Item Council 7(i) 17 February 2016

Report of Assistant Chief Executive Author Sean Plummer  282347 Title Precept and Council Tax Levels 2016/17 Wards Not Applicable affected

The purpose of this report is to set out the statutory resolutions the Council is required to approve in order to set the Council Tax for each band for the financial year 2016/17.

1. Decision Required

1.1 To approve the statutory resolutions as set out at Appendix 1 which are in accordance with the Local Government Finance Act 1992, as amended by the Localism Act 2011, in respect of the Council Tax for each band for the financial year 2016/17.

1.2 To agree the use of the Transition Grant set out within this report at paragraph 4.3.

2. Reasons for Decision

2.1 The Council is required, in accordance with the Local Government Finance Act 1992, as amended by the Localism Act 2011, to set formally the Council Tax for each band, which will include precepting authorities.

3. Alternative Options

3.1 The resolutions are a statutory requirement.

4. Borough Council’s Council Tax Requirement

4.1 Cabinet on 27 January 2016 approved and recommended to Council the 2016/17 revenue budget requirement. The final grant settlement notification received on 8 February 2016 confirmed the earlier provisional figures in respect of the total Settlement Funding Assessment. However, there are a number of issues arising from the final settlement and other final budget issues.

Local Retention of Business Rates 4.2 The Cabinet report set out the arrangements, issues and risks associated with the local retention of business rates. It was outlined that the Council is required to submit a return of estimated business rates income for 2016/17 (the NNDR 1). The budget proposals in the Cabinet paper were based on additional anticipated income above the 2016/17 baseline funding level of £800k. The table below sets out how the budgeted figures compare to the estimates set out in the NNDR 1, which shows potential additional income in line with the budget estimate. Any fluctuation in overall NNDR income during the year will be reflected in the surplus/deficit figure in the 2017/18 budget and the issue of ongoing income from retained business rates will be considered as part of the budget strategy for 2017/18.

Budget NNDR 1 Estimate Figures £’000 £’000 Retained NNDR income 5,960 5,965 Less: Baseline Funding Level 3,960 3,960 Surplus / (Deficit) 2,000 2,005 CBC share of surplus (40%) 800 802

Transition Grant 4.3 The final Settlement includes the announcement of a grant paid to those authorities affected most by the reductions announced in the provisional settlement. For Colchester this grant is £88k for 2016/17 and 2017/18. It is proposed that this is used to further reduce the amount of New Homes Bonus being used to support the base budget. This will therefore provide new one off funds of £88k and it is proposed that this is included in the budget and that Cabinet consider specific use of this funding with an aim to consider including projects that will reduce future costs or boost income. In this way the transition funding can assist with addressing future budget gaps.

Council Tax Referendum limit 4.4 The recommendations within this report are for a freeze in Council Tax as such the referendum level is not a limiting factor. However, the Government has confirmed a change to the proposed level for district councils.

4.5 Previously, this was set at 2%, however, in the provisional settlement, it was proposed that for certain smaller district councils there would be a limit of a £5 increase. In the final settlement it has been agreed that all district councils can increase their Council Tax by the higher of £5 or 2%. For Colchester the limit is therefore £5 which would currently equate to an increase of 2.85%.

4.6 The changes announced in the final settlement impact on a number of the assumptions in the C