Public Document Pack
E-mail: comsec@teignbridge.gov.uk
12 February 2020
FULL COUNCIL
To all Members of Teignbridge District Council
A meeting of the Full Council will be held on Monday, 24th February, 2020 in the Council Chamber, Forde House, Brunel Road, Newton Abbot, TQ12 4XX at 10.00 am
Phil Shears Managing Director
Please Note: Filming is permitted during Committee meeting with the exception where there are confidential or exempt items, which may need to be considered in the absence of the press and public. By entering the Council Chamber you are consenting to being filmed.
A G E N D A
Part I
1. Apologies for absence
2. Minutes (Pages 5 - 8) To approve as a correct record and sign the minutes of the previous Council meeting.
3. Chairman's announcements
4. Declarations of interest
1 5. Public Questions (if any) Members of the public may ask questions. A maximum period of 15 minutes will be allowed with a maximum period of three minutes per questioner.
The deadline for questions is no later than 12 noon two working days before the date of the meeting.
6. Councillor Questions (if any) Members of the Council may ask questions of the Council subject to procedural rules.
The deadline for questions is no later than three clear working days before the meeting.
7. Notices of motion under Council Procedure Rule 4.5(l) (Pages 9 - 10) Notice of Motion’s shall be referred to the appropriate Committee meeting. The mover of the motion can outline the proposal and then it will stand adjoined. The motion may be debated to assist debate later if agreed by two-thirds of Council Members.
Councillor Jenks supported by Councillors H Cox, Hayes, G Hook, J Hook, Keeling, MacGregor, Morgan, Nutley and Wrigley.
That Teignbridge District Council
(i) Acknowledges the efforts that this council is making to reduce greenhouse gas emissions and promote renewable energy;
(ii) Recognises that councils can play a central role in creating sustainable communities, particularly through the provision of locally generated renewable electricity;
(iii) Further recognises,
That very large financial setup and running costs involved in selling locally generated renewable electricity to local customers result in it being impossible for local renewable electricity generators to do so,
That making these financial costs proportionate to the scale of a renewable electricity suppliers operation would create significant opportunities for councils to be providers of locally generated renewable electricity directly to local people, businesses and organisations, and
That the revenues received by councils that become local renewable electricity providers could be used to help fund local greenhouse gas emissions reduction measures and to help improve local services and facilities;
(iv). Accordingly resolves to support the Local Electricity Bill, currently supported by a cross-party group of MPs (including our local MP), and which, if made law, would make the setup and running costs of selling renewable electricity to local
2 customers proportionate by establishing a Right to Local Supply; and
(v). Further resolves to
Inform the local media of this decision,
Write to local MPs, asking them to support the Bill, and
Write to the organisers of the campaign for the Bill, Power for People,(at 8 Delancey Passage, Camden, London NW1 7NN or [email protected]) expressing its support.
Councillor Patch supported by Councillors Bradford, Daws, Jenks and Mullone.
See attached - Notice of Motion regarding Facilitating Open & Accountable Decision Making - submitted by Councillor Patch and supported by four Councillors as above.
This Council resolves that:-
(a): this Council is committed to the principles of open and accountable decision making;
(b): from this day forward, in meetings of the Full Council or any Committee of the Council, if just one Member present at the meeting (and not necessarily a Member of that Committee for Committee Meetings) requests a Recorded Vote for a particular vote the names for and against the motion or amendment or abstaining from voting will be taken down in writing and entered into the minutes. A demand for a recorded vote will override a demand for a ballot; and
(c): until such time as the Articles of the Constitution for Full Council and Committees of the Council are updated to come in line with the above clause (b), clause (b) of this Motion shall take precedence over the requirements for a Recorded Vote as set out in those Articles of the Constitution.
Councillor Daws supported by Councillors Bradford, D Cox, Mullone and Patch.
Motion of Notice - Langford Bridge Planning Decision
To reassure elected members and the general public, we request that the full council back the setting up of a task and finish group, Chaired by the Deputy Chair of O&S, to investigate and clarify that all correct due processes were undertaken in relation to the tabling of, discussion of, and voting on (granting of) application 19/00238/MAJ Langford Bridge Farm, Kingskerswell Road, Newton Abbot, Devon, TQ12 5LA at the planning committee meeting of the 21st January.
3 8. Final Budget Proposals 2020/21 (Pages 11 - 130)
9. Council Tax Reduction Scheme 2020/21 (Pages 131 - 158)
10. Network Rail Transport and Works Act Order Consultation & (Pages 159 - Network Rail Presentation 164)
11. Wolborough DPD (Pages 165 - 172) Part II: Item suggested for discussion with the press and public excluded
12. Local Government (Access to Information) Act 1985 - Exclusion of Press and Public RECOMMENDED that, under Section 100A(4) of the Local Government Act 1072, the press and public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in the relevant paragraph of Part 3 of Schedule 12A of the Act.
13. Decoy Country Park Play Area Refurbishments (Pages 173 - 178)
If you would like this information in another format, please telephone 01626 361101 or e-mail [email protected]
4 Agenda Item 2
FULL COUNCIL
14 JANUARY 2020
Present:
Councillors Bradford, Bullivant, Clarance, Connett, Cook, H Cox, Daws, Dewhirst, Eden, Evans, Foden, Goodman-Bradbury, Gribble, Haines, Hayes, Hocking, J Hook, Jeffery, Keeling (Chairman), Kerswell, MacGregor, Morgan, Mullone, Nutley, Nuttall, Orme, Parker-Khan, Patch, Peart, J Petherick (Vice-Chairman), Phipps, Purser, Rollason, Russell, Swain, Taylor, Thorne, Tume and Wrigley
Apologies: Councillors Austen, Colclough, D Cox, G Hook, Jeffries, Jenks, Parker and L Petherick
Officers in Attendance: Alison Dolley, Private Sector Housing Team Leader Christopher Morgan, Trainee Democratic Services Officer Sarah Selway, Democratic Services Team Leader & Deputy Monitoring Officer Phil Shears, Managing Director Simon Thornley, Business Manager - Spatial Planning Karen Trickey, Solicitor to the Council and Monitoring Officer
1. MINUTES
The Portfolio Holder for Sport, Recreation & Culture, seconded by the Portfolio Holder for Communities and IT proposed that the minutes of the Full Council on the 19 November 2019 were approved as correct and signed by the Chairman.
2. DECLARATIONS OF INTEREST
None.
3. COUNCILLOR QUESTIONS
Member question and response attached to minutes.
In response to Councillor Mullone’s supplementary question regarding what declaration of interests officers must declare, the Chairman commented that his response to the original question had clarified this.
4. PRESENTATION - BACKGROUND TO UPDATED TEN YEAR STRATEGY
5
The Business Manager Strategic Place gave a presentation to Members on the background data to the updated Strategic Plan. – attached to minutes.
In response to Member’s questions he clarified that:- 56 % percentage of household waste was recycled. The employment data related to employees and not the self-employed, this was an international measurement which included any employment over an hour a week. Those residents who commuted to work outside of the district would on average earn more than those whose employment was within the district.
5. COUNCIL STRATEGY - 2020-2030
The Deputy Leader presented the report to Members to adopt the new revised Council Strategy. The overarching plan set out the Council’s vision, objectives and priorities it would be focusing on achieving over the forthcoming 10 years. He brought attention to the positive figures regarding life expectancy and the increase in the level of employment whilst acknowledging that there were areas including CO2 omissions that the Council would need to address. He welcomed the endorsement of the strategy by the Conservative Group.
The Independent Group Leader, Councillor Haines, confirmed his group’s endorsement of the Council Strategy.
The recommendation was proposed by the Deputy Leader, seconded by Councillor Bullivant and carried.
RESOLVED that the Council Strategy 2020-2030 as circulated at Appendix A of this report be approved.
6. COUNCIL TAX BASE - 2020/21
The Portfolio Holder for Corporate Resources presented the report to consider the proposed council tax base of 49,714 for 2020/21 as recommended by the Executive on 7 January 2020 and considered by Overview & Scrutiny Committee on 14 January 2020.
The recommendation was proposed by the Portfolio Holder for Corporate Services, seconded by Councillor Bullivant and carried.
RESOLVED that the Council the council tax base of 49,714 for 2020/21 at appendix A of the circulated report be approved.
7. HEART OF THE SOUTH WEST JOINT COMMITTEE - GOVERNANCE REVIEW REPORT
The Deputy Leader presented the report to update Members on the Heart of the South West Joint Committee governance arrangements and budgetary position for 2019/20.
6
The recommendation was proposed by Deputy Leader, seconded by the Portfolio Holder for Planning and carried.
RESOLVED that:-
(1) the proposed amendments to the Joint Committee’s list of functions attached at appendix A in emboldened text be approved; and
(2) the updated budget position for 2019/20 be noted.
8. LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 - EXCLUSION OF PRESS AND PUBLIC
The Portfolio Holder for Sport, Recreation & Culture proposed, seconded by the Deputy Leader that because of the financial sensitivity and information relating to an individual the Council go into Part II session and exclude the press and public. This was carried.
RESOLVED that under Section 100(A)(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in paragraphs 1, 2 and 3 of Part 1 of Schedule 12A of the Act.
9. WARM HOMES FUND BID TO REDUCE FUEL POVERTY IN TEIGNBRIDGE
The Portfolio Holder for Climate Change Emergency and Housing presented the report which sought Member approval to support the acceptance of the warm homes fund bid, through prudential borrowing and the use of capital receipts.
Members raised concerns regarding the grant requirements regarding the use of fossil fuels and agreed to make representations to the Government to fully support the use of renewable technology from grant making bodies and remove limitations that still require the use of fossil fuels.
The recommendation was proposed by the Portfolio Holder for Climate Change Emergency and Housing, seconded by the Deputy Leader and carried.
RESOLVED that:-
(1) the warm homes funding bid be accepted; and
(2) prudential borrowing of £422,860 and the use of £67,500 capital receipt be approved.
10. APPOINTMENT OF HEAD OF PLACE AND COMMERCIAL SERVICES
7
The Deputy Leader, who chaired the meeting of the Appointments and Remuneration Committee 6 January 2020, presented the recommendation from that Committee to approve the appointment to the Head of Place and Commercial Services.
The recommendation was proposed by the Deputy Leader, seconded by the Councillor Bullivant and carried.
RESOLVED that the appointment to the Head of Place and Commercial Services be approved.
The meeting started at 12.35 pm and finished at 1.20 pm.
Chairman
8 Agenda Item 7
Motion on Notice for Full Council
Motion on Notice submitted on 12/2/2020 for Full Council Meeting on 24/02/2020: 'Facilitating Open & Accountable Decision Making'
BACKGROUND TO THE MOTION Article 16 of the Constitution of Teignbridge District Council is concerned with Decision Making; Article 16.2 states: • “All decisions of the Council will be made in accordance with the following principles: […] (d) a presumption in favour of openness ” (my emphasis added in bold); • “[...] (g) in reaching a decision, Councillors will have regard to the 10 General Principles of Conduct set out in Schedule 3 of The Relevant Authorities (General Principles) Order 2001. These are as follows: […] (iv) Accountability: Members should be accountable to the public for their actions […]. (v) Openness: Members should be as open as possible about their actions and those of their authority […]” (my emphasis added in bold). The aims of openness and accountability of Councillor Decision Making are compromised in the Articles of the Constitution that deal with requests for Recorded Votes, which typically require that 5 Members to agree to request a Recorded Vote before one is taken. With votes in most committees taken by a show of hands it is possible to see who votes which way, although this is not recorded by default (except, of course, in the event that a decision is unanimous). In Planning Committee meetings where an electronic voting apparatus is used for Decision Making, unless a Recorded Vote is successfully requested, votes are effectively being made in secret (in terms of the way each Member votes). In a recent meeting of the Planing Committee (21/1/2020) a decision on a contentious Planning Application was made without a Recorded Vote despite four Members requesting one, and despite great public interest in the vote – not least in the way that Members were voting. This falls severely short of the principles of openness and accountability expected by the public and as espoused in Article 16 of the Constitution. It is this regrettable situation that the current Motion seeks to remedy. Article 18 of the Constitution dealing with Review and Revision of the Constitution states that Members have a duty to monitor and review the constitution. It is in that respect that the current motion is proposed. Article 18.3 also states: “Other than minor amendment, changes, changes to the Constitution will only be approved by the Full Council after consideration of the proposal by Head of Paid Service.” The Members putting forward this motion consider that changing the requirement for a Recorded Vote from 5 Members to 1 Member might be considered a minor amendment. In the event, though, that it is argued that this amendment to the constitution requires consideration of the Head of Paid Service it is anticipated that the incumbent of that position will not frustrate the wishes of Members to move towards greater openness and accountability in decision making within Teignbridge District Council, and will allow Members to
Page 1 of 2 by Cllr Adrian Patch 9 Motion on Notice for Full Council debate and vote on this Motion at the meeting of Full Council on 24/02/2020. It is acknowledged that a Constitutional Working Group (CWG) meets occasionally to consider issues that need addressing within the Constitution, such as inconsistencies between various Articles of the Constitution. The issue of Recorded Votes and the desirability of all Planning Decisions being open and accountable was raised with a member of the CWG by the proposer of this Motion back in July 2019. The CWG report presented to Full Council in September 2019 did not address this matter nor was this matter included in a list of matters to be considered by the CWG before the end of 2019/20. The CWG is not addressing this issue in a timely manner and consequently, and especially given the importance of principles of Open Democracy, this issue should be taken forward now, outside the auspices of the CWG, through Full Council, at the earliest opportunity.
THE MOTION Proposed By: Cllr Patch and supported by Cllrs Bradford, Dawes, Mullone and any other Cllrs who confirm their support by email in good time This Council resolves that: (a): this Council is committed to the principles of open and accountable decision making; (b): from this day forward, in meetings of the Full Council or any Committee of the Council, if just one Member present at the meeting (and not necessarily a Member of that Committee for Committee Meetings) requests a Recorded Vote for a particular vote the names for and against the motion or amendment or abstaining from voting will be taken down in writing and entered into the minutes. A demand for a recorded vote will override a demand for a ballot; and (c): until such time as the Articles of the Constitution for Full Council and Committees of the Council are updated to come in line with the above clause (b), clause (b) of this Motion shall take precedence over the requirements for a Recorded Vote as set out in those Articles of the Constitution.
Page 2 of 2 by Cllr Adrian Patch 10 Agenda Item 8
TEIGNBRIDGE DISTRICT COUNCIL
COUNCIL
24 FEBRUARY 2020
Report Title BUDGET AND COUNCIL TAX 2020/21
Purpose of Report To consider a recommendation from the Executive in relation to the Final Financial Plan Proposals 2019/20 to 2022/23. The information set out below is intended to assist the Council in its consideration of the Executive’s budget proposals. The Portfolio Holder for Corporate Resources will present the Executive’s proposals.
Recommendation(s) a That the Teignbridge band D council tax for 2020/21 is increased by 2.94% or £5 to £175.17 per annum
b That general reserves are increased to 12.3% of the net revenue budget for 2020/21 or just under £2.0 million
c That £100,000 of the general reserve balance in any one year continues to be available to the Executive to meet unexpected expenditure in addition to the agreed revenue budget
d All other decisions with regard to budgetary change will be approved by reference to virement rules in the financial instructions
e That the summary revenue budget for 2020/21 is £16.1 million as shown at appendix 4. In particular the revenue budget includes:
Assumptions of a 2% pay deal with higher increases for those on lower grades from 1 April 2020
Revenue contributions to fund capital at £0.6 million in 2020/21 and increasing slightly thereafter
Rural aid reducing to £26,000 from 1 April 2020
A reduction in the councillors community fund grant to £1,000 each
11 f That fees and charges are approved as shown summarised at appendix 6. This includes an increase in parking income of £185,000 from last years base budget g That the capital programme as shown at appendix 7 is approved. In particular this includes:
Increasing jobs and homes through continuing support for housing whilst backing business and encouraging community-led planning
Infrastructure delivery plan investment contributing to improving education, transport links, sports and open spaces
Three major town centre investments will be funded mainly from prudential borrowing. There is also a provision for potential Future High Street fund projects. These would be funded from a combination of government grant and other co-funding, including CIL, grant and prudential borrowing. There are also provisions for employment site investment to be funded through prudential borrowing. Both the Future High Street fund and employment site projects are indicative projects only. They are described as provisions and are not being approved in this budget. Individual business cases will be brought to members for consideration as they are h That the prudential indicators are noted and the prudential limits approved all as set out in appendix 11 i That the updated treasury management strategy statement and authorised lending list as set out in appendix 12 is approved together with the capital strategy in appendix 12a j That each scheme will be considered on its merits as explained at the end of appendix 12 to decide the calculation of minimum revenue provision for capital expenditure in 2020/21
12 k That the treasury management mid year review for 2019/20 as taken to Executive on 28 November and shown in appendix 13 is noted l That the council tax resolutions as recommended in appendix 16 are approved m That the Commercial Strategy in appendix 8 is approved and authority delegated to the Chief Finance Officer to approve the purchase of assets meeting the criteria in section 6 of the Strategy
13 Financial Implications The financial implications are contained throughout the report. The main purpose being to approve the level of council tax for Teignbridge and associated resolutions, the final budget proposals for both revenue and capital budgets and medium term financial plan covering the years 2019/20 to 2022/23, the prudential limits and the Commercial strategy. Martin Flitcroft – Chief Finance Officer Tel: 01626 215246 Email: [email protected] Legal Implications Council is required under the budget and policy framework procedure rules in the constitution (part 2, article 4, section 4.4b) to approve a budget each year. See section 3 of the report. Karen Trickey – Solicitor to the Council Tel: 01626 215119 Email: [email protected] Risk Assessment The main risk is not setting a balanced budget and the impact on reserves. An assessment of future funding are a significant concern with changes anticipated for 2021/22 in relation to business rates retention and new homes bonus an alternative funding stream to replace New Homes Bonus if this is scrapped. A programme of identifying savings or increased income is required to meet the budget gap in 2022/23 and future years thereafter. Martin Flitcroft – Chief Finance Officer Tel: 01626 215246 Email: [email protected] Environmental/ The revenue budget supports the funding of a Climate Climate Change Change Officer and associated budget and capital projects Implications are highlighted which contribute towards our climate change objectives in appendix 7 – capital programme. David Eaton – Environmental Protection Manager Tel: 01626 215064 Email: [email protected] Report Author Martin Flitcroft – Chief Finance Officer Tel: 01626 215246 Email: [email protected] Portfolio Holder Councillor Alan Connett – Portfolio holder for Corporate Resources
14 Appendices App 1 – Budget timetable 2020/21 App 2 – Recommended council tax base 2020/21 App 3 – Council tax calculator 2020/21 App 4 – Summary revenue plan 2019/20 onwards App 5 – Revenue budget detail App 6 – Fees and charges summary App 7 – Capital programme App 8 – Commercial Strategy App 9 - Financial plan sensitivity and risk analysis App 10 – business impact assessment App 11 – recommended prudential borrowing indicators App 12 – treasury management statement, authorized lending list and minimum revenue provision annual statement App 12a – Capital strategy App 13 – treasury management 2019/20 mid year review App 14 – consultation report App 15 – draft minute of the Executive meeting held on 10 February 2020 relating to the final financial plan proposals 2020/21 to 2022/23 Appendix 16 – council tax resolutions 2020/21
Part I or II Part I Background Papers Budget and settlement files The Constitution
1. PURPOSE
1.1 To consider a recommendation from the Executive in relation to the Final Financial Plan Proposals 2020/21 to 2022/23. The information set out below is intended to assist the Council in its consideration of the Executive’s budget proposals. The Portfolio Holder for Corporate Resources will present the Executive’s proposals.
1.2 The final financial plan proposals 2020/21 to 2022/23 as per agenda item 12 Overview and Scrutiny 7 February 2020 (pages 21 to 106) and agenda item 7 Executive 10 February 2020 (pages 11 to 92) have been issued. These include the detailed budget background; a complete budget pack will be issued to all Members once relevant information has been finalised. The proposals include recommended revenue and capital budgets for 2020/21 and planned in outline for 2021/22 and 2022/23.
1.3 To approve the Commercial strategy.
1.4 Appendices 1 to 8 were attached to both the Overview & Scrutiny and Executive agendas. The recommended figures are based on the provisional settlement as the final settlement had not been agreed. The final settlement has now been received and there have been no material changes.
15
1.5 A sensitivity and risk analysis is added at appendix 9 as part of the assessment of the robustness of the budget and adequacy of the reserves. See also 2.4 below. New mainly technical appendices 10 to 16 are being added to the website as they become available. The full council pack together with all appendices will be issued as we have the final recommended precepts from county, fire and police.
2. FINANCIAL PLAN SUMMARY
In considering the recommendation from the Executive the Council may wish to have regard to the following points.
2.1 A financial background for 2020/21 of:
Teignbridge has received a one year government settlement for 2020/21. The government is now suggesting a 75% rates retention scheme in 2021/22. The baseline is likely to be reset. New homes bonus has reduced and may be scrapped in future years. There are no legacy payments on the 2020/21 bonus.
We have benefitted from previous savings plans and restructuring efficiencies are still producing cost reductions. This budget also gains from the Strata partnership and the significant ongoing returns from Market Walk. We are in the fifth year of Business Efficiency Service Transition 2020 review following business challenge in earlier years.
We are in the fifth year of our ten year Strategy 2016-2025. This sets the tone for contributing to civic life and ensuring public services focus on ‘place and person’ while remaining accountable, fair and value for money. At the heart are the Teignbridge Ten overarching projects that guide our activities, where we focus our resources and how we shape services to deliver real progress for the district. The strategy has recently been updated for 2020 to 2030.
The economy continues to be buoyant however uncertainty continues about future demand and the outcome of the ongoing European Union negotiations. Teignbridge has seen some positive variations to income in the current year apart from leisure, general rental income and market income which are down on the original budget.
The assumption of a 2% pay rise from 1 April 2020 and slightly higher increases for those on lower grades.
No council tax freeze grants are available for 2020/21. A referendum would be triggered in 2020/21 if the band D council tax increase is equal to or above 2% AND is above £5
16
2.2 The budget detail in appendix 5 clearly shows the responsible portfolio holder as in recent years to provide transparent accountability.
2.3 The capital programme funding includes community infrastructure levy for local plan projects. Contributions from revenue at just under £0.5 million in the current year and £2.0 million over the next three years are enabled by new homes bonus receipts.
2.4 The chief finance officer is designated under section 151 of the Local Government Act 1972. He endorses the recommendations made in this report and discharges his duty under section 25 of the Local Government Act 2003 to report to the Council on the following matters:
a) the robustness of the estimates made for the purposes of the council tax calculations; and
b) the adequacy of the proposed financial reserves.
The relevant detailed sensitivity and risk analysis is shown at appendix 9.
There are enough reserves in the short to medium term to balance the budget in a context of falling resources. Risks are therefore manageable at present. If action is not taken promptly to balance the medium term position the Council will face challenging decisions that can be managed or avoided by a strategic approach now.
2.5 A business impact assessment has been carried out on the financial plan 2020-23 and this is shown at appendix 10.
2.6 Recommended updated prudential indicators are shown at appendix 11. An updated treasury management statement, incorporating policy statement, clauses to be adopted, investment strategy including authorised lending list and minimum revenue provision statement is at appendix 12. The capital strategy is at appendix 12a. Both the treasury management statement and capital strategy are linked to the proposed revenue and capital budgets and have regard to affordability, prudence and sustainability as required by the latest Chartered Institute of Public Finance and Accountancy Prudential Code 2017 and Treasury Management Code 2017. The commercial strategy and delegation is at appendix 8.
2.6.1 Indicators 1 to 4 of the prudential indicators are calculated from the proposed revenue and capital budgets and have been changed accordingly.
2.6.2 The authorised lending list at appendix 12 takes account of the latest ratings for banks and building societies.
2.7 The budget proposals have been published and considered by Overview & Scrutiny and at a meeting of the Teignbridge Association of Local Councils.
17 The council tax support scheme proposals put forward are to amend to an income banded scheme.
2.8 A budget survey was put on the website and publicised to encourage feedback. In particular it was brought to the attention of businesses, the residents’ panel and Teignbridge relationship groups. Responses are included for member consideration as appendix 14 to the Council budget papers.
2.9 Also included is a recommendation to pass the formal council tax resolutions which are set out in appendix 16. These are technical resolutions which are required to be passed by law by the Council and take into account the requirements of our precepting bodies.
2.10 Final decisions are being made by police, fire and county on 7, 18 and 20 February respectively and members will be advised accordingly.
3. LEGAL / JUSTIFICATION
Council is required under the budget and policy framework procedure rules in the constitution (part 2, article 4, section 4.4b) to approve a budget to Council each year.
18 Budget timetable 2020/21
September October November December January February Government (Chancellor) Autumn Spending Round Statement 4th Provisional local government settlement 20th Executive papers sent out - initial budget proposals 19th Start of formal six weeks consultation period 19th Budget survey emailed to businesses 19th Executive 10am - agree initial financial plan proposals including council tax base 7th Overview & Scrutiny 10am - consider Executive's financial plan 14th Council after O & S - approve council tax support and council tax base 14th Teignbridge Association of Local Parishes meeting 7pm TDC Council Chamber 23rd Final settlement expected 31st Deadline for business rates retention estimate to government, county and fire 31st Police and Crime Panel consider precept and approve 7th
Overview19 & Scrutiny 10am - consider Executive's final financial proposals 7th Executive 10am - agree final financial plan proposals, including budget monitoring 10th Fire Authority Resources 10am budget meeting 13th County Cabinet 10.30am budget meeting 14th
Devon County Council 2.15pm - set county precept and council tax 20th Appendix1 Fire Authority - set fire precept and council tax 21st Council meeting 10am - consider financial proposals and council tax resolution 24th Reserve county budget meeting 10am if required 25th Close council tax accounts and start bills print unless delayed if council tax not set 25th Reserve Council budget meeting if required 27th This page is intentionally left blank Recommended Council Tax Base 2020/21 Appendix 2
Section 1 Council Tax Base adjustment for Council Tax Support (CTS) and estimated growth Estimated Estimated Estimated 19/20 Estimated Estimated 20/21 Collection 20/21 Council Tax Income Net Income Band D Rate Base Number £ £ % £ Full band D at November 2019 54,501.2 1,922.94 104,802,540 less CTS at November 2019 -4,781.7 1,922.94 -9,194,920 Starting point based on November 2019 49,719.5 95,607,620 Anticipated growth at 1% 496.7 1,922.94 955,120
Total (rounded) 50,216.2 1,922.94 96,562,740 99.0% 95,597,040 49,714
Section 2 2020/21 Expected Council Tax (CT) Income at Current Council Tax Levels compared with 2019/20 19/20 Estimated Expected Preceptor Council CT Base income Tax Number £ £ 2020/21 expected income (rounded) Towns and parishes 49,714 69.68 3,464,070 District 49,714 170.17 8,459,830 County 49,714 1,384.29 68,818,590 Fire 49,714 86.52 4,301,260 Police 49,714 212.28 10,553,290
Total (rounded) shows a 1.0% increase in expected income 1,922.94 95,597,040
2019/20 expected income (rounded) Towns and parishes 49,219 69.68 3,429,596 District 49,219 170.17 8,375,597 County 49,219 1,384.29 68,133,370 Fire 49,219 86.52 4,258,428 Police 49,219 212.28 10,448,209
Total (rounded) 1,922.94 94,645,200
21 This page is intentionally left blank Council tax calculator 2020/21 Appendix 3
To show the extra Council Tax in 2020/21 that would be collected for varying increases by percentage and value.
Teignbridge Band D Council Tax 2019/20 (excluding parish precepts) £170.17 Approved Council Tax Base 2020/21 (at 99% collection rate) [a] 49,714
[b] Varying increases in Total Band Increase in Total Council Tax for D Council Council Council 2020/21 Tax Tax income Tax income 2020/21 for 2020/21 2020/21
Per Per Year Week Per Year Per Year Per Year % £ £ £ £ £ 0.00 0.00 0.00 170.17 0 8,459,830 No council tax freeze grant 0 Total income 8,459,830 0.34 0.57 0.01 170.74 28,340 8,488,170 0.59 1.00 0.02 171.17 49,720 8,509,550 1.00 1.70 0.03 171.87 84,520 8,544,350 1.18 2.00 0.04 172.17 99,430 8,559,260 1.57 2.68 0.05 172.85 133,230 8,593,060 1.76 3.00 0.06 173.17 149,140 8,608,970 1.99 3.39 0.07 173.56 168,530 8,628,360 2.35 4.00 0.08 174.17 198,860 8,658,690 2.94 5.00 0.10 175.17 248,570 8,708,400
Note:
[a] Council Tax Base of 49,714 for 2020/21 approved by Council on 14 January 2020
[b] Total Council Tax income is calculated by multiplying the Band D Council Tax by the recommended Council Tax Base of 49,714 [c] No council tax freeze grant. Referendum limit proposed by government as higher of 2% or above £5 for Band D.
23 This page is intentionally left blank Revenue Budget Summary Appendix 4
Revenue Budget 2019-20 2019-20 2020-21 2021-22 2022-23 Budget Latest Forecast Forecast Forecast EXPENDITURE £ £ £ £ £ 1 Employees 20,290,580 21,653,450 21,090,490 21,574,680 21,961,650 2 Property 4,525,970 4,807,410 4,655,960 4,703,580 4,792,390 3 Services & supplies 5,376,340 6,804,980 5,300,780 5,276,500 5,315,950 4 Grant payments 28,864,450 26,592,450 27,038,450 26,080,490 25,138,630 5 Transport 816,080 807,030 801,970 838,370 838,960 6 Leasing & capital charges 1,453,840 1,426,700 1,517,130 1,820,910 2,205,600 7 Contributions to capital 204,820 467,070 567,010 732,010 688,510
8 Total expenditure 61,532,080 62,559,090 60,971,790 61,026,540 60,941,690
INCOME 9 Sales -840,430 -761,480 -764,600 -779,890 -795,490 10 Fees & charges -9,987,330 -10,058,320 -10,297,790 -10,606,720 -10,924,920 11 Grants - income -29,023,730 -27,109,780 -27,176,480 -26,176,480 -25,176,480 12 Property income -3,004,650 -3,042,690 -3,282,330 -3,524,110 -4,258,330 13 Other income & recharges -3,017,600 -3,743,600 -2,961,550 -3,045,780 -3,106,700 14 Transfer from (-) / to earmarked reserves 324,180 -1,725,060 -354,890 -2,135,890 -79,500
15 Total income -45,549,560 -46,440,930 -44,837,640 -46,268,870 -44,341,420
16 Total net service cost 15,982,520 16,118,160 16,134,150 14,757,670 16,600,270 Funding 17 Council tax -8,375,600 -8,375,600 -8,708,400 -9,046,520 -9,390,530 18 Council tax/community charge surplus -126,150 -126,150 -62,360 0 0 19 Revenue support grant 0 0 0 0 0 20 Rates baseline funding -3,339,390 -3,339,390 -3,393,800 -3,717,000 -3,792,000 21 Estimated rates retention and pooling gain -1,489,410 -1,614,610 -1,677,200 -50,000 -100,000 22 New homes bonus/alternative housing funding -2,604,640 -2,614,430 -2,243,880 -1,943,880 -1,843,880 23 Other grants -48,200 -48,200 -48,200 0 0 24 Budget gap (-) to be found 0 0 0 0 -1,473,860
25 Total funding -15,983,390 -16,118,380 -16,133,840 -14,757,400 -16,600,270
26 -Surplus/shortfall -870 -220 310 270 0
27 General reserves at end of year 1,945,971 1,980,509 1,980,199 1,979,929 1,979,929 28 General reserves as % of net revenue budget 12.2% 12.3% 12.3% 13.4% 13.1%
25
This page is intentionally left blank Revenue Budget Detail Appendix 5
All Services Managing Director/Head Of Service 2018-19 2019-20 2020-21 Actual Outturn Budget Corporate Services £ £ £ A Pujol Business Improvement & Development 466,601 556,460 572,850 A Pujol Communications 177,153 157,050 206,580 M Flitcroft Democratic Services 799,352 739,370 713,750 P Shears Electoral Services 176,984 341,500 219,710 M Flitcroft Finance 565,827 612,290 646,270 P Shears Human Resources 491,582 371,560 444,060 M Flitcroft Internal Audit & Information Governance 179,955 201,190 201,920 M Flitcroft Legal 364,974 331,240 376,490 M Flitcroft Procurement 46,930 45,350 38,000 P Shears Strategic Leadership Team 550,742 429,410 462,090 3,820,099 3,785,420 3,881,720 Strategic Place P Shears Building Control (34,211) 6,680 36,390 A Pujol Customer Services 361,037 559,350 692,710 P Shears Development Management 545,352 378,430 656,790 T Watson/N Blaney Economy & Assets (106,649) (219,590) (360,280) A Pujol Housing 1,158,421 1,277,070 1,534,910 T Watson/N Blaney Parking (2,519,364) (2,508,700) (2,721,480) A Pujol Revenues & Benefits 528,454 658,820 566,380 P Shears Spatial Planning 707,658 641,340 574,070 640,697 793,400 979,490
Environment, Health & Wellbeing A Pujol Community Safety 91,105 101,270 101,550 L Montgomery Environmental Health 922,602 973,910 1,117,720 L Montgomery Green Spaces & Active Leisure 1,121,213 1,184,940 1,229,160 L Montgomery Leisure 358,845 499,240 502,620 L Montgomery Licensing (46,017) (56,380) (44,540) L Montgomery Resorts 95,788 101,060 89,980 L Montgomery Waste, Recycling & Cleansing 4,915,471 5,453,610 5,830,740 7,459,007 8,257,650 8,827,230
Total all services 11,919,804 12,836,470 13,688,440
Financing Items 2,331,931 2,814,620 1,878,700
Totals per actual/budget papers 14,251,735 15,651,090 15,567,140
Contribution to capital 2,535,211 467,070 567,010
Totals per actual/budget papers 16,786,946 16,118,160 16,134,150
Notes:
There is a glossary of terms at the end of this appendix
27 Revenue Budget Detail Appendix 5
PH: Gary Taylor Manager: Andrew Carpenter 2018-19 2019-20 2020-21 Activity Area: Building Control Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
1 Employees 22.0 910,666 21.5 879,470 20.5 928,590 2 Property 42,273 29,400 29,820 3 Services & Supplies 121,323 128,970 119,090 Grant Payments - - - 4 Transport 65,257 69,350 65,330 6 Leasing & capital charges - - -
1,139,519 1,107,190 1,142,830 INCOME
7 Sales - - - Fees & Charges - 991,874 - 880,000 - 897,000 Property Income - - - Grants - income - - - 8 Other income & recharges - 181,856 - 185,050 - 209,440 Transfers from earmarked reserves - - 35,460 -
(1,173,730) (1,100,510) (1,106,440)
Service Cost (34,211) 6,680 36,390
Service cost - £'s per head of population -0.26 0.05 0.27
PH: Martin Wrigley Manager: Kay O'Flaherty 2018-19 2019-20 2020-21 Activity Area: Business Improvement & Development Team Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
1 Employees 7.5 252,317 7.5 271,410 7.5 272,870 2 Property 17,372 12,680 13,110 3 Services & Supplies 56,708 80,900 109,450 5 Grant Payments 255,708 243,480 177,470 6 Transport 744 620 520 Leasing & capital charges - - -
582,849 609,090 573,420 INCOME
8 Sales - - - Fees & Charges - - - Property Income - 567 - 570 - 570 Grants - income - 103,976 - - Other income & recharges - 11,705 - 50 - Transfers from earmarked reserves - - 52,010 -
(116,248) (52,630) (570)
Service Cost 466,601 556,460 572,850
Service cost - £'s per head of population 3.55 4.19 4.27
28 Revenue Budget Detail Appendix 5
PH: Gordon Hook Manager: Amanda Pujol 2018-19 2019-20 2020-21 Activity Area: Communications Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 4.0 122,192 4.0 105,160 4.0 153,150 Property 3,660 3,150 3,440 Services & Supplies 50,884 48,530 49,180 Grant Payments - - - Transport 416 230 830 Leasing & capital charges - - -
177,153 157,070 206,600 INCOME
Sales - - - Fees & Charges - - - Property Income - - - Grants - income - - - Other income & recharges - - 20 - 20 Transfers from earmarked reserves - - -
0 (20) (20)
Service Cost 177,153 157,050 206,580
Service cost - £'s per head of population 1.35 1.18 1.54
PH: Martin Wrigley Manager: Rebecca Hewitt 2018-19 2019-20 2020-21 Activity Area: Community Safety Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 2.0 79,341 2.0 88,110 2.0 90,180 Property 1,909 3,740 1,820 Services & Supplies 8,973 7,100 7,450 Grant Payments 29,344 42,970 - Transport 2,785 2,320 2,100 Leasing & capital charges - - -
122,353 144,240 101,550 INCOME
Sales - - - Fees & Charges - - - Property Income - - - Grants - income - 1,704 - - Other income & recharges - 29,544 - 42,970 - Transfers from earmarked reserves - - -
(31,248) (42,970) 0
Service Cost 91,105 101,270 101,550
Service cost - £'s per head of population 0.69 0.76 0.76
29 Revenue Budget Detail Appendix 5
PH: Martin Wrigley Manager: Tracey Hooper 2018-19 2019-20 2020-21 Activity Area: Customer Services Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 13.0 264,906 12.5 461,550 22.0 565,600 Property 19,375 11,650 9,590 Services & Supplies 76,757 127,160 117,520 Grant Payments - - - Transport - - - Leasing & capital charges - - -
361,037 600,360 692,710 INCOME
Sales - - - Fees & Charges - - - Property Income - - - Grants - income - - - Other income & recharges - - 1,460 - Transfers from earmarked reserves - - 39,550 -
0 (41,010) 0
Service Cost 361,037 559,350 692,710
Service cost - £'s per head of population 2.75 4.21 5.16
PH: Gordon Hook Manager: Sarah Selway 2018-19 2019-20 2020-21 Activity Area: Democratic Services Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 4.0 555,306 3.5 542,700 3.5 553,700 Property 12,804 6,750 5,360 Services & Supplies 110,862 152,050 106,070 Grant Payments 146,547 70,500 47,000 Transport 1,447 160 1,620 Leasing & capital charges 377 - -
827,344 772,160 713,750 INCOME
Sales - - - Fees & Charges - 10 - - Property Income - - - Grants - income - 27,508 - - Other income & recharges - 474 - 300 - Transfers from earmarked reserves - - 32,490 -
(27,992) (32,790) 0
Service Cost 799,352 739,370 713,750
Service cost - £'s per head of population 6.08 5.57 5.32
30 Revenue Budget Detail Appendix 5
PH: Gary Taylor Manager: Ros Eastman 2018-19 2019-20 2020-21 Activity Area: Development Management Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 33.0 1,190,328 33.0 1,299,090 33.0 1,307,070 Property 77,735 69,480 60,260 Services & Supplies 334,316 317,150 371,520 Grant Payments - - - Transport 26,293 28,400 27,550 Leasing & capital charges - - -
1,628,673 1,714,120 1,766,400 INCOME
Sales - 15 - - Fees & Charges - 979,642 - 1,237,580 - 1,098,420 Property Income - - - Grants - income - - - Other income & recharges - 103,664 - 91,690 - 11,190 Transfers from earmarked reserves - - 6,420 -
(1,083,321) (1,335,690) (1,109,610)
Service Cost 545,352 378,430 656,790
Service cost - £'s per head of population 4.15 2.85 4.89
PH: Nina Jeffries/Alan Connett Manager: Tony Watson/Neil Blaney 2018-19 2019-20 2020-21 Activity Area: Economy & Assets Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 42.0 1,203,023 42.0 1,245,370 42.0 1,387,750 Property 600,665 559,660 573,420 Services & Supplies 569,816 616,100 432,960 Grant Payments 4,380 4,230 2,230 Transport 10,223 12,370 12,760 Leasing & capital charges - - -
2,388,107 2,437,730 2,409,120 INCOME
Sales - 16,297 - 22,920 - 20,580 Fees & Charges - 216,476 - 204,840 - 204,880 Property Income - 1,979,647 - 2,075,960 - 2,371,200 Grants - income - - - Other income & recharges - 282,337 - 304,340 - 172,740 Transfers from earmarked reserves - - 49,260 -
(2,494,757) (2,657,320) (2,769,400)
Service Cost (106,649) (219,590) (360,280)
Service cost - £'s per head of population -0.81 -1.65 -2.68
31 Revenue Budget Detail Appendix 5
PH: Gordon Hook Manager: Cathy Ruelens 2018-19 2019-20 2020-21 Activity Area: Electoral Services Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 2.0 97,040 3.0 97,350 3.0 119,630 Property 8,327 55,600 7,340 Services & Supplies 114,339 472,460 94,710 Grant Payments - - - Transport 578 890 290 Leasing & capital charges - - -
220,284 626,300 221,970 INCOME
Sales - - - Fees & Charges - 1,984 - 2,160 - 2,160 Property Income - - - Grants - income - 16,731 - 18,400 - Other income & recharges - 24,586 - 264,240 - 100 Transfers from earmarked reserves - - -
(43,300) (284,800) (2,260)
Service Cost 176,984 341,500 219,710
Service cost - £'s per head of population 1.35 2.57 1.64
PH: Alistair Dewhirst Manager: David Eaton & Paul Nicholls 2018-19 2019-20 2020-21 Activity Area: Environmental Health Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 23.0 721,583 22.5 770,110 22.5 854,510 Property 43,442 47,740 57,570 Services & Supplies 195,510 210,850 229,560 Grant Payments - - - Transport 31,708 32,410 32,190 Leasing & capital charges 6,588 6,330 6,330
998,831 1,067,440 1,180,160 INCOME
Sales - 16,456 - 6,000 - 6,000 Fees & Charges - 47,342 - 51,540 - 45,800 Property Income - - - Grants - income - 820 - - Other income & recharges - 11,611 - 14,750 - 10,640 Transfers from earmarked reserves - - 21,240 -
(76,228) (93,530) (62,440)
Service Cost 922,602 973,910 1,117,720
Service cost - £'s per head of population 7.02 7.33 8.33
32 Revenue Budget Detail Appendix 5
PH: Alan Connett Manager: Martin Flitcroft 2018-19 2019-20 2020-21 Activity Area: Finance Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 14.0 509,452 14.0 577,680 15.0 606,180 Property 22,519 19,990 20,440 Services & Supplies 39,440 46,940 37,370 Grant Payments - - - Transport 1,024 1,140 870 Leasing & capital charges - - -
572,435 645,750 664,860 INCOME
Sales - - - Fees & Charges - - - Property Income - - - Grants - income - - - Other income & recharges - 6,608 - 20,010 - 18,590 Transfers from earmarked reserves - - 13,450 -
(6,608) (33,460) (18,590)
Service Cost 565,827 612,290 646,270
Service cost - £'s per head of population 4.30 4.61 4.81
PH: Andrew MacGregor Manager: Lorraine Montgomery 2018-19 2019-20 2020-21 Activity Area: Green Spaces & Active Leisure Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 14.0 407,504 13.5 435,810 13.5 478,510 Property 973,939 1,015,510 936,480 Services & Supplies 388,111 246,020 242,700 Grant Payments 6,051 4,510 4,750 Transport 11,927 16,080 12,280 Leasing & capital charges - - -
1,787,531 1,717,930 1,674,720 INCOME
Sales - 3,963 - 5,020 - 5,020 Fees & Charges - 242,167 - 253,720 - 260,360 Property Income - 163,336 - 166,090 - 157,850 Grants - income - 51,868 - 33,470 - Other income & recharges - 204,984 - 61,720 - 22,330 Transfers from earmarked reserves - - 12,970 -
(666,318) (532,990) (445,560)
Service Cost 1,121,213 1,184,940 1,229,160
Service cost - £'s per head of population 8.53 8.92 9.16
33 Revenue Budget Detail Appendix 5
PH: Martin Wrigley Manager: Amanda Pujol 2018-19 2019-20 2020-21 Activity Area: Housing Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 31.0 1,299,647 30.5 1,638,130 33.5 1,292,230 Property 298,939 325,570 302,560 Services & Supplies 581,048 1,160,340 568,360 Grant Payments 483,870 497,150 412,000 Transport 24,141 44,410 22,620 Leasing & capital charges - - -
2,687,645 3,665,600 2,597,770 INCOME
Sales - 1,825 - 1,200 - 1,200 Fees & Charges - 10,315 - 5,280 - 3,220 Property Income - 573,987 - 553,310 - 524,570 Grants - income - 630,301 - 918,820 - 457,020 Other income & recharges - 312,796 - 214,900 - 76,850 Transfers from earmarked reserves - - 695,020 -
(1,529,224) (2,388,530) (1,062,860)
Service Cost 1,158,421 1,277,070 1,534,910
Service cost - £'s per head of population 8.81 9.61 11.43
PH: Gordon Hook Manager: Tim Slater 2018-19 2019-20 2020-21 Activity Area: Human Resources Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 6.5 351,817 7.0 237,930 7.0 312,510 Property 22,620 21,400 15,720 Services & Supplies 120,693 119,740 115,310 Grant Payments - - - Transport 902 880 530 Leasing & capital charges - - -
496,032 379,950 444,070 INCOME
Sales - - - Fees & Charges - - - Property Income - - - Grants - income - - - Other income & recharges - 4,450 - 6,470 - 10 Transfers from earmarked reserves - - 1,920 -
(4,450) (8,390) (10)
Service Cost 491,582 371,560 444,060
Service cost - £'s per head of population 3.74 2.80 3.31
34 Revenue Budget Detail Appendix 5
PH: Alan Connett Manager: Sue Heath 2018-19 2019-20 2020-21 Activity Area: Internal Audit & Information Governance Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 2.5 160,288 3.5 180,340 3.5 181,040 Property 7,120 7,910 8,000 Services & Supplies 12,421 12,910 12,700 Grant Payments - - - Transport 126 30 180 Leasing & capital charges - - -
179,956 201,190 201,920 INCOME
Sales - - - Fees & Charges - - - Property Income - - - Grants - income - - - Other income & recharges - 1 - - Transfers from earmarked reserves - - -
(1) 0 0
Service Cost 179,955 201,190 201,920
Service cost - £'s per head of population 1.37 1.51 1.50
PH: Alan Connett Manager: Karen Trickey 2018-19 2019-20 2020-21 Activity Area: Legal Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 6.0 347,696 6.0 319,840 6.0 323,580 Property 14,364 15,960 10,630 Services & Supplies 34,013 35,280 63,870 Grant Payments - - - Transport 103 440 440 Leasing & capital charges - - -
396,175 371,520 398,520 INCOME
Sales - - - Fees & Charges - 26,894 - 22,180 - 20,780 Property Income - - - Grants - income - - - Other income & recharges - 4,308 - 2,100 - 1,250 Transfers from earmarked reserves - - 16,000 -
(31,202) (40,280) (22,030)
Service Cost 364,974 331,240 376,490
Service cost - £'s per head of population 2.78 2.49 2.80
35 Revenue Budget Detail Appendix 5
PH: Andrew MacGregor Manager: James Teed 2018-19 2019-20 2020-21 Activity Area: Leisure Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 69.5 1,639,925 69.5 1,768,590 74.0 1,908,710 Property 886,519 904,370 896,270 Services & Supplies 309,666 325,660 331,540 Grant Payments 17,500 15,000 15,000 Transport 5,292 4,800 4,510 Leasing & capital charges 1,914 2,010 2,010
2,860,816 3,020,430 3,158,040 INCOME
Sales - 17,560 - 14,130 - 10,740 Fees & Charges - 2,312,465 - 2,329,180 - 2,468,050 Property Income - 92 - - Grants - income - - - Other income & recharges - 171,855 - 177,010 - 176,630 Transfers from earmarked reserves - - 870 -
(2,501,971) (2,521,190) (2,655,420)
Service Cost 358,845 499,240 502,620
Service cost - £'s per head of population 2.73 3.76 3.74
PH: Alistair Dewhirst Manager: Andrea Furness 2018-19 2019-20 2020-21 Activity Area: Licensing Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 3.0 107,358 3.0 101,400 3.0 112,540 Property 4,687 6,390 6,350 Services & Supplies 48,332 48,760 50,020 Grant Payments - - - Transport 237 360 270 Leasing & capital charges - - -
160,615 156,910 169,180 INCOME
Sales - - - Fees & Charges - 206,632 - 213,290 - 213,720 Property Income - - - Grants - income - - - Other income & recharges - - - Transfers from earmarked reserves - - -
(206,632) (213,290) (213,720)
Service Cost (46,017) (56,380) (44,540)
Service cost - £'s per head of population -0.35 -0.42 -0.33
36 Revenue Budget Detail Appendix 5
PH: Nina Jeffries Manager: Tony Watson/Neil Blaney 2018-19 2019-20 2020-21 Activity Area: Parking Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 9.0 235,468 9.0 240,210 9.0 252,370 Property 650,848 700,800 702,280 Services & Supplies 238,735 261,790 258,890 Grant Payments 1,538 - - Transport 2,337 3,650 3,650 Leasing & capital charges 9,164 9,160 9,160
1,138,089 1,215,610 1,226,350 INCOME
Sales - - - Fees & Charges - 3,544,531 - 3,644,250 - 3,881,220 Property Income - 40,329 - 27,010 - 21,210 Grants - income - - - Other income & recharges - 72,593 - 45,400 - 45,400 Transfers from earmarked reserves - - 7,650 -
(3,657,453) (3,724,310) (3,947,830)
Service Cost (2,519,364) (2,508,700) (2,721,480)
Service cost - £'s per head of population -19.17 -18.89 -20.27
PH: Alan Connett Manager: Rosanna Wilson 2018-19 2019-20 2020-21 Activity Area: Procurement & Commissioning Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 1.0 82,531 1.0 64,080 1.0 54,520 Property - 1,360 3,670 Services & Supplies 3,693 4,390 4,000 Grant Payments - - - Transport 71 340 60 Leasing & capital charges - - -
86,296 70,170 62,250 INCOME
Sales - - - Fees & Charges - - - Property Income - - - Grants - income - - - Other income & recharges - 39,366 - 24,820 - 24,250 Transfers from earmarked reserves - - -
(39,366) (24,820) (24,250)
Service Cost 46,930 45,350 38,000
Service cost - £'s per head of population 0.36 0.34 0.28
37 Revenue Budget Detail Appendix 5
PH: Andrew MacGregor Manager: Sarah Holgate 2018-19 2019-20 2020-21 Activity Area: Resorts Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 8.0 193,834 8.5 200,860 9.0 211,260 Property 120,014 226,940 49,870 Services & Supplies 148,621 163,400 71,020 Grant Payments - - - Transport 2,949 3,880 4,130 Leasing & capital charges - - -
465,418 595,080 336,280 INCOME
Sales 80 - 280 - Fees & Charges - 20,839 - 18,580 - 19,090 Property Income - 204,758 - 206,910 - 223,890 Grants - income - - - Other income & recharges - 144,114 - 6,580 - 3,320 Transfers from earmarked reserves - - 261,670 -
(369,630) (494,020) (246,300)
Service Cost 95,788 101,060 89,980
Service cost - £'s per head of population 0.73 0.76 0.67
PH: Alan Connett Manager: Tracey Hooper 2018-19 2019-20 2020-21 Activity Area: Revenues & Benefits Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 52.0 1,149,153 49.0 1,085,980 39.0 989,190 Property 93,299 65,590 92,390 Services & Supplies 610,162 803,260 680,770 Grant Payments 30,981,897 25,700,000 26,380,000 Transport 2,729 6,570 2,020 Leasing & capital charges - - -
32,837,240 27,661,400 28,144,370 INCOME
Sales - - - Fees & Charges - 186,749 - 199,270 - 199,000 Property Income - - - Grants - income - 31,489,024 - 26,130,240 - 26,711,360 Other income & recharges - 633,013 - 620,500 - 667,630 Transfers from earmarked reserves - - 52,570 -
(32,308,786) (27,002,580) (27,577,990)
Service Cost 528,454 658,820 566,380
Service cost - £'s per head of population 4.02 4.96 4.22
38 Revenue Budget Detail Appendix 5
PH: Gary Taylor Manager: Simon Thornley 2018-19 2019-20 2020-21 Activity Area: Spatial Planning Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 10.0 522,467 9.5 555,790 10.0 459,210 Property 25,818 8,730 8,990 Services & Supplies 261,722 244,480 111,140 Grant Payments 4,975 7,780 - Transport 6,313 7,220 4,780 Leasing & capital charges - - -
821,295 824,000 584,120 INCOME
Sales - - - Fees & Charges - 33 - 2,640 - 10,050 Property Income - - - Grants - income - 23,687 - - Other income & recharges - 89,916 - 7,200 - Transfers from earmarked reserves - - 172,820 -
(113,637) (182,660) (10,050)
Service Cost 707,658 641,340 574,070
Service cost - £'s per head of population 5.38 4.83 4.28
PH: Gordon Hook Manager: Phil Shears 2018-19 2019-20 2020-21 Activity Area: Strategic Leadership Team Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 6.0 500,981 5.0 396,900 5.0 428,130 Property 26,651 12,940 15,140 Services & Supplies 20,293 16,480 14,780 Grant Payments - - - Transport 2,917 3,370 4,320 Leasing & capital charges - - -
550,842 429,690 462,370 INCOME
Sales - - - Fees & Charges - - - Property Income - - - Grants - income - - - Other income & recharges - 100 - 280 - 280 Transfers from earmarked reserves - - -
(100) (280) (280)
Service Cost 550,742 429,410 462,090
Service cost - £'s per head of population 4.19 3.23 3.44
39 Revenue Budget Detail Appendix 5
PH: Alistair Dewhirst Manager: Chris Braines 2018-19 2019-20 2020-21 Activity Area: Waste, Recycling & Cleansing Actual Outturn Budget FTE £ FTE £ FTE £ EXPENDITURE
Employees 170.0 4,523,396 177.0 5,196,720 179.0 5,584,650 Property 573,555 618,080 559,980 Services & Supplies 1,134,329 1,031,370 957,350 Grant Payments 20,266 6,830 - Transport 537,246 566,210 593,710 Leasing & capital charges 1,270,079 1,284,030 1,327,340
8,058,869 8,703,240 9,023,030 INCOME
Sales - 803,626 - 711,930 - 721,060 Fees & Charges - 887,147 - 993,810 - 974,040 Property Income - 11,238 - 12,900 - 16,790 Grants - income - 32,231 - 750 - Other income & recharges - 1,409,156 - 1,524,160 - 1,480,400 Transfers from earmarked reserves - - 6,080 -
(3,143,398) (3,249,630) (3,192,290)
Service Cost 4,915,471 5,453,610 5,830,740
Service cost - £'s per head of population 37.40 41.05 43.44
40 Revenue Budget Detail Appendix 5
Glossary
Column Headings
2018-19 Actual – the actual cost of the service for last year
2019-20 Outturn – the likely cost of the service for this year
2020-21 Budget – the budget proposed for the service for next year
FTE – the budgeted full time equivalent average staff numbers for the year The numbers ignore spend on agency staff and Members allowances
Expenditure
Employees – includes staff related costs such as salaries, training, recruitment and employee insurance
Property – all property related costs including rent, rates, utilities, repairs, maintenance, cleaning and property insurance (including central offices and depot costs)
Services and Supplies – covers the purchase of goods and services including items such as printing, stationery, contractors, postage, telephones, specialist fees & Strata
Grant Payments – specific payments for grants and rent subsidies including rent allowances, council tax benefit, councillors’ community fund and rural aid
Transport – includes fuel, vehicle repairs and maintenance, travel and subsistence costs
Leasing - includes cost of vehicles and equipment subject to lease and/or rental agreement
Income
Sales – income from the sale of items including recycled materials
Fees & Charges – income generated from services where we charge a fee, including car parks, land charges, leisure, planning and building regulation
Grant Income – this identifies grants mainly toward specific costs such as rent allowances
Property Income – income related to property such as rent, rights and lettings
Other Income – income not covered by any of the above including contributions to costs
41 This page is intentionally left blank Final Proposed Fees and Charges Appendix 6 Income 2020/21 Actual Probable Proposed Dept total 2018/19 2019/20 2020/21 2020/21 Service £ £ £ £ Department
Building Control - 991,874 - 880,000 - 897,000 - 897,000 Building Control
Misc - 10 - - - Democratic Services
Land Charges - 201,337 - 184,850 - 200,000 Planning - 771,051 - 1,045,410 - 887,100 Planning Admin - 721 - 100 - 4,100 Street Naming - 6,532 - 7,220 - 7,220 - 1,098,420 Development Management
Livestock Market - 12,974 - 8,390 - 8,390 Old Forde house - 16,256 - 16,000 - 16,040 - 187,245 - 180,450 - 180,450 - 204,880 Economy & Assets
Electoral Registration - 1,984 - 2,160 - 2,160 - 2,160 Electoral Services
Dog Control - 1,267 - 3,250 - 2,790 Health & Food Safety - 6,213 - 5,830 - 8,480 Health Licence Fees - 33,053 - 35,930 - 27,640 Litter Clearance - 4,873 - 4,860 - 4,700 Nuisance Parking 25 - 50 - 50 Private Water Supply Sampling - 1,961 - 1,620 - 2,140 - 45,800 Environmental Health
Amenity & Conservation Sites - 3,282 - 3,580 - 1,840 Cemetery Fees - 156,050 - 174,220 - 181,950 Shaldon Golf - 68,058 - 63,120 - 63,120 Sports Pitches - 14,777 - 12,800 - 13,450 - 260,360 Green Spaces & Active Leisure
Housing - 10,315 - 5,280 - 3,220 - 3,220 Housing
Legal Fees - 26,894 - 22,180 - 20,780 - 20,780 Legal
Broadmeadow Sports Centre - 91,021 - 87,920 - 98,680 Dawlish Leisure Centre - 222,873 - 201,770 - 224,660 Leisure Childcare - 92,003 - 104,000 - 109,330 Leisure Memberships - 1,399,823 - 1,454,770 - 1,521,520 Newton Abbot Leisure Centre - 465,736 - 441,230 - 472,730 Outdoor Pools - 41,010 - 39,490 - 41,130 - 2,468,050 Leisure
Gambling Act 2005 - 25,763 - 24,470 - 25,560 Hackney Carriage - 52,416 - 60,330 - 60,050 Licensing Act 2003 - 128,453 - 128,490 - 128,110 - 213,720 Licensing
Car Parks - 3,544,529 - 3,644,250 - 3,881,220 - 3,881,220 Parking
Beach huts - 10,905 - 8,260 - 8,260 Boat Storage - 9,876 - 10,260 - 10,770 Leisure Events - 58 - 60 - 60 Polly Steps - - - - 19,090 Resorts
Council Tax - 186,749 - 199,270 - 199,000 - 199,000 Revenue & Benefits
Local Development Framework - 33 - 2,640 - 10,050 - 10,050
Abandoned Vehicles - 2,687 - 160 - 760 Commercial Waste / Household Refuse - 871,628 - 984,610 - 964,240 Composting - 2,000 - 920 - 920 Toilets for Disabled - 123 - 210 - 210 Vehicle Workshop - 10,709 - 7,910 - 7,910 - 974,040 Waste, Recycling & Cleansing
Grand Totals - 9,675,096 - 10,058,320 - 10,297,790 - 10,297,790
43 This page is intentionally left blank TEIGNBRIDGE DISTRICT COUNCIL Appendix 7 CAPITAL PROGRAMME 2019-20 TO 2022-23
27,849 13,863 32,632 22,756 16,373
Code Asset/Service Area Description ORIGINAL LATEST LATEST LATEST LATEST /bid no.
BUDGET BUDGET BUDGET BUDGET BUDGET
2019-20 2019-20 2020-21 2021-22 2022-23 £'000 £'000 £'000 £'000 £'000 (Inc Fees) (Inc Fees) (Inc Fees) (Inc Fees)
KG1 Bakers Park Bakers Park development (S106) 489 300 402 8. Out and about and active
KP1 Boat Cove, Dawlish Feasibility (CR) 10 4. Great places to live & work
Contribution to Superfast Broadband subject to procurement arrangements (RS) KL1 Broadband (2022/23) subject to satisfactory assurances 250 - 250 6. Investing in prosperity of funds being spent within Teignbridge area.
Provision for Broadmeadow Sports Centre Bid 28 Broadmeadow Sports Centre 101 - 8. Out and about and active Asbestos (RS) (Included in Bid 4)
Provision for Broadmeadow Sports Centre Bid 31 Broadmeadow Sports Centre CC central boiler installation (CR) (Included in 45 - 8. Out and about and active Bid 4)
Provision for Broadmeadow Sports Centre Bid 4 Broadmeadow Sports Centre 1,545 - 1,765 8. Out and about and active Improvement Plan (S106/BC). *
Broadmeadow Sports Centre Roof (CR) K1 Broadmeadow Sports Centre 68 - 8. Out and about and active (Included in Bid 4)
KM2 Car parks Multi-storey lift (RS) C 48 3. Going to town
KM3 Car parks Upgrade of card payment facilities (RS) C 12 3. Going to town
Bid 245 Churchyards Provision for Churchyards (RS) * 45 12 4. Great places to live & work
KD4 Churchyards Closed Churchyards (RS) 46 4. Great places to live & work
KY5 Climate Change CC Provision for carbon reduction projects (RS) 100 132 10. Zero heroes
Provision for Forde House replacement Bid 229e Climate Change CC 340 - 340 10. Zero heroes heating system (CR) *
Tunnicliffe Building energy efficiency KY2 Climate Change CC 20 10. Zero heroes measures (RS) C
SW Regional Coastal Monitoring KR3 Coastal Monitoring 798 1,391 724 9. Strong communities Programme. (GG,EC)
Coastal asset review: project management KR5 Coastal Monitoring 126 9. Strong communities support (GG)
KR6 Coastal Monitoring Coastal asset review (GG) 259 9. Strong communities
KP4 Colley Brook, Kingsteignton Gabion Basket Replacement (S106) C 35 9. Strong communities
KW3 Cricketfield UTC Cricketfield Footpath (CR) 45 - 3. Going to town
KG3 Cycle paths CC Wray Valley Trail (CIL) C 100 7. Moving up a gear
KG8 Cycle paths CC East-West Cycle Route (CIL) C 180 7. Moving up a gear
KG8 Cycle paths CC Teign Estuary Trail (CIL) 100 100 7. Moving up a gear
Bid 211 Cycle paths CC Provision for Other cycling (CIL) * 280 280 170 7. Moving up a gear
Bid 211 Cycle paths CC Dawlish/Teignmouth Cycle Schemes (CIL) * 180 65 340 7. Moving up a gear
Bid 211 Cycle paths CC Heart of Teignbridge Cycle Provision (CIL) * 180 90 7. Moving up a gear
KX7 Dawlish Dawlish link road and bridge (GG) 427 4,473 7. Moving up a gear
Provision for Dawlish Leisure Centre Bid 2 Dawlish Leisure Centre - 1,321 8. Out and about and active Improvement Plan (S106,BC). *
Provision for Dawlish Leisure Centre Bid 7 Dawlish Leisure Centre 40 - 8. Out and about and active Drainage Overhall & Improve (CR)
Dawlish Warren Visitor Provision for Dawlish Warren Visitor Centre Bid 78 - - 4. Great places to live & work Centre (HRA/S106/CIL,EA,HLF,EC)
45 ] TEIGNBRIDGE DISTRICT COUNCIL CAPITAL PROGRAMME 2019-20 TO 2022-23 Appendix 7
27,849 13,863 32,632 22,756 16,373
Code Asset/Service Area Description ORIGINAL LATEST LATEST LATEST LATEST /bid no.
BUDGET BUDGET BUDGET BUDGET BUDGET
2019-20 2019-20 2020-21 2021-22 2022-23 £'000 £'000 £'000 £'000 £'000 (Inc Fees) (Inc Fees) (Inc Fees) (Inc Fees)
KB8 Dawlish Warren Dawlish Warren Boardwalk (S106) C 65 4. Great places to live & work
KB6 Dawlish Warren Dawlish Warren Boardwalk (S106) - 107 4. Great places to live & work
KB4 Dawlish Warren Fencing (EC) - 4. Great places to live & work
KL4 Employment Land Purchase of Minerva Building (GG,BC) C 1,136 1,468 6. Investing in prosperity
K34 Energy Company CC Energy Company (CIL) 177 - 177 9. Strong communities
KD1 Forde House HR Refurb (CR) 7 What else we will do
KD2 Forde House Corporate Services Refurb feasibility (CR) 3 What else we will do
KT2 Forde Road Depot Forde Road depot concrete repairs (RS) C 12 2. Clean scene
Provision for Heart of Teignbridge Heart of Teignbridge: Bid 297 Employment Sites (BC: Prudential 5,350 425 425 6. Investing in prosperity Employment * Borrowing)
Provision for Heart of Teignbridge Heart of Teignbridge: Bid 297 Employment Sites (BC: Prudential 200 - 6. Investing in prosperity Employment Borrowing; CR)
Provision for other employment land Heart of Teignbridge: Bid purchase and infrastructure (BC: Prudential 2,000 2,000 6. Investing in prosperity Employment * Borrowing)
Heart of Teignbridge: Newton Abbot employment land feasibility KL2 20 6. Investing in prosperity Employment (BC: Prudential Borrowing)
A382 Improvements (CIL) (£5.1 m by 2022- KX8 Heart of Teignbridge 5,100 7. Moving up a gear 23)
KW8 Heart of Teignbridge Houghton Barton land (EC) 134 153 4. Great places to live & work Discretionary - Disrepair Loans & Grants JW/JV Housing 50 24 24 24 50 1. A roof over our heads (GG/CR) Better Care-funded grants re: Housing loans JW/JV Housing and grants policy, including Disabled 1,000 1,580 1,030 1,000 1,000 1. A roof over our heads Facilities (GG)
JV7 Housing CC Warm Homes Fund (GG) 26 234 1. A roof over our heads
JV Housing Warm Homes Fund (GG) 1,655 1. A roof over our heads
Broadhempston Community Land Trust JY7 Housing 10 1. A roof over our heads (CR,RS) C
JY3 Housing Exception site Starcross (CR) 65 1. A roof over our heads
JY3 Housing Exception site Denbury (CR,GG) C 100 1. A roof over our heads
JY3 Housing Moretonhampstead (Teign Housing) (EC) C 85 1. A roof over our heads
Additional Social Housing in Newton Abbot JY3 Housing (East St) (CR, RS,GG, BC: Prudential 115 68 890 1. A roof over our heads Borrowing,S106)
Additional Social Housing in Newton Abbot JY3 Housing (Drake Road) (CR,RS,GG,BC: Prudential 32 509 1. A roof over our heads Borrowing,S106)
JY3 Housing Longstone Cross Ashburton (CR) 100 100 1. A roof over our heads
JY8 Housing Shared Equity Scheme (S106) 667 1. A roof over our heads
Bid Housing Provision for Shared Equity Scheme (CR) * 158 1. A roof over our heads
JY3 Housing Affordable Housing unallocated (CR) - 59 200 200 1. A roof over our heads
JY5 Housing Additional plots Haldon (S106,CR) C 21 1. A roof over our heads
Provision for Habitat Regulations Bid 80 Habitat Regulations 118 - 179 70 88 4. Great places to live & work infrastructure measures (CIL) *
Replacement IT Equipment/ Committee Mgt KV5 IT - Committee 10 26 What else we will do (RS) C
IT - provision for Mobile KV3 CC Mobile Working (RS) 68 10 84 What else we will do Working
KV4 IT - Customer Services Customer Portal (RS) 71 What else we will do
KV6 IT - Convergence Strata projects: Convergence Projects (RS) 22 What else we will do
46 ] TEIGNBRIDGE DISTRICT COUNCIL CAPITAL PROGRAMME 2019-20 TO 2022-23 Appendix 7
27,849 13,863 32,632 22,756 16,373
Code Asset/Service Area Description ORIGINAL LATEST LATEST LATEST LATEST /bid no.
BUDGET BUDGET BUDGET BUDGET BUDGET
2019-20 2019-20 2020-21 2021-22 2022-23 £'000 £'000 £'000 £'000 £'000 (Inc Fees) (Inc Fees) (Inc Fees) (Inc Fees)
KV6 IT 17-18 Strata projects Cemeteries (RS) 8 What else we will do
KV6 IT 17-18 Strata projects Grounds, Street, Public Realm (RS) 27 What else we will do
KV6 IT 17-18 Strata projects Environmental Health: Idox (RS) 13 What else we will do
KV6 IT - Car parks (Updated) Car Park systems upgrade (RS) C 12 3. Going to town
Strata projects: Uniform Implementation KV7 IT - Planning 58 What else we will do (RS)
KV8 IT - Capital contribution Ongoing contributions towards Strata (RS) 41 41 41 41 41 What else we will do
KV9 IT - HR Strata projects: Human Resources (RS) 16 What else we will do
KW1 IT - Customer Services Reception Management (RS) C 20 What else we will do
KW7 IT - Customer Services Open channel/open access (RS) 5 What else we will do
KV2 IT - Customer Services ECM (RS) 14 - What else we will do
KW2 IT - Legal Services Legal Case Management (RS) 18 22 What else we will do
KV1 IT - Finance Cash and Income Management (RS) 22 - What else we will do
Bid IT - Finance Provision for Finance Convergence (RS) * 100 167 What else we will do
Bid IT - Finance/HR Provision for Winnix replacement (RS) * 13 What else we will do
Provision for Street Cleansing, Grounds Bid IT - Property and Assets 103 What else we will do Maintenance and Asset Management (RS) *
KJ Kingsteignton Kingsteignton Open Space (S106) 60 8. Out and about and active
KG2 Leisure Playing Pitch Improvement Plan (S106) 300 280 8. Out and about and active
KX9 Marsh Barton CC Marsh Barton Station (CIL) 1,300 7. Moving up a gear
Provision for Michaels Field Phase 2 Bid 43 Michaels Field 136 - 8. Out and about and active (S106/grant)
3G artifical playing pitch, Coach Road, KG4 Newton Abbot 220 8. Out and about and active Newton Abbot (S106, CR)
Provision for Newton Abbot Leisure Centre Bid 23 Newton Abbot Leisure Centre 30 8. Out and about and active fire alarm control panel (RS) *
Gym and tower office air conditioning KF2 Newton Abbot Leisure Centre 28 8. Out and about and active replacement (CR)
Bid Provision for Newton Abbot Leisure Centre 236a/b & Newton Abbot Leisure Centre AC Unit , Accoustic main sports hall & * 62 8. Out and about and active 237 sports hall cooling system. (CR)
Provision for Newton Abbot Leisure Centre Bid 3 Newton Abbot Leisure Centre 350 8. Out and about and active Improvement Plan (S106;RS;CR) *
Newton Abbot Leisure Centre Gym KF5 Newton Abbot Leisure Centre 40 57 56 40 40 8. Out and about and active Equipment (RS,S106)
Newton Abbot Town Centre Provision for Newton Abbot Town Centre Bid 299 2,100 - 400 3. Going to town Regeneration Improvements (GG) *
Newton Abbot Town Centre KX1 Halcyon Rd (BC:Prudential Borrowing) 100 3,381 3,418 3. Going to town Regeneration
Newton Abbot Town Centre KL6 Market Walk improvement works (CR, RS) 50 3. Going to town Regeneration C Newton Abbot Town Centre KL9 Cattle Market Enabling Works (CR) 200 3. Going to town Regeneration Newton Abbot Town Centre KL7 Bradley Lane Enabling Works (RS,CR) 113 3. Going to town Regeneration
Newton Abbot Town Centre KW9 Cinema (RS) 21 3. Going to town Regeneration Sherborne House: town centre Newton Abbot Town Centre KX2 regeneration/Social Housing (BC: Prudential 3,000 2,282 3. Going to town Regeneration Borrowing)
KW4 Newton Abbot Town Centre Sherborne Rd Planter (RS) C 14 3. Going to town
Provision for Future High Street Fund Bid Newton Abbot Town Centre projects (GG, CIL, EC, BC: Prudential * 100 4,087 5,235 5,530 3. Going to town Borrowing)
KW5 Open Spaces Cirl bunting land (S106) 47 - 250 125 4. Great places to live & work ] TEIGNBRIDGE DISTRICT COUNCIL CAPITAL PROGRAMME 2019-20 TO 2022-23 Appendix 7
27,849 13,863 32,632 22,756 16,373
Code Asset/Service Area Description ORIGINAL LATEST LATEST LATEST LATEST /bid no.
BUDGET BUDGET BUDGET BUDGET BUDGET
2019-20 2019-20 2020-21 2021-22 2022-23 £'000 £'000 £'000 £'000 £'000 (Inc Fees) (Inc Fees) (Inc Fees) (Inc Fees) KB9 Open Spaces Dormouse habitat improvements (S106) C 12 4. Great places to live & work
KB2 Open Spaces Mill Marsh Park, Bovey Tracey (S106) C 75 4. Great places to live & work
KS4 Pavilions Teignmouth Pavilions, Teignmouth (CR) C - 3. Going to town
K7 Penns Mount Park Penns Mount Hilltop Park (CIL) - 4. Great places to live & work
Provision for Dawlish play space flagship Bid 44 Play area equipment/refurb 75 - 75 8. Out and about and active provision (S106) *
Provision for Powderham Newton Abbot Bid 45 Play area equipment/refurb 30 8. Out and about and active play space equipment (S106) *
Provision for Newton Abbot Play Area Bid 47 Play area equipment/refurb 74 8. Out and about and active (S106) *
KJ1 Play area equipment/refurb Coombe Valley Play Area (S106) C 26 8. Out and about and active
Bid 46 Play area equipment/refurb Provision for Decoy refurb (S106/CIL) * 150 - 300 8. Out and about and active
Provision for Den, Teignmouth play area Bid 49 Play area equipment/refurb 200 - 200 8. Out and about and active overhaul (S106/CIL) *
Higher Woodway, Teignmouth play area KJ3 Play area equipment/refurb - 30 8. Out and about and active refurb (S106)
Provision for Meadow Centre Teignmouth Bid 51 Play area equipment/refurb - 30 8. Out and about and active play area major refurb (S106) *
Provision for Palace Meadow, Chudleigh Bid 58 Play area equipment/refurb 15 8. Out and about and active play space overhaul (S106) *
KJ6 Play area equipment/refurb Furlong Close, Buckfastleigh (CR) 28 8. Out and about and active
Provision for Teignbridge-funded play area Bid 67 Play area equipment/refurb 114 - 86 8. Out and about and active refurb/equipment (CR) *
KB1 SANGS/Open Spaces SANGS land purchase (GG; CIL) 475 715 385 4. Great places to live & work
KB1 SANGS/Open Spaces SANGS instatement (GG; CIL) 298 298 95 4. Great places to live & work
KB7 SANGS/Open Spaces SANGS: Dawlish (CIL;S106) C - - 4. Great places to live & work
Provision for South West Exeter Transport Bid 95 South West Exeter 7. Moving up a gear (2023-28) (CIL) * (Updated) SW Exeter Education Provision K13 South West Exeter 1,000 1,000 1,950 4. Great places to live & work (CIL)
Bid South West Exeter Provision for District Heating (CIL) * 3,000 9. Strong communities
Bid 5 Sport & Leisure Provision for Sports Provision (CIL) * 65 - 664 8. Out and about and active
Provision for Outdoor sport facility to serve Bid 72 Sport & Leisure 230 - 230 8. Out and about and active Newton Abbot area (S106) *
K6 Sport & Leisure Sports allocation (CIL) 358 - 8. Out and about and active Bid 90 Teignbridge Provision for Education (CIL) * 350 1,700 4. Great places to live & work Provision for Teignmouth Lido boiler Bid 40 Teignmouth Lido - 100 8. Out and about and active replacement (CR) * Teignmouth Town Centre Regeneration KX3 Teignmouth Town Centre (includes feasibility budget) (BC: Prudential 6,900 250 3,531 3,571 6. Investing in prosperity Borrowing)
KL5 Teignmouth Beachcomber café (RS) 147 3. Going to town
Provision for Teignmouth open space Bid 77 Teignmouth 50 - 50 4. Great places to live & work (S106) *
KR1 Teignmouth Beach Management Plan (GG) 115 9. Strong communities
Provision for Bulking Station - replace Bid 116 Waste Management 50 50 2. Clean scene telehandlers (RS) *
KS2 Waste Management Bulking Station - replace telehandlers (CR) 50 2. Clean scene
KS3 Waste Management Bulking Station welfare facilities (RS) 18 2. Clean scene
Provision for Bulking Station - replace Bid 118 Waste Management 75 100 2. Clean scene Sortline (RS) *
Bid 120 Waste Management Provision for Waste vehicles (RS) * 200 - 200 2. Clean scene
Bid 121 Waste Management Provision for: Replace kerbsider (CR) 100 - 2. Clean scene
Bid Waste Management Provision for replacement card baler (2026) 2. Clean scene
48 ] TEIGNBRIDGE DISTRICT COUNCIL CAPITAL PROGRAMME 2019-20 TO 2022-23 Appendix 7
27,849 13,863 32,632 22,756 16,373
Code Asset/Service Area Description ORIGINAL LATEST LATEST LATEST LATEST /bid no.
BUDGET BUDGET BUDGET BUDGET BUDGET
2019-20 2019-20 2020-21 2021-22 2022-23 £'000 £'000 £'000 £'000 £'000 (Inc Fees) (Inc Fees) (Inc Fees) (Inc Fees) KS0 Waste Management Purchase of Wheeled Bins (RS) 99 99 104 104 104 2. Clean scene
KT1 Waste Management Bulking Station Silo Refurbishment (CR) C 29 2. Clean scene
KT3 Waste Management Vehicle tracking system (RS) C 11 2. Clean scene 27,849 13,863 32,632 22,756 16,373
49 ] TEIGNBRIDGE DISTRICT COUNCIL CAPITAL PROGRAMME 2019-20 TO 2022-23 Appendix 7
27,849 13,863 32,632 22,756 16,373
Code Asset/Service Area Description ORIGINAL LATEST LATEST LATEST LATEST /bid no.
BUDGET BUDGET BUDGET BUDGET BUDGET
2019-20 2019-20 2020-21 2021-22 2022-23 £'000 £'000 £'000 £'000 £'000 (Inc Fees) (Inc Fees) (Inc Fees) (Inc Fees)
FUNDING GENERAL
Revenue contributions to reserve (124) (44) (44) (203) towards future expenditure Revenue contributions applied to (77) (77) (252) (235) - existing expenditure Capital Receipts Unapplied - Brought (2,493) (3,470) (3,290) (3,776) (3,565) forward
Capital Receipts - Anticipated (650) (246) (1,700) - -
Budgeted Revenue Contribution plus (128) (109) (271) (453) (485) additional for specific schemes
Use of Revenue Contributions Reserve - (778) (26) (75) (50)
Government Grants (1,899) (3,376) (2,507) (6,629) (2,228) S106 (1,459) (1,008) (1,413) (346) (1,250) Other External Contributions (134) (294) (803) (1,040) (101) Community Infrastructure Levy (3,461) (1,393) (6,115) (2,618) (9,109) Internal Borrowing (662) (211) (235) - - Capital Receipts Unapplied - Carried 2,013 3,290 3,776 3,565 3,315 forward
Business cases: Prudential borrowing (17,711) (4,163) (13,614) (10,160) (1,850)
HOUSING Capital Receipts Unapplied - Brought (1,526) (1,781) (2,235) (1,427) (1,953) forward Capital Receipts - Anticipated (50) (50) (50) (50) (50)
Capital Receipts - Right to Buy (700) (700) (700) (700) (700)
Better Care Funding and other government (1,000) (1,606) (3,374) (1,000) (1,000) grants.
S106 - (93) (667) -
Other External Contributions - (42) - -
Internal or Prudential Borrowing - - (801)
Budgeted Revenue Contribution plus - (60) - - additional for specific schemes.
Use of Revenue Contributions Reserve (8) (34)
Capital Receipts Unapplied - Carried 2,011 2,235 1,427 1,953 2,653 forward TOTAL FUNDING (27,849) (13,863) (32,632) (22,756) (16,373) - - Revenue contribution re: previous years' (77) (77) (252) (235) - expenditure
Revenue contributions to reserve (221) (44) (44) (203) towards future expenditure Programme Funding Budgeted and additional Revenue (128) (169) (271) (453) (485) Contribution
Revenue Contributions earmarked - (786) (60) (75) (50) reserve. Capital Receipts (1,395) (722) (2,772) (435) (300) Section 106 (1,459) (1,101) (2,080) (346) (1,250) Other External Contribution (134) (336) (803) (1,040) (101) Grant (2,899) (4,982) (5,881) (7,629) (3,228) Community Infrastructure Levy (3,461) (1,393) (6,115) (2,618) (9,109) Internal borrowing (662) (211) (235)
Business cases: Prudential borrowing (17,711) (4,163) (14,415) (10,160) (1,850)
Total (27,849) (13,863) (32,632) (22,756) (16,373)
Balance of capital receipts (4,024) (5,525) (5,203) (5,518) (5,968)
Key: EC - External Contributions GG - Government Grant CR - Capital Receipt RS - Revenue Savings BC - Business Case C - project complete. Where this relates to payment of a contribution, indicates contribution has been paid. * - Provisional scheme, pending full approval
Climate Change project
Bold Denotes a change in the programme
50 ] Appendix 8
Teignbridge District Council
Commercial Strategy
Contents 1. Introduction 2. Overall goal and context 3. Strategic Fit and Core Aims 4. Key Priority Areas 5. Commercial Strategy Principles 6. Decision Making 7. Delivery and Priority Opportunities 8. Benefits Appendix 1: Legal and Financial considerations Appendix 2: Risk Appendix 3: Governance
51 Appendix 8 1. INTRODUCTION
1.1 This commercial strategy provides the framework which will allow the Council to achieve its vision of shaping Teignbridge as a place which is economically resilient, delivering good quality services while addressing the funding challenges faced following the overhaul of public sector finances during the era of “austerity”. It sets the tone for Teignbridge as a commercially aware Council which will be essential to allow us to meet our Council vision, “Making the district a healthy and desirable place where people want to live, work and visit”. 1.2 It takes a broad view of the concept of commercialisation, to include service and charging reviews and process redesigns; financial management, investment and procurement initiatives; housing and regeneration projects, asset management and income generation. 1.3 The commercial strategy will be updated annually to include progress reviews and changes to delivery priorities. This will be reported to Full Council in February each year as part of the suite of Budget papers.
2. OVERALL GOAL AND CONTEXT 2.1 The goal of the commercial strategy is to enable the Council to become financially self-sufficient. This is essential to providing the stability which will allow it to focus on the provision of good quality services and achieving the key objectives of the Council strategy: A carbon neutral district Better quality and affordable housing Wages and jobs growth Active and sustainable travel choices Encouraging our young people to stay A healthier population living in resilient communities A clean, green and safe environment An open council 2.2 Nationally, austerity has driven a reduction in local authority funding. For Teignbridge, revenue support grant has been nil for Teignbridge since 2019-20. In addition, the business rates retention “baseline” is forecast to be reset, meaning the loss of significant business rates income associated with positive growth in the district. New Homes Bonus has been reduced and may potentially be scrapped. It is not yet clear whether there will be a replacement funding stream. This has created a forecast revenue budget gap of around £1.5 million from 2022-23. However, the Council also wishes to ensure the continuation of its capital programme with an increase in its revenue contribution to capital of £0.8 million per annum. This means that the overall budget gap is currently approximately £2.3 million. Further loss of Housing Right to Buy receipts after 2023 will increase the gap in our revenue and capital funding. While the Council currently has reserves, they will be depleted unless savings or income can be found.
52 Appendix 8 2.3 There is a requirement for the Council to produce a balanced budget each year. By acting commercially, the Council aims to fulfil its vision for Teignbridge and contribute towards the reducing the significant budget gap which has been identified from 2022-23 onwards. 2.4 Regionally, the South West is a diverse area, with a mix of coast, countryside and urban areas. Key economic sectors are tourism, farming, advanced manufacturing and renewable energy – all dynamic industries susceptible to both economic opportunity and change. The population is ageing, with more than 1 in 5 people being over state pension age. The population is well educated, with more than a third being educated to degree level or higher (Office for National Statistics, Graduate in the UK labour market: 2017). 2.5 Teignbridge itself boasts busy market towns, coastal resorts and rural countryside. It is in close proximity to the major cities of Exeter and Plymouth, with close links to the Torbay area and access to the wilds of Dartmoor. Locally, this picture presents both financial and demographic challenges and opportunities. In order to respond, Teignbridge is looking at the opportunities to develop new ways of generating the income required, as well as more agile and efficient ways of delivering services. An effective and financially sustainable council is at the heart of its vision to make the district a healthy and desirable place where people want to live, work and visit. 2.6 The goal of financial self-sufficiency is being sought in the context of meeting the social, economic and environmental needs of the residents and district. This means that the Council needs to be clear about the services it must provide (statutory) and those it opts to provide (discretionary), whether they offer good value for money and whether they are meeting the needs of customers. Defining the role of the Council is key to ensuring that it focuses on services unique to it and does not squander resources on those which are the responsibility of other public sector organisations, or which can be provided by the private sector or open market. The emphasis is on providing services which significantly contribute to the delivery of Council Strategy, or where there is market failure and social and/or economic value of Council intervention has been identified. 2.7 There are complex legal and financial considerations, such as tax, procurement and State Aid rules. Appendix 1 provides examples of these for information. However, it is expected that the relevant advice would be sought on a case-by-case basis to ensure the Council enters into any commercial venture in full knowledge of the legal powers which enables it to do so. 3. STRATEGIC FIT AND CORE AIMS 3.1 The Teignbridge Council strategy 2020- 2030 sets out the Council’s overall vision, objectives and details of the ten programmes the Council will be focusing its efforts on. The programmes are set to ensure managers and members focus on delivering services that ultimately will ensure Teignbridge is fit and sustainable for now and the future ahead. 3.2 The commercial strategy is one of the key cross-cutting strategic documents that supports managers and members to ensure there is true understanding of how to shape, plan and deliver services commercially. The transition to a more commercial approach applies across the council. It has links to the capital strategy in terms of 53 Appendix 8 the larger projects within the Key Priorities of Regeneration and Commercial Property, Asset Management and Housing. Delivery of these projects is integral to the Council strategy. They are supported by the Council’s approach to investments and the borrowing which is critical to funding them, so must be taken into account within the Council’s treasury management strategy. Key Priority 4: Financial Management underpins this, as well as ensuring that project stream implications can be drawn together within the requirement of producing a balanced budget for the Medium Term Financial Strategy. 3.3 The commercial strategy is not limited to capital projects and has strong links to both the One Teignbridge digital transformation process, and BEST2020 business planning process, as outlined in Key Priority 3: Commercialisation and strong, agile working processes. These activities align with the goal of creating an operating model for the Council which focuses on fostering a commercial approach, selecting the most efficient delivery models for each service. Digital and process redesigns achieved under the One Teignbridge project are key to delivering our transformation programme. Shifting access to self-serve where possible (internally and externally) allows resources to be available for face-to-face or phone support for those residents who truly need them. Use of data generated by systems helps to predict future service needs and demands.
54 Appendix 8
Vision and Objectives
Council Strategy 2020 - 2030 Medium Term Financial Strategy
Commercial Strategy
odel
Growth Plan
Transformation Plan OperatingM (Economic
One Teignbridge regeneration, Housing & Local Plan)
nce and nce a
Govern BEST2020 Business Planning
Procurement Capital Treasury Asset Fees and Human Project Strategy & ManagementCore AimsManagement Charges Resources (including Management Programme Preston model)
3.4 In order to achieve the overall goal of financial sustainability and contributing to the closure of the identified budget gap, while adhering to council priorities and sound governance, the commercial strategy will focus on the following core aims:
Increasing financial and social benefits through delivery of regeneration initiatives which stimulate economic growth, and local Housing. This will help ensure local residents find the support they need to thrive and that the right conditions are created for existing and new businesses to grow and be financially independent. Increasing the council’s financial sustainability, resilience and continuing ability to provide statutory functions. This will be achieved by analysis of appropriate service provision, generating additional income through trading, fees and charges and investment, within the relevant legal framework as outlined in Appendix 1. 55 Appendix 8 Fees and charges should deliver full cost recovery unless a specific reason has been identified where there is a social or economic benefit in not doing so. Any subsidies must be deliberate. See section 7.3.1 for more information on how the Council will implement this process. Being socially responsible – investments and practices which support local prosperity, social and environmental benefits. In line with the Public Services (Social Values) Act 2012 – if business cases have similar returns, look to deliver those initiatives which provide best social or environmental outcome whilst paying due attention to equality, wellbeing and safeguarding. Investing within the district is the first priority. However, it is recognised that there are benefits to investing within the local functional economic area. Many residents and businesses commute or trade between Teignbridge and the area of the Greater Exeter Strategic Plan (GESP), or the wider Heart of the South West Local Enterprise Partnership area, comprising Devon, Plymouth, Somerset and Torbay. Therefore, investments within these boundaries will in turn encourage the growth of business rates and Council Tax. Investments outside the area will also be considered, especially where equivalent opportunities are not available within the district. Securing external funding and working in partnership
4. KEY PRIORITIES 4.0 The latest BEST2020 process generated a database setting out areas where savings have already been identified and those to be investigated and progressed. This has been added to following advice obtained via the Local Government Association’s scheme to assist councils in improving their approach to commercialisation. The Council’s capital programme sets out existing projects in relation to the priorities of Housing and regeneration. There are 5 key priority areas:
4.1 Key Priority 1: Regeneration and Commercial Property Investment Enabling the district to continue to thrive in evolving economic times. The Council is currently working on town centre regeneration projects which focus on the transformation of our town centres away from places simply to shop and towards being destinations for leisure and focal points for communities. Delivering new hotels in Newton Abbot and Teignmouth as well as working towards broader regeneration of Newton Abbot town centre will positively influence the economic prosperity of the district, helping to provide growth in local jobs, attracting businesses to the area and contributing towards local vibrancy. In turn, this encourages people to both work and spend leisure time locally, which should help reduce carbon emissions. 4.2 Key Priority 2: Asset Management To ensure the Council maximises the available benefits of its assets, whether as operational sites, to generate rental income, to re-purpose or sell. Carbon neutrality will be considered in relation to asset management. The recent move of the Department for Work and Pensions to Forde House makes efficient use of
56 Appendix 8 Teignbridge property assets. Officers are currently working on schemes to ensure we are obtaining best use of other assets, such as leisure facilities, with provisions in the capital programme for leisure centre improvements. 4.3 Key Priority 3: Commercialisation and strong, agile operating practices Grow those activities which provide income through fees and charges, ensuring cost recovery unless deliberately providing subsidy. New trading services, for example using departmental specialisms to generate income to support service delivery and capital investment. The BEST2020 process enables departments to take a commercially-aware overview of existing services to ensure they are delivering good value for money. One Teignbridge is the name of the digital transformation programme which supports the Council to act, think and behave as a digital first organisation, delivering continuous improvement to benefit customers. The One Teignbridge project team includes specialists from across the council and they are led by the Transformation Programme Board made up of senior management staff and a portfolio-holding member of the administration. The team is working with departments to analyse processes, identifying strengths and opportunities for improvement, ensuring optimum efficiency. In many ways, the BEST2020 and One Teignbridge processes have already laid the groundwork. This will continue, with work-streams being taken forward to realise further benefits. This area also encompasses human resources, delivery models and systems. 4.4 Key Priority 4: Financial Management Financial management: The treasury investment strategy is being reviewed with a view to including an element of commercial investment such as a property fund to provide improved returns. This involves a move away from the traditional “risk averse” strategy towards one which is “risk aware”. This will be approached in a measured way to mitigate against risk, while recognising a shift in balance within the overall priorities of security, liquidity and yield. The council is also taking advice on investment and borrowing strategies against the backdrop of a capital programme which assumes future prudential borrowing. Pension deficit reduction is being investigated. Procurement and contract management offer opportunities to continuously improve services and control costs, avoiding arrangements which “roll on” to the disadvantage of the council and its residents. Income generation – a local lottery is potentially a route to “crowd-funding” schemes which would otherwise be unlikely to attract funding. 4.5 Key Priority 5: Housing The provision of affordable/social rented accommodation (in acceptance that this may not provide optimum return, but fulfils social priorities). While keeping an open mind, the council does not currently intend to set up a housing company. The Council is currently working on projects to deliver accommodation for social rent in Newton Abbot town centre, both independently and through working with a development partner. It also seeks to enable solutions for those seeking affordable home ownership and to deliver services efficiently through asset management. 57 Appendix 8
5. COMMERCIAL STRATEGY PRINCIPLES
5.1 Team Teignbridge
Enhancing the council’s commercial capability by working together, learning and harnessing the necessary external expertise is essential. The success of the commercial strategy will rely on the all staff and elected Members playing their role. Senior management will encourage a commercial approach, both within the council and in its interactions with partners and outside bodies. The council recognises that the demands of commercial projects require time and resources and a skill-set which may require development. Where specific expertise is required, this will mean seeking external advice where appropriate.
5.2 Due diligence and risk
Venturing into new areas inevitably carries a degree of risk. While this cannot be eliminated and it must be acknowledged that some ideas may fail, the council is working to develop commercial skills, promoting risk-awareness – a change from the past culture of being risk-averse. Teignbridge’s appetite for risk seeks to be proportional to its role as a district council.
The council seeks to minimise risk by the development of business cases. Due diligence and financial appraisal are key to ensuring there is a sound basis for initiatives and investments.
Teignbridge will consider each initiative on its own merit, using an appropriate period for whole-life appraisal based on the asset type and regulatory guidance. For example, the following ranges might be used, dependent on the dynamics of particular schemes: Land and property: 25 to 40 years Plant and equipment: 5 to 10 years Intangible: 5 to 10 years Business cases must be sound and demonstrate consideration and mitigation of risk factors as per the risk policy at appendix 2. Progression of schemes is dependent on either the Capital Review Group or the Transformation Board being satisfied that business cases meet the investment criteria in the flow chart at Appendix 3.
5.3 Rate of return
In order to ensure that an initiative will make an appropriate contribution to the council’s finances, it will seek a rate of return which provides a margin above costs, including financing costs such as borrowing interest and Minimum Revenue Provision (MRP). The guideline minimum is 1%.
58 Appendix 8 5.4 Corporate governance
Activities will comply with the council’s governance arrangements, including the Code of Conduct, Contract Procedure Rules and Financial Instructions including Committee approval requirements and the Capital Review Group and project management process.
5.5 Legal compliance
Local authorities’ freedom to act to generate income is governed by legislation and case law. See Appendix 1 for examples. However, expert advice must be obtained on a case-by-case basis.
5.6 Prudent borrowing
The council seeks to gain best value through its treasury management practices. This may include a range of borrowing options, including “internal” borrowing. However, external borrowing will be necessary and will be undertaken in line with CIPFA’s Prudential Code and with the benefit of external advice where appropriate. The Council will remain flexible in considering the most appropriate sources of borrowing. This might include the Public Works Loans Board (PWLB), other local authorities, bond finance or alternative more specialist sources.
6 DECISION MAKING
Commercial Property Investment Board (CPIB)
The Commercial Property Investment Board consists of: Chief Finance Officer or deputy Head of Place and Commercial Services Solicitor to the Council or deputy The Leader of the Council or deputy Executive PH for Corporate Resources Chair of Overview & Scrutiny Committee and Leader of Opposition if different Chair of Audit Scrutiny Any Group leader with 10% of the Members Other service representatives, relevant executive members or expert external assistance will be called upon as required. Commercial investments bring an imperative to respond quickly in order to maintain a strong negotiating position in a competitive market. Therefore, delegated authority is to be sought from Full Council within the Budget papers 2020-21 as follows:
Subject to prior consultation with all CPIB members (or in their absence their deputies), or a minimum of four Board members including the Chief Finance Officer 59 Appendix 8 (or deputy) and Leader of the Council (or deputy), in the event of any Board member being unavailable, delegated authority be given to the Chief Finance Officer (or deputy) To: (a) Approve the purchase of assets (including feasibility costs if necessary) where the investment is in line with the principles of the commercial strategy and meets the following criteria, as laid out in the flow-chart at Appendix 3: The purchase is within the established borrowing cap of £70 million. The business case demonstrates a return of at least 1% after all costs, including financing items There is a sufficient return for the level of risk (as determined by the CFO in consultation with the Board) The asset falls into one of the acceptable asset classes as detailed at 7.1.3 And (b) Complete all associated agreements (including but not limited to professional appointments to advise on relevant matters). PROVIDED THAT this delegation shall only apply in cases where it would be contrary to the financial interests of the Council to delay making a decision on the matters in (a) as a result of Financial Instructions Rules (e.g. due to timing of the next available meeting of a relevant committee / Full Council). The intention is to allow a quick response to opportunities where appropriate, while adhering to a strict due diligence process.
7 DELIVERY AND PRIORITY OPPORTUNITIES The following summary includes relevant extracts from the BEST2020 database of actions where appropriate. 7.1 Key Priority 1: Regeneration and Commercial Property Investment). 7.1.1 The Council will continue to monitor opportunities to add value and diversity to its property portfolio within the constraints of the Commercial Strategy Principles and the proportionality and prudential limits as outlined in the capital strategy. 7.1.2 It will prioritise capital investment which focuses on supporting outcomes in the Council strategy 2020 - 2030 and Commercial Strategy Core Aims and which yield optimal rental growth and stable income. 7.1.3 Acceptable investment classes: Regeneration and Housing Economic Benefit/business rate growth Support for local business growth; creating or safeguarding jobs Energy/low carbon projects Creation or protection of social value in the district or LEP area 60 Appendix 8 Responding to local market failures Ancillary contributions to the financial sustainability of the council, including out of area investments where opportunities are not available within the district.
7.1.4 Decisions will be made with reference to the defined framework for risk management and ensure appropriate exit strategies and contingency plans are in place to protect the Council’s long-term position.
7.1.5 The council will work within the governance arrangements as described within the Commercial Strategy Principles. Developing from the basis already formed by the capital review group process, use of the capital proposal form and financial appraisal has been taken up and will continue to ensure a competitive system for project approval, which considers risk, value for money and resource implications.
7.1.6 The focus as projects progress and new opportunities arise will be to develop detailed business cases including whole life costings, financing implications and cost benefit analysis. The minimum appropriate yield which must be demonstrated is 1% after all costs, including financing costs.
7.1.7 It is intended that the Cost Benefit Analysis Model will help to identify both financial, environmental and social benefits of projects, taking into account the core aims of social responsibility and investing within the district and LEP area. Where returns on projects are similar, preference will be given to those demonstrating greater social benefits.
7.1.8 The proportional debt limit for the council has been assessed as approximately £70 million. See 7.4.2 for more details. Projects must be considered with regard to this limit.
7.1.9 Monitoring and review: the capital review group uses the corporate SPAR performance management system to monitor progress and learn from issues arising during the delivery phase. This also acts as the key project management tool for capital projects, identifying areas of concern.
7.1.10 Ongoing financial outcomes (actual yields and market values) will be monitored and reported as part of the requirement to identify the contribution of commercial activities to council budgets in the capital strategy. This process will identify any loss of value or revenue consequences of yields not performing as anticipated and contribute to an open learning culture.
7.2 Key Priority 2: Asset management 7.2.1 The following priority areas have been identified to ensure that assets are being managed in line with the Teignbridge Corporate Asset Management Overview as outlined within the Capital Strategy.
61 Appendix 8 7.2.2 A long-term review of the current use of existing assets, identifying their contribution, in order to classify as over-performing, performing or under- performing. This information will be used to determine the best future path for each asset: Investment to cut costs/improve efficiency/generate additional income Review of rents and subsidies, including maintenance responsibilities, in order to achieve market rents and prices for assets Identify surplus assets for disposal, being mindful that planning permission can increase the value to potential developers. This maintains a fund of capital receipts to supplement revenue contributions and prudential borrowing in the long term, especially for corporate priorities which cannot demonstrate a business case. Transfer to town and parish councils where appropriate Do not keep any asset with no income, development value, marriage value or operational need. 7.2.3 Identify land/buildings to purchase to deliver priorities in terms of the economy, environmental and social wellbeing of the area and financial return (refer to 7.1.6), ensuring that a disposal plan or exit strategy is included within proposals for consideration by the Capital Review Group and Commercial Investment Board 7.3 Key Priority 3: Commercialisation and strong, agile operating practices 7.3.1 BEST 2020 The BEST 2020 process contributes to robust service planning by encouraging services to examine o The nature of services provided: are they statutory or discretionary; if discretionary, is there a clear social or economic benefit to the Council providing the service; is the service the responsibility of other public sector organisations or can it be provided by the private sector? o The potential for trading and income; assessing whether there is market appetite to sell or share services and considering alternative delivery models such as partnership, outsourcing, contracting or stopping. Over the next twelve months, business managers and accountants will analyse non-statutory services to determine the level of cost recovery through fees and charges. Alongside this work, a refreshed “inflation plus” pricing strategy, with an approvals process for exceptions, will ensure that any subsidies (for example, where there are notable affordability issues for residents) are conscious and deliberate and their impacts understood. Projects are progressing to review and expand the range of discretionary, chargeable services, such as: Planning – drawing on in-house expertise to market neighbourhood planning support 62 Appendix 8 Developing training resources to sell training places to external candidates to help cover cost of courses and improve efficiency (leisure/food safety) Reviewing the programming of leisure facilities to increase income potential 7.3.2 One Teignbridge The One Teignbridge programme continues with investment in staff and structure to analyse processes, performance and productivity, benchmarking where appropriate. Key elements are the use of digital solutions and demand management (use of Firmstep encourages customers to self-serve and the council to get its response right first time – job done). 7.3.3 Human Resources, delivery models and external expertise Teignbridge is benefiting from savings from the recent restructuring of its Senior Leadership Team. Over the long term, the One Teignbridge process provides the opportunity to extend this across other functions, taking into account organisational structure, spans of responsibility, etc. In addition, it has been identified as a priority to consider the impact of reviewing terms and conditions of employment relating to the length of the working week, grading structure and increments. This also includes examining alternative delivery models such as local authority trading companies which can reduce pension liabilities by taking employees out of the scope of the local government pension scheme. Role-sharing to reduce costs and improve co-ordination of shared activities eg. habitat regulations/strategic infrastructure/cash processing will be considered where appropriate. The use of “locality teams” rather than dedicated resources for cleansing and other tasks will also be assessed. There is continued emphasis on training and development, with a review of current provision underway. Teignbridge will continue to make use of peer networks and external expertise. This is vital in the context of the specialised knowledge and capacity required relating to due diligence around commercial property investments. 7.3.4 Systems New payroll and finance systems – accessible and up to date, with the emphasis on being 100% digital wherever possible. This will provide new efficiencies such as electronic invoicing and billing, self-service, etc. 7.4 Key Priority 4: Financial Management 7.4.1 Investments The Treasury Management Investment Strategy is being revised as part of the 2020 Budget papers. This involves a move away from the traditional “risk averse” strategy towards one which is “risk aware”. This will be approached in a measured way to mitigate against risk, while recognising a shift in balance within
63 Appendix 8 the overall priorities of security, liquidity and yield. Key suggestions which will be made for consideration are: Inclusion of property and diversified income funds Inclusion of renewable energy/social impact investments On-lending to key partners/stakeholders in order to make a return and support jointly beneficial projects, for example housing associations, NHS Provision to lend in instances where doing so would protect the local economy (eg. in relation to significant supply chains). Investigation of peer-to-peer lending 7.4.2 Borrowing The strategy will also review the Council’s ability to borrow, including the overall limit and relating to existing schemes and likely headroom. The proportional debt limit for the council has been assessed as approximately £70 million. This figure has been arrived at after consideration of benchmarking provided by external expertise, based on overall debt compared to cost of service and the financing liabilities this would place upon the council. This is balanced against the council’s stated intention to generate in excess of £2 million in savings and income. Assuming the robustness of business cases delivers the stated minimum 1% return, £70 million of investment will provide £700,000 per annum. £70 million is 4.4 times the council’s average annual cost of services over the 4- year period covered by the medium term financial plan (2019-20 to 2022-23). Assuming the full £70 million were borrowed and loans were secured at 3%, interest costs would represent 13.2% of the current average cost of service. Following the rise in PWLB interest rates, Finance will investigate and secure where appropriate, other sources of funding, recognising the time, resource and due diligence required to implement. The continuing use of internal versus external borrowing for capital projects will be assessed, to ensure that the Council is making best use of its resources (for example in relation to investments and additional pension payments). 7.4.3 Pensions The Council will continue to review its approach to managing its pension liabilities, including one-off contributions, payments in advance, borrowing to reduce the overall liability and investigating the use of local authority trading companies to remove certain functions from the scope of the Local Government Pension Scheme. 7.4.4 Payment methods Use of direct debits will be prioritised where possible as the most cost efficient method of taking payments. Back-office procedures will be digital wherever possible. Where appropriate, arrangements with customers might include fixed or minimum terms for contracts e.g. green waste/leisure, to minimise administrative burden. 64 Appendix 8 7.4.5 Insurance Excess levels will be reviewed against existing premiums. Consideration will also be given to expanding the existing shared service to other local authorities. 7.4.6 Procurement There will be continued focus on reviewing contracts, including those highlighted in BEST2020 to ensure high quality service provision while ensuring value for money and that the council is only paying for the required services. For example, considering frequency of service and specifications. Where possible, the option of purchasing with others to obtain economies of scale will be considered. Procurement channels may also reveal new opportunities for trading and shared services. Contract management to ensure best quality balanced against cost Adminstrative good practice will be reviewed to reduce the use of “cheque” requests (retrospective orders). The creation of concession contracts to earn more money for the council. Provide more opportunities to local businesses by holding “meet the buyer” events, talking the suppliers through the technical aspects of submitting a tender and gearing the tender towards local suppliers where appropriate whilst adhering to The Public Contracts Regulations 2015. Promoting investment in the district by encouraging community wealth- building along the lines of the “Preston model”. This applies not just to the Council but a range of local “anchor” institutions and employers. The award of contracts to local firms where possible leads to the retention of wealth within the local economy, with associated employment and social benefits.
7.4.7 External funding Teignbridge intends to utilise the authorised percentage of Community Infrastructure Levy (CIL) towards administrative costs in recognition of the significant burden this task places on the authority. Section 106 agreements will include a contribution towards administration costs where appropriate. Grant funding - the council has a good track record of maintaining awareness of funding availability and recent examples include the Housing Infrastructure Fund application to contribute to the purchase, instatement and maintenance of SANGS at South West Exeter. Several heating initiative grants have been sought and delivered, providing significant benefits to vulnerable customers and the overall carbon footprint of the district. The Future High Street fund bid has the potential to deliver almost £8 million in funding for the redevelopment of Newton Abbot town centre. On a smaller scale, grants are available for sports projects and cultural and open space initiatives such as the regeneration of Homeyards botanical gardens. The council will continue to pursue opportunities to access external funding. “Horizon-scanning” will be introduced to the BEST2020 process in recognition of the potential value such funding provides and in recognition of 65 Appendix 8 the work already done within departments to identify and secure available funds. With all externally funded projects, it is vital to consider the resource and ongoing cost requirements. As such, these projects follow the same governance pathways as others. 7.4.8 Transition Fund In recognition of the importance of the commercial agenda, a Transition fund will be introduced. This is to support the development of income generation and commercial activity. Officers will be able to apply for the fund through SLT to support their ideas. 7.4.9 Local lottery The introduction of a local lottery will be investigated in recognition that “crowd-funding” may provide a route to local investment where grant-funding can no longer be the full answer to supporting such initiatives.
7.5 Key Priority 5: Housing Helping Teignbridge residents to access affordable Housing is a high priority for the Council. Teignbridge are taking multiple approaches to ensure this happens. In addition to independent projects at East Street, Newton Abbot and Drake Road, Newton Abbot to create units for social rent, the Council actively engage with local registered providers to deliver outcomes collaboratively. The approach being taken at Bradley Lane, Newton Abbot is a good example of joint venture working. Funding models for social rented housing are challenging as by their very nature, they seek to provide social benefits rather than commercial return. However the Council is using innovative approaches to include Housing within other projects. This can contribute towards the re-balancing and regeneration of town centres. The Council is also in a position to leverage the expertise and economies of scale provided by specialists in the area both for the provision of new homes and updating existing stock to tackle warmth and fuel efficiency. Taking advantage of grants allows housing stock to be improved while making positive steps towards the district’s commitment to tackling climate change through the reduction of its carbon footprint. As a major partner, discussions are taking place with Teign Housing to understand their projected programme in respect of retrofitting their existing stock. The Council has recently approved the innovative use of external funding to set up a shared equity scheme. This provides an alternative route towards residents seeking affordable home ownership. The Council also keeps under review opportunities to acquire assets which optimise efficient delivery of its services, for example the provision of temporary accommodation. Significant savings have been made through the use of Albany House for this purpose.
66 Appendix 8
8. Benefits of a commercial culture Financial sustainability and future stability Benefits to the economy of the district and wider local area Generates a financial return which both protects non-statutory services and can also be used to protect services which cannot recover income Efficient operating methods raise standards and free up resources to ensure there is still one-to-one help available for the council’s most vulnerable residents where needed Staff and skills development; an innovative workplace Enhancing Teignbridge District Council’s reputation as a respected, leading-edge authority
67 Appendix 8
Appendix 1 Legal and financial considerations Examples of legislation relating to charging, trading and purchasing property and investment and borrowing are set out below. Relevant expert advice should be sought on a case-by-case basis. Local Authorities (Goods and Services Act 1970): Gives councils the power to enter into agreements with each other and certain other types of public bodies for the performance of certain services.
Local Government Act 1972 Section 120 provides the power for the acquisition of land by agreement for the purpose of: Any of their functions under this or any other enactment, or for the benefit, improvement or development of their area (e.g. business development, job creation in the area or to provide jobs (in neighbouring authorities) for persons living in the district etc.) also importantly “whether situated inside or outside their area”. Acquisition can take place notwithstanding that the land is not immediately required for that purpose. Local Government Act 2003: Added further possibilities by giving councils the power to: 1. Charge for services on a cost recovery basis. Charging: Only applies to discretionary services (that the council has the power to provide but not a duty) Cannot be used where charging is specifically prohibited by other legislation Cannot be used where another specific charging regime applies Is limited to cost recovery The recipient of the discretionary service must have agreed to pay for the provision of such services. 2. Trade in activities related to their functions on a commercial basis. Trading: Must be exercised through a company which has a business plan for operation Can be delivered by participating in an existing private trading venture providing that this is a company within the relevant definitions (limited partnership and limited liability partnerships are not acceptable structures for local authority trading) Can be used with a view to make a profit – in a company wholly owned by a local authority, profits can be returned to the council through a dividend or service charge to hold down council tax or be reinvested
In relation to borrowing, the Local Government Act 2003 introduced the local prudential system – a self-regulation regime which requires local authorities to decide how much they can prudently borrow in line with CIPFA’s Prudential Code. The Prudential Code sets out the criteria which local authorities must have explicit regard to when making capital investment decisions: Option appraisal Asset management planning Strategic planning for the authority 68 Appendix 8 Achievability of the forward plan Affordability of borrowing Local Government Act 2003 – key sections Section 1: general power to borrow “(a) for any purpose relevant to its functions under any enactment and (b) for the process of the prudent management of its financial affairs” Section 12: general power to invest “(a) for any purpose relevant to its functions under any enactment and (b) for the process of the prudent management of its financial affairs” Section 13: restricts a local authority’s ability to charge any of its property for borrowing purposes Section 15 requires local authorities to have regard to guidance issued or specified by the Secretary of State. This includes MHCLG guidance on local authority investments and Minimum Revenue Provision and the CIPFA Prudential Code and Treasury Management Code.
The Localism Act 2011 Local authorities’ powers and responsibilities have traditionally been defined by legislation - they could do only what the law says. This created a culture of caution with councils abstaining from new, potentially beneficial practices due to uncertainty about whether it was legal and concern over being challenged in the courts.
This changed under the Localism Act. Instead of being able to act only where the law says, local authorities became free to do anything - provided they do not break other laws. The Localism Act includes a ‘general power of competence’ for local authorities in England. The power of competence gives local authorities the legal capacity to do anything that an individual of full legal capacity can do and that is not specifically prohibited. They will not, for example, be able to impose new taxes as an individual has no power to tax. The new general power gives councils more freedom to work together in new ways to drive down costs. It gives increased confidence to do creative, innovative things to meet local peoples’ needs. It is drawn very widely and includes reference to commercial activities and does not have to be in benefit of the local authority’s area
The general power of competence does not remove any duties from local authorities. The Act allows the Secretary of State to remove unnecessary restrictions and limitations where there is a good case to do so, subject to safeguards designed to protect vital services.
The Localism Act 2011 (Section 4) effectively extended the new power of competency to enable trading of services etc. which were not of a statutory function of the council Other considerations
As well as this statutory framework council decision-making is also limited by certain well known principles including obligations to act rationally and fairly (the Wednesbury principle) and to exercise powers for their proper purpose. This means that the council cannot use a power given to it for one purpose in order simply to generate income. It also means that in charging for discretionary services it will have to have due regard to the rationality of imposing the charge and its impact on individuals as well as its ability to generate income. The following matters will need to be taken into account:
69 Appendix 8 1. Company law issues 2. Tax liability (corporation tax and VAT) 3. EU procurement law 4. Employment law (specifically TUPE and pensions) 5. The costs associated with bidding for contracts 6. State aid rules 7. Insurance requirements 8. State Aid https://www.gov.uk/guidance/state-aid
70 Appendix 8
Appendix 2 - Risk Risk Timeline There are 3 broad phases of risk:
Due diligence Governance process Risk management
Managing the Identifying risk Accepting the (pre-acquisition/ accepted risk risk (post-acquisition implementation /implementation)
Due diligence is the process of factual and legal investigation, research, analysis and discovery into the relevant borrower, asset, sponsor and other principal parties typically undertaken by a prospective buyer, lender or investor prior to entering a transaction. The following, though by no means exhaustive, is intended to suggest areas for consideration. The perceived risk will need to be considered on a project-by-project basis, for each risk phase.
Risk Area Details Perceived risk (low, Suggested mitigation medium, high) measures Council reputation Are there any Continuous monitoring by businesses/investments business managers. running contradictory to Completion of business impact council corporate values? assessments. Environmental, Health & Safety, climate, ethics, supply chain terms and conditions. Does it fit with the council “brand”? Risk of over- promising or under delivering. Financial regulations MRP Awareness of Prudential Code requirements, Treasury Management Code, MHCLG guidance on local authority investments and MRP Timescales Grant deadlines, planning Governance and processes in requirements, place to facilitate. reporting/Committee requirements Legal barriers Do we know which legal Legal advice, Legal pathways we are relying on? representative on Commercial Investment Board
71 Appendix 8 Weak governance Adequate arrangements and project management Abortive costs Sinking fund? Tax matters eg. VAT, Have we opted to tax or not? Purchase of timely advice corporation tax, SDLT from specialists. Stakeholder buy-in Sufficient detail supplied for Timely, detailed reports decision-making Valuation External expertise/2nd/3rd opinion Missed opportunity Identification of Asset Management; land/property available to Commercial Investment Board buy Additional costs Both capital and revenue. Appraisal sheet, expert borrowing costs, rent, R&M, internal and external advice, utilities, voids (lost surveys, sufficient contingency income/NDR cost), allowance management time to deal with leases/issues Fraud Property fraud, money Procurement, Financial Rules, laundering dual control for internet banking, check your vendor. Poor communications Ensuring all project team Working groups, shared members receive all relevant information and filing information structures Environment Tenant performance Ability to pay, likelihood of Credit rating agency reports, moving on, void periods, accounts, (at acquisition but rising irrecoverable also throughout lease) “know expenditure. your tenant” ie. what is the sector, who do they buy/sell from, what are their aspirations. Monitor rent payments, intervene early Asset performance Review of returns/service Frequent valuations, portfolio delivery management. Capture of and reporting of financial data Market changes Brexit, trade wars, cost of Diversify, monitor sector borrowing, tax changes. proportions within portfolio. Eg. retail, offices, residential, warehouses, storage, hotels, gyms. Take independent advice, regular revaluations, continually monitor and manage performance. Exit strategy/Plan B Economy Market downturn – harder to Diversify, keep taking sell assets and realise funds. independent economic advice, Affects liquidity. limit exposure to investment types. Maintenance of reserves. Legislation Brexit, trade rules Monitor political and economic events; regular updates 72 Appendix 8 Lack of staff resources Prioritise staff resources; actively seek external funding opportunities and identify partnership, joint venture opportunities Team skills Necessary skills to acquire, Training, succession planning, manage and know when to procedures sell? What would happen if people change eg. MD, CFO, Head of Commercial Services, political control? Asset condition Environmental performance, Strict criteria on acquisitions, repairs and refurbishment, keep abreast of the market ability to re-let, physical (expert advice), tenant obsolescence. repairing covenants, meet contractual repairing obligations, sinking fund for periodic investment. Keep existing assets under review. Budgets Costings, projections. Use of contingencies, review Insufficient funding to deliver and monitor throughout life of projects. investment. Active asset management to “recycle” funds from sale of assets. Receive Grant Finder notifications. Regular monitoring of revenue and capital budgets checking for variations. Use of SPAR project monitoring. Policy Risk of missing key changes Information shared via work in Government groups such as CABIG policy/initiatives – wasted time, missed opportunities, failing to meet Government expectations and standards Ongoing revenue and What will it really cost to Sound/proficient costings and management costs manage and will it be whole life project cost recovered? Eg. borrowing analysis. Council governance costs, rent, R&M, utilities, process ensures decisions are voids (lost income/NDR cost), made with reference to management time to deal Finance staff. Regular with leases/issues). Failure monitoring. to recognise will affect yield. Insurance Insurance cover invalid, Insurance officer post with inadequate, insufficient or responsibility to ensure not there insurance is sufficient. Insurance flagged on proposal form. Change in local or Monitoring of manifestos, national political issues, government websites administration – changed priorities
73 Appendix 8 Managing Business case/appraisal and change/controlling costs business impact assessments; when moving to different regular monitoring. methods of accessing services HR – failure to follow Training/regular updates eg. legislation, policies and professional publications; good practice; failure to keeping policies up to date protect Council’s image use of specialist advisors/legal as a good employer advice; senior management review;
74 Appendix 8 Appendix 3 Governance flow chart for commercial investments.
Investment Criteria to be considered by Capital Review Opportunity Group/Transformation Board as appropriate
Yes Yes
Borrowing Legal requirement ? and Return Profile Risk on investment
Is the investment Does this Is there within the meet the sufficient established needs of a return for borrowing cap and No balanced the level of does it meet the portfolio? risk? minimum 1% Within return? powers?
Fiduciary Yes duties? No Value for No No money?
Gateway Terminate option/stop progress 1 complete
Decision of Chief Finance Officer in consultation with Commercial Property Investment Board
75 This page is intentionally left blank Appendix 9
Financial plan sensitivity and risk analysis (section 25 assessment and report)
The Local Government Act 2003 (section 25) requires that when a local authority is agreeing its annual budget and precept, the Chief Finance Officer must report to it on the robustness of the estimates made for the purposes of the calculations and the adequacy of the proposed financial reserves.
In expressing this opinion the Chief Finance Officer has considered the financial management arrangements that are in place, the level of reserves, the budget assumptions, the overall financial and economic environment, the financial risks facing the Council and its overall financial standing.
The key long term driver is preserving the Councils financial resilience within the financial strategy and the medium term financial plan.
The main risks are around revisions to local authority funding and reductions likely for future years. These are described below together with potential adverse changes in other income and expenditure streams. The risks are mitigated by careful use of earmarked funding reserves, the ongoing BEST2020 review of services, action to act more commercially and monthly monitoring of our financial position and reporting of variances.
1. The budget assumes £14.3 million of income from fees and charges, recycling, property and investments. Whilst this assumption is realistic it includes significant rental income from Market Walk and there is always the risk that income could fall or be less than anticipated. A drop in income as compared to budget of around 10% would result in a loss of £1,434,000.
2. A small provision of 1% has been made for potential losses in council tax collection which is likely to be more difficult next year with the estimated overall increase of 4.1% in council tax.
3. Inflation on costs is being managed through energy reduction measures and cost effective procurement. An allowance of £156,000 for inflation (excluding pay award provision) is included in the budget which is considered reasonable.
4. Known liabilities have been provided for and there are no significant outstanding claims.
5. The final settlement confirmed significantly reducing figures for New Homes Bonus and legacy payments after 2020/21.
6. Business rates retention income from rates growth above the baseline and some pooling gain has been assumed for the four plan years. This is reasonable being largely based on the special grants we are due to get to cover the cost to Teignbridge of government schemes to help businesses. 75% retention is included for 2021/22. A realistic provision of £520,000 has been made for business rates appeals next year. We are only protected against any rates downturn or further rates appeals by a relatively low safety net and a 10% reduction in funding would be £507,000.
7. New homes bonus was estimated on 620 extra homes per year as in the local plan and a 4 year payment. In addition a 0.4% baseline deduction reduces the figure year on year. The reducing figure of £2.2 million has been used in the budget and continuing baseline reductions of 0.4% have been assumed for 2021/22 and 2022/23. The Government has intimated eliminating New Homes Bonus and replacing with an alternative form of housing funding. No details of what the changes might be are available at present or whether this will actually take place. 77 Appendix 9 8. The capital programme is financed over the next three years using realistic estimates of contributions from revenue, receipts, grants, prudential borrowing and other funding including community infrastructure levy. Three major town centre investments will be funded mainly from prudential borrowing. There is also a provision for potential Future High Street fund projects. These would be funded from a combination of government grant and other co-funding, including CIL, grant and prudential borrowing. There are also provisions for employment site investment to be funded through prudential borrowing. Both the Future High Street fund and employment site projects are indicative projects only and not being approved in this budget. Individual business cases will be brought to members for consideration as they are developed.
Summary & conclusion
Significant risks are identified above with a potential total adverse revenue effect for 2019/20 of £1.9 million. However, revenue reserves are planned to be 12.3% of the net revenue budget or £2.0 million. It is anticipated, dependent upon progress of the town centre developments, that external borrowing will be required by the Autumn of 2020. Such financing is costed within the budget estimates and in line with the requirements of the Treasury Management Strategy and Prudential Indicators. I therefore confirm the robustness of the budget and the adequacy of the reserves.
Martin Flitcroft, Chief Finance Officer 24 February 2020
78 Appendix 10 Proposal: Budget 2020/2021 Conducted by: Martin Flitcroft Date: 10 February 2020
Aims of the Proposal The budget proposes to make the best use of diminishing funds in a way that reflects the priorities of the council in the ten year Strategy 2020-30 and the Teignbridge Ten overarching projects.
With no council tax freeze, and reduced grant from government, this budget includes a council tax increase of £5 equivalent to 2.94%, a review of fees and charges, an assumed pay deal of a wage increase of 2% with higher increases for those on lower grades, whilst continuing to maintain services.
Environment impacts The proposal indicates the following impacts on the environment. Please score
+3 0 -3
Natural environment (wildlife, landscape, trees). +2 Built environment (townscape, design, archaeology, conservation). +1 Climate change (adaptation, mitigation). +1 Resource use (land, energy, water, minerals). +1
The budget anticipates continued funding of the ongoing Local Plan process, development management and green spaces. All of which can help preserve and enhance the natural environment and mitigate the effect of new development.
The capital programme contains provision for investment which will reduce our use of, and spend on, energy. It also includes a significant contribution towards Suitable Alternative Natural Green Spaces (SANGS) at South West Exeter plus refurbishment of Decoy and Den play areas and improvements to Bakers Park.
Working with the Environment Agency the programme also includes substantial investment in South West regional coastal monitoring and coastal asset review.
Value and financial impacts The proposal indicates the following financial impacts.
Please score
+3 0 -3
Jobs or training opportunities The capital programme continues the provision for employment land +2 purchase and development with the aim of improving the economy and jobs in the area. 79 Appendix 10 Business investment within the area A flat nominal fee of £1 for Sunday parking may assist local businesses Investment in superfast broadband, with provisions for employment sites +1 and town centre improvements in the capital programme. The supply or quality of housing Housing investment continues with the majority going into the improvement of private sector housing. Affordable housing provision is +2 mainly facilitated in rural and/or small sites with the majority of the remainder being achieved through the Local Plan. Proposals do include affordable house building on 3 sites in Newton Abbot. Access to services and benefits Continued provision of housing benefit and council tax support (where the most vulnerable receive 100% council tax support) along with improved 24/7 interactions for customers, and the website with easily accessible information +1 Extra council tax income should help avoid the need for service cuts as main government funding reduces.
The increased car park revenue will be partly invested in replacement car parking machines and improving payment options for car park users.
Reduce cost or increase income The review of car park fees and charges and estimates of income increasing by £185,000 which will used to assist with inflationary costs.
Continuing reductions in management costs and increasing savings from the Strata partnership +1 Market Walk rentals continue with reinvestment into the area including regeneration through the Future High Street funding provision.
Forde House accommodation rentals with the Department for Works & Pensions continue to make more efficient use of the building and reduce net costs. This is generating additional rental income and sharing of costs. Increase capital receipts/funding The capital programme is funded by sales of assets and realistic assumptions about future receipts upon which it is dependent have been made. Prudential borrowing is assumed for positive business cases. Community infrastructure levy funding continues and is increasing. There +2 are significant contributions from revenue at just under £0.5 million in the current year and £2.0 million over the next three years enabled by new homes bonus receipts but these are assumed to reduce in later years as replaced by an alternative form of housing funding.
80 Appendix 10 Social impacts and duties The proposal indicates the following social impacts. Please score
+3 0 -3
Age Children (Under 16) – 17% +1 Young (16-24) – 9% +1 Working age (25-59) – 43% +1 Older (60+) – 31% +1 Men – 48% 0 Women – 52% +1 Transgender – c. 1% 0 BAME (Black, Asian, minority ethnic) – 4% 0 LGB (lesbian, gay, bisexual) – c. 5% 0 Marriage and Civil Partnership – 52% 0 Religion and belief – 72% 0 Disability – 21% +1 Pregnancy and Maternity 0 Rural – 27% +1 Economic Deprivation – 22% +1 * Bold = ‘Protected characteristics’
Have representatives of those likely to be affected by the proposal been consulted? Yes
These specific budget proposals have been publicised and a survey added to the website which has been drawn to the attention of the Residents’ Panel and Teignbridge relationship groups. Overview and scrutiny considered the initial proposals on 14 January and met to look at the final proposals on 7 February. In particular the survey was brought to the attention of businesses. Towns and parishes have been advised of the main budget proposals. Responses are generally supportive.
The proposals are based on the provisional settlement. The final settlement has now been received by government and there are no significant adjustments however we continue to deal with the impact of previous decisions to reduce new homes bonus and the elimination of revenue support grant.
Whilst a council tax increase is proposed Teignbridge has an approved council tax support scheme where it is possible to receive 100% reduction in the council tax charge. The changes proposed for 2020/21 are to move to an income banded scheme due to the existing scheme not being compatible with the roll out of Universal Credit and with the aim to support the lowest income households and simplify administration.
There is provision for sports including leisure centre improvements, and provision for the playing pitch improvement plan. 81 Appendix 10
Capital projects are identified to the relevant Teignbridge Ten strategy projects.
Are there ongoing plans to monitor the impact of the proposals? Yes
Are there any relevant Human Rights considerations? No
Summary of impacts and planned mitigations:
Age Children and Young People Potential beneficial impacts include: - Access to training, work placements and employment - Affordable housing options and increased supply of housing - Sports and other activities targeted at the young - Contributions to education provision proposed for South West Exeter and the wider Teignbridge area. - Provisions for play area improvements.
Working Age People Potential beneficial impacts include: - Access to training, work placements and employment opportunities, predominantly in the urban areas - Provision of a range of affordable housing choices and increased supply supported by adequate infrastructure - A proposed new railway station at Marsh Barton to provide residents access to employment
Older People Potential beneficial impacts include: - Enhanced opportunities for participation in community life - Support for vulnerable older people to live in their own homes - Sports and activities aimed at older people - New accessible green spaces
Gender Women Potential beneficial impacts include: - Parents with young children, predominantly young women, are often socially isolated. Targeted actions in deprived areas and the provision of specific sporting / leisure activities may provide a benefit for this population - Demographically women form the greater part of our population of older people. Actions targeted at older groups may particularly benefit women
82 Appendix 10 Disabilities Potential beneficial impacts include: - Improved access to services through 24/7 online/automated web interactions without leaving home - Continued support to adaptations and lifetime design principles in housing
Rural Potential beneficial impacts include: - Support for business may benefit the rural economy - Improved access to services through 24/7 online/automated web interactions without leaving home - Support for the protection and enhancement of the natural and built characteristics of the environment may support the rural economy - Provision of affordable housing is mainly facilitated in rural and/or small sites - Supporting community transport initiatives - An approved contribution is included towards the Connecting Devon & Somerset partnership project to enhance the Phase 2 Superfast Broadband programme in 2022/23.
Economic Deprivation Potential beneficial impacts include: - Actions to improve access to training and jobs - Providing in excess of the statutory national living wage to lower paid Teignbridge staff - Council tax support for those on the lowest household incomes - Improved quality and availability of housing
Duties
Under the Equality Act 2010 s.149 the Council must annually publish what actions we have taken in response to our 3 equality duties. This proposal contributes to the duties in the following ways:
1) The elimination of discrimination, harassment, victimisation and other prohibited conduct by…. Working to eliminate anti-social behaviour and improve feelings of community safety
2) The advancement of equality of opportunity by……. providing decent places to live, work and play that are accessible for all Improving access to services helping people of all ages to get healthy helping the homeless and providing benefit support/debt advice supporting training and skills education, investing in prosperity to make jobs available for all
3) The fostering of good relations between people by….. supporting communities to identify what they need, and how to get it; bring together communities with voluntary groups and assist in finding funding streams for making their places safer, healthier and more vibrant 83 Appendix 10
Managers’ evaluation
No major change required.
Adjustments have been made to better advance equality.
Continue despite having identified some potential for adverse impacts. (Please detail your justification here.) Cease the proposal. It shows actual or potential unlawful discrimination.
Recommended Actions
No further action is required, (pending results of the consultation exercise).
Sign Off
Service Manager Signed: Martin Flitcroft Date: 10 February 2020
BID Signed: Kay O’Flaherty
Signed: Date: 10 February 2020
Date the BIA should be reviewed N/A
84 Appendix 11 PRUDENTIAL INDICATORS
Indicator Code Para Indicator Actual Estimate Budget Forecast Forecast Number Page No. 2018-19 2019-20 2020-21 2021-22 2022-23
AFFORDABILITY 1 22 73 Estimates of the ratio of financing (.21%) 0.97% 2.84% 5.24% costs to net revenue stream
2 22 74 Actual ratio of financing costs (0.48%) - - - - to net revenue stream
PRUDENCE 3 20 62 Gross debt and the capital Will not exceed CFR ------> ------> financing requirement (CFR).
The Chief Finance Officer reports that the Council complied with this prudential indicator in the current financial year and does not envisage difficulties for the future. This view takes into account current commitments, existing plans and the proposals in this budget report.
CAPITAL EXPENDITURE 4 18 48 Estimates of capital expenditure £13.86 M £32.63 M £22.75 M £16.37 M
5 18 50 Actual capital expenditure £9.54 M
6 18 51 Estimates of CFR £20.59 M £34.30 M £46.15 M £46.25 M
7 18 54 Actual capital financing requirement £16.95 M
Total proportional debt limit as set in capital strategy and commercial £70 M £70 M £70 M strategy. This figure includes forecast "internal borrowing".
EXTERNAL DEBT
8 19 55 Authorised limit £30 M £35 M £55 M £70 M
9 19 56 Operational boundary £25 M £30 M £50 M £65 M
10 20 60 Actual external debt at 31/3/19 £5.765 M (Borrowing plus long-term liabilities). TREASURY INDICATORS
11 Adoption of the CIPFA Treasury Management in the Public Services: YES YES YES YES YES Code of practice and cross-sectoral guidance notes 2017 Edition.
12 Maturity structure of borrowing: Upper/lowerUpper/lowerUpper/lowerUpper/lowerUpper/lower Fixed rate borrowing under 12 months 0%/0% 100%/0% 100%/0% 100%/0% 100%/0% 12 months and within 24 months 0%/0% 0%/0% 40%/0% 40%/0% 40%/0% 24 months and within five years 0%/0% 0%/0% 40%/0% 40%/0% 40%/0% five years and within 10 years 0%/0% 0%/0% 40%/0% 40%/0% 40%/0% 10 years and above 0%/0% 0%/0% 100%/0% 100%/0% 100%/0%
13 Variable rate borrowing NB: no more than 10% of overall external borrowing under 12 months 0%/0% 0%/0% 100%/0% 100%/0% 100%/0% 12 months and within 24 months 0%/0% 0%/0% 60%/0% 60%/0% 60%/0% 24 months and within five years 0%/0% 0%/0% 40%/0% 40%/0% 40%/0% five years and within 10 years 0%/0% 0%/0% 0%/0% 0%/0% 0%/0% 10 years and above 0%/0% 0%/0% 0%/0% 0%/0% 0%/0%
14 Total principal sums invested for £0 £0 £10.5 M £10.5 M £10.5 M periods longer than 365 days
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TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
1.1 Background
The Council is required to operate a balanced budget so that cash raised during the year will meet cash expenditure. Part of the treasury management function is to ensure that this cash flow is adequately planned, with cash being available when it is needed to meet spending commitments as they fall due, either on day-to-day revenue or in the longer term for larger capital projects. The capital programme gives an indication of the borrowing need of the Council, essentially longer-term cash flow planning. Management of longer-term cash may involve arranging long or short-term borrowing. Surplus monies are invested in counterparties or instruments commensurate with the Council’s low risk appetite, providing adequate liquidity initially before considering investment return. It is paramount to ensure adequate security of the sums invested, as a loss of principal would result in a loss to the General Fund Balance.
1.2 Reporting requirements
The Local Government Act 2003 requires local authorities to have regard to the Chartered Institute of Public Finance & Accountancy (CIPFA) Treasury Management (TM) Code and Prudential Code.
CIPFA’s Treasury Management in the Public Services Code of Practice and Cross-Sectoral Guidance Notes 2017 requires local authorities to report annually to Council on their treasury strategy and plan before the start of the year. The Ministry of Housing, Communities and Local Government (MHCLG)’s 2018 Statutory Guidance on Local Government Investments (3rd Edition) requires authorities to produce a publicly available investment strategy setting out policies for managing investments. This report fulfils those requirements. A mid-year review and year-end results report are also required and provided to Council at the appropriate time of year.
The Prudential Code 2017 requires local authorities to set and revise prudential indicators (Appendix 10) and to prepare a capital strategy (Appendix 11a) to provide a high-level overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of services.
1.3 Review of Treasury Management Policy Statement The CIPFA Treasury Management in the Public Services Code of Practice and Cross- Sectoral Guidance Notes 2017 recommends in Section 6 that an organisation’s treasury management policy statement adopts the following form of words to define the policies and objectives of its treasury management activities. There has been no change since February 2019, however the statement is shown in full below:
1. Teignbridge District Council defines its treasury management activities as: The management of its investments and cash flows, its banking, money market and capital transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.
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TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
2. Teignbridge District Council regards the successful identification, monitoring and control of risk to be the prime criteria by which the effectiveness of its treasury management activities will be measured. Accordingly, the analysis and reporting of treasury management activities will focus on their risk implications for the organisation, and any financial instruments entered into to manage these risks.
3. Teignbridge District Council acknowledges that effective treasury management will provide support towards the achievement of its business and service objectives. It is therefore committed to the principles of achieving value for money in treasury management, and to employing suitable comprehensive performance management techniques, within the context of effective risk management.
The Code also recommends that all public service organisations adopt the following four clauses, which Teignbridge District Council did in February 2018. There has been no change since then.
1.4 Clauses adopted
1. Teignbridge District Council will create and maintain, as the cornerstones for effective treasury management: - A treasury management policy statement, stating the policies, objectives and approach to risk management of its treasury management activities - Suitable treasury management practices (TMPs), setting out the manner in which Teignbridge District Council will seek to achieve those policies and objectives, and prescribing how it will manage and control those activities. 2. Full Council will receive reports on its treasury management policies, practices and activities, including, as a minimum, an annual strategy and plan in advance of the year, a mid-year review and an annual report after its close, in the form prescribed by its TMPs. 3. Teignbridge District Council delegates responsibility for the implementation and regular monitoring of its treasury management policies and practices to the Executive Committee, and for the execution and administration of treasury management decisions to the Chief Finance Officer, who will act in accordance with Teignbridge District Council’s policy statement and TMPs and, if he/she is a CIPFA member, CIPFA’s Standard of Professional Practice on Treasury Management. 4. Teignbridge District Council nominates the Audit Scrutiny Committee to be responsible for ensuring the effective scrutiny of the treasury management strategy and policies.
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TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
2. Annual Investment Strategy
2.1 Investment categories
Investments can fall into one of the following four categories as listed below – Loans and Non-financial investments fall outside of the treasury management function and are dealt with in the Commercial Strategy and Capital Strategy.
This authority has defined the list of types of investment instruments that the treasury management team are authorised to use within the lending list. There are two categories within the list: ‘specified’ and ‘non-specified’ investments.
Specified investments (short term, sterling investments made with a body of high quality, the UK government or local authorities). Teignbridge District Council’s treasury management transactions fall into this category. They contribute to the objectives stated above in the policy statement. The principles of the TM Code to prioritise security, liquidity and yield, in that order of importance, applies to these investments. The lending list within this report sets out which counterparties the Council may invest with and the lending limits which apply.
Non-specified investments (any financial investment that is not a loan and does not meet the criteria of specified investments). They could potentially be of less high credit quality, for periods in excess of one year, and/or more complex instruments which require greater consideration by members and officers before being authorised for use. Once an investment is classed as non-specified, it remains non-specified all the way through to maturity i.e. an 18 month deposit would still be non-specified even if it has only 11 months left until maturity.
As a result of the change in accounting standards for 2019/20 under IFRS 9, this authority will consider the implications of investment instruments which could result in an adverse movement in the value of the amount invested and resultant charges at the end of the year to the General Fund. (In November 2018, the Ministry of Housing, Communities and Local Government, [MHCLG], concluded a consultation for a temporary override to allow English local authorities time to adjust their portfolio of all pooled investments by announcing a statutory override to delay implementation of IFRS 9 for five years commencing from 1.4.18.)
The Council has determined that its exposure to non-specified investments will be managed through the decision-making framework laid out in its Commercial Strategy, subject to an overall limit of 15% of its agreed borrowing cap (determined as £70m for 2020-21).
Loans (for local enterprises as part of a wider strategy for economic growth). Teignbridge District Council may make loans to public bodies and other organisations which deliver social value or economic growth within the district. These loans should follow the governance procedures laid out in Teignbridge District Council’s commercial strategy.
Non-financial investments (generally involving a physical asset that can be realised to recoup the capital investment). Teignbridge89 District Council does not currently hold any investments purely for financial gain. However, the council has invested in property for regeneration and local economic benefit purposes which also benefit the Council financially. Appendix 12
TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
There are provisions in the capital programme for projects which are for a combination of service delivery, regeneration and local economic benefits.
Where there are projects which would deliver social value, but where equivalent opportunities do not exist within the local functional economic area (for example, renewable energy), then investments outside the area will also be considered.
In the case of non-financial investments, it is recognised that it may not be possible to give priority to security and liquidity over yield due to the nature of the assets. It is expected that the risks associated with non-financial investments would be considered in detail as part of the due diligence process required by the Capital Review Group process and Commercial Property Investment Board process. The Council’s Commercial Strategy and Capital Strategy set out its approach to potential future non-financial investments of this type. Business cases would include market assessments, the nature and level of competition, how market/customer needs will evolve over time and barriers to entry and exit. Specialist consultants will be appointed as necessary to provide detailed analysis required for the due diligence process.
Annual assessments of fair value are carried out and monitored against the original capital investment, to take account of changes in the market and other conditions Minimum revenue provision is set aside in relation to these investments, mitigating against the possibility of adverse valuation changes and also, ongoing refurbishment or replacements. Revenue budgets are monitored as part of the budget monitoring which feeds into the regular reports provided by the Chief Finance Officer to CLT and Executive. In addition, the estates team track rent receipts and market conditions for early indications of potential problems.
2.2. Managing risk
2.2.1 Risk appetite
The MHCLG and CIPFA have extended the meaning of ‘investments’ to include both financial and non-financial investments. Guidance from MHCLG and CIPFA places a high priority on the effective identification, monitoring and control of risk. The TM Code identifies the main treasury management risks. These are considered in detail within Teignbridge District Council’s TM Practices, which are available within Finance. This strategy sets out the council’s approach to investments and borrowing, including credit and counterparty risk, liquidity risk, interest rate risk and refinancing risk.
This authority has adopted a prudent approach to managing risk and defines its risk appetite by the following means: -
Minimum acceptable credit criteria are applied in order to generate a lending list of counterparties with acceptable creditworthiness. This also enables diversification and thus avoidance of concentration risk. The key ratings used to monitor counterparties are detailed at 2.2.5 below. 90
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TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
2.2.2 Liquidity
Length of treasury management investments will take into consideration that monies are available to meet large regular outgoings such as BACS payments for creditors, benefits and salaries and other regular commitments such as precepts and non-domestic rates contributions. A cash flow planner is maintained with details of regular payments and receipts. Other information is recorded as it becomes available, for example payments in relation to capital projects. This is in order to identify whether Teignbridge District Council may be exposed to the effects of potential cash flow variations and shortfalls. The maximum length of an investment will depend both on when funds will be required and on the ratings of the institution with which the investment is placed. In addition, the treasury team will take into account the likely path of interest rates (see interest rate risk below). These activities are carried out daily to ensure the current account bank balance is near to zero in order to maximise investment returns whilst minimising risk and protecting capital.
2.2.3 Interest rate risk
This is the risk that fluctuations in the levels of interest rates create an unexpected or unbudgeted burden on an organisation’s finances, against which it has failed to protect itself adequately.
Greater returns are usually obtainable by investing for longer periods
The treasury management team actively monitors interest rates and provides a monthly interest forecast report in order to regularly assess the impact of interest rate changes on the council’s budgets. Where cash sums can be identified that could be invested for longer periods, the value to be obtained from longer term investments will be carefully assessed. If it is thought that Bank Rate is likely to rise significantly within the time horizon being considered, then consideration will be given to keeping most investments as being short term or variable. Conversely, if it is thought that Bank Rate is likely to fall within that time period, consideration will be given to locking in higher rates currently obtainable, for longer periods.
Officers will continue to seek the best rate, balanced against risk, at the time of investment, whether this is for a fixed term deposit with counterparties from the lending list, or use of call, notice and money market fund accounts. These accounts provide access to flexible deposits, with a range of access options and interest rates.
Investment returns expectations.
On the assumption that the UK and EU agree a Brexit deal including the terms of trade by the end of 2020 or soon after, then Bank Rate is forecast to increase only slowly over the next few years to reach 1.00% by quarter 1 2023. Bank Rate forecasts for financial year ends (March) are:
Q1 2021 0.75% 91 Q1 2022 1.00% Q1 2023 1.00% Appendix 12
TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
The overall balance of risks to economic growth in the UK is probably to the downside due to the weight of all the uncertainties over Brexit, as well as a softening global economic picture. The balance of risks to increases in Bank Rate and shorter term PWLB rates are broadly similarly to the downside. In the event that a Brexit deal is agreed with the EU and approved by Parliament, the balance of risks to economic growth and to increases in Bank Rate is likely to change to the upside.
External borrowing liability
The council does not currently have any long-term external borrowing. However there are policies in place through the Prudential Indicators to ensure a planned and well-balanced spread of maturity dates. This is in order to reduce the prospect of having to negotiate refinancing at an unfavourable time.
The review of the Treasury Management Code has removed the requirement for an interest rate exposure indicator. However, the councils are encouraged to define their own “liability benchmark”. This has been calculated by working out the total borrowing requirement should the provisional capital programme expenditure occur, then adjusting for sums which could be funded by internal borrowing. A liquidity allowance is factored in to ensure that funds are available for regular outgoings (see Liquidity above). This is currently assumed to be a minimum £5 million average daily lending.
The liability benchmark is a tool which allows measured borrowing decisions to be made in relation to the amount and maturity profile of loans, which manages interest rate exposure.
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TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
The council does not use financial instruments based on derivatives for interest rate risk management.
2.2.4 Security
As stated in the MHCLG investment guidance, the council’s investment priorities are security of the principal sums and liquidity, keeping money readily available for expenditure when needed. Yield becomes a consideration after the priorities have been satisfied.
“Specified” investments as defined in the MHCLG investment guidance; in sterling, with a maturity of no more than one year, placed with the UK government, other local authorities or bodies and investment schemes of high credit quality, determined by the lending list.
In relation to treasury management, the maximum value and period of specified investments with any one organisation is dependent on a score based on credit ratings. Institutions are graded to allow larger sums and longer investments with the strongest banks and building societies, capitalising on the better terms available while actively maintaining a breadth of counterparties, allowing us to spread our investments and achieve effective risk management.
One organisation is defined as a banking group or other institution, including any subsidiaries. If the maximum amount is invested with one subsidiary, no more will be invested within that group.
Non-specified investments require further due diligence analysis to arrive at an assessment of the security of Council funds and follow the decision making process laid out in the Commercial Strategy.
2.2.5 Credit and counterparty risk This is the risk of failure by a counterparty to meet its contractual obligations, particularly as a result of diminished creditworthiness.
Teignbridge District Council regularly monitors the standing of counterparties it does or may deal with and maintains an authorised lending list, which is updated quarterly, with reference to credit ratings and other information provided by its treasury advisors.
Use of ratings The MHCLG investment guidance requires that the annual strategy statement details the authority’s use of ratings and external treasury advisors.
There are three main ratings agencies: Fitch, Moody’s and Standard and Poor. These agencies provide an opinion on the ability of the institutions to repay short and long-term investments, whether there is likelihood of them receiving state support should they run into difficulties and their general financial strength.
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The council’s TM schedules require that institutions meet the following minimum ratings: Ratings Agency Long Term Short Term Baseline Credit Assessment/ Bank viability
Fitch BBB F2 bbb Moody’s Baa2 P2 baa2
While ratings from all agencies are considered, our scoring system is currently based on those of Moody’s and Fitch. Standard and Poor do not cover some of the institutions on our list. Ratings are reviewed quarterly. In addition, they are monitored if there is any news of changes in the press and before any investment. If ratings have fallen below the minimum acceptable level, an alternative would be sought.
Other information: ratings will not be the sole determinant of the quality of an institution; it is important to continually assess and monitor the financial sector on both a micro and macro basis and in relation to the economic and political environments in which institutions operate. The assessment will also take account of information that reflects the opinion of the markets. To achieve this consideration the Council will engage with its advisors to maintain a monitor on market pricing such as “credit default swaps” and overlay that information on top of the credit ratings.
Other information sources used will include the financial press, share price and other such information pertaining to the financial sector in order to establish the most robust scrutiny process on the suitability of potential investment counterparties. Daily relevant financial news updates and market commentaries are received by email from treasury advisors, brokers and the Council’s bank. These enable assessment of future treasury risks and scenarios in order to develop suitable risk management strategies.
2.2.6 Staff training and treasury management advisors
The MHCLG investment guidance requires that the annual strategy gives details of procedures for reviewing and addressing the training needs of the authority’s treasury management staff and members.
All new members are offered a Budget and Financial Management Seminar, which includes an overview of Treasury Management.
Treasury staff receive internal training from experienced staff and managers. Staffing is arranged so that a bank signatory (all experienced managers), is always available for consultation on decisions. Procedure and system notes, together with official guidance from CIPFA and the MHCLG are maintained for consultation within the section. These are updated for any changes, which are also communicated to the relevant staff. Bank signatories are professionally qualified accountants, with the officers carrying out daily procedures either studying with or AAT-qualified. Cover staff have regular experience of carrying out the procedures.
The Council uses Link Asset Services, Treasury94 solutions as its external treasury management advisors.
Appendix 12
TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
The Council recognises that responsibility for treasury management decisions remains with the organisation at all times and will ensure that undue reliance is not placed upon the services of our external service providers. All decisions will be undertaken with regards to all available information, including, but not solely, our treasury advisers.
It also recognises that there is value in employing external providers of treasury management services in order to acquire access to specialist skills and resources. The Council will ensure that the terms of their appointment and the methods by which their value will be assessed are properly agreed and documented, and subjected to regular review
The scope of investments within the Council’s operations now includes both conventional treasury investments, (the placing of residual cash from the Council’s functions), and more commercial non-financial investments, such as investment in properties. In relation to non-financial investments, the Council’s Estates team has the experience of RICS-qualified staff. The Council has working relationships with a range of specialist consultants whose areas of expertise include property management, development and infrastructure, investment and valuation. This is crucial for the due diligence required in assessing potential commercial investments. The process for this is set out in the Commercial Strategy.
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TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
3. Lending list The current authorised lending list has been updated to take account of changes in ratings and banks and is shown below for approval. Specified Investments Type of Lender Details 1. Current Banker Lloyds Bank £3,000,000 limit 2. Local Authorities All No limit 3. UK Debt Management Office Deposit Facility (UK government AA/Aa2/AA rated) no limit. 4. UK Treasury Bills (UK government AA/Aa2/AA rated) no limit. 5. Money market funds, subject to maintenance of LNAV status and AAAmf rating. CCLA Public Sector Deposit Fund AAAmmf £3,000,000 limit Aberdeen Liquidity Fund AAAmmf £3,000,000 limit Blackrock Liquidity Fund AAAmmf £3,000,000 limit LGIM Liquidity Fund AAAmmf £3,000,000 limit 7. Top UK-registered Banks and Building Societies, subject to satisfactory ratings. Updated below to reflect information provided by treasury advisors. 8. Non-specified: CCLA Property and Diversified Income Funds - £2,000,000 limit
90 day 180 day 364 day Overall Institution Tier limit limit limit limit £ £ £ £ HSBC Bank plc 1 3,000,000 2,000,000 1,000,000 3,000,000 Close Brothers Ltd 1 3,000,000 2,000,000 1,000,000 3,000,000 Santander UK plc 1 3,000,000 2,000,000 1,000,000 3,000,000 Nationwide Building Society 1 3,000,000 2,000,000 1,000,000 3,000,000 Lloyds Bank plc and 1 3,000,000 2,000,000 1,000,000 3,000,000 Bank of Scotland plc Handelsbanken plc 1 3,000,000 2,000,000 1,000,000 3,000,000 Sumitomo Mitsui Banking 1 3,000,000 2,000,000 1,000,000 3,000,000 Corporation Europe Ltd
Goldman Sachs International Bank 2 2,000,000 1,000,000 2,000,000 Standard Chartered Bank 2 2,000,000 1,000,000 2,000,000 NatWest Bank 2 2,000,000 1,000,000 2,000,000 Royal Bank of Scotland 2 2,000,000 1,000,000 2,000,000 Coventry Building Society 2 2,000,000 1,000,000 2,000,000
Clydesdale Bank 3 1,000,000 1,000,000 Nottingham Building Society 3 1,000,000 1,000,000 Skipton Building Society 3 1,000,000 1,000,000 Yorkshire Building Society 3 1,000,000 1,000,000 Leeds Building Society 3 1,000,00096 1,000,000 Principality Building Society 3 1,000,000 1,000,000 Appendix 12
TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
Bank regulations force banks to maintain “capital buffers”, classifying their deposits according to duration. Instant access accounts and short deposits are not attractive to banks as they cannot be counted towards those buffers. For this reason, interest rates on most “call” accounts remain low.
Other Non-specified investments
These will be considered on a case-by case basis, using the decision-making framework laid out in the Commercial Strategy. Investments which may be considered include Renewable energy/social impact investments On-lending to key partners/stakeholders in relation to jointly beneficial projects Lending in instances where doing so would protect the local economy
4. Borrowing
Section 33 of the Local Government Finance Act 1992 requires each council to set a balanced budget. The treasury management function will comply with this requirement. This means that increases in capital expenditure must be limited to a level at which increases in financing charges from increased borrowing, such as interest and minimum revenue provision, and increases in running costs are affordable for the foreseeable future. Teignbridge District Council adheres to the Prudential Code, which underpins “prudential” borrowing by ensuring that the Council takes into account the following factors:
Strategic service objectives (in line with the council strategy) Stewardship of assets Value for money (project appraisal as required by the capital approval process) Prudence and sustainability (factors such as the implications of external debt; looking at whole life costing and the impact on revenue budgets) Affordability Practicality (achievability of the capital programme and staff resource requirements)
4.1 Borrowing Strategy The Council is currently maintaining an under-borrowed position. This means that the capital borrowing need (the Capital Financing Requirement), has not been fully funded with loan debt as cash supporting the Council’s reserves, balances and cash flow has been used as a temporary measure. This strategy is prudent as investment returns are low and counterparty risk is still an issue that needs to be considered.
The Council will continue to adopt a flexible approach to borrowing, making use of internal resources and keeping shorter term borrowing under review in comparison to longer term borrowing costs. This approach has minimised financing costs for capital projects where appropriate. The Council currently has no external borrowing and does not foresee undertaking any external 97borrowing during the remainder of the 2019-20 financial year. Appendix 12
TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
Forward projections of borrowing are summarised in the Prudential Indicators at appendix 11 and considered in more detail in the capital strategy at appendix 12a. The liability benchmark set out in the Interest Rate Risk section above allows management of interest rate exposure while ensuring that funds are kept available for cash flow requirements.
Acceptable sources of loans as stated in the TM schedules are: Public Works Loans Board UK Municipal Bonds Agency Local authorities Public bodies UK banks and building societies Debt capital markets (a market where companies raise funds by trading debit securities such as corporate and government bonds). This could include, for example, insurance companies or pension funds.
In October 2019, the Public Works Loans Board increased their margin over gilt yields by 100 basis points (1%) to 180 basis points (1.8%) on loans lent to local authorities, meaning they may no longer be the lender of first choice. Officers will review alternative sources of borrowing in conjunction with its treasury management advisors and select those offering the best value for money to the Council at the time the funding is required.
4.2 Limits to borrowing activity
Borrowing limits are included within the Prudential Indicators. The operational boundary is the limit which external debt is not normally expected to exceed. The authorised limit represents a control on the maximum level of borrowing. This represents a legal limit beyond which external debt is prohibited.
The Council’s Commercial Strategy and Capital Strategy also sets a proportional debt limit, which has been assessed as approximately £70 million. This figure has been arrived at after consideration of benchmarking provided by external expertise, based on overall debt compared to cost of service and the financing liabilities this would place upon the council. This overall limit encompasses both internal and external borrowing activity.
Teignbridge District Council adheres to the MHCLG investment guidance which states that money may not be borrowed in advance of need in order to invest at a profit. Any decision to borrow in advance for capital projects or debt maturities would only occur if there was a clear business case to do so. Borrowing may occur to cover temporary shortfalls in cash balances.
5. Prudential indicators The Council’s capital expenditure plans are the key driver of treasury management activity. They are reflected in the prudential indicators, which include both capital and treasury elements. 98
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TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
The Prudential Code requires local authorities to set prudential indicators for capital finance for the forthcoming and following years and to monitor actual figures from previous years where required. The setting of indicators is done before the beginning of the forthcoming year as part of the budget process. The prudential indicators may be revised at any time, following due process and taking into account their affordability. The prudential and treasury indicators in appendix 10 take into account the affordability of the Council’s capital finance plans, ensuring that borrowing remains within prudent and sustainable levels and that treasury management decisions are taken in accordance with good practice.
Further detail is available within the Council’s capital strategy. This takes a long-term view of proposed borrowing to fund capital expenditure, together with the financing costs (interest and Minimum Revenue Provision).
6. Minimum Revenue Position (MRP) Annual Statement:
Regulation 28 of The Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2008 states that ‘A local authority shall determine for the current financial year an amount of minimum revenue provision which it considers to be prudent’. The provision is made from revenue in respect of capital expenditure financed by borrowing or credit arrangements. These amounts make up the Council’s capital financing requirement (CFR).
With all options MRP should normally commence in the financial year following the one in which expenditure was incurred. Regulation 28 does not define ‘prudent’. However statutory guidance, which authorities must “have regard” to, has been issued by MHCLG. It makes recommendations to authorities on the interpretation of that term. The broad aim is to put aside revenue over time to cover the CFR. The MHCLG guidance was updated in 2018 (applicable from 1 April 2019) to include a number of clarifications on determining a prudent level of provision. MRP can only be nil if a local authority’s capital financing requirement is nil or negative on the last day of the preceding year, or a previous year’s overpayment is being offset. The Council has a positive capital financing requirement, mainly due to the purchase of Market Walk.
The first recommendation given by the guidance is to prepare, before the start of each financial year, an annual statement of the policy on making MRP in respect of that financial year and submit this to Full Council for approval. The guidance recommends that ‘prudent’ provision should be made in accordance to the following:
That the provision should ensure that debt is repaid over a period similar to one over which the capital expenditure provides the benefit, or if it is government-supported borrowing, over the period in the grant determination. That the provision should be calculated by one of the four methods that the Secretary of State considers appropriate to making prudent provision although it is recognised that other approaches are not ruled out.
In 2020-21 it is proposed to continue 99to adopt option 3, the asset life (annuity) method. The annuity method differs from the equal instalment method in that the amounts Appendix 12
TEIGNBRIDGE DISTRICT COUNCIL TREASURY MANAGEMENT: POLICY STATEMENT, CLAUSES TO BE ADOPTED, STRATEGY STATEMENT AND AUTHORISED LENDING LIST FROM 24 FEBRUARY 2020 MINIMUM REVENUE PROVISION ANNUAL STATEMENT
payable start low and increase over time. This is because it is a method often used to calculate loan repayments, where it is required that the total amount of principal and interest repaid each year is a common amount. It is therefore suited to investments where revenues will increase over time. It also takes into account the time value of money.
Investment assets may also be sold to repay any outstanding debt liabilities.
100 Appendix 12a
Teignbridge District Council Capital Strategy Background Local authorities are required by regulation to have regard for the Chartered Institute of Public Finance & Accountancy (CIPFA) Prudential Code 2017 edition and Treasury Management Code 2017 edition. The updated 2017 Prudential Code requires that local authorities have in place a capital strategy. This is in order to demonstrate that the authority takes capital expenditure and investment decisions in line with service objectives and overall organisational strategy and resources. The aim is to ensure decisions are being made with sufficient regard to the long run financing implications and potential risks to the authority. Local authorities must also have regard to the Statutory Guidance on Local Government Investments, the updated 3rd edition of which applies from 1 April 2018. This requires the production of at least one investment strategy. Teignbridge District Council have: a Treasury Management Strategy Statement which is primarily concerned with treasury (financial) investments a Commercial Strategy, the focus of which is other loans and non-financial investments (for example, investments in property). Purpose The capital strategy is intended to give an overview of how the Council plans and delivers its capital expenditure, capital financing, treasury management and investment activities. It shows how these activities are carried out with the aim of fulfilling the priorities set out in key strategic documents such as the ten year council strategy and local plan. It is a key document for the Council and forms part of the annual budget papers. As part of its budget papers, the Council produces a Medium Term Financial Plan. It shows how the Council has been demonstrating a prudent approach to prepare for grant reductions, including the ongoing Business Efficiency Service Transition programme (BEST 2020). This has allowed the Council to make savings and benefit from restructuring efficiencies and income generation. However, the future funding scenario requires further action to ensure the Council’s future financial stability. Revenue support grant has been nil for Teignbridge since 2019-20. In addition, the business rates retention “baseline” is likely to be reset and New Homes Bonus reduced or potentially scrapped. The Commercial Strategy shows how the Council intends to build on its current progress to generate alternative income and savings to enable financial self-sufficiency. It provides the framework which will allow the Council to achieve its vision of shaping Teignbridge as a place which is economically resilient, delivering good quality services while addressing the funding challenges outlined above. The Treasury Management Strategy and performance indicators, along with the Commercial Strategy provide information on Teignbridge’s approach to managing the risks associated with capital investment and financing decisions taken.
101 Appendix 12a
Teignbridge District Council Capital Strategy 1. Capital Expenditure 1.1 Strategic factors The capital programme is included at Appendix 7 of the budget papers. The capital strategy which underpins it is driven by a number of factors: The ten year Council strategy. This consists of eight key objectives: A carbon neutral district Better quality and affordable housing Wages and jobs growth Active and sustainable travel choices Encouraging our young people to stay A healthier population living in resilient communities A clean, green and safe environment An open council Projects within the capital programme which reflect this include provisions for significant investment in town centres and employment land, sustainable travel, flood alleviation, housing grants including fuel efficiency, affordable housing and investment in leisure facilities, open spaces and play areas. The Local Plan, which guides development in the district, setting out policies, proposals and actions to meet the environmental, social and economic challenges facing the area. This includes supporting infrastructure for proposed developments. The capital programme shows contributions to a new railway station at Marsh Barton and provisions for improvements to the A382 and enabling a new bridge and link road in Dawlish. There are provisions for contributions to education facilities in South West Exeter and the wider Teignbridge area, and projects to create and improve green spaces, sports and leisure facilities and cycle routes. The council’s asset management plan, which sets out the council’s approach to the strategic management of its land and building assets. It aims to ensure the council maximises use and efficiency of its property portfolio, making a long term positive contribution to service delivery. The capital programme includes items which invest in council buildings, such as the provision for heating improvement at Forde House and provisions for leisure centre refurbishment. The capital programme is supported by any capital receipts arising from the disposal of assets. The council’s Medium Term Financial Plan – the programme must be affordable within the council’s overall budget plans. This means that business cases for projects funded by borrowing must demonstrate that they will cover the revenue costs associated with borrowing over the life of the asset. Strategic Service Planning – The council is in the fifth year of Business Efficiency Service Transition 2020. This process incorporates service business plans. In addition to identifying potential savings, the focus is on defining strategic direction, examining the nature of services provided and whether they provide clear social or
102 Appendix 12a
Teignbridge District Council Capital Strategy economic value. As part of this, future projects and asset management options are considered, which will shape the future shape of the capital programme. Commercial Strategy – The commercial strategy is intended to support the Council’s financial sustainability. It takes a broad view of the concept of commercialisation, to include service and charging reviews and process redesigns; financial management, investment and procurement initiatives; housing and regeneration projects, asset management and income generation. While it does not relate exclusively to the capital programme, it has links to the capital strategy in terms of the larger projects within the Key Priorities of Regeneration and Commercial Property, Asset Management and Housing. Delivery of these projects is integral to the Council strategy. They are supported by the Council’s approach to investments and the borrowing which is critical to funding them. This is relevant to the Key Priority of Financial Management and must be taken into account within the Council’s treasury management strategy. CIPFA and Government guidance – the council must have regard to both CIPFA’s Prudential Code (capital expenditure and financing) and its Treasury Management Code (the management of borrowing, investments and cash flow). Both of these Codes were recently updated at the end of 2017. In addition the Ministry of Housing, Communities and Local Government (MHCLG) issued updated statutory guidance on investments and minimum revenue provision in February 2018. 1.2 Governance Responsibility for decision-making and ongoing monitoring in respect of capital expenditure, investment and borrowing, including prudential indicators remains with Full Council. Each year, the budget process reports to Full Council across a range of strategies and information which is relevant to capital expenditure, investment plans and financing implications, to ensure that decisions are taken in accordance with good professional practice and in full understanding of the risks involved. The capital programme is considered annually by Full Council. Updates are reported to CMT and Executive throughout the year, with any budgetary changes approved by reference to the virement rules in the financial instructions. Separate reports are brought back to Full Council for approval for any larger projects (over £250k). The Treasury Management strategy, which sets out policies relating to the management of investments, balancing security, liquidity and yield. This is approved annually by Full Council and includes the approved lending list and the council’s approach to borrowing. Updates are brought to Executive throughout the year as necessary. The Minimum Revenue Provision Statement sets out the council’s method of making prudent provision from revenue in respect of capital expenditure financed by borrowing or credit arrangements. Any changes are required to be approved by Full Council. The Prudential Indicators aim to demonstrate whether the Council has fulfilled the objectives of an affordable, prudent and sustainable approach to capital expenditure, investment and debt. Any revisions are required to be approved by Full Council.
103 Appendix 12a
Teignbridge District Council Capital Strategy The Commercial Strategy is taken to Full Council as part of the budget papers. It includes an explanation of the role of the Commercial Property Investment Board, which consists of key members and officers and delegates authority to the Chief Finance Officer or deputy to approve purchase of assets where relevant criteria are met, if it would be contrary to the financial interests of the Council to delay making a decision. This is to allow a quick response to opportunities where appropriate, while adhering to a strict due diligence process. Role of the Capital Review Group Teignbridge District Council operates a Capital Review Group (CRG), with members including senior officers across a range of services. This allows a corporate approach to capital planning and expenditure, along with the use of property assets throughout the organisation. Its role is to consider and prioritise capital proposals, ensuring that proper option appraisals are carried out and that they have considered in sufficient detail those matters which are required to be taken into account by the Prudential Code: Strategic service objectives Stewardship of assets Value for money (option appraisals) Prudence and sustainability (including external debt implications and impact on revenue budgets) Affordability Practicality (including staff resource requirements) Proposals must follow the Capital project reporting flow chart as per the Financial Instructions. An initial Outline Proposal Form is followed up by a financial appraisal and Project Initiation Document (PID) as required. The CRG ensures early wide consideration. Stage 2 of the flow chart ensures the correct level of approval as per the Council’s constitution. Basis of cost estimates – Council project managers are experienced in providing cost estimates in line with best practice, to include surveys, preliminaries, project and design team fees, risk allowances, contingency and other development and project costs. Previous similar schemes can be reviewed on SPAR.net (the council’s performance and risk management system). For certain projects, external quantity surveyors may be appointed either on a one-off basis or as part of a multi-disciplinary project management team. Financial appraisals look at the whole life cost of projects including both capital and long term revenue costs, with inflation factored in. The CRG also monitors the existing capital programme to ensure its continued relevance, consider the progress of schemes including variations and re-phasing and to identify or reallocate unused resources. SPAR.net is used to identify potential risks and to highlight causes for concern, whether budgetary or progress-related. In addition, it provides a reference resource of historical information which can help to inform current decisions and allows lessons to be learned from past experience.
104 Appendix 12a
Teignbridge District Council Capital Strategy The role of the CRG is crucial to ensuring that the risks associated with capital investments are mitigated. It ensures that projects demonstrate affordability, that there is wide consultation to ensure proper procedures are followed, for example tender processes, legal and financial matters. It also considers whether there are sufficient resources for effective project management and delivery. 1.3 Commercial Activity The Council’s approach to commercial activity is dealt with in its Commercial Strategy. This takes a broad view of commercialisation, so as well as capital investments such as housing and regeneration projects, it also deals with service and charging reviews and process redesigns, financial investments, asset management and income generation. The goal of the commercial strategy is to enable the Council to become financially self- sufficient against the backdrop of reduced central government funding for local authorities. This is essential to providing the stability which will allow it to focus on the provision of good quality services and achieving the key objectives of the Council strategy. A budget gap of £1.5 million is forecast from 2022-23. However, the Council also wishes to ensure the continuation of its capital programme with an increase in its revenue contribution to capital of £0.8 million per annum. This means that the overall budget gap is currently approximately £2.3 million. By acting commercially, the Council aims to fulfil its vision for Teignbridge and contribute towards the reducing the significant budget gap which has been identified. The core aim of the commercial strategy which most directly relates to the capital plans of the Council is: Increasing financial and social benefits through delivery of regeneration initiatives which stimulate economic growth, and local Housing. This will help ensure local residents find the support they need to thrive and that the right conditions are created for existing and new businesses to grow and be financially independent. The core aims which underpin the Council’s approach to these investments are as follows: Being socially responsible – investments and practices which support local prosperity, social and environmental benefits. In line with the Public Services (Social Values) Act 2012 – if business cases have similar returns, look to deliver those initiatives which provide best social or environmental outcome whilst paying due attention to equality, wellbeing and safeguarding. Investing within the district is the first priority. However, it is recognised that there are benefits to investing within the local functional economic area. Many residents and businesses commute or trade between Teignbridge and the area of the Greater Exeter Strategic Plan (GESP), or the wider Heart of the South West Local Enterprise Partnership area, comprising Devon, Plymouth, Somerset and Torbay. Therefore, investments within these boundaries will in turn encourage the growth of business rates and Council Tax. Investments outside the area will also be considered, especially where equivalent opportunities are not available within the district. Securing external funding and working in partnership
105 Appendix 12a
Teignbridge District Council Capital Strategy Following the core aims are five specific key priority areas. Relating to capital are the following: Key Priority 1: Regeneration and Commercial Property Investment Within the capital programme are significant town centre regeneration projects which focus on the transformation of our town centres away from places simply to shop and towards being destinations for leisure and focal points for communities. Delivering new hotels in Newton Abbot and Teignmouth as well as working towards broader regeneration of Newton Abbot town centre will positively influence the economic prosperity of the district, helping to provide growth in local jobs, attracting businesses to the area and contributing towards local vibrancy. In turn, this encourages people to both work and spend leisure time locally, which should help reduce carbon emissions. Key Priority 2: Asset Management To ensure the Council maximises the available benefits of its assets, whether as operational sites, to generate rental income, to re-purpose or sell. Carbon neutrality will be considered in relation to asset management. The capital programme contains various projects for the ongoing stewardship of assets, including improvements to leisure facilities, heating efficiency measures and improvements to open spaces and play areas. Key Priority 3: Commercialisation and strong, agile operating practices Although largely relating to operational procedures, there are links to the capital programme via the purchase of the equipment and software to enable digital transformation projects. Key Priority 4: Financial Management Treasury management is crucial to ensuring cash is available when needed, including longer term for capital projects which may be funded from borrowing. Investments which are not covered by the Treasury Strategy lending list follow the approvals route described within the commercial strategy. This also encompasses activity which falls outside the treasury management function, including loans to key partners and stakeholders which deliver social value or economic growth within the district. Key Priority 5: Housing The Council is currently developing and working on projects in the capital programme to deliver accommodation for social rent in Newton Abbot town centre, both independently and through working with a development partner. Due diligence and risk The council is working to develop commercial skills, promoting risk-awareness. Teignbridge’s appetite for risk seeks to be proportional to its role as a district council. The commercial strategy promotes the development of risk awareness by the use of business cases which must demonstrate the consideration and mitigation of risk factors (an appendix is provided to aid this process), focus on due diligence and consultation where appropriate
106 Appendix 12a
Teignbridge District Council Capital Strategy Governance and decision-making Commercial activity is subject to the Council’s governance arrangements, with legal advice to be sought on a case-by-case basis. There are provisions for urgent decisions to be taken by the Chief Finance Officer in consultation with the Commercial Property Investment Board, if it would be contrary to the financial interests of the Council to delay. The intention is to allow a quick response to opportunities where appropriate, while adhering to a strict due diligence process. 1.4 Policies on Capitalisation The Council’s accounts are required to be prepared in accordance with proper accounting practices. For capital, these practices are governed by the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 (SI 2003 No 3146, as amended) supported by International Financial Reporting Standards (IFRS). Local authorities must also have regard to CIPFA’s Prudential Code. The Council’s Statement of Accounts includes detailed policies on the treatment of different asset classes. Capital documentation such as the outline proposal form is considered by the Capital Review Group to ensure that projects meet the requirements for capital expenditure. There are three routes by which expenditure might qualify as capital: The expenditure results in the acquisition of, or the addition of subsequent costs to non- current assets in accordance with proper practices. REFCUS expenditure (Revenue Expenditure Funded from Capital Under Statute): These are arrangements which recognise that some expenditure incurred by local authorities has a wider, lasting public benefit than is reflected in the accounting rules for non-current assets, for example grants and loans and expenditure on non-Council assets. The Secretary of State makes a direction that the expenditure can be treated as capital expenditure. The Council’s de minimus for capital is £10,000. The Council has not used the capitalisation flexibilities issued by the Secretary of State for the Ministry of Housing, Communities and Local Government. These give authorities the continued freedom to use capital receipts to help fund the revenue costs of transformation projects and release savings. These flexibilities are due to continue until 2021-22. 1.5 Capital Expenditure Plans and Financing Strategies The Capital Programme – the capital programme sets out planned capital expenditure over the medium term financial plan period of 3 years. It shows how each project is linked to a Council Strategy priority and summarises planned expenditure and funding. It is approved annually along with the budget papers, with quarterly updates to Executive Committee
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Teignbridge District Council Capital Strategy The Council’s capital expenditure plans for the current 3 years of the Medium Term Financial Plan amount to £71.8 million, summarised in the table below:
Capital Expenditure and Financing 2020-21 2021-22 2022-23 2020-23 Total (Estimate) £’000 £’000 £’000 £’000 Planning and Development 20,862 18,117 14,368 53,347 Flood Alleviation and Environment 1,350 179 454 1,983 Open spaces and Leisure 4,647 3,028 210 7,885 Central support services / IT 341 208 291 840 Housing grants and affordable housing 5,432 1,224 1050 7,706 Total Expenditure 32,632 22,756 16,373 71,761 Revenue Contribution -331 -528 -535 -1,394 Capital Receipts -2,772 -435 -300 -3,507 Section 106 -2,080 -346 -1,250 -3,676 Other External Contribution -803 -1,040 -101 -1,944 Grant -5,881 -7,629 -3,228 -16,738 Community Infrastructure Levy -6,115 -2,618 -9,109 -17,842 Borrowing -14,650 -10,160 -1,850 -26,660 Total Funding -32,632 -22,756 -16,373 71,761
Sources of funding The programme is funded from a combination of capital receipts, revenue contributions, grants and external contributions, Community Infrastructure Levy (CIL) and borrowing. These are explained in further detail below.
Community Infrastructure Levy (CIL) is a charge on new development which aims to ensure that it contributes to the provision of essential local facilities. It must be spent on infrastructure. Under the current system, local authorities are not permitted to borrow 108 Appendix 12a
Teignbridge District Council Capital Strategy against the receipt of future CIL. The council is aware that the government is committed to responding to the recent CIL review, which may address this issue. Teignbridge’s priorities for CIL expenditure are available on the Council’s website and reflect the needs identified in the Infrastructure Delivery Plan which supports the Teignbridge Local Plan. Projects include provision of Suitable Alternative Natural Green Spaces, habitat mitigation, leisure provision such as playing pitches and parks, education infrastructure and improvements to local roads and rail, infrastructure for cycling, walking and public transport. CIL projects often involve working together with other organisations, such as the Habitat Mitigation Executive and Devon County Council to achieve improvements across a wide range of infrastructure. Section 106 contributions are received from developers in relation to specific needs such as leisure and open space improvements, affordable housing, air quality and drainage improvements. Grants and external contributions are received from a range of government and agency sources towards expenditure such as Disabled Facilities Grants, flood alleviation and prevention and open space and leisure improvements. Capital schemes funded by CIL, Section 106 contributions, grants or external contributions are required to follow the capital approval process to ensure that the matters which the Prudential Code requires to be taken into account are considered. For example, strategic service objectives, revenue budget implications and the practicalities of delivery. Teignbridge Capital Funding. There are two ways in which the council can directly contribute to capital projects. Capital Receipts are funds which result from events such as the disposal of assets or the repayment of loans which were made for a capital purpose. The Council also receives Right to Buy receipts, allocated to Housing. The council had £5.3 million capital receipts at the start of 2019-20. It is currently forecast that General Fund capital receipts will be £0.3 million by the end of the current Medium Term Financial Plan. In order for Teignbridge to continue to benefit from capital investment, the council is budgeting £2.0 million Revenue Contribution to capital over the same period, towards both projects on the forward programme and earlier expenditure which has not yet been funded by the methods above. Projects funded by capital receipts and revenue contributions include contributions to superfast Broadband provision, improvements to Council buildings and equipment including IT projects and waste management, discretionary housing grants and affordable housing contributions. Borrowing Projects which are not funded by one of the sources above are initially funded by borrowing and must first demonstrate a sound business case during the capital approval process. This is because there are revenue budget implications associated with borrowing. Both the principal borrowed and interest costs will have to be repaid and it is essential that the capital programme remains affordable, prudent and sustainable with regard to: Capital financing costs, eg. interest Loss of investment income
109 Appendix 12a
Teignbridge District Council Capital Strategy Other income and costs eg. rent, fees & charges, salaries, rates, energy and maintenance arising from the investment MRP – this is the statutory requirement to charge the revenue account with the principal cost of capital expenditure which has not been met from grants, contributions or capital receipts. It is explained in the Council’s Minimum Revenue Provision statement. Business cases must demonstrate a scheme’s ability to cover all the relevant costs above for the whole life of the asset. Projects funded from borrowing aim to bring a broad range of economic benefits such as continued growth in local jobs, business expansion and wealth creation as well as improving the Council’s income resilience against the challenge of lower government funding. Projects include town centre improvements and commercial and industrial estates. The council’s approach to borrowing is laid out in Appendix 11 of the budget papers – the Treasury Management Strategy. See also Section 2 below for a projection of the Council’s borrowing requirements. 1.6 Asset Management Planning The Leader is the Executive member with responsibility for assets. The Head Place af Commercial Services is the current designated Corporate Property Officer (CPO). The CPO is authorised to take the lead on asset management planning across all services thus ensuring that property assets are regarded throughout the Council as corporate assets. This strategic approach ensures that the Council’s business and property plans support its key objectives and inform its spending decisions. The alignment of the corporate vision with service business plans, the Medium Term Financial Plan and Capital Strategy provides a stable context in which to make informed decisions and deliver the right outcomes. Further, it provides the opportunity to shape the property portfolio to efficiently support the delivery of services and to hold, acquire or occupy only those properties that support the aims of the Council. Property assets represent the Council’s largest physical resource in financial terms and they underpin all service activities; a) For the purpose of direct service delivery (such as parks, gardens and leisure centres); b) To support service delivery (for example administrative offices and depots); and c) To support the Council’s wider policy objectives. This part of the portfolio is varied: Many assets have been made available for social or sporting purposes or are retained for a range of reasons such as a potential to contribute to future regeneration schemes or provide workspace for local employment provision. In addition, the portfolio provides a valuable revenue income, (approx. £3.0 million 2019/20), which in turn helps to support the Council in delivering important services to its residents. The Council’s corporate property function sits as part of the Economy and Assets Service and is overseen and supported by the Capital Review Group. The overview below summarises the Council’s strategic property aims, asset priorities and how they are managed and monitored.
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Teignbridge District Council Capital Strategy
TEIGNBRIDGE COUNCIL CORPORATE ASSET MANAGEMENT OVERVIEW
Our Strategic ENSURE THAT TDC LAND AND BUILDING ASSETS ARE EFFICIENTLY MANAGED, MAINTAINED, REDEVELOPED, ACQUIRED AND DISPOSED OF Property aim is: IN A CONSISTENT, STRATEGIC MANNER THAT SUPPORTS CORPORATE OBJECTIVES AND SERVICE DELIVERY :is: Understand our assets Challenge whether Dispose of Acquire Maintain and Make assets Reduce the Make the most of and how they perform we have the right the assets new invest in more carbon our assets Our asset assets in the right we no assets if property efficient to footprint of priorities are: place and in a longer need we need run our assets condition to meet them service delivery needs 111 Retention of a Asset Challenge Compliance with Investing in a prioritised programme of Proactive estates Corporate Asset Review Property Disposal & Planned Maintenance and Capital management Database with Acquisition Policy and Programme projects We deliver continued programme to Procedures these rationalise property information into one place
priorities Measuring and Service Business Delivery of a prioritised programme of Ensuring ‘best by: monitoring asset Planning strategic property projects set out in the consideration’ in all data and Capital Programme our property information to show transactions how our assets
perform One Teignbridge Compliance with statutory and health & Clear Property Transformation safety legislation Policies and Programme Procedures
Appendix 12a
Teignbridge District Council Capital Strategy
We keep Capital Programme - monitoring of delivery by the Capital Review Group
track of Performance indicators Budget monitoring/ SPAR risk register progress & An Asset Review Asset Asset Capital Programme monitoring Capital receipts and performance Schedule Disposal Acquisition revenue income with: Planned & Reactive Maintenance monitoring Property Inspection Regimes
The Corporate Property Officer (Head of Commercial Services) This work is Economy & Assets All Services Economy & Assets - Economy & Assets Economy & Assets Housing & Health Estates Housing & Health
112 led by: Environment & Leisure Environment & Leisure
The ongoing costs associated with existing assets are reflected in the Medium Term Financial Plan and mainly comprise repairs and maintenance, utilities, non-domestic rates, property insurance, furniture and fittings and contracts such as cleaning and grounds maintenance. When considering new capital projects, these long-term costs would be considered as part of the proposal and appraisal process. Appendix 12a
Teignbridge District Council Capital Strategy
2. Debt, Borrowing and Treasury Management 2.1 Projection of borrowing requirements Previous capital projects such as the purchase of Market Walk mean that Teignbridge District Council has an underlying need to borrow. In addition, the capital programme contains projects which would not be immediately funded by grants, contributions, capital receipts or revenue contributions. When taken together, the current underlying need to borrow and projected borrowing from the capital programme give an estimate of the council’s future borrowing requirements. The table below divides this between the amount it is estimated we could fund internally from our other cash balances and the amount we would seek to borrow externally.
2020-21 2021-22 2022-23
£'000 £'000 £'000 Estimated Capital Financing Requirement should provisional schemes be approved 34,296 46,148 46,253 (total cumulative underlying need to borrow). Estimated internal -20,000 -20,000 -15,000 borrowing Liquidity cash flow buffer 5,000 5,000 5,000 & contingency Estimated external 19,296 31,148 36,253 borrowing
In the longer term, the calculation of a liability benchmark as recommended by CIPFA, extends this information and allows measured borrowing decisions to be made in relation to the amount and maturity profile of loans, which manages interest rate exposure: This has been calculated by working out the total borrowing requirement should the provisional capital programme expenditure occur, then adjusting for sums which could be funded by internal borrowing. A liquidity allowance is factored in to ensure that funds are available for regular outgoings. This is currently assumed to be a minimum £5 million average daily lending.
113 Appendix 12a
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Acceptable sources of loans are the Public Works Loans Board, local authorities, public bodies and UK banks and building societies. The estimated sums for external borrowing relating to capital are taken account of, along with contingency sums for possible temporary borrowing, in the Prudential Indicators authorised limit and operational boundary. The operational boundary represents a prudent estimate of the maximum level of external debt, whereas the authorised limit provides headroom over and above the operational boundary sufficient for unusual cash movements: 2020-21 2021-22 2022-23 £’000 £’000 £’000 Operational boundary 30,000 50,000 65,000 Authorised limit 35,000 55,000 70,000
The Council’s Commercial Strategy also sets a proportional debt limit, which has been assessed as approximately £70 million. This figure has been arrived at after consideration of benchmarking provided by external expertise, based on overall debt compared to cost of service and the financing liabilities this would place upon the council. This overall limit encompasses both internal and external borrowing activity.
114 Appendix 12a
Teignbridge District Council Capital Strategy 2.2 Implications of borrowing 2.2.1 Minimum Revenue Provision (MRP) All capital expenditure has to be financed from capital receipts, grants and contributions (such as S106 and CIL) or eventually from revenue income. Where local authorities borrow to fund capital expenditure, there is a requirement to ensure that they put aside enough revenue money over time to cover those debts. This is MRP and the broad aim is to ensure that the period over which it is charged is commensurate with the period over which the capital expenditure provides benefits. The Local Government Act 2003 requires the council to have regard to the Ministry of Housing, Communities and Local Government’s (MHCLG) Guidance on MRP. This guidance requires the council to approve an annual MRP statement and recommends a number of options for calculating the required prudent provision, while also not ruling out other methods should they be deemed more appropriate. This is discussed in more depth in the council’s Minimum Revenue Provision Statement. The updated MHCLG Statutory Guidance on Minimum Revenue Provision includes a number of clarifications on determining a prudent level of provision. MRP can only be nil if a local authority’s capital financing requirement is nil or negative on the last day of the preceding year, or a previous year’s overpayment is being offset. The Council has a positive capital financing requirement, mainly due to the purchase of Market Walk. For 2020-21 the Council’s MRP statement continues to adopt option 3, the asset life (annuity) method. This is a method often used to calculate loan repayments, where it is required that the total amount of principal and interest repaid each year is a common amount. Principal amounts start low and increase over time. It is therefore suited to investments where revenues will increase over time. It also takes into account the time value of money.
Investment assets may also be sold to repay any outstanding debt liabilities.
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2.2.2 Interest payable
Based on the projected borrowing discussed above (should provisional schemes be approved) and a maturity structure which is spread to mitigate against interest rate risk, it is calculated that interest payable would be £307k in 2020-21, rising to £701k in 2021-22 and £888k in 2022-23. The following chart shows financing costs (interest and MRP) over 25 years. It should be borne in mind that the business cases for each project would need to demonstrate that they would achieve sufficient return to cover interest costs and any MRP.
2.2.3 Proportionality
In its new investment guidance, MHCLG introduces the concept of proportionality. This is to allow assessment of the contribution of yield-bearing investments to the achievement of a balanced budget. It also requires that quantitative indicators are provided to allow risk exposure as a result of investments to be assessed.
The proportional debt limit for the council has been assessed as approximately £70 million. This figure has been arrived at after consideration of benchmarking provided by external expertise, based on overall debt compared to cost of service and the financing liabilities this would place upon the council. This is balanced against the council’s stated intention to generate in excess of £2 million in savings and income.
The Council’s purchase of Market Walk was not a purely commercial investment, as it contributes to regeneration and the economic benefit of the local area in addition to providing an income stream. It is however an investment which creates an underlying need to borrow and contributes to the Capital Financing Requirement.
The Council has chosen to forego treasury management interest in order to fund the underlying need to borrow from other balances in the medium term. Based on the average treasury management interest rate received during the first half of 2019-20, interest foregone would be in the region of £105,577 per annum. Should base rate rise again, this figure would increase. 116 Appendix 12a
Teignbridge District Council Capital Strategy
Current debt to net service expenditure ratio: 2019-20 £’000 External debt 0 Net service expenditure 16,118 Ratio 0
Should all forecast borrowing occur during 2020-21:
2020-21 £’000 External debt 19,296 Net service expenditure 16,134 Ratio 1.2
Commercial income
Teignbridge District Council does not currently hold property investments purely to profit from the income. Assets are held for a combination of service delivery, regeneration and economic benefit to the area.
The remaining indicators recommended by MHCLG relate to commercial property investments and are therefore not currently applicable.
2.2.4 Prudential Indicators
The Local Government Act 2003 requires the council to have regard to CIPFA’s Prudential Code. Its objectives are to ensure, within a clear framework, that the capital expenditure plans of local authorities are affordable, prudent and sustainable and that treasury management decisions are taken in accordance with good professional practice, with an understanding of the risks involved. Local authorities must look at capital expenditure and investment plans in the light of overall organisational strategy and resources, ensuring decisions are made with sufficient regard to the long run financing implications and potential risks to the authority.
To that end, the Prudential Code sets out indicators which must be approved by Full Council and factors which must be taken into account. The factors which must be taken into account underpin the work of the Capital Review Group (see above).
In setting its Prudential Indicators, the council sets borrowing limits which are affordable and sustainable. The authorised (absolute) limit and operational (day-to-day) boundary are consistent with the council’s capital programme and treasury management strategy. In addition, they identify long-term liabilities relating to capital (and as set out in the relevant note to the annual Statement of Accounts) in order to arrive at prudent limits on external borrowing.
Estimates of capital expenditure and the capital financing requirement bring together past and future capital commitments for consideration of affordability.
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The treasury management prudential indicators are designed to deliver accountability in taking capital financing, borrowing and treasury management decisions. They also highlight possible risks such as interest rate exposure and demonstrate the policies in place to mitigate the risks, for example, limiting the length of investments and the maturity structure of borrowing.
2.3 Treasury Management
The Council has regard to CIPFA’s Treasury Management in the Public Services Code of Practice and Cross-Sectoral Guidance Notes 2017. In doing so, it follows three key principles: Maintaining comprehensive policies, practices, strategies and reporting arrangements for the effective management and control of treasury management activities The effective management and control of risk are prime objectives and responsibility for these lies clearly within the Council. Risk appetite forms part of the annual Treasury Management Strategy. The council’s investment priorities relating to this area are security of the principal sums and liquidity, keeping money readily available for expenditure when needed. The pursuit of value for money and the use of suitable performance indicators are valid and important tools. Within the context of effective risk management, the Council’s policies and practices reflect this.
The Council has adopted four clauses as recommended in the Treasury Management Code, as follows: 1. Teignbridge District Council will create and maintain, as the cornerstones for effective treasury management: A treasury management policy statement, stating the policies, objectives and approach to risk management of its treasury management activities Suitable treasury management practices (TMPs), setting out the manner in which Teignbridge District Council will seek to achieve those policies and objectives, and prescribing how it will manage and control those activities. 2. Full Council will receive reports on its treasury management policies, practices and activities, including, as a minimum, an annual strategy and plan in advance of the year, a mid-year review and an annual report after its close, in the form prescribed by its TMPs. 3. Teignbridge District Council delegates responsibility for the implementation and regular monitoring of its treasury management policies and practices to the Executive Committee, and for the execution and administration of treasury management decisions to the Chief Finance Officer, who will act in accordance with Teignbridge District Council’s policy statement and TMPs and, if he/she is a CIPFA member, CIPFA’s Standard of Professional Practice on Treasury Management.
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Teignbridge District Council Capital Strategy 4. Teignbridge District Council nominates the Audit Scrutiny Committee to be responsible for ensuring the effective scrutiny of the treasury management strategy and policies. Yield becomes a consideration after the priorities have been satisfied. The majority of treasury management investments are “specified” as defined in the MHCLG 2018 investment guidance; in sterling, with a maturity of no more than one year, placed with the UK government, other local authorities or bodies and investment schemes of high credit quality, determined by the lending list, which is reviewed quarterly and updated as necessary. However, as part of the new commercial approach outlined in the Commercial Strategy, the treasury management strategy has been revised, moving away from the traditional “risk averse” strategy towards one which is “risk aware”. This has been approached in a measured way to mitigate against risk, while recognising a shift in balance within the overall priorities of security, liquidity and yield. Property and diversified income funds are now included as non-specified investments within the authorised lending list, while other non- specified investments such as renewable energy/social impact investments and on-lending to key partners and stakeholders will follow the approvals route laid out in the Commercial Strategy. The council’s Treasury Management schedules require that specified investment institutions meet the following minimum ratings from the ratings agencies:
Ratings Agency Long Term Short Term Baseline Credit Assessment/ Bank viability
Fitch BBB F2 bbb Moody’s Baa2 P2 baa2
In addition to considering ratings from agencies it is important to continually assess and monitor the financial sector on both a micro and macro basis and in relation to the economic and political environments in which institutions operate. The assessment will also take account of information that reflects the opinion of the markets. To achieve this consideration the Council will engage with its advisors to maintain a monitor on market pricing such as “credit default swaps” and overlay that information on top of the credit ratings. Other information sources used will include the financial press, share price and other such information pertaining to the financial sector in order to establish the most robust scrutiny process on the suitability of potential investment counterparties. Daily relevant financial news updates and market commentaries are received by email from treasury advisors, brokers and the Council’s bank. These enable assessment of future treasury risks and scenarios in order to develop suitable risk management strategies. The Treasury Management strategy also sets out the Council’s approach to borrowing and is underpinned by the Prudential Code and MHCLG investment guidance. Any decision to borrow in advance for capital projects or debt maturities would only occur if there was a clear business case to do so. Borrowing may occur to cover temporary shortfalls in cash balances. The liability benchmark set out above allows management of interest rate exposure while ensuring that funds are kept available for cash flow requirements. 119 Appendix 12a
Teignbridge District Council Capital Strategy The Council will adopt a flexible approach to borrowing, making use of internal resources and keeping shorter term borrowing under review in comparison to longer term borrowing costs. This approach is to minimise financing costs and to spread re-financing risk. Acceptable sources of loans as stated in the Treasury Management schedules are the PWLB, UK Municipal Bonds Agency, local authorities, public bodies, UK banks and building societies and debt capital markets. In October 2019, the Public Works Loans Board increased their margin over gilt yields by 100 basis points (1%) to 180 basis points (1.8%) on loans lent to local authorities, meaning they may no longer be the lender of first choice. Officers will review alternative sources of borrowing in conjunction with its treasury management advisors and select those offering the best value for money to the Council at the time the funding is required. The Treasury Management Mid-Year and Year End Reviews report on activities undertaken and provides key information on performance including average interest rates achieved. In addition, the Chief Finance Officer receives regular reports, which form part of financial reports received by the Executive and Corporate Leadership Team. Historically, these have used the 7-day London Interbank Bid Rate (LIBID, or the interest rate at which banks are willing to borrow from other banks) as a benchmark. However, from 2019-20, the 7-day London Interbank Offer Rate (LIBOR, or the interest rate at which a bank will lend) is used. This is because LIBOR is readily available and published, whereas LIBID is not standardized or publicly available. The latest Treasury Management Code includes investments which fall outside normal treasury management activity. Commercial investments for financial benefit rather than for service outcomes are sometimes entered into outside of normal treasury management activity. These need careful financial risk assessment. Where such investments do not give priority for security and liquidity over yield, CIPFA recommends that such a decision should be explicit, setting out the risks and the impact on financial sustainability. This is a critical purpose of due diligence procedures. The Council’s current CFR and projected borrowing relate to projects whose central purpose is for the provision of services or regeneration. The Commercial Strategy highlights the crucial role of risk assessment and due diligence before entering into any non-specified investment. 3. Knowledge and Skills The Prudential Code requires that the capital strategy gives details of the knowledge and skills available to the authority and confirmation that they are commensurate with its risk appetite. As a district council, Teignbridge strikes a balance between the retention of suitably qualified staff and the use of external expertise where this offers best value and flexible use of resources. Treasury management staff receive internal training from experienced staff and managers. Staffing is arranged so that a bank signatory (all experienced managers), is always available for consultation on decisions. Procedure and system notes, together with official guidance from CIPFA and the MHCLG are maintained for consultation within the section. These are updated for any changes, which are also communicated to the relevant staff. Bank signatories are professionally qualified accountants, with the officers carrying out daily procedures either studying with or AAT-qualified. 120 Appendix 12a
Teignbridge District Council Capital Strategy During 2019-20, a tender process was undertaken to appoint treasury management advisors. The Council uses Link Asset Services. This decision recognises the value in employing external providers to acquire access to specialist skills and resources, especially in the light of the Council’s anticipated borrowing requirement. However, responsibility for treasury management decisions remains with Teignbridge District Council at all times and officers will ensure that undue reliance is not placed upon the services of our external service providers. All decisions will be undertaken with regards to all available information, including, but not solely, our treasury advisers. In terms of capital expenditure, the Council has the benefit of the experience of three fully qualified chartered accountants and six AAT-qualified members of staff. It also has access to specialist advice through subscription to consultants who specialise in local authority accounting and capital finance. In addition, knowledge and skills are shared throughout the region via the Devon Accounting Development Group. In relation to the investment strategy, as well as the experience of RICS-qualified staff, the Council has working relationships with a range of specialist consultants whose areas of expertise include property management, development and infrastructure, investment and valuation. The Council has a Legal team, experienced in a comprehensive range of legal work relevant to local authority and also works with external legal service providers where other expertise is required. Council officers across a range of disciplines, including Property and Assets, Planning, Housing and Finance as well as other service areas, make up the Capital Review Group to ensure project appraisal is subject to wide early scrutiny and practical considerations. The Council’s constitution ensures an effective governance process. The chief finance officer is responsible for ensuring that all matters required to be taken into account are reported to the decision-making body (normally Full Council).
121 This page is intentionally left blank Appendix 13 Teignbridge District Council Treasury Management Mid-Year Review 2019-20
Teignbridge District Council has adopted CIPFA’s Treasury Management in the Public Services: Code of Practice and Cross-Sectoral Guidance Notes 2017 Edition. One of the requirements is the provision of a mid-year review of treasury management activities.
Activities Undertaken: Daily lending and borrowing from 1 April to 30 September 2019:
Fixed-term lending Borrower Terms Amount Dates Total Interest % Lent Days Earned to £ Lent in 30/9/19 year £
Close Brothers** 1.15 1,000,000 15/03/19 – 23/12/19 266 5,765.75 Thurrock Council** 1.06 1,000,000 15/03/19 – 15/01/20 289 5,314.52 Debt Management Office 0.51 500,000 02/04/19 – 19/04/19 16 111.78 Debt Management Office 0.50 8,100,000 15/04/19 – 18/04/19 3 332.88 Debt Management Office 0.50 500,000 18/04/19 – 30/04/19 12 82.19 Debt Management Office 0.50 1,000,000 25/04/19 – 26/04/19 1 13.70 Debt Management Office 0.50 2,500,000 15/05/19 – 20/05/19 5 171.23 Debt Management Office 0.50 2,000,000 15/05/19 – 28/05/19 13 356.16 Debt Management Office 0.50 3,000,000 15/05/19 – 29/05/19 14 575.34 Nationwide Building Society 0.75 1,000,000 15/05/19 – 08/08/19 85 1,746.58 Coventry Building Society 0.89 1,000,000 17/06/19 – 13/12/19 179 2,584.66 Nottingham Building Society 0.85 1,000,000 17/06/19 – 13/09/19 88 2,049.32 Debt Management Office 0.50 2,400,000 17/06/19 – 19/06/19 2 65.75 Debt Management Office 0.50 2,000,000 17/06/19 – 24/06/19 7 191.78 Debt Management Office 0.50 1,000,000 17/06/19 – 04/07/19 17 232.88 Debt Management Office 0.50 500,000 26/06/19 – 04/07/19 8 54.79 Debt Management Office 0.50 3,000,000 01/07/19 – 04/07/19 3 123.29 Debt Management Office 0.50 4,000,000 15/07/19 – 22/07/19 7 383.56 Debt Management Office 0.50 1,000,000 15/07/19 – 23/07/19 8 109.59 Debt Management Office 0.50 1,000,000 24/07/19 – 08/08/19 15 205.48 Coventry Building Society 0.65 1,000,000 24/07/19 – 23/09/19 61 1,086.30 Debt Management Office 0.50 3,700,000 01/08/19 – 08/08/19 7 354.79 Debt Management Office 0.50 3,000,000 15/08/19 – 19/08/19 4 164.38 Debt Management Office 0.50 1,000,000 15/08/19 – 23/08/19 8 109.59 Debt Management Office 0.51 1,000,000 15/08/19 - 16/09/19 32 447.12 Principality Building Society 0.56 1,000,000 15/08/19 – 16/09/19 32 490.96 Debt Management Office 0.50 500,000 29/08/19 – 16/09/19 18 123.29 Debt Management Office 0.50 2,600,000 02/09/19 – 16/09/19 14 498.63 Debt Management Office 0.50 1,000,000 10/09/19 – 23/09/19 13 178.08 Debt Management Office 0.50 700,000 13/09/19 – 30/09/19 17 163.01 Debt Management Office 0.50 1,500,000 16/09/19 – 19/09/19 3 61.64 Santander UK plc 0.80 1,000,000 16/09/19 – 10/02/20 147 328.77 Principality Building Society 0.72 1,000,000 16/09/19 – 13/12/19 88 295.89 Debt Management Office 0.50 1,000,000 23/09/19 – 27/09/19 4 54.79 Debt Management Office 0.50 1,100,000 30/09/19 – 01/10/19 1 15.07
123 Appendix 13 Sub-total fixed lending £24,843.54
** These deposits were entered into during 2018-19, but interest accrued since 1 April 2019 relates to 2019-20.
Deposits were also made into the following call accounts and money market funds, dependent upon cash flow: Bank Account terms Interest Earned £ Barclays Bank plc 0.05% to 0.2% instant access 0.06 Clydesdale Bank 0.15% instant access/30 days’ notice 0.69 Royal Bank of Scotland 0.15% instant access 0.94 Santander UK plc 0.40% instant access 34.16 Public Sector Deposit Fund 0.71% to 0.79% instant access 10,929.75 Lloyds plc 175-day notice 1.00% to 1.13% 175-day notice 11,442.11 Lloyds plc 0.65% current account 144.25 Lloyds plc Deposit account 0.65% instant access 1,358.08 Aberdeen Standard 0.68% to 0.74% instant access 8,736.40 Sub-total call accounts and 32,646.44 money market funds Grand total all lending 57,489.98
Temporary Borrowing 1 April to 30 September 2019:
Lender Terms % Amount Dates Days lent Interest paid lent £ in year in year £ Lloyds Bank Base + 1% 63,533 Overdraft agreement 1 3.04
Teignbridge District Council Interim Performance Report for the Period 1 April to 30 September 2019
Apr-Sep Apr-Sep 2018-19 2019-20 (i) Short Term Funds Invested
Interest received and receivable for the period £40,472 £57,490
Maximum period of investment on any one 346 days 179 days loan made in the period
“Fixed” investment rates in period. 0.25% - 1.00% 0.50% - 0.89%
(ii) Short Term Funds Borrowed
Interest paid and payable for the period £34.52 £3.04
Number of new “fixed” loans borrowed in 124the period 1 0
Appendix 13 Maximum period of borrowing on any one “fixed” 3 days 0 loan borrowed in the period.
“Fixed” borrowing rates. 0.42% n/a
(iii) Average Net Interest Rate Earned 0.61% 0.81%
(iv) Average Short Term Net Lending £13,254,937 £14,124,098
Regular Monitoring Two monthly reports are prepared for the Chief Finance Officer: a forecast of interest receivable for the year, and an investment comparison, which shows the sum available for investment compared to the previous year. The Chief Finance Officer presents a monthly report to CMT and updates the Executive Committee on a quarterly basis. These reports include any policy updates, such as changes to the official lending list, based on the latest ratings information. Full council receives an annual review and strategy statement and a mid- year review.
The interest forecast is currently predicting a total net interest receivable for the year of £91,270. This compares to £102,965 in 2018-19. This forecast decrease is mainly due to a forecast increase in the Council’s borrowing requirement in the second half of the year due to items within the capital programme. However, this is dependent on the timing of the schemes proceeding as anticipated. During the first half of the year, there has been an increase both in the funds available for lending out (average daily lending is £14.1 million in 2019-20 compared to £13.3 million at the same stage in 2018-19 and average net interest rate achieved is 0.81% in 2019-20, compared to 0.61% at the same point in 2018-19). Average benchmark 7-day LIBOR rate to the end of September 2019 was 0.69%.
Treasury Management Indicators These are part of the Prudential Indicators, as agreed at Full Council on 28 February 2019. They are available on request or on the Teignbridge website agenda for that meeting.
125 This page is intentionally left blank Appendix 14
Teignbridge District Council - Budget Consultation Report Date: 24th February 2020
From: Business Improvement and Development (BID) Subject: Consultation feedback to Executive Committee
Methodology BID were tasked to consult with the council’s Residents’ Panel ‘Talking Teignbridge’, and on the website, about the budget proposals.
The consultation ran from 20th December 2019 to 31st January 2020 and below you will find a short summary of the results so that full Council on 24th February has the opportunity to take into account residents’ feedback when considering the final budget recommendations from Executive.
The survey The following budget questions were put to Teignbridge residents:
Please say how strongly you agree, or disagree, with the Council's proposals to:
1. Continue to increase council tax to help maintain essential services. The current recommendation is a 2.94% increase, (£5 per year, for a Band D property taking the council tax to £175.17 for the year). 2. Work with others to support climate change initiatives and take our own action where appropriate. 3. Continue to support housing as a priority by enabling affordable housing and improving poor quality homes. 4. Back business and improve town centres 5. Invest in infrastructure for employment, education, transport links, sports and open spaces.
The table below shows a detailed breakdown of the results.
Increase Support Support housing Back business & Invest in council Climate change improve town infrastructure tax centres Strongly 26% 35% 25% 32% 38% Agree Agree 28% 31% 41% 49% 49% Neither Agree nor 25% 15% disagree 11% 13% 9% Disagree 12% 4% 10% 4% 2% Strongly disagree 23% 5% 9% 2% 2%
6. To balance the council’s budget in the future, which of these would you expect us to consider? You can tick more than one.
Generating more income to re-invest in council services 42% agree Make more budget savings 26% agree Reducing the services we provide 12% agree Increasing council tax further 20% agree
127 Appendix 14
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EXTRACT EXECUTIVE MINUTES 10 FEBRUARY 2020
Minute No.15 - Final Budget Proposals 2020/21 Member question and response below. The Portfolio Holder for Corporate Resources presented the report to consider the final financial plan proposals 2020/21 to 2022/23 for recommendation to Council on 24 February 2020. These proposals include recommended revenue and capital budgets for 2020/21 and planned in outline those for 2021/22 and 2022/23.
Non-Executive Members raised concerns regarding the proposed Sunday car parking charges, the anomalies and conflicts that arose from this proposal and asked that a decision should be delayed until any implications had been reviewed; the proposed charging for emptying of dog bins; introduction of charges for bins for new properties; could the Community Infrastructure levy (CIL) schedule be revised to enable more income for the Council; the raising of Council tax levels beyond which a referendum would be required; and welcomed the amendment to enable a budget of £26,000 for Rural Aid.
The Portfolio Holder for Corporate Services clarified the Council should have previously been charging for emptying of dog bins and that the proposals to charge for bins for new households were to look to help address future shortfall in funding. He acknowledged that Sunday car parking charging had complexities and that these would these need to be worked through, the car parking review group could review this over the coming year. A council tax increase that would require a referendum would be an unnecessary public expense.
Members were advised that 680 budget survey responses had been received of these:- 54% agree to increase in council tax 66% agree to supporting climate change 66% agree to supporting housing 81% agree to backing business and improving town centres 87% agree to investment in infrastructure.
Regarding what the Council should do to balance its budget the following had been received:- 42% agree Generating more income to re-invest in council services 26% agree Make more budget savings 12% agree Reducing the services we provide 20% agree Increasing council tax further.
The Leader to address concerns raised at Overview & Scrutiny Committee proposed amendments to the membership of the Commercial Property Investment Board that:- Chair of Overview & Scrutiny Committee and the Leader of the Opposition if different
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Any Group Leader with 10% of the Members.
RECOMMENDED that Council approve:-
(1) The final budget for 2020/21 and the outline plan for the subsequent years 2021/22 and 2022/23; and
(2) The Commercial Strategy in appendix 8 subject to the amendments to the Commercial Property Investment Board composition to read ‘Chair of Overview & Scrutiny Committee and Leader of Opposition if different’ and to add ‘any Group Leader with 10% of the Members’; and
(3) That delegate authority be given to the Chief Finance Officer to approve the purchase of assets meeting the prescribed criteria in section 6 of the Strategy subject to prior consultation with the Commercial Property Investment Board.
Agenda Item 7 – Final Budget Proposals 2020/21 Cllr Phil Bullivant Question Can the Executive confirm that the budget for 20/21 has no more increases other than those detailed to O&S If there are more can the reason why they were not included in the disclosure to O&S
Response from the Portfolio Holder for Corporate Services
The only revenue adjustments have been to add £26000 each year for rural aid, adjusting through reserves and creating a higher budget gap in 22-23. There is also a proposal to introduce a £1 Sunday car parking charge but no adjustments have been made for anticipated income from this source
130 Agenda Item 9 TEIGNBRIDGE DISTRICT COUNCIL
COUNCIL
14 JANUARY 2020
PART I
Report Title COUNCIL TAX REDUCTION SCHEME 2020-21
Purpose of Report The report seeks Council’s approval of the proposal to introduce a new Council Tax Reduction Scheme for working age claimants for the year 2020-21
Recommendation(s) That the Council considers the business impact assessment in relation to the changes to the current scheme and resolves:
1. To adopt the new income-banded Council Tax Reduction Scheme for the year 2020-21 2. To adopt the revised Discretionary Discount and Exceptional Hardship Policy for the year 2020-21.
Financial Implications The scheme is designed to be largely cost neutral. See paragraph 2.1 for further information
Chief Finance Officer Email: [email protected]
Legal Implications Members’ attention is drawn to the importance of fully considering the Business Impact Assessment (available here) in relation to the new scheme before any decision is taken.
Further legal implications are set out at paragraphs 2.2 to 2.3
Risk Assessment See paragraphs 2.4 to 2.7 which sets out the main risks to changing the scheme together with associated mitigations.
Interim Service Lead for Revenue, Benefits & Customer Support Email: [email protected]
Environmental/ The proposal will reduce the volume of letters, paper and Climate Change therefore energy use. See paragraphs 2.8 to 2.9 Implications Environmental Protection Manager Email:[email protected]
Council 24 February 2020 131 Report Author Interim Service Lead for Revenue, Benefits and Customer Support. Email: [email protected]
Portfolio Holder Corporate Resources - Alan Connett
Background Papers Appendix A – Overview & Scrutiny report 17.12.19 Appendix B – Council Tax Reduction Scheme 2020-21 (here) Appendix C – Business Impact Assessment (here) Appendix D – Discretionary Discount and Exceptional Hardship Policy (here) Background papers - Consultation Report and Vulnerability Statement
1. INTRODUCTION / BACKGROUND 1.1 On 5th September 2019 the Executive approved plans to consult with major preceptors and the public on proposals to introduce a new working-age Council Tax Reduction Scheme for 2020-21.
1.2 The proposed scheme moves away from the current complex fully means-tested scheme to a new discount–based income-banded scheme, that, as well as retaining a number of key elements of our current scheme, will also incorporate the following features:
Disregard Carers Allowance when calculating income Disregard Employment and Support Allowance (support element) when calculating income Replace current variable earnings disregard with a standard £25 disregard for all Incorporate a Return to Work Incentive for Universal Credit claimants and others by paying support for a period of one month beyond the return to work date. Apply the current two dependent children ‘limit' to existing claimants. Remove non-dependant deductions from the scheme Disregard payments made under the Windrush Compensation Scheme, We Love Manchester Emergency Fund and similar Government funded compensation schemes Reduction to be awarded from the date of change as opposed to the ‘Monday following’ the date of change Remove the requirement for good cause to be proven before backdating the award. Increase the 1 month back-date time limit to 12 months. Remove the restriction that limits support to maximum Band D property.
1.3 The public response to the consultation was positive, with the majority in support of all the proposed changes. The results were shared with Overview and Scrutiny on 17th December following which the committee resolved that the proposed new scheme be recommended for approval by Council.
1.4 A copy of the report to Overview & Scrutiny and the relevant extract of the minutes of that meeting is available at Appendix A attached.
Council 24 February 2020 132
1.3 The Council Tax Reduction Scheme for 2020-21 is available online here as Appendix B.
1.4 The main scheme will be underpinned by the Exceptional Hardship Scheme which was introduced in April 2017. This policy has been reviewed and revised in collaboration with Citizens’ Advice Teignbridge to ensure it provides a robust safety net for council tax payers. The policy will also be used to provide transitional support where needed to council tax payers receiving a reduced amount of Council Tax Reduction as a result of changes to the scheme and who need time to adapt to the reduced level of support.
1.5 The Council also has discretionary powers under S13(1)A(c) Local Government Finance Act 1992 (as amended) to reduce the amount of council tax payable in certain circumstances. For ease of reference and to raise awareness that two schemes exist, they have been incorporated into the same policy document entitled the Council Tax Discretionary Discount and Exceptional Hardship Policy, The policy is available online here as Appendix C.
1.5 A Business Impact Assessment has been conducted in relation to the changes to the Scheme and is available online here as Appendix D. Members are reminded of the need to consider the findings set out in this assessment before making any decision on the new scheme.
2. IMPLICATIONS, RISK MANAGEMENT & CLIMATE CHANGE IMPACT
2.1 Financial - The cost of the Council Tax Reduction scheme falls on the collection fund with each preceptor meeting the cost in proportion to their precept share. For Teignbridge this share is 8.85% of total cost (2019-20). The proposed scheme is largely cost neutral, maintaining overall support at current levels, which assists with our medium-term financial planning. Any increase in council tax will impact on the overall cost of the scheme and will need to be factored into council budget.
2.2 Legal - In considering changes to the Council Tax Reduction scheme, the Council must take into account the provisions of the Council Tax Reduction Schemes (Prescribed Requirements) (England) 2012 and subsequent amendments.
2.3 Billing authorities are required to review their schemes each year and decide if they want to make any changes. Before any changes can be implemented, they must be subject to public consultation. Decisions on the Council Tax Reduction scheme must be made by a meeting of Full Council before 11th March of the preceding financial year. Due regard must be given to any equality impacts before making any decision. Importantly, for operational reasons the scheme needs to be approved by Council at its meeting on 24 February 2020.
2.4 Risks - Since the introduction of Council Tax Reduction schemes there have been a number of legal challenges against other local schemes. Most of these challenges have been in relation to the consultation undertaken and have questioned whether due regard was given to any equality impact assessment when changes were made to schemes.
Council 24 February 2020 133 2.5 There is a risk that redistribution of support may result in some households having difficulty or being unable to pay their council tax. The Exceptional Hardship scheme will serve to mitigate this risk.
2.6 There is also a risk that the forecast spend differs from actual spend when the scheme goes live. The cost of the new scheme has been extensively modelled using software supplied for that purpose. We have cross checked the results of the modelling using manual methods to ensure accuracy as far as it is possible to do so. It should be noted that our caseload numbers and composition fluctuate on a day to day basis so the financial modelling outputs will constantly change. We will continue to model on a periodic basis to monitor impacts and identify any trends.
2.7 There are changes to software associated with the changes to the scheme and a requirement for a new digital claim form using Firmstep. There is a risk of failing to deliver in time and errors in calculation or form design. To mitigate these risks we are working in tandem with Strata and partnering authorities to ensure effective implementation and will fully test any software changes before we go live
2.8 Environmental/Climate Change Impact - The introduction of a banded scheme which is less reactive to change, will see a reduction in the number of re- assessments. It is estimated that this will reduce the number of letters sent out by around 75% (from an average 1,500 letters a month to 375). The proposal reduces the volume of letters, paper and therefore energy use.
3. CONCLUSION
3.1 The proposed changes will simplify the scheme and provide transparency and certainty for claimants. The public support the proposals with each proposal receiving support from the majority of respondents, both claimants and non-claimants alike.
3.2 There will be no reduction in overall level of support but a redistribution of support to the lowest income households which will typically find it the hardest to meet their council tax liability. The main scheme is underpinned by the Exceptional Hardship scheme which will be applied proactively to ensure we can deliver targeted support where needed.
3.3 Impacts will be monitored and reported and, where it is apparent that it would be beneficial to make further changes to the main scheme, Overview and Scrutiny will be asked to consider any recommendations ahead of any public consultation exercise.
Council 24 February 2020 134
OVERVIEW & SCRUTINY COMMITTEE 17 DECEMBER 2019
MINUTES EXTRACT
108. COUNCIL TAX REDUCTION SCHEME
Further to the Executive on 5 September, 2019, the Portfolio Holder for Corporate Services, and the Interim Service Lead for Revenue, Benefits and Customer Support referred to the report circulated with the agenda which summarised the results of the consultation with major preceptors and the public on proposals to introduce a new working-age Council Tax Reduction Scheme from 2020-2.
The proposed scheme adopts a discount-based income-banded approach rather than the full means test required under the current scheme. It is designed to be largely cost neutral, with no significant change to the overall level of support, other than some re-distribution of support across our caseload, with most support to those households with the lowest incomes. It is predicted that 58% of working age households would receive the same level of support, 25% would gain an average of £5.70 per week and 17% would lose an average of £7.29 per week.
There would be no reduction in overall level of support but a redistribution of support to the lowest income households which would typically find it the hardest to meet their council tax liability.
The committee expressed concerns that some larger families with children currently in receipt of the benefit would lose out up to £1500 per year so that individuals would receive more. Only around 22 households will lose this level of support i.e. more than £1,000, and these are households whose average income exceeds £2,000 per month after ignoring any child benefit, child maintenance and disability related benefits. Capping support at 2 children is concurrent with other welfare schemes such as housing benefit, tax credits and universal credit and the public consultation indicates a high level of public support for this proposal.
In response to concerns from the Committee relating to the 17% that would lose out, the Service Lead advised that Teignbridge operated one of the most generous schemes in the country and is the only council in Devon still paying up to 100% support, when other Devon authorities have a cap on support ranging from 70-80%, ensuring maximum protection for the most vulnerable in our community.
The Committee also raised concerns relating to single parent households, or couple households, which were likely to lose out, where one or potentially both parties have limited capacity for work, perhaps because one or the other has a disability. It was noted that the scheme disregards all disability-related incomes in the assessment of support and the Council would be undertaking a joint review of the Council's Exceptional Hardship Policy with Citizens Advice Teignbridge to ensure it provides an effective safety net to the main
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scheme. This provides targeted support on a case by case basis, and this relief is shared equally by the Council and its major preceptors. Under this scheme the Council seeks not just to reduce the amount of council tax payable where appropriate but also to provide budgeting advice and to ensure claimants are in receipt of all entitlements and have access to cheaper utility tariffs where available. There is no specific budget for hardship. This is because the Council must not fetter its discretion by reference to an available budget. In previous years the take up of exceptional hardship has been lower than estimated despite the Council taking a proactive approach to encourage claims. Any claim for hardship will effectively operate as a write off against the account and will be funded by all major preceptors in proportion to preceptor share.
The individual clauses in the proposals were voted on and whilst some had unanimous support there were a number where they were supported by a majority vote.
Resolved Council be advised that the Overview and Scrutiny Committee recommend approval of the proposed changes as detailed in the report circulated with the agenda.
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TEIGNBRIDGE DISTRICT COUNCIL
OVERVIEW & SCRUTINY COMMITTEE
17 DECEMBER 2019
PART I
Report Title COUNCIL TAX REDUCTION SCHEME 2020-21 public consultation results Purpose of Report To update members on the results of the consultation with major preceptors and the public on proposals to introduce a new working-age Council Tax Reduction Scheme for the year 2020-21 Recommendation(s) To recommend to the Executive and Full Council that the proposed changes be agreed.
Financial Implications The scheme is designed to be cost neutral. See paragraph 7.1 for further information
Chief Finance Officer Email: [email protected]
Legal Implications See paragraphs 7.1 to 7.3 and 9.1.
Solicitor to the Council Email: [email protected]
Risk Assessment See paragraphs 7.4 to 7.7 which sets out the main risks to changing the scheme together with associated mitigations.
Interim Service Lead for Revenue, Benefits & Customer Support Email: [email protected]
See paragraph Environmental/ The proposal will reduce the volume of letters, paper and Climate Change therefore energy use. See paragraphs 7.8 to 7.9 Implications Environmental Protection Manager Email:[email protected]
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Report Author Interim Service Lead for Revenue, Benefits and Customer Support. Email: [email protected]
Portfolio Holder Corporate Resources - Alan Connett
Background Papers Appendix A - Executive Report & Minutes 05.09.19 Background papers - Business Impact Assessment, Council Tax Collections Protocol, Exceptional Hardship Relief Scheme and Consultation Report
1. INTRODUCTION / BACKGROUND 1.1 On 5th September 2019 the Executive approved plans to consult with major preceptors and the public on proposals to introduce a new working-age Council Tax Reduction Scheme for 2020-21.
1.2 The proposed scheme adopts a discount-based income-banded approach rather than the full means test required under the current scheme. A copy of the report, which explains the proposals and reasons for changing the scheme, and the relevant extract of the minutes, is available at Appendix A.
1.3 The new scheme is designed to be cost neutral, with no significant change to the overall level of support. We will however see some re-distribution of support across our caseload. By its nature, banding provides most support to those households with the lowest incomes. These are the households which are likely to experience the most difficulty in paying their council tax bills.
1.4 The modelling carried out in September 2019 predicted that just under 2,600 (58%) of the total 4,400 working age households will be entirely unaffected by the change. These are primarily ‘passported’ cases which will continue to receive 100% support on account of receiving Income Related Employment and Support Allowance, income based Jobseekers Allowance, or Income Support. Many of these households will include persons with disabilities who will continue to receive maximum support. In the new scheme approximately:
2,600 will continue to receive the same level of support 1,085 are predicted to gain. Average gain £5.70 per week 760 are predicted to lose. Average loss £7.29 per week
2. MAJOR PRECEPTOR CONSULTATION
2.1 We have consulted with our major preceptors: Devon County Council, Police and Crime Commissioner for Devon and Cornwall, and Devon and Somerset Fire and Rescue Authority. County’s response was silent on the proposed changes to the scheme but raised concerns about the overall level of spend which is higher than that of the other billing authorities in Devon. The other Devon authorities have a cap on support ranging from 70% to 80% which accounts for their lower costs. Teignbridge is alone in continuing to pay up to 100% support.
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2.2 Both Police and Fire support the proposals and raised no concerns about level of spend.
3. PUBLIC CONSULTATION
3.1 The consultation ran for a period of 6 weeks commencing 20th September and ending 1st November 2019. A press release was issued following the Executive meeting explaining the proposals and referring to the forthcoming consultation. The consultation was published on our website and promoted on Twitter and Facebook.
3.2 We wrote to each of the 1,845 benefit claimants likely to be affected by the changes and sent out 8,000 text messages to randomly selected council tax payers. We also added text to our award letters signposting claimants to the consultation. The survey was available online with paper copies on request.
3.3 We also consulted with major stakeholders including, but not limited to, Citizens Advice, CVS, housing associations and others as well as meeting with the Chief Officer of Citizens Advice Teignbridge to discuss the proposals in detail.
4. SURVEY RESULTS
4.1 We received 149 completed survey forms. A summary of the responses is shown below.
Current CTR Claimant
Yes No Don’t know Proposal 1 -- The introduction of an income banded discount scheme to replace the current scheme for all working age applicants. Agree 65% 42% 53% 3% Disagree 17% 42% 54% 1% Don’t know 17% 72% 24% 4% Proposal 2 - To limit the number of dependent children within the calculation for Council Tax Reduction to a maximum of 2 for all applicants. Agree 75% 45% 50% 4% Disagree 17% 44% 52% 4% Don’t know 8% 75% 25% - Proposal 3 - To remove Non-dependent deductions from the scheme. Agree 62% 47% 48% 3% Disagree 16% 25% 63% 8% Don’t know 20% 67% 33% - Proposal 4 - Removing the current earnings disregards and replacing them with a standard £25 earnings disregard irrespective of a person’s circumstances. Agree 70% 47% 49% 3% Disagree 9% 23% 69% 8% Don’t know 20% 60% 33% 7% Proposal 5 - Ignoring carers allowance which is currently taken into account as income.
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Agree 77% 48% 48% 4% Disagree 11% 13% 81% - Don’t know 11% 76% 24% - Proposal 6 - Ignoring the support element of Employment and Support Allowance which is currently taken into account as income. Agree 80% 48% 48% 3% Disagree 7% 9% 82% - Don’t know 10% 60% 33% 7% Proposal 7 - Incorporating a one month Return to Work Incentive for all claimants including Universal Credit claimants. Agree 89% 45% 50% 4% Disagree 5% 29% 57% - Don’t know 7% 60% 33% 7% Proposal 8 - Removing the Band D restriction Agree 69% 50% 48% 4% Disagree 19% 32% 64% - Don’t know 12% 61% 33% 6% Proposal 9 - To disregard any payments made under the Windrush Compensation Scheme, We Love Manchester Emergency Fund, and similar schemes where Government guidance recommends the payment be disregarded. Agree 77% 48% 48% 3% Disagree 7% 9% 91% - Don’t know 16% 58% 29% 8% Proposal 10 - To remove the requirement to show continuous good cause before backdating a Council Tax Reduction for up to 12 months. Instead we will consider the circumstances of each case on its own merits Agree 79% 49% 47% 3% Disagree 9% 21% 71% - Don’t know 11% 56% 38% 6% Proposal 11 - Any change in circumstances which changes Council Tax Reduction entitlement will be made from the date on which the change occurs rather than on a weekly basis as at present. Agree 85% 44% 51% 4% Disagree 5% 14% 71% - Don’t know 10% 80% 20% - Proposal 12 - Changing the claiming process for all applicants who receive Universal Credit Agree 87% 49% 47% 3% Disagree 7% 9% 82% - Don’t know 4% 67% 17% 17% Additional support and Protection Do you think that we should offer additional protection for any particular households who may be negatively affected by these proposals? Yes 54% 61% 38% 1% No 22% 15% 79% 3% Don’t know 21% 48% 42% 6% Do you think we should offer any further protection for households where the applicant or their partner meets the qualifying conditions for a disability benefit?
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Yes 60% 51% 48% 1% No 26% 28% 62% 8% Don’t know 13% 68% 21% 5% Do you think we should offer any further protection for households where a child meets the qualifying conditions for a disability benefit? Yes 60% 51% 46% 2% No 26% 29% 66% 5% Don’t know 13% 63% 26% 5% Do you think we should offer any further protection for households with children? Yes 44% 64% 33% 3% No 38% 28% 67% 4% Don’t know 16% 50% 42% 4% Do you think we should offer any further protection for households who lose support? Yes 35% 60% 40% - No 36% 30% 63% 6% Don’t know 28% 55% 38% 5% Are there any additional groups you believe should be protected? Yes 15% 48% 48% 4% No 36% 28% 67% 4% Don’t know 43% 61% 34% 3%
4.2 In response to the consultation the Devon Benefit Officers Group received a letter from the Devon Citizens Advice Consortium - this was a generic response and as such addressed the proposals across the full range of Devon schemes.
4.3 In order to determine the specific response for Teignbridge, a meeting was held with the Chief Officer of Citizens Advice Teignbridge. He has indicated broad support for the proposals, particularly those which disregard income (e.g. disability related incomes, carers allowance, child benefit etc) or which increase the level of support. In particular, he supports the removal of the non-dependent deductions because of the impact this has on low income council tax payers who are unable to secure any contribution from others who live in the property. Teignbridge’s proposal to retain support at 100% is also welcomed as this ensures maximum protection for the most vulnerable in our community.
4.4 They do however have concerns about the impact on anyone losing support and have expressed concerns about couple households where one or potentially both parties have limited capacity for work, perhaps because one or the other has a disability.
4.5 We discussed how to provide additional protection and targeted support in circumstances such as these and agreed to carry out a joint review of our Exceptional Hardship Policy (details below) to ensure it provides an effective safety net to the main scheme.
4.6 We will take a collaborative approach to this review, working with key officers from Citizens Advice Teignbridge. Alongside this we propose to conduct a review of our collection and recovery processes with a view to signing up to the Citizens Advice Council Tax Collections Protocol.
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5. ADDITIONAL SUPPORT AND PROTECTION FOR CLAIMANTS
5.1 Any claimant not in receipt of 100% support may ask for assistance under the Council’s Exceptional Hardship Policy. This policy supports the main scheme, providing targeted support on a case by case basis. It was introduced in 2017 to provide a safety net for anyone experiencing significant financial hardship as a result of changes to the main scheme. 5.2 As mentioned earlier in this report, we propose to review the current policy, in collaboration with Citizens Advice Teignbridge, to ensure it provides appropriate protection where it is needed most.
5.3 The cost of awarding this relief is shared equally by Teignbridge and its major preceptors.
6. TRANSITIONAL ARRANGEMENTS
6.1 Schedule 1A of the Local Government Finance Act requires authorities to include any transitional provision relating to a reduction or removal of support as the Authority thinks fit. As it is proposed to provide targeted support under the Exceptional Hardship Scheme, no further measures are considered necessary.
7. IMPLICATIONS, RISK MANAGEMENT & CLIMATE CHANGE IMPACT 7.1 Financial - The cost of the Council Tax Reduction scheme falls on the collection fund with each preceptor meeting the cost in proportion to their precept share. For Teignbridge this share is 8.85% of total cost. The proposal to consult on a cost neutral scheme, which maintains overall support at current levels, would assist with our medium-term financial planning. Any increase in council tax will impact on the overall cost of the scheme and will need to be factored into council budget.
7.2 Legal - In considering changes to the Council Tax Reduction scheme, the Council must take into account the provisions of the Council Tax Reduction Schemes (Prescribed Requirements) (England) 2012 and subsequent amendments.
7.3 Billing authorities are required to review their schemes each year and decide if they want to make any changes. Before any changes can be implemented, they must be subject to public consultation. Decisions on Council Tax Reduction scheme must be made by a meeting of Full Council before 11th March of the preceding financial year. Due regard must be given to any equality impacts before making any decision. Importantly, for operational reasons the scheme needs to be approved by Council at its meeting on 14th January.
7.4 Risks - Since the introduction of Council Tax Reduction schemes there have been a number of legal challenges against other local schemes. Most of these challenges have been in relation to the consultation undertaken and have questioned whether due regard was given to any equality impact assessment when changes were made to schemes. A full Business Impact Assessment has been undertaken and is taken into account in reaching the recommendations.
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7.5 There is a risk that redistribution of support may result in some households having difficulty or being unable to pay their council tax. The Exceptional Hardship Policy will serve to mitigate this risk.
7.6 There is also a risk that the forecast spend differs from actual spend when the scheme goes live. The cost of the new scheme has been extensively modelled using software supplied for that purpose. We have cross checked the results of the modelling using manual methods to ensure accuracy as far as it is possible to do so. It should be noted that our caseload numbers and composition fluctuate on a day to day basis so the financial modelling outputs will constantly change. We will continue to model on a periodic basis to monitor impacts and identify any trends.
7.7 There are changes to software associated with the changes to the scheme and a requirement for a new digital claim form using Firmstep. There is a risk of failing to deliver in time and errors in calculation or form design. To mitigate these risks we are working in tandem with Strata and partnering authorities to ensure effective implementation and will fully test any software changes before we go live
7.8 Environmental/Climate Change Impact - The introduction of a banded scheme which is less reactive to change, will see a reduction in the number of re-assessments. It is estimated that this will reduce the number of letters sent out by around 75% (from an average 1,500 letters a month to 375).
7.9 The proposal reduces the volume of letters, paper and therefore energy use.
8. ALTERNATIVE OPTIONS 8.1 The alternative is to continue with the current scheme which is highly reactive to changes in circumstance and incompatible with Universal Credit. This would result in increases in administration costs, complexity and uncertainty for council tax payers.
8.2 It may be possible to implement some of the proposals in part but this would require further modelling to assess impacts and, depending on the circumstances, may require further consultation.
9. TIMESCALE
9.1 Recommendations arising from Overview & Scrutiny will be considered by Executive on 7th January before Full Council is recommended to approve the scheme on 14th January 2020. The new scheme will take effect from 1st April 2020.
10. CONCLUSION
10.1 The proposed changes will simplify the scheme and provide transparency and certainty for claimants. The public support the proposals with each proposal receiving support from the majority of respondents, both claimants and non-claimants alike.
10.2 There will be no reduction in overall level of support but a redistribution of support to the lowest income households which will typically find it the hardest to meet their council tax liability. The main scheme is underpinned by the Exceptional Hardship Scheme which will be applied proactively to ensure we can deliver targeted support where needed.
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10.3 Impacts will be monitored and reported and, where it is apparent that it would be beneficial to make further changes to the main scheme, Overview and Scrutiny will be asked to consider any recommendations ahead of any public consultation exercise.
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EXECUTIVE
LEADER: Cllr Gordon Hook PORTFOLIO HOLDER: Cllr Alan Connett
DATE: 5th September 2019
REPORT OF: Alan Connett – Portfolio Holder for Corporate Resources Tracey Hooper – Interim Service Lead for Revenue, Benefits and Customer Support
SUBJECT: Council Tax Reduction Scheme - public consultation
PART I
RECOMMENDATIONS
The Executive is recommended to approve plans to consult with major preceptors and the public on proposals to introduce a new working-age Council Tax Reduction Scheme for the year 2020-21.
It is recommended that we maintain overall support at current levels and that the following key features of our current scheme be retained:
o Maintain maximum support at 100% o Maintain an Exceptional Hardship Scheme o Continue to award 100% support to passported claims o Disregard disability related benefits when calculating income o Disregard child benefit and child maintenance when calculating income o Disregard War disablement/widows pension when calculating income o Limit the no. of dependant children in the calculation to a maximum of two for all new claimants o Apply the minimum income floor for self-employed claimants o Capital limit of £6,000 o Allow for childcare costs
It is recommended that the following additional features are included in the new scheme:
o Disregard Carers Allowance when calculating income o Disregard Employment and Support Allowance (support element) when calculating income o Replace current variable earnings disregard with a standard £25 disregard for all o Incorporate a Return to Work Incentive for Universal Credit claimants and others by paying support for a period of one month beyond the return to work date. o Apply the current two dependant children limit used in the calculation to existing claimants o Remove non-dependant deductions from the scheme o Disregard payments made under the Windrush Compensation Scheme, We Love Manchester Emergency Fund and similar Government funded compensation schemes o Reduction to be awarded from the date of change as opposed to the ‘Monday following’ the date of change
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o Remove the requirement for good cause to be proven before backdating the award. o Increase the 1 month back-date time limit to 12 months. o Remove the restriction that limits support to maximum Band D property. 1. PURPOSE
1.1 The report outlines the main reasons for recommending a move to a new simplified Council Tax Reduction scheme for the year 2020-21 which will be reviewed and revised as appropriate at the end of the year,
1.2 The report also seeks permission to consult with precepting authorities (Devon County Council, Police & Crime Commissioner for Devon and Cornwall, Devon and Somerset Fire and Rescue Authority) and such other persons as are likely to have an interest in the operation of the scheme.
2. BACKGROUND
2.1 Until 2013, help for low income residents to pay council tax was delivered alongside housing benefit using the national benefit system which prescribed the rules and levels of support for both working age and pensioner households. 2.2 The council tax benefit scheme was abolished in 2013 and replaced with a discount scheme known as Council Tax Reduction. The rules for pensioners are still set nationally but it is for billing authorities to determine the rules and levels of support for working age claimants. 2.3 Given that we administer housing benefit and Council Tax Reduction together it has always made sense to align the schemes, minimising confusion for claimants and staff alike, and avoiding any increase in administration costs. However, since the rollout of Universal Credit, the benefits arising from alignment with housing benefit have been lost. New claimants and those experiencing a ‘triggering’ change in circumstances must now apply to the Department for Work and Pensions (DWP) for Universal Credit which includes an amount towards their housing costs, and to the Council for Council Tax Reduction.
2.4 Because of this, administration has become increasingly difficult. We typically receive notifications from the DWP of a change in income every month. These changes are often insignificant (e.g. £1 variation in income) but as Council Tax Reduction schemes are fully means tested, even a trivial change requires reassessment, triggering an amended council tax bill and rescheduling of instalment profile. As a result, some households are issued with many bills and a bewildering number of changed instalments each year. This can make it difficult for taxpayers to budget or even understand what is due.
2.5 Now that the link with housing benefit has been broken, the burden of carrying out a full means test assessment, which can take a number of weeks to finalise, for what is effectively a council tax discount cannot be justified.
2.6 The funding available from Government to administer the scheme has reduced by approximately 44% since 2013 and is expected to fall more sharply as more cases move onto Universal Credit, resulting in more of the administration cost having to be met by the Council. Even if it was desirable to retain the previous means tested system, the administrative costs involved would be prohibitive.
3. INCOME-BANDED SCHEMES
3.1 For the reasons outlined above, Councils across the country are starting to move to discount based income-banded schemes. These are characterised by simple rules and straightforward administration, making them transparent to the taxpayer and simple to grant.
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3.2 South Hams and West Devon introduced an income-banded scheme this year and, although it’s early days, this appears to be working well. 3.3 There are a variety of schemes in existence but principally these schemes provide support based on bands of income. There are two main types in operation, the grid scheme which takes into account income and household composition, and the banded scheme which looks only at income and pays no regard to household factors. These two types are illustrated below:
Banded Scheme Grid Scheme
% Council Earned % Council Tax Reduction Earned Tax Income Couple with Couple with Income Band Single Couple Reduction Band 1 child 2+ children 1 1 2 2 3 3 4 4
Moving to a discount- based income-banded approach will deliver the following benefits:
Benefits for the taxpayer Benefits for Billing Authorities
Easy to understand; the income banded Reduction in admin costs due to fewer changes in grid provides a transparent formula where circumstances to process and revised bills to residents can easily calculate for issue. themselves how much Council Tax Support they will be entitled to. Reduced level of contact from customers seeking explanations of why they have received further Easy to apply for; a simple online revised Council Tax Support award notifications application form requiring minimal data. and recalculated Council Tax bills. Constancy of award; entitlement will Potential for full automation – even as a manual change only if the variation moves the process, discount can be calculated and granted / claimant into another band, enabling amended in seconds. customers to budget accordingly without confusion of frequent instalment Reduced training for staff. recalculations. Protect council tax collection rate by avoiding Customers will need to report a change in frequent deferral of payment due dates. circumstance only if it moves them into Reduction in appeals to tribunal because rules another band. are simple and less open to interpretation. Higher take up due to ease of application.
3.4 There are of course some drawbacks to moving away from a fully-means tested approach; inevitably there will be winners and losers, and the income-bands will create ‘cliff edges’ – claimants on the edge of the band could lose/gain because of minor difference in income.
4 PROPOSALS FOR 2020-21
4.1 On 26th July 2019, the Devon Benefit Officer Group took a report to the Devon Local Government Steering Group recommending that all Devon councils move to income-banded
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schemes with effect from 2020-21. South Hams and West Devon Councils have already made this move. They went live with a grid scheme in April 2019 and, although early days, it is reported that the schemes are working well. 4.2 Having considered both styles of income-banded schemes, the grid scheme, although marginally more complex, appears to be the fairer of the two models. Unlike the banded scheme it takes household composition into account allowing for higher incomes in larger households. This is the model adopted by the majority of councils who have moved to income-banded schemes and is the one currently being progressed by all the Devon councils..
4.3 The grid scheme is illustrated in table 1 below.
NB. As far as possible, the income bands are aligned to the applicable amounts that exist within the current Council Tax Reduction scheme up to a maximum of two children. Applicable amounts are prescribed by DWP and represent the income requirements per household type.
Table 1 Weekly Income & Discount (%) A B C D E F
£0.00- £75.01- £150.01 £225.01 £300.01 £375.01- £75 £150 -£225 -£300 -£375 £450 1 Single no Dependant 100% 75% 50% 25% 0% 0% 2 Couple no dependant 100% 75% 50% 25% 0% 0% 3 Single one dependant 100% 100% 75% 50% 25% 0% Household 4 Couple one dependant 100% 100% 75% 50% 25% 0% 5 Single two or more dependants 100% 100% 100% 75% 50% 25% 6 Couple two or more dependants 100% 100% 100% 75% 50% 25%
4.4 Applying a percentage discount mirrors the principles of other types of Council Tax discounts. For example single person discount = 25% reduction.
5. MODELLING
5.1 We have adopted a cost neutral approach to the modelling, aiming to maintain overall support around current levels whilst accepting that a move to a banded scheme will redistribute support across our caseload.
5.2 Whilst it is inevitable that some households will lose, the biggest losses will be amongst those with the highest entitlement under the current means test – the highest household incomes and the largest properties. By its nature, banding provides most support to those on low incomes who will likely experience the most difficulty in paying their council tax bills.
5.3 The modelling carried out to date predicts that just under 2,600 (58%) of households will be unaffected by the change. These are primarily ‘passported’ cases which will continue to receive 100% support on account of receiving Income Related Employment and Support Allowance, income based Jobseekers Allowance, or Income Support. Many of these households will include persons with disabilities who will continue to receive maximum support. In the new scheme approximately:
2,600 will continue to receive the same level of support 1,085 are predicted to gain. Average gain £5.70 per week 760 are predicted to lose. Average loss £7.29 per week
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5.4 See Appendix 1 for summary of impacts on caseload and Appendix 2 for a range of case studies
5.5 As the data is modelled based at a fixed point in time this will need to be refreshed to take account of changes in caseload before any final decisions are taken.
6. TRANSITIONAL PROTECTION
6.1 When making changes to schemes councils must consider transitional protection. Historically we have done this through our Exceptional Hardship Fund (EHF). This allows claimants to apply for further support where there is financial need and for each case to be considered on its merits. The cost of EHF is shared between County, Teignbridge, Police, and Fire & Rescue, in proportion to the share of the collection fund. This approach has worked well and costs to the Council have been minimal, just £4,000 in 2018/19.
7. CONSULTATION PROCESS
7.1 The process for making changes to our Council Tax Support scheme is set out in legislation. This includes the requirement to consult with major preceptors (Devon County Council, Police & Crime Commissioner for Devon and Cornwall, Devon and Somerset Fire and Rescue Authority) and to conduct a public consultation exercise.
7.2 Following the case of (R (Moseley) v London Borough of Haringey) 2014, any consultation on changes to council tax reduction schemes must also include an option for any current scheme to be retained on the same level of funding with a consequent reduction in funding for other services. As such, there will be questions in the consultation paper on these options 7.3 Subject to Executive approval we aim to commence consultation with major preceptors with immediate effect and then conduct a 6 week consultation with the public and other stakeholders commencing mid- September to early November 2019.
7.4 At this stage we are proposing a draft scheme for consultation. There is still scope, following consultation, for members to vary the percentages, the income bands, build in other protections and transitional arrangements prior to the final scheme being approved if required.
8. MAIN IMPLICATIONS
8.1 Financial – The cost of the Council Tax Reduction scheme falls on the collection fund with each preceptor meeting the cost in proportion to their precept share. For Teignbridge this share is 8.85% of total cost. The proposal to consult on a cost neutral scheme which maintains overall support at current levels, would assist with our medium-term financial planning. Any increase in council tax will impact on the overall cost of the scheme and will need to be factored into council budget. 8.2 Legal – In considering changes to the Council Tax Reduction scheme, the Council must take into account the provisions of the Council Tax Reduction Schemes (Prescribed Requirements) (England) 2012 and subsequent amendments. 8.3 Since the introduction of Council Tax Reduction schemes there have been a number of legal challenges against other local schemes. Most of these challenges have been in relation to the consultation undertaken and have questioned whether due regard was given to any equality impact assessment when changes were made to schemes. 8.4 Billing authorities are required to review their schemes each year and decide if they want to make any changes. Before any changes can be implemented, they must be
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subject to public consultation. Decisions on Council Tax Reduction scheme must be made by a meeting of Full Council. 8.5 Equality Impacts – Before any decisions are taken in relation to changes to the Council Tax Reduction scheme, full regard must be had to equality impacts. We have identified summary impacts arising from the proposed new scheme in appendix 1 and will have a finalised Business Impact Assessment (BIA) at the time we go out to public consultation. Members will be asked to consider the BIA alongside the consultation results before any decisions are taken.
9. GROUPS CONSULTED
9.1 The Devon Local Government Steering Group and the Chief Finance Officer have been consulted and are supportive of the move to an income-banded scheme.
10. TIME-SCALE
10.1 In order to meet the timetable to introduce a new scheme in April 2020 this consultation must be concluded by early November 2019. The consultation will run for a period of 6 weeks.
10.2 Decisions on schemes to run from 1st April each year must be made by a meeting of Full Council before 11th March that year.
11. JUSTIFICATION
11.1 To comply with the provisions of Schedule 1a of the Local Government Finance Act 1992, as inserted by schedule 4 to the Local Government Finance Act 2012, which requires the authority to consider whether, for each financial year, the Council Tax Reduction scheme is to be revised or replaced and to consult with major preceptors and such other persons as it considers are likely to have an interest in the operation of the scheme, prior to making any determination.
DATE OF IMPLEMENTATION (CONFIRMATION OF DECISION SUBJECT TO CALL-IN)
10.00 a.m. on 12.09.19
Tracey Hooper Cllr Alan Connett Interim Service Lead for Revenue, Portfolio Holder for Corporate Resources Benefits & Customer Support
BELOW TO BE FILLED IN BY REPORT AUTHOR: Wards affected All Contact for any more information Tracey Hooper 01626 215266 Background Papers (For Part I reports only) Current CTR Scheme: Exceptional Hardship Policy Key Decision Y In Forward Plan Y In O&S Work Programme N Community Impact Assessment attached: N Appendices attached: 1: Summary Impacts on Caseload 2: Case studies
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APPENDIX 1 – Summary Impacts Unaffected by Affected by change Existing New Banded Scheme change or change or change is greater Scheme Scheme Caseload analysis is less than 50p pw than 50p pw Average Average Average % of % of No’s Expenditure Weekly No’s Expenditure Weekly Weekly Cases Cases Group Group Award Award Gain/Loss £1,842,9 £1,855,3 £19.5 Single 1,813 £19.44 1,813 £0.13 1,389 77 424 23 72 25 7 £23.1 Couple 341 £442,495 £24.82 333 £412,364 -£1.69 206 60 135 40 3 £17.7 Lone Parent +1 767 £629,759 £15.70 766 £712,356 £2.06 369 48 398 52 6 £18.5 Lone Parent +2 556 £465,595 £16.02 553 £538,277 £2.50 238 43 318 57 2 £18.1 Lone Parent +>2 273 £279,335 £19.57 263 £259,600 -£1.38 148 54 125 46
151 9 £18.7 Couple +1 198 £213,177 £20.59 192 £194,136 -£1.84 71 36 127 64 5 £18.6 Couple +2 227 £221,309 £18.65 220 £221,158 £-0.02 69 30 158 70 3 £14.5 Couple +>2 233 £247,533 £20.32 168 £177,426 £-5.75 73 31 160 69 6 £1,447,0 £1,410,7 £19.5 Applicant Gender - Male 1,381 £20.04 1,352 -£0.51 960 70 421 30 69 23 3 £2,895,1 £2,959,9 £18.7 Applicant Gender - Female 3,027 £18.29 2,956 £0.41 1,603 53 1,424 47 06 19 0 All Passported (including £2,341,5 £2,371,7 £22.9 unquantifiable disability benefits in 1,973 £22.70 1,973 £0.29 1,889 96 84 4 10 88 9 payment) All households with a disability £17.1 benefit in payment (including 441 £477,964 £20.73 397 £396,085 £-3.55 167 38 274 62 8 quantifiable passported cases) All Standard claims (no disability £1,522,7 £1,602,7 £15.3 1,994 £14.61 1,938 £0.77 507 25 1,487 75 benefit in payment) 01 69 7 £4,342,1 £4,370,6 £18.9 Total Working Age Scheme 4,408 £18.84 4,308 £0.12 2,563 58 1,845 42 75 42 6
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Increase in discount Increase in Reduction in Reduction in Increase in level of Reduction in level Banded Scheme between £5 and discount of over discount between discount of over discount of discount Caseload analysis £9.99 pw £10 pw £5 and £9.99pw £10 pw Average Average Average Average Average Average Cases Cases Cases Cases Cases Cases Gain pw Loss pw Gain pw Gain pw Loss pw Loss pw Single 248 £5.31 176 £6.18 70 £7.33 34 £12.83 71 £7.32 24 £12.11
Couple 37 £4.61 98 £7.50 13 £7.71 2 £19.66 38 £6.89 30 £13.65
Lone Parent +1 332 £5.76 66 £5.13 155 £6.91 36 £11.21 31 £6.29 6 £11.69
Lone Parent +2 266 £6.21 52 £5.30 130 £7.14 39 £11.33 20 £5.91 8 £12.79
Lone Parent +>2 36 £4.85 89 £5.96 16 £6.01 4 £11.02 37 £6.20 17 £13.76
Couple +1 51 £5.06 76 £7.84 27 £7.09 0 £0.00 39 £7.32 19 £15.76 153
Couple +2 82 £6.78 76 £7.06 44 £7.18 14 £12.84 31 £7.26 19 £14.87
Couple +>2 33 £4.69 127 £11.32 8 £7.36 3 £12.44 39 £7.89 63 £17.82
Applicant Gender - Male 195 £5.13 226 £7.55 80 £7.24 13 £13.24 86 £7.42 53 £16.14
Applicant Gender - Female 890 £5.75 534 £7.19 383 £7.06 119 £11.79 221 £6.83 133 £14.71
All Passported (including unquantifiable disability benefits in 84 £6.89 0 £0.00 29 £7.34 13 £15.34 0 £0.00 0 £0.00 payment) All households with a disability benefit in payment 57 £4.58 217 £8.20 11 £7.69 6 £12.37 81 £7.08 65 £15.93 (including quantifiable passported cases)
All Standard claims (no disability 944 £5.67 543 £6.94 423 £7.03 113 £11.58 226 £6.96 121 £14.67 benefit in payment)
Total Working Age Scheme 1,085 £5.70 760 £7.29 463 £7.07 132 £11.98 307 £6.99 186 £15.11
APPENDIX 2 - Case Studies Cases with highest gains
Case 1 Single Parent with 3 children aged 18 (non-dependant), 11 and 8 In private rented accommodation receiving £30.93 housing benefit against a rent liability of £196.15 per week Weekly Income Earned Income £167.09 Child Tax Credit £173.40 Working Tax Credit £58.64 Child Benefit £34.40 disregarded Child maintenance £11.54 disregarded Total Weekly Income £445.07 Of which £45.94 disregarded Less rent paid £165.22 Net Weekly Income £279.85
0% entitlement under current CTR Scheme – Lone Parent Premium + Family Premium + 2 Children Premium. Non-dependant deduction. Nil entitlement 25% entitlement under Grid Scheme - Qualifying income (total income less income disregards, less £25 earnings disregard) £374.13 is within the qualifying income bands and would receive 50% CTR
Case 2 Couple with 3 children aged 21 (non-dependant), 13 and 9 Housing Association tenant receiving £87.66 per week housing element of UC against a rent liability of unknown. Weekly Income Earned Income £232.62 Net UC award £127.71 Child Benefit £34.40 disregarded Total Weekly Income £394.73 Of which £34.40 disregarded
1% entitlement under current CTR Scheme - UC Standard Premium + UC Housing Element + UC Child Element less non-dependant deduction of £12.20 results in negligible entitlement of 1% CTR 50% entitlement under the Grid Scheme - Qualifying income (total income less income disregards, less £25 earnings disregard) £335.33 is within the qualifying income bracket and would receive 50% CTR
Case 3 Couple with 2 childres aged 28 (non-dependant) and 23 (non-dependant) Owner occupiers Weekly Income Earned Income £160.00 Total Weekly Income £160.00
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29% entitlement under current CTR Scheme – Couple premium. Due to 2 non-dependant deductions qualifies for 29% CTR 75% entitlement under Grid Scheme - Qualifying income (total income less £25 earnings disregard of £135.00 is within the qualifying income bracket and would receive 75% CTR
Cases with highest losses
Case 4 Couple with 4 children aged 15, 11, 3 & 3. The 15 year old is disabled and attends school for special needs Housing Association tenants receiving 100% Housing Benefit (£190.32 pw) so no rent to pay Weekly Income Earned Income £346.23 Child Tax Credit £121.24 Carer’s Allowance £66.15 disregarded in grid scheme only Child Benefit £61.80 disregarded DLA for 1 child (higher rate) £149.00 disregarded Total Weekly Income £744.42 Of which £276.95 disregarded Less rent paid £0 Net Weekly Income £744.42
100% entitlement under current CTR Scheme - Has Family Premium + 4 Child Premiums + Carer Premium + Disabled Child Premium + Enhanced Child Disability Premium resulting in 100% entitlement 0% entitlement under Grid Scheme – Qualifying income (total income less income disregards, less £25 earnings disregard) of £442.47 is between £375.01 - £450.00 band so 25% entitlement.
Case 5 Couple with 5 children aged 12, 11, 9, 7, 3. The 11 year old has low needs disability and attends main stream school Housing Association tenants receiving 100% Housing Benefit (£188.42 pw) so no rent to pay Weekly Income Earned Income £100.00 Child Tax Credit £387.03 Child Benefit £75.50 disregarded DLA for 1 child (lower rate) £88.00 Total Weekly Income £650.53 Of which £163.50 disregarded Less rent paid £0 Net Weekly Income £650.53
100% entitlement under current CTR Scheme – Has Couple Premium + 5 Child Premiums + Disabled Child Premium resulting in 100% entitlement 0% entitlement under Grid Scheme - Qualifying income (total income less income disregards, less £25 earnings disregard) of £462.03 is outside of qualification income bracket so nil entitlement
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Case 6 Couple with 6 children aged 14, 13, 9, 9, 4, 2 Housing Association tenants receiving £165.89 per week housing benefit (93% of rent liability)
Weekly Income Earned Income £185.48 Child Tax Credit £328.68 Working Tax Credit £49.55 Child Benefit £89.20 disregarded Total Weekly Income £652.91 Of which £89.20 disregarded Less rent paid £13.24 Net Weekly Income £639.67
98% entitlement under current CTR Scheme - No disabilities, Couple Premium + Family Premium + 6 Children Premium – results in almost maximum entitlement. 0% entitlement under Grid Scheme – Qualifying income (total income less income disregards, less £25 earnings disregard) of £538.71 is outside of maximum income bracket so nil entitlement
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Executive 5 September 2019
Minutes Extract
62. COUNCIL TAX REDUCTION SCHEME - PUBLIC CONSULTATION
Prior notification - Member questions and responses attached to minutes.
The Portfolio Holder for Corporate Resources presented the report that outlined the main reasons for recommending a move to a new simplified Council Tax Reduction scheme for the year 2020-21 which would be reviewed and revised as appropriate at the end of the year. The Council had a long record of providing Council Tax Support for those in need and this report sought to address the changes with the rollout of Universal Credit. The report also sought permission to consult with precepting authorities (Devon County Council, Police & Crime Commissioner for Devon and Cornwall, Devon and Somerset Fire and Rescue Authority) and such other persons as were likely to have an interest in the operation of the scheme.
He brought Members attention to the proposed additional features which included incorporating a return to work incentive and the removal of the restriction that limited support to a maximum Band D property. He brought Members attention to the case studies in the appendix. The scheme would be cost neutral and Overview & Scrutiny Committee would have a chance to review the proposals in light of the consultation responses before coming back to Executive and Council.
Non-Executive Members raised issues regarding the inadequate response to the submitted questions; had concern regarding some the proposed changes, how they could affect low income residents; could not support the proposals; Overview & Scrutiny Committee would look at the scheme with the goal to develop the best scheme possible.
The Leader stated that everybody effected would be consulted.
Officers advised that it should be noted that any new proposals not considered in the original consultation could not take effect without fresh consultation.
The Portfolio Holder for Corporate Services proposed the recommendation, this was seconded by the Portfolio Holder for Waste Management & Environmental Health.
RESOLVED that plans to consult with major preceptors and the public on proposals to introduce a new working-age Council Tax Reduction Scheme for the year 2020-21 be approved.
It is recommended that the Council maintain overall support at current levels and that the following key features of our current scheme be retained: o Maintain maximum support at 100% o Maintain an Exceptional Hardship Scheme o Continue to award 100% support to passported claims o Disregard disability related benefits when calculating income o Disregard child benefit and child maintenance when calculating income o Disregard War disablement/widows pension when calculating income o Limit the no. of dependent children in the calculation to a maximum of two for all new claimants o Apply the minimum income floor for self-employed claimants o Capital limit of £6,000 o Allow for childcare costs 157
It is recommended that the following additional features are included in the new scheme: o Disregard Carers Allowance when calculating income o Disregard Employment and Support Allowance (support element) when calculating income o Replace current variable earnings disregard with a standard £25 disregard for all o Incorporate a Return to Work Incentive for Universal Credit claimants and others by paying support for a period of one month beyond the return to work date. o Apply the current two dependent children limit used in the calculation to existing claimants o Remove non-dependent deductions from the scheme o Disregard payments made under the Windrush Compensation Scheme, We Love Manchester Emergency Fund and similar Government funded compensation schemes o Reduction to be awarded from the date of change as opposed to the ‘Monday following’ the date of change o Remove the requirement for good cause to be proven before backdating the award. o Increase the 1 month back-date time limit to 12 months. o Remove the restriction that limits support to maximum Band D property.
158 Agenda Item 10
TEIGNBRIDGE DISTRICT COUNCIL
FULL COUNCIL
24 FEBRUARY 2020
PART I
Report Title Network Rail Transport and Works Act Order Consultation
Purpose of Report To update Members regarding progress by Network Rail in developing Rail Resilience proposals for the section between Parson’s Tunnel, Holcombe and Teignmouth, and associated Transport and Work Act Order (TWAO) consenting processes and timeframes.
Recommendation(s) RECOMMENDED that Council:
(a) Receive a presentation and note progress to date, and
(b) Requests that the relevant Portfolio Holders and Coastal Officer submit a consultation response on behalf of the Council.
Financial Implications Not applicable
Legal Implications Not applicable
Risk Assessment Not applicable
Environmental/ There are no direct carbon/environmental implications Climate Change arising from the submission of a consultation response at Implications this stage in the TWAO process.
Report Author Graeme Smith Coastal Officer [email protected]
Portfolio Holder Cllr N.Jeffries and Cllr J.Hook
Appendices / none Background Papers
Full Council 24 February 2020 159
1. INTRODUCTION / BACKGROUND 1.1 Proposals to reclaim foreshore, create new sea wall, install rock revetment, regrade cliffs, create bund in front of remaining cliffs, realign track, create pedestrian routes, install bridges, drainage works, temporary landing facilities and associated infrastructure over a 1.8km length of coastline between Smugglers Lane, Holcombe and Eastcliff, Teignmouth are being developed by Network Rail to be submitted for determination through an Order under the Transport and Works Act 1992 (TWA or TWAO).
Network Rail’s proposals are principally aimed to counter a perceived geo- technical risk of significant collapse or slumping of the cliffs landward of the existing rail alignment, rather than marine driven risks (wave damage and overtopping) which are the principal risks at the resilience project works at Marine Parade, Dawlish.
1.2 The TWAO process is administered by the Department for Transport (Transport Infrastructure Planning Unit) and the Order is made by the Secretary of State (The Rt Hon Grant Shapps).
A TWAO has wide ranging powers including – powers to construct, effects on navigation, compulsory purchase of land, rights to use land, closure of roads/footpaths, provide temporary alternative routes, amendments or exclusions of other legislation, creation of Byelaws, and safeguards for public service providers and others.
1.3 A TWAO does not in itself grant planning permission, but the organisation applying for the order usually asks the Secretary of State to grant planning permission for any development described in the order. There are no listed structures within the site and Network Rail has secured an immunity from future listing
1.4 If the Secretary of State decides to grant planning permission for the proposed development, he issues a planning direction when the TWAO is made. The planning direction is likely to include conditions. If Planning Conditions are imposed by the Sec of State then the Council will have a role in monitoring and compliance of the conditions, but not the drafting of those conditions.
1.5 The notices of the TWAO application gives a date by which any objections, or other comments, should be sent to the Secretary of State from statutory and non- statutory consultees. The time period for objections is at least 6 weeks from the date in which the application is made. Being the Local Authority for the area in which the works are to be carried out, the Council would become a ‘statutory objector’ and may make objections to the application in line with the TWAO provisions. As a statutory objector, the following rights apply:
• If required, have an objection heard before a person appointed by the Secretary of State. This cannot be heard privately and likely be heard through either a public inquiry or a less formal (but still public) hearing
Full Council 24 February 2020 160 • If a public inquiry is held, entitlement to speak at it
• Require the inspector to carry out a site visit during or after an inquiry, accompanied by a relevant representative/s of the authority and at least one representative of the applicant
1.6 All objections and other comments are carefully considered before a decision is taken on a TWAO application by the Secretary of State. If an application has opposition, the Secretary of State must decide, within 28 days of the end of the objection period, whether to hold a public inquiry or a hearing, or ‘exchanges of written representations’. Network Rail envisages that a Public Inquiry is required to determine the TWAO application
2. TWAO Timeframe
December 2019 - Outline Design Freeze Main elements of the design are set to enable assessment of environmental impacts
20 January – 1 March 2020 - Second round Public Consultation (6wks) Range of public events including Dawlish, Holcombe, Teignmouth, Newton Abbot, Exeter and Torbay.
April 2020 - Final design iterations Designs updated to include potential environmental mitigation requirements
June 2020 - Draft Environmental Statement Surveys and assessment of impacts completed, draft mitigation proposed
September 2020 - Information Events Final proposed scheme presented to public and statutory consultees
October 2020 - TWAO submission Formal Objection Period, where interested parties can object or make representations to Sec of State
December 2020 - Objection Period ends
July 2021 - Public Inquiry The SoS will appoint a Planning Inspector to oversee the Public Inquiry Individuals and organisations who have objected to the proposed development invited to present at Inquiry
November 2021 - Inspector’s Report issued
February 2022 - Secretary of State decision
Full Council 24 February 2020 161 Construction period estimated 5-7 years
3. Independent evidence
3.1 The Council run and host the South West Regional Coastal Monitoring Programme and through this vehicle it has commissioned a multi-beam bathymetric survey for the area between The Ness headland at Shaldon, through to Orcombe Rocks east of Exmouth (and including a short distance inside both the Teign and Exe estuaries) The survey area covers the Teignmouth, Holcombe and Dawlish frontages, so will be an invaluable baseline to inform appraisals of Network Rail’s proposals. The survey has been completed and is currently being Quality Assured through the Maritime and Coastguard Agency and the UK Hydrographic Office, and will form the first step of a Beach Management Plan (BMP) for the Teignmouth frontage.
3.2 The Beach Management Plan (BMP) is a comprehensive look at the baselines, sediment dynamics and defence needs of the beach undertaken to a national standard (Beach Management Manual CIRIA C685). A BMP’s first focus is towards Flood and Coastal Erosion Risk Management at the local site, as this is the national emphasis and funding criteria, whilst taking into account and where possible, promoting or enhancing the other uses and functions of a beach – amenity, socio-economics, habitats and species etc.
3.3 The BMP provides the evidence required to access national Defra funds to remove, refurbish, replace defence options/structures (walls, groyne fields, recharge etc) as needed to alleviate identified risk. The function of Teignmouth Beach is effected by the sediment budget of the wider system, inc between Eastcliff and Holcombe, and a better understanding of this dynamic aspect is part of the justification for the BMP investment. The BMP will enable the Council to have a properly evidenced independent assessment of the wider system to inform any input to TWAO processes or Inquiry.
3.4 The resources to undertake the BMP and bathymetric survey have been successfully secured from national funding streams (including an aspect of match funding through Council Officer time), which further recognises the complexity and importance of managing a dynamic coast and the need for best evidence to be able to appraise likely impacts of developments, such as those being proposed by the railway resilience scheme.
3.5 In addition to the BMP, and associated bathymetric survey, the Council is working with the Environment Agency to commission an independent peer review of Network Rail’s modelling prescriptions which will inform the final design of the resilience programme.
4. Consultation
4.1 The current consultation has attracted considerable public interest, primarily around the proposed seaward realignment of the railway which would include
Full Council 24 February 2020 162 building over a proportion of the existing beach which is used by the public at low water.
4.2 The current consultation whilst a formal stage of the TWAO process comes before the publication of the majority of the technical information (including Environmental Impact Assessment, coastal process modelling, construction methodologies, temporary structures and impacts, influences on adjacent beach sediment sources, bathing waters and local economics, final design and project resourcing), which will be required to be made available before the expected Public Inquiry in summer 20121. In the absence of technical information consultation comments can only therefore be made on the outline proposals. The Council will further engage at a later stage in its role as a ‘statutory objector’, when detailed information is published and its own commissioned evidence (bathymetric survey, BMP, modelling review) is completed.
5. IMPLICATIONS, RISK MANAGEMENT & CLIMATE CHANGE IMPACT 5.1 Financial None at this stage 5.2 Legal None at this stage 5.3 Risks None at this stage 5.4 Environmental/Climate Change Impact There are no direct carbon/environmental implications arising from the submission of a consultation response at this stage in the TWAO process.
6 CONCLUSION
6.1 A proposal to enhance the resilience of the South West mainline railway is being developed by Network Rail to be determined through a TWAO process. The Council will become a ‘statutory objector’ within the process and will have the benefit of a suite of technical reports from the applicant to appraise alongside a few key pieces of information being compiled independently.
In the interim the Council is able to respond to a current round of public consultation regarding an outline proposal.
Full Council 24 February 2020 163 This page is intentionally left blank Agenda Item 11
TEIGNBRIDGE DISTRICT COUNCIL
FULL COUNCIL
24 FEBRUARY 2020
Report Title Wolborough Masterplan Development Plan Document (DPD) Purpose of Report To recommend that work on the Wolborough Masterplan DPD ceases. Recommendation(s) The Committee RESOLVES to:
Cease work on the Wolborough Masterplan DPD and to remove it from the published Local Development Scheme.
Full Council 24 February 2020 165 Financial Implications Full Council previously approved a budget of up to £210,000 for the preparation of the DPD. Any underspend was to be returned as a saving thus reducing the draw down from earmarked reserves. Almost £88,000 has been spent, mainly on bat survey work, and therefore there is a saving of £122,000. Martin Flitcroft Chief Finance Officer Tel: 01626 215246 Email: [email protected] Legal Implications This would involve an amendment to the published Local Development Scheme. Planning applications on the Wolborough would continue to be considered against the adopted Local Plan and other material considerations. Name/Title of person giving advice Tel: 01626 215 Email: @teignbridge.gov.uk Risk Assessment The DPD was intended to provide additional detail to supplement the existing Local Plan policy NA3 and this additional detail would no longer be available. However progress on the Local Plan Part 1 means that design and other Development Management policies are to be updated quickly, with a similar impact. Simon Thornley Business Manager Tel: 01626 215706 Email: [email protected] Environmental/ The climate implications are clearly set out in section 2.4.1 Climate Change in the report. Implications David Eaton | Environmental Protection Manager. Tel: 01626 215706 Email: [email protected] Report Author Simon Thornley, Business Manager Tel: 01626 215064 Email: [email protected] Portfolio Holder Portfolio Holder for Planning (Gary Taylor)
Appendices Part I or II Part 1 Background Papers
1. PURPOSE
1.1. To consider factors concerning the preparation of the Wolborough DPD and to agree that work on the DPD should cease.
2. REPORT DETAIL
2.1. Financial
2.1.1. The original budget for the DPD was £210,000 including staff time, evidence preparation and costs of the examination, to be spent over this and next Full Council 24 February 2020 166 financial year, funded by £75,000 of unspent budget relating to other planning matters and £135,000 from earmarked reserves held with the intention of supporting housing delivery in the first instance. Of this, almost £88,000 has been spent, covering updated bat evidence and a planning officer seconded from Devon County Council. No contractual commitment to further expenditure has been made. Therefore, there would be a total saving of £122,000, to return to earmarked reserves.
2.2. Legal
2.2.1. There would be a change to the content of the Local Development Scheme. This is the published document which includes timetables for all Development Plan Documents/Local Plans which the Council proposes to prepare. This change is covered in the recommendation. The DPD would have provided additional detail, but without changing the content of the existing Local Plan policy NA3. Policy NA3 will continue to apply to applications affecting the site, regardless of the outcome of this decision, subject to other material considerations. It should be noted that the main part of the site is subject to a “called-in” appeal which will be considered by the Secretary of State. A DPD cannot render a planning permission null and void.
2.3. Risks
2.3.1. The DPD was intended to provide additional detail to supplement the existing local plan policy NA3, although with no ability to make significant variations compared with the content of policy NA3. However, the update to the Local Plan (Part 1) will update and amend the existing Local Plan policies on design, climate change and other development management matters. This update is being prepared on a very similar timetable, i.e. adoption in mid- 2021. It will be relevant to any applications made on the site once adopted. Any risk is therefore significantly mitigated.
2.4. Environmental/Climate Change Impact
2.4.1. Any applications for the site are currently assessed against the adopted climate change policies in the current Local Plan, taking account of the revised carbon target agreed by Executive on 28th November 2019. With or without the DPD (which would have concentrated on matters of detail around site delivery rather than amendments to strategic Local Plan policies) applications will continue to be assessed against these requirements. The various climate change policies of the Local Plan are being reviewed at present through the Local Plan Update (Part 1) and these policies will apply from the date of its adoption. As a result, this decision has no climate change implications.
2.5. Background
2.5.1. Policy NA3 of the current Local Plan requires that “a comprehensive landscape and design led masterplan for the strategic site allocation, Full Council 24 February 2020 167 produced with meaningful and continued input and engagement from stakeholders” is prepared to support any applications for development of the site. The Council published a masterplan satisfying this criteria in summer 2018 for consultation, at which time it was proposed to be a Supplementary Planning Document (SPD).
2.5.2. Following legal advice in relation to the scope of SPDs, it was recommended to Full Council on the 14 January 2019 that the masterplan be effectively ‘upgraded’ to a Development Plan Document. The Local Development Scheme was amended at an Executive meeting in February 2019 to include the “Wolborough Masterplan Development Plan Document” with the following scope:
“The Wolborough DPD would draw on new and existing evidence to address matters that could include:
Streets and movement Design principles Density and main land uses Landscape and green infrastructure Greater Horseshoe Bat design framework and parameters Wolborough fen monitoring and mitigation Heritage and associated design responses Infrastructure delivery
2.5.3. The scope for the DPD is therefore detailed matters of design and implementation which are not covered in the existing policy NA3. It should be noted that any extension of this scope to include significant alterations to policy NA3 would not be “sound” and therefore could not be adopted.
2.5.4. It should be noted that the current Local Plan requires the same “comprehensive landscape and design led masterplan” for all of the strategic allocations included within the Local Plan. None of the other masterplans are proposed for adoption as DPDs. These masterplans, some prepared as SPDs and others as approved council policy documents, are being effective in guiding subsequent planning applications for development within the sites. Indeed, new national policy published by the government in October 2019 confirms that site masterplans do not have to be adopted as DPDs.
2.6. Reasons why the project is no longer relevant or achievable
2.6.1. There were two main strategic reasons why the DPD was proposed:
1. Resistance from the site promoters of the appeal site (Wolborough Barton) to the prompt timescales for the delivery of the main road and the reduced scale of development within the allocation’s most sensitive area’s to the setting of St Mary’s Church (Grade 1 listed building) as set out in the draft masterplan.
Full Council 24 February 2020 168 2.6.2. During the public appeal hearings which took place in April and June last year, Heads of Terms were agreed by the Council and the Appellants on the basis of all of the expert witness statements and evidence that were heard at the sessions and a S106 agreement has been subsequently signed (planning reference 18/00035/NONDET). The S106 includes timescales for the delivery of the main road. In the absence of any additional transport assessments to be carried out (which is not within the scope or budget of the DPD), the DPD would be bound to confirm these agreed timescales. The scale of development within the setting of the listed building was also debated at the appeal. The Statement of Significance and Heritage Strategy prepared as part of the draft masterplan by specialist consultants was used as a material consideration in defending the case for reduced levels of development in the setting of the Church. The appeal decision, to be taken by the Secretary of State, will need to consider and come to conclusions on this matter as part of the discussion. Secretary of State decisions have significant weight as precedent in future planning decisions and it is therefore another area where the DPD’s scope for decision will be limited. Depending on the outcome of the appeal, there may be more or less matters for the DPD to consider. As such, if Members are minded to continue with the DPD, at the very least it is recommended that there is a ‘pause’ on its preparation until a decision is made by the Secretary of State. This would mean that resource is not wasted pursuing specific matters in the DPD which may no longer be relevant.
2. Main community stakeholders (particularly Abbotskerwell Parish Council and Wolborough Resident’s Association) argued that the masterplan be prepared as a DPD if it is to maximise the impact it has on development outcomes.
2.6.3. Since the decision by Full Council was taken to prepare the DPD in January 2019, the new administration has committed to fast-tracking a partial update of the Local Plan for the benefit of better development outcomes for the whole of the district. This partial update will include many of the issues within the scope of the DPD concerning design, green infrastructure and heritage, and in addition matters such as climate change which were not due to be incorporated in the Wolborough DPD. The preparation of both the DPD and the Local Plan (Part 1) to a large extent duplicates unnecessary work. The Local Plan covers the entire district and therefore has the greatest potential for better design and environmental outcomes for the whole of Teignbridge. As such, the lack of a DPD would not result in the community missing out on these policy benefits as they would apply equally to the development site at Wolborough as to anywhere else in the district. As such, it is considered that this strategic reason is no longer relevant as the matters can be adequately covered through the Local Plan Part 1 without unnecessary duplication of resources and finance.
2.7. Considering applications without the Wolborough Masterplan DPD
2.7.1. The scope of the DPD is set out in the Local Development Scheme and quoted in paragraph 2.5.2 above.
Full Council 24 February 2020 169 2.7.2. In the absence of a DPD for Wolborough, the following table sets out how these issues will be addressed on planning applications within the site. In addition to the specific items mentioned below, the existing policy NA3 and the Local Plan Polices Map provide a statutory framework for decision making, which includes a significant level of detail already. The masterplan is also providing a useful framework to assist in the determination of outline applications and proposals are coming forward broadly in conformity with the principles included within it. The current Local Plan and emerging Local Plan (Part 1) will ensure that, in the absence of the DPD, there will be no policy gap or weakening of the position in relation to achieving the best quality development of the site.
DPD Matter Fall-back Position Design principles Use specialist advice provided by internal or external urban designers; Once adopted, use new policies contained in the updated Local Plan (Part 1) which relate specifically to design principles including building character, neighbourhood centres, healthy active places, legibility, street design/character and parking. Density and main land uses Use indicative layouts included within the masterplan; Use NPPF and existing Local Plan policies which require an efficient use of land; Once adopted, use new policies contained in the updated Local Plan (Part 1) which relate specifically to densities. Landscape and green infrastructure Use landscape strategy included within the masterplan; Use specialist advice provided by Landscape Officer, Green Infrastructure Officer and the Green Spaces and Active Leisure Team; Once adopted, use new policies contained in the updated Local Plan (Part 1) which relate to landscape and natural infrastructure. Greater Horseshoe Bat design Use up to date (2019) GHB survey framework and parameters evidence and recommendations to inform the mitigation plan; Use in-house ecologists and the recently approved SH SAC Habitats Regulations Assessment Guidance (2019) to manage the HRA process; Use the contents of submitted Appropriate Assessments taking account of expert advice from Natural England
Full Council 24 February 2020 170 Once adopted, use new policies contained in the updated Local Plan (Part 1) which relate specifically to the South Hams SAC. Wolborough Fen monitoring and Follow the advice provided by Natural mitigation England which is to condition any applications relating to the Fen so that they are required to submit a Scheme prior to development (based upon an evidence base agreed with the LPA in consultation with Natural England) which sets out detailed measures to ensure that the development does not have an adverse impact on the integrity of the Wolborough Fen SSSI during the construction or operation of the development; Once adopted, use new policies contained in the updated Local Plan (Part 1) which relate specifically to Sustainable Drainage System requirements, water quality and flooding. Heritage and associated design Use the Statement of Significance and responses Heritage Strategy included within the NA3 Masterplan; Use specialist advice provided by Historic England and Conservation officers; Once adopted, use new policies contained in the updated Local Plan (Part 1) which relate specifically to heritage assets. Infrastructure delivery Take full account of the agreed timings on infrastructure agreed between the applicants, Devon County Council and the Council during the appeal process. Consider comments from consultation responses including from statutory consultees as material considerations.
3. OPTIONS
3.1.1. There are 3 available options:
3.1.2. Option 1: Continue with the DPD in its current scope. This option would see the DPD prepared along similar timescales to the Local Plan and alongside the awaited appeal decision. The timescales for such would mean that the DPD would not be adopted until towards the end of next year at the earliest, with a risk that outline and reserved matters applications may be determined in advance of this. Continuing with this option would require the full amount of the remaining £122,000 to be used for completing the DPD.
Full Council 24 February 2020 171 3.1.3. Option 2: Pause work on the DPD pending the Secretary of State’s decision on the appeal site: This option would mean delaying work on the draft DPD until a decision is received from the Secretary of State on the appeal at Wolborough Barton. Depending on the outcome of the appeal, a decision could then be made about the most appropriate course of action to be taken. Continuing to prepare the DPD whilst awaiting the decision could be potentially wasteful, with matters of detail included within the decision superseding any work done on the DPD. The £122,000 remaining budget would need to be safeguarded under this option.
3.1.4. Option 3: Cease preparation of the DPD. The strategic reasons for preparing the DPD have now largely been superseded by events, and the existing policies and tools available to the council are sufficient to make appropriate decisions on any planning applications. This option would result in an underspend of £122,000 and reduce the drawdown from earmarked reserves.
4. CONCLUSION
4.1.1. The original purpose of the DPD was to provide additional policies to ensure that key matters relating to design, infrastructure, heritage, landscape and the environment were given sufficient weight when determining planning applications on land at NA3. However, since the commitment to prepare the DPD was made, various changes have occurred which mean that the main strategic reasons for preparing the DPD are now less relevant than previously considered. In particular, the Executive’s decision to fast track the Local Plan (Part 1) will mean that this partial update will cover many of the issues within the scope of the DPD. This includes policies on design, green infrastructure and heritage, and in addition matters such as climate change which were not due to be incorporated in the Wolborough DPD.
4.1.2. Given the unnecessary duplication of work and additional costs that would result from progressing the DPD and Local Plan (Part 1) alongside each other, it is recommended that work on the Wolborough DPD should cease, with its removal from the Local Development Scheme. The adopted policies in the current Local Plan and the emerging Local Plan (Part 1) will ensure that, in the absence of the DPD, there will be no policy gap or weakening of the position in relation to achieving the best quality development of the site.
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