Chichester District Council
Agenda item

Agenda item

Budget Spending Plans 2020-21

The Cabinet is requested to consider the agenda report and its appendices and make the following resolutions and recommendations to Council as set out below:

 

That the Cabinet recommends to the Council:

 

1.    That a net budget requirement of £14,235,800 for 2020-20 be approved.

 

2.    That Council Tax be increased by £5.00 from £160.81 to £165.81 for a Band D equivalent in 2020-21.

 

3.    That the uncommitted revenue budget of £483,900 be transferred to the General Fund Reserve to mitigate the deficit expected in 2021-22.

 

4.    Should the final settlement differ from the draft settlement, the sum in 3.1 (c) above be adjusted accordingly.

 

5.    The capital programme, including the asset renewal programme (appendix 1c and 1d of the agenda report) be approved.

That the Cabinet further notes:

 

1.    The current estimated resources position set in appendix 2 of the agenda report, and

 

2.    The budget variances included in the Draft Budget Spending Plan as set out in appendix 1b of the agenda report.

Decision:

RESOLVED

 

1.    That the current estimated resources position set in appendix 2 of the agenda report be noted, and

2.    The budget variances included in the Draft Budget Spending Plan as set out in appendix 1b of the agenda report be noted.

 

*RECOMMENDED TO COUNCIL 

 

1.     That a net budget requirement of £14,235,800 for 2020-21 be approved.

2.     That Council Tax be increased by £5.00 from £160.81 to £165.81 for a Band D equivalent in 2020-21.

3.     That the uncommitted revenue budget of £483,900 be transferred to the General Fund Reserve to mitigate the deficit expected in 2020-21.

4.     That should the final settlement differ from the draft settlement, the sum in 3.1 (c) above be adjusted accordingly.

5.     That the capital programme, including the asset renewal programme (appendix 1c and 1d of the agenda report) be approved. 

Minutes:

Mr Wilding introduced the item. He explained that the report follows on from Council’s approval of our Financial Strategy in December 2019. He confirmed that Full Council will set the budget and Council tax in March 2020. He explained that the report focusses on the Budget Spending Plans of each of Cabinet member’s portfolios and how these aggregate and underpin the balanced budget presented.

 

Mr Wilding acknowledged that the budget process involves co-operation between individual budget managers and the council’s finance team, overseen by the Strategic Leadership Team. The process ensures that service delivery priorities are met within the constraints on public sector financial resources.

 

Mr Wilding then confirmed that the draft financial settlement from the Government had been broadly as anticipated with the 2020-21 settlement effectively an extension to the previously agreed four-year settlement due to the Government Funding reforms being delayed until 2021-22.    

 

Mr Wilding then drew attention to some of the key variables and issues that impact the forthcoming financial year detailed in the report and supporting appendices, namely, income from fees, charges and rents; use of reserves; and Council tax. With  regard to Council Tax he explained that he felt that the council should take up central government’s offer of allowing a rise in Council Tax by £5 for Band D properties (or less than 10 pence per week) and equivalent increases for other property Bands. He explained that it will help to offset the continued reduction of central government funding by generating an extra £270,667 per year to assist in closing the budget deficit that would otherwise emerge in the medium term.  He confirmed that to not approve an increase would leave the council with a deficit to address in later years. In addition there will be continued work on the 2016 deficit reduction plan which aims to generate further income and savings amounting to just under £1 million over the next 5 years.

 

Mr Wilding then explained the overall 2020-21 budget summarised in the income and expenditure statement as detailed at pages 62 and 63 of the agenda pack.  He added that a corrected page 63 was circulated as a supplementary agenda paper. There is a net revenue requirement of £14.236 million with the draft budget showing a net surplus of £484,000 for 2020-21.  However, the Financial Strategy shows that in the two subsequent years the total deficit is forecast to be £500,000. Mr Wilding explained that it is therefore prudent to reserve the 2020-21 surplus by transferring it to the council’s General Fund Reserve in order to off-set future deficits and avoid unwanted service reductions.

 

Mr Wilding then drew attention to pages 64 - 69 of the supplement pack which details the major variances by department and service area between the 2019-20 budget and that for 2020-21. The most significant variation is the loss of recycling credits which amounts to £769,000 per year.

He then outlined the budget summaries by portfolio on pages 71-86, of the supplement pack.  He explained that the details can be found in the draft budget book on to the council’s website.

 

Mr Wilding then explained that all projects included in the Capital Programme had already been approved by the Cabinet and Council, but some may be subject to a separate future report along with a Project Initiation Document before the funding is released.  He noted that the Statement of Reserves, remains robust and healthy and highlights the purpose of specific reserves and the respective authorisations for their use, and demonstrates that the Capital Programme and Asset Replacement Programmes are fully funded, as demonstrated in the prudential indicators set out in page 115 of the supplement pack, along with the Council’s Minimum Revenue Provision (MRP) Policy (pages 116-117) which state the arrangements for the repayment of any debt. Mr Wilding clarified that this is a requirement of the Prudential Code even if the council is debt free. 

 

Mr Wilding then drew attention to paragraph 8.2 on page 24 of the report. He explained that the Director of Corporate Services is obliged by statute to report on the robustness of the estimates and the adequacy of reserves. The advice remains that the council’s financial estimates are sound, the resultant estimates robust and reserves adequate, and that this view also applies to the affordability and risks associated with the council’s capital strategy which was considered on the previous item on this meeting’s agenda.

 

With reference to page 24 of the pack Mrs Taylor asked whether there had been any feedback following the budget consultation. Mrs Belenger confirmed that no feedback had been received.

 

Mrs Plant drew attention to the importance of the Asset Replacement Programme given the number of parish projects which had benefitted.

 

With reference to Appendix 1a Mrs Lintill asked why the asset replacement figure for 2020/21 is less than the figure for 2019/20. Mrs Belenger confirmed this is due to a net movement figure and the contribution is still increasing.

 

With reference to page 64 of the pack Mrs Lintill requested clarification of the difference between the pay settlement and salary increments. Mrs Belenger explained that the budget allows for a pay settlement of 2%. Following the pay structure review there are now only 3  increments within  each pay grade of the new  pay structure, so larger changes. With regard to page 66 and the Chichester Contract Services staff budget alignment she explained that there had been growth in the service due to the number of new houses and previously this additional work had been  met from existing budget. However, it is no longer possible to contain this additional growth within existing budget and therefore needs to be reflected.

 

Mrs Belenger then confirmed that the Budget Task and Finish Group had made no recommendations to the Cabinet.

 

Decision

 

The Cabinet then voted unanimously to make the resolutions and recommendation below.

 

RESOLVED

 

1.    That the current estimated resources position set in appendix 2 of the agenda report be noted, and

2.    The budget variances included in the Draft Budget Spending Plan as set out in appendix 1b of the agenda report be noted.

 

RECOMMENDED TO COUNCIL 

 

1.     That a net budget requirement of £14,235,800 for 2020-21 be approved.

2.     That Council Tax be increased by £5.00 from £160.81 to £165.81 for a Band D equivalent in 2020-21.

3.     That the uncommitted revenue budget of £483,900 be transferred to the General Fund Reserve to mitigate the deficit expected in 2021-22.

4.     That should the final settlement differ from the draft settlement, the sum in 3.1 (c) above be adjusted accordingly.

5.     That the capital programme, including the asset renewal programme (appendix 1c and 1d of the agenda report) be approved. 

 

 

Supporting documents:

 

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