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Report Finance and Governance Committee 22 12 2020

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Report Finance and Governance Committee 22 12 2020 WELLINGBOROUGH TOWN COUNCIL (WTC) AGENDA ITEM 5 (SHADOW COUNCIL) SHADOW FINANCE AND GOVERNANCE COMMITTEE 22 DECEMBER 2020 Report of the Interim Town Clerk REVENUE BUDGET AND PRECEPT FOR 2021/22 1 Purpose of Report The purpose of this report is for the committee to consider and approve Wellingborough Town Council’s revenue budget and precept for 2021/22 before recommending to Wellingborough Town Council (WTC) (Shadow Council). 2 Executive Summary This report sets out the budget requirements for Wellingborough Town Council (WTC) for the 2021/22 financial year which includes three options for an anticipated precept for 2021/22. 3 Appendices Appendix 1 Wellingborough Town Council Precept and Expenditure for 2020/21; Appendix 2 Proposed Wellingborough Town Council Revenue Budget Options for 2021/22 Precept 4 To RECOMMEND that: (i) members of the finance and governance committee consider the report and the attached revenue budget and precept options for 2021/22; (ii) the preferred option be ‘option one’ and that this be recommended to the shadow council of Wellingborough Town Council for approval. 5 Background 5.1 Wellingborough Town Council was established on 1 April 2020 following a community governance review and the Borough Council of Wellingborough (Reorganisation of Community Governance) Order 2019. The order created the Wellingborough Town Council with 23 councillors commencing 1 April 2020, with elections now taking place on 6 May 2021, having been postponed from 7 May 2020. 1 5.2 The order did not stipulate the services that Wellingborough Town Council might undertake, nor did it include any future administrative arrangements or any provision with respect to the transfer of management of property, functions, rights and liabilities or for transfer of staff. 5.3 The initial precept for Wellingborough Town Council for 2020/21 was calculated on the basis that no services would be transferred to Wellingborough Town Council in year one, to allow the town council to decide for itself what services, responsibilities and assets it wished to undertake. It is thought that this process will commence on appointment of the Town Clerk/RFO and the election of members to Wellingborough Town Council, and negotiations will take place with the newly formed North Northamptonshire Council during 2021/22 and beyond. 5.4 Wellingborough Town Council has been operating as a shadow council and must set a budget for the coming financial year 2021/22. To date there has been limited spend on the original limited budget (Appendix 1) as no developmental work has been undertaken due to the postponed election, due to the Covid-19 pandemic and subsequent delayed appointment of a Town Clerk/RFO. 5.5 The pro-rata costs of employing a Town Clerk/RFO for the remaining months of the municipal year 2020/21 will be met from the 2020/21 Wellingborough Town Council budget. Any balance remaining at the end of the current financial year will be transferred to Wellingborough Town Council as a general reserve. 5.6 The original budget was supplemented by £10k approved by the Borough Council of Wellingborough’s resources committee to support the creation of Wellingborough Town Council which included the branding, website and licence, two months membership and project support of Northamptonshire County Association of Local Councils (NCALC), member training for the newly elected town councillors and Zoom exhibition package and subscription. 5.7 It should be recognised that the 2020/21 budget and precept was extremely low for the size of the council tax base for Wellingborough Town Council and comparative to other town councils given its geographical size. A presentation was recently given by Northamptonshire County Association of Local Councils (NCALC) to the shadow staffing committee of Wellingborough Town Council entitled ‘Setting the Scene – Five Year Plan’. It was reported that benchmarking with similar councils for 2020/21 figures, indicated that Wellingborough Town Council, with a band D precept of £4.24 had the lowest precept, and that an average band D for local councils in unitary areas was £101.86. 5.8 The purpose of this report is to prepare a budget that provides for the effective management and development of services and responsibilities that Wellingborough Town Council might undertake in 2021/22 and beyond. It is against this context that members will appreciate that the main principle informing the 2021/22 annual budget is the need to raise the precept to develop the town council going forward to deliver and grow, rather than simply existing for the sake of having a town council. 2 6 Discussion 6.1 At the Wellingborough Town Council shadow staffing committee held on 23 November 2020, it was recommended that a Town Clerk/RFO be recruited for with immediate effect and proposed an appropriate salary band for the post. It was also agreed to recruit an additional post of a part/full time business/finance officer during the municipal year 2021/22, as required, along with a proposed salary band for this post. These decisions have led to a recommended staffing budget requirement for 2021/22 of £102,000. Without appropriate staffing, Wellingborough Town Council may be unable to function and develop. 6.2 The budget overheads have been estimated on the basis of best evidence from a comparative town council and advice from Borough Council of Wellingborough finance officers. 6.3 The proposed budget for 2021/22 is based upon the following principles: • To enable Wellingborough Town Council to have a sound financial base on which to develop and manage the business and services so that it can operate independently of the Borough Council of Wellingborough which will no longer exist from 1 April 2021; • To support as far as possible, in the early days of the town council’s creation, member initiatives from the newly elected town councillors that might be proposed in 2021/22; • To provide value for money. 6.4 Option one: The attached budget (Appendix 2), will necessitate an increase to the precept of £115,735, which will result in an increase to a band D property equivalent of £7.57, which equates to a total for 2021/22 for a band D property of £11.81. 2020/21 2020/21 2021/22 2021/22 Precept Band D Precept Band D £64,500 £4.24 £180,235 £11.81 The proposed draft budget captures the intent of the town council to move forward, to be independent of the principal authority and to be able to develop and deliver a range of community initiatives and services. The draft budget includes the twinning partnership agreements with Niort, France and Wittlich, Germany and therefore the current ‘Treaty of Friendships’ will need to be transferred to Wellingborough Town Council. Although the precept is increasing compared to the previous year, it should be stressed that the original precept was set at a minimal level and staff costs were pro-rata. 3 6.5 Members will recall that options for some services were suggested for consideration when the precept for 2020/21 was approved and it was agreed that no services would be transferred to Wellingborough Town Council in year one. If members were minded to agree to the transfer of events; or events and the market to Wellingborough Town Council the costings and precept for these options is shown in Appendix 2 and in the tables below. The council tax, taxbase calculation for a band D property in Wellingborough town for 2021/22 is 15,255. Whether or not the market operation is transferred to Wellingborough Town Council, it may be prudent to transfer the Market Charter and this would then need to be included in one of the consequential orders to Parliament. Option two (Events): This will necessitate an increase to the precept of £185,735, which will result in an increase to band D equivalent of £12.16, which equates to a total for 2021/22 for a band D property of £16.40. 2019/20 2019/20 2021/22 2021/22 Precept Band D Precept Band D £64,500 £4.24 £250,235 £16.40 Option three (Events and Market): This will necessitate an increase to the precept of £244,235, which will result in an increase to band D equivalent of £16.00, which equates to a total for 2021/22 for a band D property of £20.24. 2019/20 2019/20 2021/22 2021/22 Precept Band D Precept Band D £64,500 £4.24 £308,735 £20.24 6.6 In managing its business affairs Wellingborough Town Council would need to register for VAT. It should also be noted that if members choose either option two or three, the premium for insurance would need to be substantially increased from the quotation detailed in option one. New quotes will need to be sought if either of these options are chosen. In the interim any increase could be met from contingency. 6.7 If either option two or three are chosen it is still unclear at this point what potential assets, responsibilities, other services and budgets will fall under the remit of Wellingborough Town Council. This will be the subject of negotiations between an appointed Town Clerk/RFO and the newly formed North Northamptonshire Council. The precept when being set for 2022/23, will likely increase significantly once any assets and responsibilities have been transferred, however, the town council will by then, have started to grow, and will have a strategy going forward, and be in a position to consider other options such as sourcing income and applying for grants etc. 6.8 If either option two or three are chosen there is likely to be staffing TUPE issues to be worked through between the Town Council and the Borough Council through HR to ensure continuity of any service transfer.
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