Report No.4/2019 was received from the Strategic Director for Resources.
Mr Gordon Brown, Portfolio Holder for Finance, introduced the report the purpose of which was for Cabinet, as it is required, to set a balanced budget and agree the level of Council tax for 2019/20 in the context of its Medium Term Financial Plan. The report presented a draft budget for consultation prior to the budget being formally set in February 2019.
During discussion the following points were noted:
· It was important that this budget was taken in the context of the uncertainty that the Council currently faced due to Brexit, a potential general election and possible recession, and the fact that future funding beyond 2022 was unknown. These factors necessitated prudence going forward.
· The Council was however in a better position than originally anticipated as a result of a great deal of work done by officers that had resulted in significant savings and identified future savings.
· The funding split was significant as Rutland‘s budget was funded 72% by Council tax and 28% by Government. Rutland received less funding per head than any other unitary authority.
· The Council was predicting a gap in funding and unless there was a change to Government funding the Council would have to run down reserves if the Council tax and adult social care precept were not increased.
· St George’s Barracks was an issue but also an opportunity as the Master Plan continued. There were no significant risks in the Medium Term Financial Plan (MTFP) as the revenue stream would start after the term of the MTFP.
· Inflation had been higher than the 2% target and so had had a negative impact on finances.
· Rutland had a higher proportion of its population aged over 55 so there would be a pent up demand for adult social care going forward.
· The Council’s reserves position compared favourably with other unitary authorities.
· The expenditure chart on page 45 of the report referred to looked after children. This should have read children looked after.
· The Council had been actively making its voice heard in respect of the level of funding that Rutland received. Although urban areas often had greater needs, rural areas had greater costs. The Government was looking at the needs issue but also looking at the fairness of that approach. The Leader and Portfolio Holder had written to Rutland’s MP, Sir Alan Duncan, and had been assured that he would be making strong representations on the Council’s behalf. Talks had also been held on this issue with the Local Government Authority.
1) APPROVED for consultation:
· The Revenue Budget for 2019/20 detailed in Appendix 1, section 3 including savings proposals
· The Directorate budgets per Appendices 4-6 including savings and pressures
· An increase Council Tax by 2.99% with a further 2% for the Adult Social Care precept
· The Capital programme as detailed in Section 4 of Appendix 1
· That the funding position may change when the NNDR (business rates) tax base and local government finance settlement were finalised
· That additional revenue or capital expenditure may be incurred in 2019/20 funded through 2018/19 budget under spends to be carried forward via earmarked reserves. The use of reserves for budget carry forwards was not currently shown in the budget but would have no impact on the General Fund
· The estimated surplus of £75k on the Collection Fund as at 31 March 2019 (2.2 of Appendix 1) of which £65k was the Rutland share
· That Council would be considering the Treasury Management Strategy and Capital Investment Strategy separately
· The position on the Dedicated Schools Grant budget as per para 2.5.
Reasons for the decision
The Council is required to set a balanced budget and agree the level of Council tax for 2019/20.
The draft budget for consultation is affordable within the context of the MTFP and will allow the Council to meet service aims and objectives for the coming year.