Council Agenda Wednesday 4 March 2015 Book 2 of 2
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COUNCIL AGENDA WEDNESDAY 4 MARCH 2015 BOOK 2 OF 2 BUDGET 2015/16 AND MEDIUM TERM FINANCIAL STRATEGY (MTFS) TO 2024/25 COUNCILLOR DAVID SEATON JOHN HARRISON CABINET MEMBER EXECUTIVE DIRECTOR FOR RESOURCES RESOURCES Growing the right way for a bigger, better Peterborough CONTENTS COUNCIL REPORT ...................................................................... 2 APPENDIX A – Council Tax Resolution ..................................... 8 APPENDIX B – Cabinet recommendations to Council ............ 15 Appendix A – Phase two budget proposals schedule (updated) ........... 39 Appendix B – NNDR Return (Part 1) ..................................................... 41 Appendix C – Discretionary rate relief schemes in 2015/16 .................. 45 APPENDIX C – Addendum to Cabinet...................................... 49 Report of the Chief Finance Officer ......................................... 52 Appendix D – Budget Risks ................................................................... 71 1. Local Government Finance Settlement .............................. 75 2. Key Figures .......................................................................... 84 3. Investment ............................................................................ 87 Appendix 3a – Investment – Inescapable .............................................. 87 Appendix 3b – Investment – Essential ................................................... 89 Appendix 3c – Investment – Funding Pressures ................................... 90 4. Savings ................................................................................. 91 Appendix 4a – Savings – Service Reductions ....................................... 91 Appendix 4b – Savings – New Savings and Efficiencies ....................... 93 Appendix 4c – Savings – Additional Income .......................................... 97 Appendix 4d – Savings – Council Tax and Other Funding .................... 98 5. Fees and Charges Schedule ............................................... 99 6. Reserves Position .............................................................. 103 7. Budget Monitoring – Probable Outturn ............................ 104 8. Treasury Strategy, Prudential Code and Minimum Revenue Position .............................................................................. 111 9. Capital Strategy, Programme and Disposals ................... 136 10. Asset Management Plan .................................................... 166 11. Budget Consultation - responses ..................................... 217 12 Budget Consultation .............................................................. 0 i AGENDA ITEM 9(b) COUNCIL 4 MARCH 2015 PUBLIC REPORT BUDGET 2015/16 AND MEDIUM TERM FINANCIAL STRATEGY (MTFS) TO 2024/25 R E C O M M E N D A T I O N S FROM : Executive Director, Resources That Council is recommended to: 1) Have regard to the consultation feedback received to date and statutory advice detailed in the report when determining the budget recommendations, noting that consultation remains open and further update will be provided at the Council meeting. 2) Approve: a) The budget is set in the context of council priorities and has been undertaken following a two phase approach to consider budget proposals to set a balanced budget for 2015/16; b) The budget for 2015/16 takes note of the budget monitoring position for 2014/15; c) The revenue budget for 2015/16 and proposed cash limits for 2016/17 to 2024/25 (including investment and savings proposals); d) The capital programme for 2015/16 and proposed cash limits to 2024/25 and associated capital strategy, treasury management strategy and asset management plan; e) A council tax freeze in 2015/16 with indicative increases for planning purposes of 2% for 2016/17 to 2024/25; f) That education funding is spent at the level of funding resources available to both schools and the council in 2015/16 and future estimates to 2024/25; g) The budget is supported adequately with reserves, provisions and robust budget estimates set in the context of the risks outlined in the report; h) The proposals for setting fees and charges for 2015/16. 3) Approve the council tax setting resolution as set out in appendix A. 2 1. PURPOSE AND REASON FOR REPORT 1.1 The purpose of this report is to present budget proposals for 2015/16 through to 2024/25. 1.2 Full Council are required to set the council tax for 2015/16 which includes not only its own requirements but that of the relevant precepting bodies, i.e. Police, Fire and Parishes (where applicable). 1.3 The decisions contained in this report are a matter reserved for Council. Is this a Major Policy YES If Yes, date for n/a Item/Statutory Plan? relevant Cabinet Meeting Date for relevant 4 March Date for submission Communities and Local Council Meeting 2015 to Government Government (CLG) 10 department March 2015 2. BACKGROUND 2.1 Cabinet at its meeting on the 23 February 2015, considered a report entitled ‘Budget 2015/16 and medium term financial strategy (MTFS) to 2024/25’ and an accompanying addendum entitled ‘Cabinet Addendum – Consultation Response Update’. The recommendations from Cabinet are attached at appendix B. The addendum provided further budget consultation responses and these have been included in section 11 of the MTFS. The overall recommended budget position is as follows: 2015/16 2016/17 2017/18 2018/19 2019/20 £k £k £k £k £k Funding Business Rates -47,169 -48,390 -49,373 -50,338 -51,324 Revenue Support Grant -34,319 -30,135 -29,330 -28,509 -27,372 Other Grants -33,818 -30,669 -30,561 -30,386 -30,274 Housing Benefit Grant -72,600 -72,600 -72,600 -72,600 -72,600 Parish Precepts -514 -514 -514 -514 -514 Council Tax Base -57,590 -59,002 -60,841 -62,737 -64,692 Council Tax Growth Estimate -1,411 -646 -666 -687 -708 Council Tax Increase 0 -1,193 -1,230 -1,268 -1,308 Collection Fund Deficit 1,522 0 0 0 0 Subtotal -245,899 -243,149 -245,115 -247,039 -248,792 Schools Grant -130,152 -130,152 -130,152 -130,152 -130,152 Total Funding -376,051 -373,301 -375,267 -377,191 -378,944 Total Expenditure 376,051 383,450 389,354 394,661 399,462 Budget Deficit 0 10,149 14,087 17,470 20,518 3 2.2 During the Cabinet meeting the Cabinet recommended the following adjustments to the budget, which are incorporated in the table above: a) To allocate £70,000 from the risk management contingency for 2015/16 to enable the library proposals to be amended to allow a staff presence at all times within the larger libraries across the city, and to assist with the implementation plans (noting that Cabinet will not make a final decision on library options until their meeting of 20 th March); b) To increase the capital sum for Street Cleansing by £200,000 in order to enable further investment into making services more efficient and to help keep our city clean; with the capital financing costs in 2015/16 of £4k being met from the risk management contingency, and c) To maintain the risk management contingency at a minimum level of £500,000. The relevant sections in the MTFS have been adjusted to reflect these changes. 2.3 The Council Tax excluding Parishes (local precepts), can be summarised as follows: Band D Band D Percentage 2014/15 2015/16 Increase Peterborough City Council £1,128.03 £1,128.03 0.00% Major Precepts: Cambridgeshire Police and Crime Commissioner £181.35 £181.35 0.00% Cambridgeshire and Peterborough Fire Authority £64.26 £64.26 0.00% TOTAL £1,373.64 £1,373.64 0.00% The average increase in council tax for the Peterborough area incorporating the billing authority and major and local precepts is 0.08%. Under the Local Government Finance Act 1992 (as amended by the Localism Act 2011), councils are required to determine whether they have set an excessive increase in council tax. The Secretary of State has power to determine the principles of assessing excessive council tax increases and these principles were published on 3 February 2015 within the report Referendums Relating to Council Tax Increases (Principles) (England) Report 2015/16. For principal councils such as Peterborough City Council, an increase in the relevant basic amount of council tax in excess of 2.00% would be deemed excessive and would require a local referendum. The council is freezing council tax and therefore is not excessive and does not require a referendum. The Cambridgeshire Police and Crime Commissioner and the Cambridgeshire and Peterborough Fire Authority have held their own meetings to set the Band D element of council tax. The council is now in receipt of the formal notification of their meetings. The Police and Fire organisations are responsible for ensuring that they meet the referendum regulations for their element of the council tax. 4 The parish element of the council tax set by the individual parish councils has either increased or decreased as shown on the council tax bills. Parish councils are separate entities and therefore the council has no control on how parish councils set their budgets. Parish councils are exempt from applying referendum principles in 2015/16 to calculate whether the parish council has set an excessive council tax increase. The overall increase in the parish precept is 15.4% from £445k in 2014/15 to £514k in 2015/16. This is due in part to removal of discretionary funding of council tax support of £0.1m approved in last year’s budget. Parish councils were provided with a full year’s notice. The parish council impact on band D council tax levels range from a reduction of -1.88% to an increase of 44.04% across the Peterborough