Agenda item

The Council received a report setting out the Council’s revenue budget for the coming financial year. Members were reminded that councils were legally obliged to set a balanced budget and it was advised that the budget presented achieved this through a combination of efficiencies, increased returns from investment assets and an increase in Council Tax.

The net cost of services for 2019/20 at £13,427,892 represented an increase of £2,078,892.  This was as a result of inflationary pressures in areas such as wages and contracted costs, together with reductions in grants for services the Council provided. This had been offset by increases in investment income and the use of grants and reserves.

Members were reminded that councils would be required to hold a referendum if their Council Tax increase was more than the higher of 2.99% or £5. The budget has been prepared on the basis of slightly below the maximum permissible increase of 2.94%, for rounding purposes. It was noted that Surrey County Council and Surrey Police had opted for the maximum permited increases.

Overall no general savings target was required this year and none of this year’s New Homes Bonus would be needed to support revenue expenditure.

The Council continued to receive no Revenue Support Grant and central funding, which included business rates, had fallen by £2.7m in 8 years. This loss, together with inflationary pressures, had been made up by the Council following a strategy of greater efficiency, investment in property and income generation rather than cuts to services. However, the financial forecast indicated that there were future budget pressures to be addressed if current services were to be maintained.

Government funding in the form of business rates and New Homes Bonus had been based on the provisional settlement announced in December 2018 and confirmed on 29 January 2019.

It was repoted that 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, £756,700 would  be paid to Surrey County Council, £126,800 to the Police and Crime Commissioner, with the remaining £116,500 to this council. This would be used to support the Budget for 2019/20.

It had been determined that items totalling £2,042,116 of expenditure should be funded from reserves relating to community grants, transformatiom costs, grounds maintenance for SANGS, grounds and playgrounds maintenance, family support, the Council’s elections, a temporary shortfall in rents, and pension deficit payments.

Special expenses reflected the cost of providing services to non-parished areas which in parished areas were funded by a parish precept. The charge was billed as a separate item to non-parished areas in a similar way to a precept in parished areas.

All reserves and provisions were considered appropriate and supportive of future expenditure requirements. Revenue Reserves (including earmarked reserves) were projected to be around £30m at 31 March 2019.  However the Council had no capital reserves which meant that all capital expenditure had to be funded through borrowing.

In respect of the General Fund Working Balance, a risk calculation indicated that a minimum balance of £2m was needed to provide financial cover for day to day cash flow and any financial emergencies which might occur during the financial year.

It was noted that a number of fees and charges had been increased and had been approved in accordance with the Financial Regulations. Income from investment propoerty was budgeted to contribute £1.245m to the 2019/20 budget after loans and repayments.

The Council was required to consider a financial forecast which predicted the Council’s finances over the short and medium term.  This year had proved to be especially difficult as the Government had given no indication as to the level of Local Government funding beyond 2019/20.

Members reviewed the 2019/20 – 2022/23 Financial Strategy annexed to the report and the challenges faced over the next 4 years set out therein.

As the Council had no capital receipts it could only fund its capital plans by borrowing or by way of grant. If these projects were not in themselves self-financing then the interest and Minimum Revenue Provision would have to be covered.

The Council’s Chief Financial Officer confirmed he was satisfied that the preparation of the 2019/20 estimates had been undertaken with rigour and due diligence and provided the appropriate level of resources to meet forecast service requirements whichever Budget option was adopted.  He also reported 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 reliance on income to fund services and the continuing need to make further savings and/or income, as shown by the Medium Term Financial Forecast, if services were to be maintained in to the future.

It was moved by Councillor Charlotte Morley and seconded by Councillor Richard Brooks and

RESOLVED

                               (i)          to note that under delegated powers the Executive Head of Finance calculated the amount of the Council Tax Base as 38,054.42 (Band D Equivalent properties) for the year 2019/20 calculated in accordance with the Local Government Finance Act 1992, as amended;

                              (ii)          to note that expenditure totalling £2,042,116 be charged directly to reserves;

                            (iii)          to note that £185,000 be a special expense relating to the non-parished area of the Borough;

                            (iv)          to note that the budget includes provision of £250,000 for the proposed pay increase for all staff;

                             (v)          to note the comments in respect of the robustness of the 2019/20 Budget and the adequacy of the Council’s reserves, provisions and the General Fund Working Balance;

                            (vi)          to note the comments in respect of the financial forecast, strategy and future financial sustainability of the Council;

                          (vii)          that the Budget Requirement for 2019/20 be £13,157,835 as set out at the end of  Annex A to the agenda report;

                        (viii)          that the Council Tax Requirement for the Council’s own purposes for 2019/20 be £8,324,785 as set out in Annex A and;

                            (ix)          that the Council Tax for 2019/20 (excluding special expenses and Parish precepts) be set at £218.66 for a Band D property.

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 Dan Adams, Richard Brooks, Bill Chapman, Vivienne Chapman, Paul Deach, Craig Fennell, Moira Gibson, Paul Ilnicki, Rebecca Jennings-Evans, David Lewis, Jonathan Lytle, Katia Malcaus Cooper, David Mansfield, Alan McClafferty, Charlotte Morley, Adrian Page, Robin Perry, Chris Pitt, Joanne Potter, Nic Price, Wynne Price, Darryl Ratiram, Ian Sams, Valerie White, John Winterton.

The following Members voted against the decision: Councillors Rodney Bates, Pat Tedder, Victoria Wheeler.