Report no: 34/2021

(Key decision)

Cabinet RECOMMENDED TO COUNCIL that it:

·       Approves the Revenue Budget of £42.6m for 2020/21 detailed in Section 3

·       Notes that the Revenue Budget includes a £2.4m use of Reserves assuming a 3% Council tax rise (in the event that the Council approves a different level of Council tax, the use of Reserves will vary accordingly)

·       Approves the capital programme as detailed in Section 6

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

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

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

·       Notes 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

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

·       Notes the responses to consultation (section 3)

·       Notes the updates since the draft budget was approved (section 2.2)

·       Delegates authority to the s151 Officer to make any necessary changes to the budget arising from the Council tax decision and/or any additional funding received

Councillor G Brown, as the relevant Cabinet Member, elaborated on his report. He thanked the Chief Finance Officer and his team for their hard work in delivering grants, drafting the budget and delivering the Quarter 3 – finance monitoring report during difficult circumstances.

Members were asked to note the updates following the draft budget approved by Cabinet on the 12^th January 2021 listed below.

1.    Use of Reserves – various changes to business rates (para 2.2.5) mean that the projected deficit for 21/22 is now £2.4m. In the draft budget, Council was advised to take action to reduce that deficit by at least £500k. This has been increased to £1m given that indications from Government is that there will be no increase in the overall settlement.

2.    Council tax rise – Cabinet has confirmed that following consultation, they will proceed with a 3% council tax proposal (2% general and 1% for adult social care).

3.    Business Rates - the Council has completed its NNDR1 return and business rates estimates to Government. Business rate estimates indicate an increase of £201k due to the growth in the property tax base from new business (e.g. McDonalds) and existing businesses now being brought into the rating system by the Valuation Office Agency.

4.    Spending plans - no changes have been made to detailed Directorate budgets. 2.2.7 Pay settlement - The pay settlement negotiations are still ongoing with an agreement unlikely to be reached by 1 April.

5.    Early Years - The Early Years funding rates have been confirmed with £5.36 for 2 year old provision and £4.25 for 3 and 4 year olds.

6.    The Government is introducing a compensation scheme for Council tax and business rate losses. The Council’s view is that likely compensation will be less than £70k and at this stage no amount has been built into the MTFP.

7.    MTFP - minor adjustments totalling £16k to align the tax base to that proposed in the Council Tax report.

8.    Council tax base - Section 4 of the report set out potential “losses” of different council tax increases relative to the maximum possible increase of 5%. The draft report indicated losses were for a five year period (this has been clarified as the loss covers the current year plus five years). The 126 volatility of the tax base, in the economic circumstances, means that the loss figures are now expressed as being within a range i.e. between £1.5m - £2m. The annual loss figure for 21/22 has not changed.

9.    Consultation responses – these are included in Section 9 of the report.

Councillor G Brown explained that Scrutiny Committees had discussed the report and that noted that there had been 197 responses from members of the public during the budget consultation period. He further explained that the preferred option was for a 2.99% increase in council tax in order to reduce additional financial pressures on the residents, contrary to the advice of the Chief Finance Officer to increase council tax by 4.99%

RESOLVED:

That Cabinet RECOMMEND TO COUNCIL that it:

·       Approves the Revenue Budget of £42.6m for 2020/21 detailed in Section 3

·       Notes that the Revenue Budget includes a £2.4m use of Reserves assuming a 3% Council tax rise (in the event that the Council approves a different level of Council tax, the use of Reserves will vary accordingly)

·       Approves the capital programme as detailed in Section 6

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

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

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

·       Notes 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

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

·       Notes the responses to consultation (section 3)

·       Notes the updates since the draft budget was approved (section 2.2)

·       Delegates authority to the s151 Officer to make any necessary changes to the budget arising from the Council tax decision and/or any additional funding received