Agenda item

To approve the Council’s Budget and Council Tax for the Financial Year 2015/16 – report attached.

The Council was advised that the Government continued to pursue its policy of reducing the budget deficit. This has resulted in a 40% cut, in real terms, to total local government funding nationally since 2010. For this Council, this had resulted in a reduction in grant of almost £3m and the Rate Support Grant was now under £1m.

The Government had again announced that it would pay a 1% compensatory grant to all those Councils which elected to freeze their Council Tax in 2015/16. The Secretary of State had set the referendum limit at 2%. Any increase in Council Tax above this limit would be deemed to be excessive and required to be the subject of a binding referendum.

The net cost of services for 2015/15 at £11,125,700 represented a decrease of £160,575 on the previous year. It was noted that not all of the net cost of services would be met by council tax and that the council tax requirement would be determined following deductions made to allow for sources of funding.

In order to address the deficit on the Pension Fund, the actuary had proposed that the additional deficit contribution of £380k in 2015/16, would need to be increased to £507k in 2016/17.  It was noted that this would be a significant pressure on the budget going forward.

Members were advised that expenditure of £693,850, relating to community grants, transformation costs, property maintenance, community safety and family support would be funded from reserves.

It was estimated that a New Homes Bonus of £1,271,000 would be received in 2015/16 and it was proposed that £600,000 be used to support the revenue budget.

Last year the Council had made a special grant to parishes to compensate them for the impact of the changes to the Local Council Tax Support Scheme. It was proposed that this grant would remain unchanged from that made in 2014/15. 

The Section 151 Officer had determined that a surplus of £1,000,000 could be declared on the Collection Fund for the year. Of this, £750,000 would be paid to Surrey County Council, £130,000 to the police and the remaining £120,000 to this Council.

Members were advised there was likely to be a national business rates revaluation in 2017 and a rebalancing of business rates between authorities in 2020. In addition the current Government had also announced that there would be a wholesale review of business rates and the way businesses were taxed in 2016.  Given the continued uncertainty over the level of revaluations on appeal, no growth in business rates had been included within the budget and instead, the government baseline had been used. Any gains above this would be taken to reserves to offset future losses and any losses would be capped at £107,000.

As in previous years, the budget contained an in-year savings target in order to deliver a balanced budget.

The Council received a detailed financial forecast which predicted the Council’s finances for the next 5 years and the assumptions made.  A prudent scenario based on a 1.94% increase in council tax showed that savings of about £1m would be required by 2019/20 if no steps were taken to increase income or reduce costs.

Members were advised of the financial risks contained in the budget relating to income projections, the achievement of savings, inflation rates and funding risks.

The Council’s Chief Financial Officer confirmed he was satisfied that the preparation of the 2015/16 estimates had been undertaken with rigour and due diligence and provided the appropriate level of resources to meet forecast service requirements.  He also reports that the Council’s reserves, provisions and the General Fund Working Balance, supplemented by the Revenue Capital Reserves, were at such levels to meet all known future expenditure requirements and fund any unforeseen or urgent spending which might arise.  The Chief Financial Officer drew attention to the risks within the budget particularly around the Council’s ability to continue to deliver savings in the future.

Members considered two options for the budget, either to freeze Council Tax and accept the compensatory grant or to increase Council Tax by 1.94% and reject the grant.

It was proposed by Councillor Richard Brooks, seconded by Councillor Moira Gibson and

Resolved

              (i)                    to note that under delegated powers the Executive Head of Finance calculated the amount of the Council Tax Base as 36,600.49 (Band D Equivalent properties) for the year 2015/16 calculated in accordance with the Local Government Finance Act 1992, as amended;

             (ii)                    to note expenditure totalling £693,850 be charged directly to reserves;

           (iii)                    to note that £600,000 of the new homes bonus is being used to support the 2015/16 budget;

           (iv)                    to note the implications of the Council Tax freeze grant and that an increase in Council Tax above 2% was deemed to be excessive by the Government;

             (v)                    to note the level of savings required;

           (vi)                    to note that the Revenue Support Grant had been reduced by 33% compared to the previous year

         (vii)                    to note that there was no reduction in the grant given to parishes for the Local Council Tax Support Scheme

        (viii)                    to note that a council tax surplus of £1m was being declared;

           (ix)                    to note the comments in respect of the robustness of the 2015/16 budget and the adequacy of the Council’s reserves, provisions and the General Fund Working Balance;

             (x)                    to note the comments in respect of the financial forecast;

           (xi)                    to note that of the Council’s Budget requirement, £176,000 be a special expense relating to the non-parished area of the Borough.

         (xii)                    that the Budget Requirement for 2015/16 be £9,999,046 as set out in Annex A;

        (xiii)                    that the Council Tax Requirement for the Council’s own purposes for 2015/16 be £7,184,676 as set out in Annex A to the agenda report and;

        (xiv)                    that the Council Tax for 2015/16 (excluding special expenses and parish precepts) be set at £196.30 for a Band D property being an increase of 1.94% compared with 2014/15.

Note:  In accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, a recorded vote was taken.  The following Members voted in favour of the decision: Councillors David Allen, Richard Brooks, Keith Bush, Bill Chapman, Mrs Vivienne Chapman, Ian Cullen, Paul Deach, Tim Dodds, Colin Dougan, Craig Fennell, Liane Gibson, Moira Gibson, Beverley Harding, Edward Hawkins, Josephine Hawkins, Paul Ilnicki, Lexie Kemp, David Mansfield, Charlotte Morley, Adrian Page, Bob Paton, Ken Pedder, Chris Pitt, Joanne Potter, Wynne Price, Audrey Roxburgh, Ian Sams, Pat Tedder, Valerie White and John Winterton. The following Members voted against the decision: Councillors Rodney Bates and Judi Trow.  No Members abstained from voting.