Draft Budget 2018/19 MTFS to 2022/23 Capital Programme 2 - - PowerPoint PPT Presentation

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Draft Budget 2018/19 MTFS to 2022/23 Capital Programme

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What am I going to cover in summary?

Government Funding Business Rates Council Tax New Homes Bonus Draft Budget 2018/19 Financial Strategy Capital Investment Assumptions & Risks

Headlines

• More complicated
• More changes and impacts
• Greater uncertainty = higher risk
• Risk transfer
• Longer report
• Report starts “doom and gloom” – nationally
• Torridge in quite an “enviable” position
• But, not complacent as still challenges ahead

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What am I going to cover in summary?

Government Funding Business Rates Council Tax New Homes Bonus Draft Budget 2018/19 Financial Strategy Capital Investment Assumptions & Risks

Report & Presentation

• Pick out / highlight key points
• Questions as go along
• Sum up and conclusions
• Recommendations at end / debate &

discussions

• Provide reasons and rationale to support why

reached the recommendations

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Torridge – Summary Position (Draft) – Report P25

Area 2018/19 £'m 2019/20 £'m 2020/21 £'m 2021/22 £'m 2022/23 £'m Cost of Services 8.714 8.668 9.046 9.245 9.436 Reserve Movements 1.666 1.247 1.094 0.980 0.995 Other (0.163) (0.163) (0.163) (0.163) (0.163) Net Revenue Budget 10.217 9.752 9.977 10.062 10.268 Government Grants 0.000 0.511 0.380 0.380 0.380 Business Rates 5.095 3.801 4.104 4.219 4.336 Council Tax 3.750 3.790 3.919 4.052 4.189 New Homes Bonus 1.372 1.283 1.080 0.929 0.950 Total Funding 10.217 9.384 9.483 9.580 9.855 Contribution (to) / from Reserve to balance budgets (0.000) 0.368 0.494 0.482 0.413

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Local Authority – Government Funding

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National funding levels

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Government Grant Funding

• Four year funding offer / proposal – accepted by TDC (97%)
• Revenue Support Grant

– 2016/17 = £1.152m – 2017/18 = £0.716m – 2018/19 = £0.440m – 2019/20 = £0.131m – 2020/21 = expect zero

• Rural / Sparsity grant – circa £0.4m per year

– Extra £16m allocated nationally - £0.094m – One-off unexpected – not allocated yet!

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New Homes Bonus

• What we get now - £1.754m
• How that is allocated / spent – 50%:25%:25%
• No further changes for 2018/19 – deadweight 0.4%

– 130 properties before anything

• Reduction in cumulative bonus – 6 yrs to 5yrs – 4yrs in 2018/19
• 2018/19 = £1.372m & 2019/20 = £1.283m (forecast)

– £0.4m reduction (£0.2m – Capital investment, £0.1m Community Pot and Revenue Budget pressure)

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Council tax 2018/19 – referendum principles

• Shire Districts – choice £5 or up to 2.99%, which ever the

greatest – without referendum

– £5 is the equivalent of £0.118m and 3.25% – 2.99% is the equivalent of £4.59 and £0.108m – 1% = £0.036m – Number of Band D properties is 23,552 (23,420 – 2017-18)

• Government assumes that will now increase year on year and have

relaxed the referendum principles for 2018-19

• County and Unitaries – 2% / 3% (social care) + 2.99% = £76
• PCC - £12 or 2.99% = £12
• Fire – 2.99% = £2.45
• Total increase could be £95 per annum or £1.84 per week

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Business Rates - Complexities

• Reliefs – change at Government

discretion

• Rateable Value - VOA
• Rate in £ = Government
• RPI increases
• Appeals - VOA
• Pre – 2013 easy and risk free
• 50% BRRS 2013 – reward for growth
• Business rates pool
• Revaluation – 2017
• 100% BRRS 2020?
• Pilot – 01 April 2018
• 75% BRRS 2021?

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Business Rates – benefits & risks

Risks

• Appeals – 109 at £6.9m RV
• Backdating – 2010 in some case
• Appeals provision - £0.516m
• New scheme – 2020?
• Reserve at 8% - £0.8m of £11.5m

income

• Significant source of funding

Benefits

• Business rates pool - £0.15m
• Renewable energy - £0.803m
• SBRR – 100% collection
• Business rates pilot - £0.190m

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Main cost pressures, savings and income

• Pay award - £0.575m (incl. NI and pension costs)

– 2% (SCP 20) – bottom loading to move to National Living Wage (3.7% - 9%) – rejected by unions – 2 year offer

• Benefits, homelessness and subsidy - £0.2m
• Inflation - £0.1m
• Car park income - £0.13m with £0.09m set aside for

replacement machines

• Impact W&R review and chargeable garden waste - £0.557m

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What does this draft budget allows for?

• Additional resources for property maintenance - £0.05m
• Replenish transition in Government Funding Reserve - £0.1m

– £0.4m taken out 2018-19 – Sufficient to balance 2019-20 forecast budget

• Set aside for Economic Regeneration - £0.2m

– Business rate pilot benefit 2019-20

• Set aside £0.09m for replacement parking machines

– Total cost estimated at £0.19m

• Rural Sparsity Grant - £0.094m extra cash not yet allocated

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Conclusions

• Plenty of positives – very strong financial base
• Members to decide annually about Council Tax increases

– not necessary if just looking at 2018-19 – not included in 2019-20

• Options to future proof income for later years balancing of MTFS
• Options to set aside resources for priority areas
• Potentially no savings plans / cuts required for 2019-20

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Summary Position – Report P11

2018/19 - £'m 2019/20

• £'m

2020/21

• £'m

2021/2022

• £'m

2022/2023

• £'m

Funding Gap assuming £5 increase to Band D Council Tax in 2018/19 0.00 0.368 0.494 0.482 0.413 Funding Gap if no increase to Council Tax in 2018/19 0.118 0.487 0.615 0.605 0.537

• Additional RSG of £0.094m,

but only 2018-19

• Every £1 Council tax

movement = £0.024m (Band D)

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Future savings plans

• Recommendation to report back by 30 September 2018

– Outturn position for 2017-18 – First 4 / 5 months knowledge of 2018-19 – Relocated to RBH – synergies – Take up of garden waste scheme

• Revisit TTP – savings removed as delays

– Retender “Riverside” – Bridge Buildings – further review – Income generation T&F group – investments, CTAX discounts, reliefs for BR and external grants – Regeneration projects – Caddsdown, Burrows centre – Council tax 2019-20

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Capital Projects

Full Council

Member / Officer Event December OMT PiDs Submitted First stage review - feasibility & staging Community & Resources then Overview & Scrutiny (internal)

General steer & ideas Recommend those ready to go Consider priority

• f others and

develop where able Compilation

• f ideas into

high level projects All projects reviewed & were at varying stages, but all included at Member event - none ruled out

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Recommendations and rationale

• Torridge’s Band D Council Tax for 2018/19 be increased by £5

(3.25%) from £153.66 to £158.66 per year and that the additional resources be directed to Economic Regeneration.

– responsibility to provide long term options on managing the finances – future proof the council tax base income – less savings / cut to find in future years – External Auditors review Torridge’s “going concern” & financial sustainability

• Torridge’s Net Revenue Budget 2018/19 is £10.217m

– Statement depending on first recommendation

• The grants to external organisations as attached in Appendix 1

are approved

– Joint external / internal task & finish review during 2018-19

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Recommendations and rationale

• The contributions to the Council’s reserves as outlined in

paragraph 10.1 are approved.

– Will depend on outcome of first recommendation whether any changes – Set aside resources for specific priority areas

• That Members note the Chief Finance Officer (s151 Officer)

assurance of the robustness of the Budget 2018/19 set out in section 13 of the report

– Specific requirement

• Notes the assumptions and forecasts applied to develop the

MTFS outlined in section 14

– Prudent to highlight where these are, but subject to change

• Notes the forecast deficit of £0.413m in the MTFS for 2022/23.

– May change depending on first recommednation

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Recommendations and rationale

• That a report be taken to Community & Resources Committee

by 30 September 2018 outlining options for meeting the 2022/23 Budget deficit and to incorporate a review of the Transforming Torridge Programme and associated savings.

– Known forecast budget gap therefore prudent to review early once changes in place – Recommend doing some time before Budget process as can agree / approve actions to put in place

• Notes the risks associated with the Budget 2018/19 and MTFS
• utlined in paragraph 14.3.

– Recommended / good practice to highlight these once known

• The inclusion of the Capital Projects (PiDs) listed at 12.6 into the

Capital Programme 2018/19 to 2021/22 are approved.

– Have been reviewed by Members at earlier event as those suggested to take forward

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