Agenda item

The Executive RECOMMENDED to Council that the 2019/20 General Fund Revenue Budget of £13,158,597 as set out in Annex A to the agenda report, be approved;

The Executive RESOLVED to note

1.               That expenditure totalling £2,042,116 will be charged directly to reserves;

2.               That a minimum revenue provision of £2,014,000 is required to repay debt;

3.               That the budget includes provision for a staff pay increase;

4.               The provisional NNDR baseline of £1,543,240 and the final settlement on will be reported to Council at its meeting on 27th February 2019;

5.               That a full report, setting out Council Tax proposals for 2019/20 will be presented to Council on 27th February 2019.

6.               The Financial Strategy and its implications for financial sustainability

The Executive considered a report detailing a General Fund Revenue Budget for 2019/20 of £13,158,597.The budget had been prepared on the assumption that Council Tax would be increased by the maximum permitted without requiring a referendum, namely by £2.99% or by £5 on a Band D property, whichever was greater.

Members were reminded that, whilst it was for the Council to decide upon the level of Council Tax set, the Executive could make a recommendation.

The Net Cost of Services for 2019/20 had increased compared to the previous year.  Inflation had impacted payroll and contract costs and there had been additional costs to fund the pension deficit. Property income had fallen due to the need to allow for loss of rent from The SQ, although this has been offset in part by rent from new investments. However, the Council was still able to achieve a balanced budget due to higher income from Council Tax and retained Business Rates and the use of reserves.

It was noted that provision had also been included within the budget for an annual pay increase.

Members received a summary of the budget.  It was advised that a number of fees and charges had been increased and approved in accordance with financial regulations. These changes had been reflected within the proposed budget.

The 2019/20 financial year marked the final year of the 4 year finance settlement announced in 2015. Although a “negative grant” had been expected for 2019/20 based on the 2015 announcement, following intensive lobbying this had been removed by the Government in the announcement made on 13 December 2018 and confirmed on 29 January 2019. This meant that, although the Council would receive no grant, it would not have to pay money over to the Government.

Members were reminded that the Government had made changes to the New Homes Bonus (NHB) in 2017/18 where the first 0.4% increase in the tax base, approximately 150 houses for Surrey Heath, would not attract NHB. In addition, payments were paid for 4 years rather than 6. These changes had resulted in NHB being a reduced incentive for housing delivery. No further changes to NHB had been proposed for 2019/20.

The Executive was advised that costs of £2,042,116 in the budget had been charged directly to reserves.  The General Fund was estimated to be at least £2m at the end of 2019/20 if the budget was delivered as proposed.

Members considered the revised Medium Term Financial Strategy annexed to the report and highlighted a paragraph relating to income from charges. It was agreed to ask the Executive Head of Finance whether further clarification of this paragraph was required.

RECOMMENDED to Council that the 2019/20 General Fund Revenue Budget of £13,158,597 as set out in Annex A to the agenda report, be approved.

RESOLVED to note

1.          That expenditure totalling £2,042,116 be charged directly to reserves;

2.          That a minimum revenue provision of £2,014,000 is required to repay debt;

3.          That the budget includes provision for a staff pay increase;

4.          The provisional NNDR baseline of £1,543,240 and the final settlement would be reported to Council at its meeting on 27th February 2019;

5.          That a full report, setting out Council Tax proposals for 2019/20 would be presented to Council on 27th February 2019.

6.          The Financial Strategy and its implications for financial sustainability.