Agenda item - DRAFT 2021/22 REVENUE AND CAPITAL BUDGET

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Cabinet approved for consultation:

· The General Fund Budget of £42.4m for 2021/22 detailed in Section 3

· An increase in Council Tax of 1.99% with a further 1% for the Adult Social Care precept of the 3% available over 2 years

· The capital programme as detailed in Section 6

· The creation of a new Earmarked Reserve for Ash Dieback (£500k) as per para 3.5.9

· The minimum reserve level be increased from £2m to £3m to reflect the changing risk profile.

Cabinet noted:

· The advice from the Council’s Section 151 Officer in respect of the budget as set out in para 2.1.12

· The Medium Term financial outlook and commits to taking action in 21/22 to address the deficit position

· Representations to government on the unfair distribution of the Local Government Settlement and the resulting impact on Rutland residents

· That the funding position may change when the NNDR (business rates) tax base and local government finance settlement is finalised

· That additional revenue or capital expenditure may be incurred in 2021/22 funded through 2020/21 budget under spends to be carried forward via earmarked reserves. The use of reserves for budget carry forwards is not currently shown in the budget but will have no impact on the General Fund

· The estimated deficit of c£186k on the Collection Fund as at 31 March 2021 (Section 4.2) of which £160k is the Rutland share

· That Council will be considering the Treasury Management Strategy and Capital Investment Strategy separately

Councillor G Brown as the relevant Cabinet Member, elaborated on the recommendations as set out in the report. He stated that the advice from the Councils S151 should be noted as should the representation to government about the level of funding which the Council’s believes is unfair. He explained that the 21/22 local government finance settlement gave the council less government funding than in 20/21 despite all the talk of “new funding”.

Councillor G Brown explained that the Government defined the amount of core funding that councils had available as “spending power”. Since 2013/14 the Council’s spending power had increased by 21% in absolute terms but government funded spending power had reduced by 35% and Council tax spending power had gone up by 53% since 2013/14 with nearly 81% of our funding now coming from Council tax. This compares to the national average of 60%.

Significant grants had been received from Government to deal with additional pressures during the pandemic, but the financial impact of the pandemic is as yet unknown and will only materialise over next few years,

The Chief Finance Officer elaborated on the 4 main areas of concern:

First, in order to set a balanced budget there was a requirement to use £2.6m from reserves. It was explained that ideally, reserves should be to be used for one off purposes and in order to take action to minimise the use of reserves, there was an urgent need to stop spending.

Second, with regards to the Medium Term Financial Plan it was noted that there was a need to prioritise and reshape services with emphasis being placed on ‘living within the Councils means’. The Council was urged to start projects now that would reduce the projected deficit for 22/23 to less than £1m.

Third, The Chief Finance Officer urged Members to think carefully about the percentage increase in Council Tax. Should there be an increase of 5% the Council would get additional £500,000 (over a 2.99% increase) and his advice was that in the financial circumstances this should be considered..

Fourth, he further explained that there was a need to retain a minimum level of reserves to cushion the Council and proposed that this be increased from £2 million to £3 million.

Councillor G Brown explained that there would be consultation with the public and that lobbying, at Government level, was being undertaken to highlight the unfair distribution of the Local Government Settlement and the resulting impact on Rutland residents.

RESOLVED:

That consultation be approved: