Issue - meetings

Report of the Cabinet Member Finance

RESOLVED THAT:

1.    the budget setting timetable at Appendix 2 be approved;

2.    the budget strategy outlined in section 5 be approved;

3.    the intention for this Council to remain in the Gloucestershire Business Rates Pool in 2020/21 as outlined in section 6 be noted;

4.    the Executive Director Finance & Assets and the Cabinet Member for Finance be requested to consider suggestions from the Budget Scrutiny Working Group in preparing the interim budget proposals for 2020/21, as outlined in section 7.

The report was presented by the Cabinet Member Finance. She explained that the draft budget timetable attached to the report set out the sequence of events to come, leading up to the setting of the budget and council tax level for 2020/21.

She reported that in 2016/17, the government offered a guaranteed 4 year budget to every council that could demonstrate efficiency savings. 2019/20 was intended to be the final year, with a fair funding review, business rates review and business rates reset anticipated. This was to be ­concluded in 2019/20 and take effect from 2020/21. However, the political uncertainty surrounding Brexit had resulted in a 12 month deferral to 2021/22.

The Cabinet Member explained that the 2019 Spending Review had been announced in September and represented a single year spending review that covered only 2020/21. A multi-year spending review would be announced next year, with a number of aspects directly affecting local government, including the confirmation that the Fair Funding Review, Business Rates Review and business rates reset have been deferred by 12 months to 2021/22, and a £2.9bn increase in overall core spending power. Most of this additional funding was for adults and children’s services, but with £54m allocated to tackling homelessness. Clarification on its distribution has been requested. The Council Tax referendum limit was proposed at 2% but this would be subject to consultation in the Provisional Settlement. Additionally, baseline funding for business rates would be uprated by the CPI, funding to remove negative RSG had been continued for 2020/21, and legacy payments of the New Homes Bonus (NHB) would be honoured but the scheme for 2020/21 was still under ministerial discussion. She reported that 75% business rates pilots would come to an end and no new pilots were planned for 2020/21. A technical consultation would be issued on the settlement, with the provisional settlement being announced in early December.

The Council’s approved Medium Term Financial Strategy (MTFS) was predicated on the basis that council tax would increase by 2.99% per annum. However, the proposal to retain business rates growth achieved between 2013 and 2020 for a further year, alongside continued removal of negative RSG, should have a positive effect on the council’s funding in 2020/21.

She explained that the MTFS assumed legacy payments for the NHB would be honoured. However, a continuation of the same methodology for a further year could equate to an additional £250k funding in 2020/21. The MTFS projections were in the process of being updated to reflect the best estimates of the financial pressures impacting on the Council, including an updated view on business rates income and the potential impact of the fair funding review, business rates review and business rates reset in 2021/22. The estimate of the funding gap for 2020/21, based on the previous iteration of the MTFS, was £2.414m. Updated high level projections supported a revised worst case funding gap of £1.9m, and a best case of £900k.

The Cabinet Member highlighted that, as in the previous year, given  ...  view the full minutes text for item 10