Agenda item

Report number HOF189 of the Resources Portfolio Holder         (Attached)

Decision:

 

PART A

 

In relation to the General Fund (Revenue) SECTION B of report HOF189, the Council:

 

a.    Approves the original base estimate for 2012/13 and indicative base estimates for 2013/14 and 2014/15 and to set a General Fund budget requirement of £14.027M for 2012/13 (inclusive of special expenses) as detailed in the summary at Appendix A page 1;

b.    Approves a Council Tax freeze for 2012/13 (including special expense areas)

c.    Approves increases in Fees and Charges for 2012/13 as set out in Appendix D

 

In relation to the Housing Revenue Account (HRA) SECTION C of report HOF189, the Council:

 

d.    Approves the Housing Revenue Account for the year 2012/13 to set dwelling rent increases in accordance with Government guideline rent providing an average rent of £71.08 (and an average rental increase of 7.65%) shown at Appendix A page 7

e.    Sets an increase in garage rents of 5.6%

f.     Increases service charges by 5.6% 

g.    and indicative years 2012/13 and 2014/15

h.    Approves the borrowing for the self financing of the HRA of a short term Maturity loan of term of between 8-9 years to the value of £25m and a 30 year  Equalised Instalments of Principal (EIP) loan to the value of £96.6M

i.      In the event of extreme volatility in market rates between the date of the Council’s decision and the date currently set for the financing implementation in respect of item h above to delegate to the Strategic Director Corporate Focus the authority to secure the most financially advantageous financing arrangement.

 

In relation to Capital and investment Programmes SECTION D of report HOF 189, the Council:

 

j.      Approves the General Fund Capital programme for 2012/13 to 2014/15 detailed at Appendix B page 1

k.    Approves the indicative Housing Investment programme for 2012/13 to 2014/15 detailed at Appendix B page 2

l.      Approves the Capital Financing statement detailed at Appendix B page 3

 

In relation to the Reserves and balances SECTION E of report HOF 189, the Council:

 

m.  Approves the use of the reserves as detailed at paragraph 16.

 Management and prudential indicators SECTION F of report HOF 189, the Council:

n.    Approves the Treasury Management Strategy provided at Appendix D

PART B

 

In accordance with the requirements set out in paragraphs 32 to 36 of the Local Government Finance Act 1992, the Council adopts:

 

1)         That the following amounts be calculated by the Council for the year 2012/13 in accordance with Sections 32 to 36 of the Local Government Finance Act 1992 (as amended)

           

a)         £78,763,000 being the aggregate of the amounts which the Council estimates for the items set out in Section 32 (2) (a) to (e) of the Act (including special expense and parish precepts).

 

b)           £63,653,000 being the aggregate of the amounts which the Council estimates for the items set out in Section 32 (3) (a) to (c) of the Act.

 

c)             £15,110,000 being the amount by which the aggregate at a) above exceeds the aggregate at b) above, calculated by the Council, in accordance with Section 32(4) of the Act, as its budget requirement for the year.

 

d)           £7,369,000 being the aggregate of the sums which the Council estimates will be payable for the year into its General Fund in respect of redistributed Non-Domestic Rates and Revenue Support Grant increased by the amount of the sum to be transferred from the Collection Fund to the General Fund

 

e)         £164.33 being the amount at c) above less the amount at d) above, all divided by the Council's tax base of 47,105.8 as  recorded in minute 34 of the cabinet meeting of  5 December 2011, in accordance Section 33(1) of the Act, as the basic amount of its Council Tax for the year 2012/2013.

 

f)          £1,958,546 being the aggregate amount of all special items referred to in Section 34(1) of the Act.

 

g)        £122.76 being the amount of e) above, less the result given by dividing the amount of f) above by the Council's tax base relating to special items as set on 5 December, 2011 calculated by the Council in accordance with Section 34(2) of the Act, as the basic amount of its Council Tax for year for dwellings in those parts of its area to which no special item relates.

 

h)        Part of the Council’s area                                    Band D equiv.

           

Parish	Band D Equivalents
	No.
Grantham	11274.8
Stamford	7131.8
Bourne	5005.5
Allington	359.0
Ancaster	582.4
Aslackby & Laughton	113.7
Barholm & Stow	34.2
Barkston & Syston	263.6
Barrowby	726.3
Baston	543.4
Belton & Manthorpe	205.0
Billingborough	485.1
Bitchfield & Bassingthorpe	58.1
Boothby Pagnell	64.2
Braceborough & Wilsthorpe	135.9
Ropsley,Humby,Braceby & Sapperton	341.3
Burton Coggles	38.8
Careby,Aunby & Holywell	68.6
Carlby	212.6
Carlton Scroop & Normanton	129.1
Castle Bytham	301.7
Caythorpe	539.8
Claypole	505.7
Colsterworth,Gunby & Stainby & N.Witham	737.9
Corby Glen	399.7
Counthorpe & Creeton	34.3
Deeping St James	2464.9
Denton	121.4
Dowsby	62.4
Dunsby	46.4
Stoke Rochford & Easton	86.6
Edenham	113.0
Fenton	56.0
Folkingham	299.4
Foston	218.1
Fulbeck	220.4
Greatford	126.1
Great Gonerby	809.3
Great Ponton	130.1
Haconby	194.3
Harlaxton	338.1
Heydour	155.5
Honington	71.6
Horbling	167.1
Hougham	79.5
Hough on the Hill	167.3
Ingoldsby	115.8
Irnham	103.7
Kirkby Underwood	84.1
Langtoft	752.8
Lenton,Keisby & Osgodby	66.8
Little Bytham	112.1
Little Ponton & Stroxton	70.9
Londonthorpe & Harrowby Without	1743.3
Long Bennington	899.3
Market Deeping	2058.5
Marston	151.1
Morton	831.1
Old Somerby	92.3
Pickworth	76.3
Pointon & Sempringham	199.7
Rippingale	346.8
Sedgebrook	144.9
Skillington	137.5
South Witham	489.5
Stubton	75.2
Swayfield	146.7
Swinstead	89.9
Tallington	200.8
Thurlby	816.9
Toft, Lound & Manthorpe	137.9
Uffington	316.4
Welby	77.5
Westborough & Dry Doddington	152.4
West Deeping	125.0
Witham on the Hill	99.9
Woolsthorpe	152.0
Wyville cum Hungerton	18.9

 

being calculated by adding to the amount at (g) above the amounts of special item relating to dwellings in those parts of the Council's area, divided in each case by the individual tax bases as recorded in minute 49 in accordance with Section 34(3) of the Act, as the basic amounts of its Council Tax for the year for dwellings in those parts of its area to which special item relates.

 

i)          The amounts on the attached schedule (Appendix A to Part B), being the amounts given by multiplying the amounts at g) above and h) above by the number which, in the proportion set out in Section 5(1) of the Act,  is applicable to dwellings listed in valuation Band 'D', calculated by theCouncil, in accordance with Section 36(1) of the Act, as the amounts to be taken into account for the year in respect of categories of dwellings listed in different valuation bands.

 

j)          That it be noted that for the year 2012/13 Lincolnshire County Council has stated the following amounts as a precept issued to the Council in accordance with Section 40 of the Local Government Finance Act, 1992, for each of the categories of dwellings shown below:-

 

Valuation Band

 

A      £	B     £	C      £	D      £	E     £	F     £	G     £	H      £
710.46	828.87	947.28	1065.69	1302.51	1539.33	1776.15	2131.38

 

k)         That it be noted that for the year 2012/13  Lincolnshire Police Authority has stated the following amounts as a precept issued to the Council in accordance with Section 40 of the Local Government Finance Act 1992, for each of the categories of dwellings shown below:-

 

Valuation Band

 

 

A      £	B     £	C      £	D      £	E     £	F     £	G     £	H      £
124.26	144.97	165.68	186.39	227.81	269.23	310.65	372.78

 

l)          That, having calculated the aggregate in each case of the amounts at i), j) and k) above, the Council, in accordance with Section 30 (2) of the Local Government Finance Act 1992, hereby sets the amounts in Appendix B to part B as the levels of Council Tax for the year 2012/13 for the categories of dwellings shown in Appendix A to part B.

 

The Chairman drew Members’ attention to papers that had been circulated: a coloured version of the graph on page 12 of report number HOF189: determination of Budget 2012/13 and indicative budgets to 2014/15 – general fund, housing revenue account and associated capital programmes. The second paper was an addendum to Part B of the report, which incorporated the police precept, which had not been determined when the agenda was produced.

 

The Resources Portfolio Holder presented and moved the Budget proposals for 2012/13, which covered all aspects of the Council’s financial operation and was split into the following areas: general fund, Housing Revenue Account (HRA), capital and investment programmes, reserves and balances and management of prudential indicators, incorporating treasury management. The Budget was the second year of a two-year grant settlement; in the future the settlement process was changing with the introduction of the localisation of business rates. The budget process reflected the Council’s priorities however it also recognised potential risks to the Budget. Council tax setting was covered in Part B of the report, with a zero Council Tax increase proposed.

 

The proposed budget would enable the Council to maintain frontline services at the current service level and invest in its priorities. The Portfolio Holder advised members that the General Fund capital programme was ambitious and that a number of major projects would be funded.

 

Significant changes were being made to the Housing Revenue Account, with the introduction of a self-financing model, which would see the Council take on approximately £122m housing debt. The Council had taken advice from the Chartered Institute of Housing and Sector (the Council’s treasury management advisors), and the Resources Policy Development Group had considered and recommended the proposed approach. The Chairman of the PDG was invited to summarised the group’s deliberations.

 

The Chairman of the Resources PDG explained that it had recommended the Council should finance the debt through an eight year maturity loan for £25m, which would assist  the short to medium term cashflow of the HRA. Modelling indicated that this approach would save an estimated £9m in interest over the repayment period. It was recommended the remainder of the debt (£97m) should be financed through a 30-year Equal Instalment of Principal (EIP) loan. Interest rates on the transaction day (26 March 2012) would be fixed for the duration of the loan.

 

The Portfolio Holder thanked the PDG for its work on changes to the HRA. The Council would continue progressing towards rent convergence by 2015/16. Capital investment in the Council’s housing stock through the Housing Investment Programme concentrated on achieving and maintaining the ‘decent homes standard’ for all Council properties.

 

The seconder of the proposition spoke in favour of the proposed budget, highlighting consultation on priorities, which was carried out across the district, efficiency work undertaken to protect frontline services and how the Council sought effective partnership opportunities to optimise investment. Consultation was also undertaken on charging for the green waste recycling service, which was supported by 72% of those consulted. Some of the Council’s achievements were listed and commitment supporting longer-term investment projects was given, including key development in Bourne and Grantham. Other key projects that would be funded included: an in-house apprenticeship programme, improvements to broadband infrastructure, maximising opportunities for affordable homes and introducing a range of arts and cultural activities.

 

During debate, it was noted that whilst the district council was proposing a zero council tax increase, the precepts for towns and parishes had increased, which would reflect in increased council tax bills. Some concern was expressed over the introduction of charges for the green waste recycling scheme. It was suggested that the Council should publicise the work it was undertaking to support the economy and the investment it had made and was planning to make. The spending profile for the Housing Investment Programme was irregular; officers explained that projections were based on the stock condition survey, which identified when particular elements of properties would require replacement or upgrade.

 

Councillor Shorrock proposed an amendment to the budget relating to the development and implementation of Ward budgets. In proposing the amendment, he explained that Ward budgets would give Councillors a means through which they could work with individuals and communities in their Wards to develop local projects based on the area’s priorities, promoting community engagement and cohesion. It was suggested this funding could be used to secure match-funding.

 

 Notice was also given of two further amendments he wished to propose.

 

“The  Development and Implementation of Ward budgets

 

£2000 per councillor

 

Costs: £116,000 + admin costs on will be 10% to administer and set up.

This will reside in the Corporate area expense specifically democratic and legal

 

The key reasons for introducing this are:

 

·         Promote community engagement and cohesion

·         Develop community led activities

·         Develop small community pots that can be used as a basis for match funding.

·         Enhances communication between SKDC and the public

 

It is proposed that this is a two year pilot project monitored and reviewed by the Engagement PDG. To pay for this in the short term funds will be taken from reserves and balances. Engagement PDG should also look at developing appropriate recommendations for inclusion in future budgets.

 

Total: £132k approx.”

 

The amendment was seconded.

 

Reference was made to a similar scheme run by Lincolnshire County Council. Those speaking in favour of the amendment commented on how it would complement the Council’s priorities and the national localism agenda. Particular reference was made to the potential for pump-priming projects and helping local organisations and groups within the current economic climate. An example was given of how local youth services could benefit.

 

Councillors speaking against the amendment highlighted other funding sources available to community groups, including ‘Awards for All’. Concerns were expressed about whether the funding would be used; referring to the County Council scheme, some Members reported that some county councillors had not been able to spend their allocation.

 

Those against the amendment also expressed concern about the proposition to fund the project through reserves and balances. A challenge was made, comparing the potential funding of this project and the commitment the Council and already made to fund the LAMS through reserves and balances. The Strategic Director (Corporate Focus) explained that under LAMS the money would be deposited with Lloyds Bank plc and a return was expected.

 

Discussion ensued on the funding across Wards with different numbers of Councillors. Members speaking against the amendment highlighted the disparity in funding, while those speaking in favour highlighted the greater number of residents in multi-Member Wards.

 

The amendment was put to the vote and lost.

 

Councillor Shorrock proposed his second amendment:

 

“Community Group Development fund.

 

Develop a grant funding pot and to pay for expertise to support groups in making bids for grant funding. The fund could also be used to support groups and organisations. The key reasons for introducing this are:

 

·         Build voluntary sector capacity to play a credible role in service provision

·         Recognise the impact of austerity on these organisations and protect their social value during this period .

·         Support and facilitate the role they can play in the economic growth of the district.

 

This combination of direct grants and staff fundraising support to organisations will be critical in building capacity of the sector to enable them to survive and deliver services during this period of austerity. Of key concern is the ability of groups to compete for grant funding in competition with organisations that employ professional fundraisers. Increasing competition for a smaller point of funding is a significant threat to those organisations that do not have this capacity.

 

In addition, this will support the Council’s community engagement remit and enable community groups to develop effective fundraising strategies. We would propose that the councils seeks to work in partnership with the SLCVS to deliver this project.

 

It is proposed that funding will come from carpark revenues. It is proposed that these estimates for these revenues are adjusted to take into account new charges for Bourne car parks. These charges should be set in accordance with  option 1 from report CHFR123 ( 9TH OCTOBER 2008) With the appropriate uprating, this places Bourne carparking charges on a comparable rate with Grantham and Stamford.

 

Total: £250K (the level of funding each year should be tied to a formula related to revenues generated through car parks)”

 

Councillor Shorrock explained that he was proposing the amendment as a means through which the Council could support voluntary sector and community groups that had been affected by cuts to grant funding. He commented on increased competition for grant-funding and the impact of larger charitable organisations that employed full-time fund-raisers. He stated that these organisations were required to deliver frontline services more often and the example of foodbank was given. It was proposed the project should be funded through car parking receipts, and, so that all parts of the district contributed, car parking charges for Bourne should be introduced. It was proposed that ongoing funding of the scheme should be based on a formula applied to car parking receipts across the district. The amendment was seconded.

 

Councillors speaking in favour of the amendment highlighted the work that was being undertaken by the voluntary and community sector and the funding of community projects through local revenue.

 

Speaking against the amendment, Councillors highlighted a £105k p.a. spend in support of the South Lincolnshire Community and Voluntary Service (which supported the voluntary and community sector in raising funds) and the Citizen’s Advice Bureau, which gave advice to residents. The Council also secured funding for debt welfare and advice services. Reference was also made to the proposed financing model; work undertaken on the viability of introducing car parking charges in Bourne indicated that it would take five years to recoup the cost of introducing any scheme.

 

On being put to the vote, the amendment was lost.

 

Councillor Shorrock proposed his third amendment, which was seconded:

 

“Business and Economic Incubation – Grantham

 

A business incubator is part of the local plans for Grantham.  However, the realisation of these plans is still not clear, and we cannot wait that long. Economic growth remains critical and the current government’s abolition of the RDAs and as a consequence the cutting back on Business Link services to merely a website means that there is little direct support s new businesses can get to start, survive and grow.

 

We propose a seed funding grant pot of £300k.

 

In addition to this we would ask the provision of in-house expertise and the identification of premises that could be used to incubate these businesses in the first 6-9 months of their lives.  We would also propose links with partners including the Business Clubs and training and development to develop a cost effective package supporting these fledgling businesses. The package could include:

 

·         Reduced price or free premises for 6 month

·         Seed funding to support product development, testing and marketing.

·         Advice and support

·         Integrated Web marketing.

·         Link up with complementary business to look at shared cost models.

 

The value of this approach is that provides, albeit in a limited way, a safety net for new businesses to test markets before making costly decisions about premises or plant. Links with training providers the opportunity to source and develop training and development of skills and qualifications. It provides a direct investment in business growth for the district.

 

We would seek to use funding from balances and reserves to do this as a short term measure to provide a model of provision for the Business Incubator comes on-line with Granthams’s plans for development.

 

Total: £300k”

 

Councillor Shorrock introduced his amendment and explained it complemented the ‘Grow the economy’ and ‘Grantham Growth’ priorities and action detailed in the corporate plan. He expressed concerns about indefinite timescales in delivering a business incubation centre for Grantham as part of the Station Approach project. The difficulties faced by new businesses were highlighted; the aim of the amendment was the improved viability of new businesses.

 

Councillors in favour of the amendment commented on the importance of encouraging new businesses to grow the economy and potential opportunities to fill empty retail units in Grantham town centre. The success of business to business events was noted, however, Councillors felt more should be done to promote opportunities presented by the area outside the district. One Councillor quoted an increase in youth unemployment (16-24) of 143% and suggested supporting the amendment was one means through which this rate could be improved.

 

The Economic Development Portfolio Holder explained that timelines for the business incubation centre were available and had been developed in conjunction with a funding bid that was submitted to the European Regional Development Fund. If the bid for funding was successful, payment would be dependent on the successful completion of the project within specific deadlines. If the bid was not successful, SKDC had committed to funding the project. DeMontfort University had expressed an interest in the business incubation centre; they were also linked with five further universities. She also commented that a major leaser of retail space in Grantham had all its units occupied.

 

On being put to the vote, the amendment was lost.

 

The Resources Portfolio Holder, in summing up, thanked everyone who had been involved in the preparation of the budget and commended it to Council for adoption.

 

The vote on the budget was taken in the sections highlighted in report HOF189.

 

·         Part A, recommendations a to c were put to the vote and carried

·         Part A, recommendations d to i were put to the vote and carried

·         Part A, recommendations j to l were put to the vote and carried

·         Part A, recommendation m was put to the vote and carried

·         Part A, recommendation n was put to the vote and carried

·         Part B, recommendations a to l were put to the vote and carried

16:10-16:29   The meeting adjourned