Decision Maker: Cabinet
Decision status: For Determination
Is Key decision?: No
Is subject to call in?: Yes
To consider the latest draft budget for
2019/20 to 2023/24.
The Finance Portfolio Holder presented the latest 2019/20 Five Year Draft Budget. Following the multiyear settlement for 2016/17 to 2019/20, there had been relatively few budget changes arising from the provisional Local Government Finance Settlement. A balanced budget for 2019/20 was presented, including an increase in the Band D Council tax of £5.
The Portfolio Holder highlighted the main changes which had arisen since consideration of the budget on 18 December 2018, namely:-
· additions to the Capital Programme:-
o South Lakeland House/Kendal Town Hall - £4.7m plus £200,000 in revenue; and
o Windermere Road Car Park Grange - £100,000;
· reprofiling of £458,000 of capital expenditure to 2019/20 and additional ERDF grant (and expenditure) of £670,000 and DRF grant of £132,000 (no change in expenditure);
· inclusion of Council Tax Collection Fund surplus of £42,200 – mainly due to increase in empty properties and loss of new-build to holiday lets;
· updated interest payable and receivable calculations – to reflect that the Council was unlikely to borrow at 31 March 2018 but that there might be an increased need to borrow to fund the Capital Programme in future years; and
· inclusion of additional one-off grants from the provisional local government finance settlement.
Overall, these changes had resulted in a movement from a need to use £120,000 of reserves to balance the general fund next year to a small contribution to reserves of £51,400.
The report included a summary position. The Medium Term Financial Plan provided a summary five year annual position which included a projection of the overall surplus or deficit on the General Fund Revenue Budget. The assumptions and financial implications were kept constantly under review as circumstances changed. A summary of the know changes at this stage was provided at Table 1 of the report, with a more detailed analysis of expenditure and income at Appendix 2a to the report. Table 1 set out the summarised estimated annual General Fund Budget requirement across the review period, including the projected deficits. It also showed the savings identified and where the budgets had been reduced.
The projected annual revenue deficit totalled circa £800,000 in 2020/21 rising to circa £2.7m by 2023/24. This position was after the inclusion of Customer Connect savings of £740,000k in 2019/20 and £1.550m from 2020/21 onwards. These annual projections were based on information available at the time of preparation of the report, along with the broad set of assumptions detailed in paragraph 3.9 of the report.
Work was underway to resolve the projected deficits. Future year estimates would be kept under review as part of the Medium Term Financial Plan process to ensure that savings plans were sufficient to set balanced budgets.
The July Medium Term Financial Plan had included £500,000 of unallocated growth which had now been removed. The Council had a statutory duty to set a balanced budget. Any additional budget pressures or discretionary, fixed term growth items would need to be funded by savings in existing budgets.
Significant savings would be required from 2020/21 onwards to produce balanced budgets for the future. It was expected that the Customer Connect Programme would contribute a large part of the required savings.
The Portfolio Holder closed, saying that the Medium Term Financial Plan showed that the Council was in robust financial health and was maintaining services, delivering strategic projects and had a record of balancing the budget, whilst not having to raid reserves. However, the significant uncertainties that lay ahead could not be ignored, particularly around potentially severe cuts in Government funding. The Council was in a good position to face these, but major cuts in funding would pose a major challenge, and it was important that the Council took actions now that would help protect it, including the ambitious savings programme. The Council would continue to work to find ways of facing this whilst minimising the impact on its residents in South Lakeland.
The Portfolio Holder thanked officers for their continued work in developing the budget.
Reference was made to the full fees and charges listing attached at Appendix 6 to the report and strong concern was expressed with regard to the 85% increase shown in the net fee for 2019/20 in relation to analysing a full suite of parameters in connection with private water supplies. It was suggested that, as a gesture of good will, this increase be capped for a year, pending a review of private water supplies. The Finance Portfolio Holder explained that the figure shown related to the total cost for a full suite of sampling that could be a requirement of the new regulations, but in practice this would be very unlikely to be applied at this level, as sampling was undertaken according to risk. An example was the potential addition of Radon in the full suite of parameters testing for which would be unlikely to be undertaken as this was not a cause for concern in this area. Additionally, he highlighted that the possible frequency of sampling could range from once every five years for a small, shared domestic supply to more frequently for the largest commercial suppliers. He pointed out, however, that the Council had a duty to cover the costs related to the testing of private water supplies and also drew attention to the annual cost of water rates to those on mains water supply.
The Leader and Promoting South Lakeland Portfolio Holder suggested that further description was required at Appendix 6 under this item. He also thanked officers for their prudent management of the Council’s finances.
During consideration of the item, it was pointed out that Councillor John Holmes, Shadow Executive Member (Finance Portfolio) had recently had a fall, which was why he was not present at the meeting. Members wished him well.
RESOLVED – That
(1) the proposals contained in the report to achieve a balanced budget in 2019/20 be noted; and
(2) the Draft Budget 2019/20 to 2023/24 be recommended to Council for approval.
Reasons for Decision
The report sets out the draft Budget to enable the consideration of how the Council’s priorities will be delivered. Setting a sound framework for budget preparation assists in the delivery of all corporate outcomes. This strategy has been developed within the context of the Medium Term Financial Plan.
The expected outcome is that Council will be in a position to deliver the priorities set out in the Council Plan within its resources. This will enable the statutory requirement to agree a balanced budget and to set the appropriate Council Tax level for 2019/20.
Alternative Options Considered and Rejected
The report presents alternative options in relation to potential budget pressures and savings, new Capital Programme bids, one off revenue growth bids and fees and charges. The proposals together aim to meet the Council’s statutory duty to set a balanced Budget for 2019/20.
Report author: Helen Smith
Publication date: 08/02/2019
Date of decision: 06/02/2019
Decided at meeting: 06/02/2019 - Cabinet
Effective from: 18/02/2019