Agenda item

Report number CHFCS25 by the Assets & Resources portfolio holder (on behalf of the Cabinet):

                                                                        (Enclosure)

 

PART A:  

• Revenue Estimates 2009/10 and indicative budget 2010/11 to 2011/12
• Fees and Charges
• Treasury Management Strategy
• Priority Theme Plans

 

PART B:  Council Tax setting

 

 

NOTE: Please can Members bring their budget books to the meeting.

                                                                            

 

 

PART A: Revenue Estimates 2009/10 and indicative budget 2010/11 and 2011/12

 

DECISION: That the Council:-

 

General Fund Revenue Estimate and Priority Theme Plans

 

a.     sets a General Fund budget requirement of £16.171M for 2009/10 and an indicative target of £16.581M for 2010/11 and £16.592M for 2011/12 (inclusive of special expenses)

b.    sets a Council Tax increase of 3.5% for 2009/10 (excluding special expenses and parish precepts) which equates to an average increase of 3.45% when including special expenses for comparative purposes.

c.     approves the original base estimate for 2009/10: and indicative base estimates for 2010/11 and 2011/12 as detailed in the summary at Appendix A page 1 to report CHFCS25;

d.    approves the Treasury Management Strategy provided at Appendix B to report CHFCS25;

e.     approves increases in Fees and Charges for 2009/10 (in accordance with the Council’s Fees and Charges Strategy) as set out in Appendix C

f.       approves the Revenue and Capital Reserves statement contained at Appendix A page 8 to report CHFCS25

g.    requires the fundamental review of services where the projected income levels show a continued reduction to ensure the allocated resources are proportionally aligned. 

h.    approves the setting of cash releasing efficiency targets for each corporate head area in order for the Council to achieve its overall efficiency target

i.       approves the priority theme plans as detailed at Appendix D

j.       approves the introduction of MOT testing for taxis, motorcycles and larger vehicles (up to 3.5 tonnes)

k.     approves the cessation of play schemes with effect from 1 April 2009

l.       approves the use of the Housing and Planning Delivery Grant in respect of the works associated with the Local Development Framework

m.  approves the creation of a Community Response Fund

 

 

Capital Programme

n.    approves the Capital Programme for 2009/10 and indicative programme for 2010/11 to 2011/12 detailed at Appendix A page 9-12

o.     authorises the funding proposals subject to an annual review of the financing options by the Corporate Head of Finance and Customer Services, in consultation with the Portfolio Holder, during the preparation of the Statement of Accounts to optimise the use of Council resources.

p.    approves the setting of cash releasing efficiency target in respect of the Capital programme

 

Housing Revenue Account (HRA)

 

q.    sets dwelling rent increases in accordance with Government guideline rent, but with a cap on individual rent increases of no more than 7%, providing an average rent of £62.61 ( and an average rental increase of 6.04%)

r.      sets an increase in garage rents of 5.5%

s.     increases service charges by 5.0% (retail price index September 2008 )

t.      approves a policy of a target HRA working balance of £5M

u.    approves the policy of achieving a breakeven Housing Revenue Account by the financial year 2011/12 and to ensure all years, thereafter, achieve a breakeven position.

v.     approves the Housing Revenue Account for the year 2009/10 and indicative years 2010/11 and 2011/12 shown at Appendix A page 13

w.  approves the setting of cash releasing efficiency target in respect of the Housing Revenue Account

 

PART B: Council Tax setting 2009/10:

 

DECISION: That the Council pass the following resolution to set the level of council tax for 2009/10 based on an increase of 3.5% excluding special expenses (and 3.45% including special expenses):

 

(1)  That the following amounts be calculated by the Council for the year 2009/10 in accordance with Sections 32 to 36 of the Local Government Finance Act 1992 (as amended):

 

a)   £77,684,000 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.

b)   £60,232,000 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)    £17,452,000 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)   £10,084,000 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)    £161.09 being the amount at c) above less the amount at d) above, all divided by the Council's tax base of 45,738.30 as  recorded in minute 74 of the cabinet meeting of  1  December 2008, in accordance Section 33(1) of the Act, as the basic amount of its Council Tax for the year 2009/2010.

f)     £1,889,000 being the aggregate amount of all special items referred to in Section 34(1) of the Act.

g)   £119.79 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 1 December, 2008 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 equivalent

 

 

                 

Grantham	164.07
Stamford	187.02
Bourne	150.12
Deeping St James	158.40
Market Deeping	227.16
Allington	161.64
Ancaster	164.07
Aslackby & Laughton	143.10
Barholm & Stow	128.16
Barkston & Syston	140.49
Barrowby	163.71
Baston	139.23
Belton & Manthorpe	123.39
Billingborough	145.62
Bitchfield & Bassingthorpe	119.79
Boothby Pagnell	123.66
Braceborough & Wilsthorpe	136.62
BurtonCoggles	132.84
Careby,Aunby & Holywell	127.80
Carlby	153.90
CarltonScroop & Normanton	173.43
Castle Bytham	139.50
Caythorpe	152.46
Claypole	140.22
Colsterworth,Gunby, Stainby and North Witham	150.48
Corby Glen	144.45
Counthorpe & Creeton	119.79
Denton	138.33
Dowsby	148.95
Dunsby	126.09
Edenham	139.68
Fenton	127.98
Folkingham	143.82
Foston	155.52
Fulbeck	142.56
Greatford	143.37
Great Gonerby	149.22
Great Ponton	157.77
Haconby	121.05
Harlaxton	171.99
Heydour	139.14
Honington	119.79
Horbling	119.79
Hougham	139.77
Hough-on-the-Hill	149.22
Ingoldsby	130.77
Irnham	121.68
Kirkby Underwood	132.03
Langtoft	163.80
Lenton,Keisby & Osgodby	123.57
Little Bytham	152.46
Little Ponton & Stroxton	127.98
Londonthorpe & Harrowby Without	132.93
Long Bennington	158.04
Marston	146.16
Morton	134.19
Old Somerby	136.53
Pickworth	119.79
Pointon & Sempringham	152.19
Rippingale	164.97
Ropsley,Humby,Braceby & Sapperton	137.16
Sedgebrook	147.60
Skillington	152.91
South Witham	166.05
Stoke Rochford & Easton	136.26
Stubton	138.42
Swayfield	138.96
Swinstead	146.43
Tallington	138.15
Thurlby	145.62
Toft, Lound & Manthorpe	119.79
Uffington	129.42
Welby	137.07
Westborough & Dry Doddington	123.66
West Deeping	141.48
Witham-on-the-Hill	140.76
Woolsthorpe	152.82
Wyville-cum-Hungerton	140.49

 

 

 

     i)      The amounts on the attached schedule (Appendix A to Part B of report CHFCS25), 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 the Council, 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 2009/10 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

 

 

 

 

            k)     That it be noted that for the year 2009/10  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

 

 

 

 

 

 

            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 the revised Appendix B to part B as the levels of Council Tax for the year 2009/10 for the categories of dwellings shown in the revised Appendix A to part B of report CHFCS25.

 

Members had previously been circulated with a copy of report number CHFCS25 the purpose of which was to present the Cabinet’s budget proposals for 2009/10 for both revenue and capital expenditure together with indicative budgets for 2010/11 and 2011/12.  The report also covered the potential use of reserves, the treasury management strategy for the Council, and the level of recommended revised fees and charges.  Members were advised by the Chief Finance Officer on the robustness of the budget proposals and adequacy of balances and reserves as required by the Local Government Act 2003. 

 

The second part of the report dealt with the setting of the Council Tax for 2009/10 in accordance with the relevant statutory requirements.  An addendum to this report was circulated at the meeting detailing the figures for the Valuation Bands following receipt of the Lincolnshire Police authority precept.

 

The last appendices to the report represented the Council’s four priority themes, detailing what the Council proposed to achieve under each theme and the intended outcome in terms of the difference the various activities would make to the local community.

 

The Assets and Resources portfolio holder, Councillor Mrs Spencer-Gregson O.B.E.  presented the report on behalf of the Cabinet, proposing the recommendations it contained.  In so doing, she thanked the Corporate Head of Finance & Customer Services, Mr. Richard Wyles, and his team for their diligent work in preparing what had been a difficult budget to balance in the current economic climate.  She said that the Cabinet was acutely aware of the financial circumstances facing the customers of the authority; although over £800,000 of efficiency savings had been found, the economic downtown had affected revenue from fees and charges and this was not likely to recover in the short term.  Councillor Mrs Spencer-Gregson also thanked the Chairman of the Resources PDG and its members for their hard work on reviewing fees and charges which included a new service proposal to introduce MOT testing for certain types of vehicles.  In her presentation, the portfolio holder also highlighted the impact on the reserves through falling return on investments and the consequent cautious approach to the Council’s investment strategy, the strengthened management procedures for budget monitoring to ensure income and expenditure were continually reviewed, and the need to begin preparations now for the new grant settlements from 2011/12 onwards.  The Cabinet supported the view that reserves should be used in a prudent way.

 

The level of Council tax had been carefully considered by the Cabinet: at the start of the budget preparation process, two options for either no increase or an increase of 4.60% had been proposed.  However, with the rapidly altering financial climate, a third option to increase the council tax by 3.5% had been introduced.  This third option, representing an 8 pence increase per week on a Band D property was included for consideration at the recent round of Local Forum meetings.

 

 

The Government had announced a review of the Housing Revenue Account (HRA) and its subsidy system.  The HRA had to meet its costs from the rental it receives but next year over £6 million of this income would be handed over to the Government at a time when customer demand was increasing and there was additional financial pressure from demands on the housing repair service.

 

The motion was seconded by the Chairman of the Governance and Audit Committee.  On behalf of the Council, Councillor Lovelock thanked Councillor Mrs Spencer-Gregson and the officers for their hard work on the budget.

 

The Corporate Head of Finance and Customer Services referred members to the addendum to the budget report Part B circulated at the meeting.  The addendum included the Lincolnshire Police authority precept which had only been set on 25 February 2009.  He advised members on the difficult background against which the budget had been prepared;  over a short space of time the financial climate had fluctuated continually.  He advised that the driver for the relatively low Government settlement had been the efficiency agenda.  However, he warned that the national settlements due in the autumn of 2010 (CSR10) would pose even more challenges particularly for shire districts and the Council would need to financially prepare itself for this.   The Corporate Head then gave an overview of the key elements of the budget stating that it was a commendable achievement to have arrived at a balanced budget without drawing on reserves.  He drew members’ attention to the appendix to the report in which he had identified risks to the budget and how these had been scored should unforeseen circumstances occur.

 

[Councillors John Smith and Ian Stokes left the council chamber at this point in the meeting.]

 

The Corporate Head of Finance and Customer Services was thanked by the Council for his clear, comprehensive summary of the budget proposals.

 

The debate opened with an amendment proposed by Councillor Wood:

 

“I propose that an additional budget of £2,000 per Councillor (total £116,000) is established to be spent on the local community projects. Individual Councillors will be responsible for proposing or supporting local community projects in their ward area and have a budget of up to £2,000 to allocate.

 

The Corporate Head of Finance (Section 151 officer) will be responsible for approving the expenditure following submission of an appraisal form submitted by the Councillor.  The appraisal will have to demonstrate that the project

 

·         Supports one of South Kesteven District Council key objectives

·         Is a benefit to the local community

·         That there is a need in the local community for the project

·         That it is value for money.

 

The budget for this would be financed from the general fund reserves and the Corporate Head of Finance has confirmed that this is possible while still retaining the proposed Council Tax levels and maintaining a robust overall budget.”

 

 

In support of his amendment, Councillor Wood stated he was not proposing an increase in the council tax but an allocation of an additional £116,000 from reserves to be allocated to local community projects for the benefit of the community.  The amendment was seconded.

 

A discussion ensued on the amendment during which views for and against were expressed.  Reference was made to the new Sustainable Communities Bill and new powers it proposed for local authorities. A point was made that at this point it was not known what the proposals would entail so Councillor Wood’s proposal might help to alleviate some local issues.  A member raised the issue of the rural imbalance and expressed support for the amendment as he considered it would make an immense difference to addressing this inequity between rural and urban locations. Concern was expressed over the use of reserves and questions raised over whether this was just a one off use of reserves or a year on year feature and what impact this would have in terms of value for money and procurement.

 

In exercising her right of reply, the mover of the original motion stated that whilst the principle behind the idea was sound, she could not support it on this occasion because of the expectations about the Government settlement in future years.  The Council needed to continue its prudent line to ensure its sound financial standing and it had taken a lot of work against considerable financial constraints to arrive at a balanced budget. She acknowledged that it was not a large amount of money compared to the overall budget, but she was against taking this out of reserves.  Had the economic climate been better, the idea would have been worth considering.

 

The Corporate Head of Finance and Customer Services stated he had not tested the amendment for its robustness and validity although it could be funded from reserves as a one off initiative.  If passed, work would be needed on the governance arrangements for the operation of the scheme.

 

A vote on the amendment was taken but as only 26 out of a possible 44 votes were registered, the Chairman instructed that the vote be taken again.  A second vote resulted in 15 votes for and 27 votes against and the amendment was therefore lost.

 

The debate resumed on the original motion:  leaders of the opposition groups paid their tributes to both members and officers who had worked on the budget process and indicated their support for the budget recommendations proposed.  Points raised included: support for representations (preferably collectively with other Lincolnshire districts) being made to the Police to make a contribution to the CCTV service; consideration being given to bringing forward some of the authority’s capital expenditure to help stimulate the local economy; the warnings made at the time about the future impact on the HRA if stock transfer did not go ahead and that were now materialising; concern at the suggested increase of 8.4% for the Audit Commission fees; the impact of housing rents increases on the more vulnerable in the community; and clarification sought on a breakdown of costs for town centre management.

 

The Corporate Head of Finance and Customer Services responded to these points: he was aware that Boston BC were intending to make similar approaches to the Police over funding CCTV; if the Council did not adopt the 7% rent increase this would impact negatively on the authority as this figure was already built into the housing subsidy.  The Corporate Head offered to make more detailed information on the town centre management budgets available to interested members after the meeting.

 

After the Assets and Resources portfolio holder had summed up, a vote on Part A of the budget was taken and carried.

 

[A refreshment break took place between 3.45pm and 4.02pm.]

 

[Councillors Davidson and Selby did not return to the meeting after the break.]

 

[Councillors John Smith and Stokes returned to the meeting at this point.]

 

The Assets and Resources portfolio holder moved the recommendations a) to l) contained in the revised addendum to Part B of the budget report.  The motion was seconded by the Chairman of the Governance and Audit Committee, and following a vote, carried.