivering housing growth. It will also consider withholding payments for homes that are built following an appeal. 3. New Investment and Unavoidable Budget Demands 3.1 Three bids are proposed for new Investments: Additional resources to support the Economic Growth agenda and capital project delivery. The proposed additional cost is £252,000 per annum (£207,000 for four members of staff and £45,000 for project and feasibility expense budgets). It is proposed that funding is provided from unallocated New Homes Bonus (£144,800) and capital resources (£107,200); Welfare Reforms, increased Homelessness responsibilities, changes to Housing Benefit regulations, lower Benefit Cap, etc. will put pressure on the Housing Services’ ability to find accommodation for families and single people, particularly those under 35 years of age. It is proposed to make a provision of £150,000 to be available to meet the cost of actions taken to address these issues as required. As a one-off provision it is proposed that it is met from unallocated balances; and To procure and implement the ‘Gov Delivery’ digital marketing platform to promote Council services and initiatives, support channel shift and digital transformation. The additional budget requested is £7,000 per annum. 3.2 In addition to the new investments above, a budget allocation which is assessed on an annual basis is the sharing of a proportion of the Council’s share of the anticipated balance, if a surplus, on the council tax collection fund with town/parish councils. The Council’s share of the estimated surplus on the Council Tax Collection Fund is £194,255. The amount that will be paid to Town/Parish Councils in 2017/18 is £34,820, as agreed by Council on 12th December 2016. 3.3 Requests for revenue funding to meet unavoidable budget demands total £169,680 in 2017/18, £73,640 in 2018/19 and £120,000 in 2019/20, all of which is requested to be added to the base budget: Environment and Place Waste Management Recycling – the current contract for the sale of mixed dry recyclates was due to terminate on 31st March 2017. The contract has been renegotiated but with the downturn in the recyclates market the 5 Council will be paying a gate fee from 1st April 2017. A budget growth bid of £70,000 will be required for 2017/18. A further budget increase of £120,000 will be required in 2019/20; Increase in budget required to provide a second litter pick and mechanical sweep of the Braintree Bypass on an annual basis, to maintain cleanliness standards. Request for £20,000; Public Toilets. Actual cost of maintaining and cleaning the Public Toilets in Braintree and Witham and Cemeteries is higher than the current base budget. Request for £5,000; New Bocking Cemetery. Additional cost of maintaining the new Cemetery extension at Bocking that is now coming into use for burials and cremated remains. Request for £5,000; Operations Training Budget. Request for £20,000; Planning and Housing Two posts in the Housing Options section are currently funded from an earmarked reserve.
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