Agenda item

To consider the final financial plan proposals 2020/21 to 2022/23 for recommendation to Council on 24 February, 2020.

 

Councillor D Cox declared an Appendix 2 interest by virtue of his position as Chairman of the CVS Trustees.

 

The Portfolio Holder for Corporate Services presented the report on the final financial plan proposals 2020/21 to 2020/23 for recommendation to Council on 24 February, 2020.  The proposals included recommended revenue and capital budgets for 2020/21 and planned in outline for 2021/22 and 2022/23.

 

The Portfolio Holder referred to pertinent factors which particularly impacted the budget:

·      Local government finance settlement for 2020/21 would be a settlement for one year only.

·      The Government was planning to introduce 75% business rates retention in 2021/22.

·      The Government’s intention to cease New Homes Bonus.

·      The senior management structure has been finalised and approved and the resultant savings will ultimately amount to in excess of £150,000 per annum.

·      The council tax support scheme is proposed to be amended to an income banded scheme due to the existing scheme not being compatible with the roll out of Universal Credit.

·      The average Teignbridge council tax of £170.17 per household is below the current average of Devon districts of £176.86.

·      A flat nominal charge for Sunday parking of £1 between the time of 10am -4pm has been included within the fees and charges for the majority of the car parks across the District.

·      The successful opt in green waste subscription would be maintained at its existing level and no increase is proposed. The fee continues to be below the national average and the average charge within Devon.

·      Revenue support grant reduced from £4.5 million to zero in 2019/20. Uncertainty existed for 2021/22 when a proposed reset of the baseline was likely to occur, reducing gains established from growth and altering business rates retention to 75%.

·      The general reserves were maintained at around 12.3% of the budget which was equivalent to just under £2.0 million. However there was much uncertainty over the move to 75% and potentially an eventual 100% business rates retention scheme with the higher risks that the Council would face.

·      The budget proposals show how the Council could start to prepare for the grant reductions and anticipated funding regime by continuing to make savings and generate income.

·      The proposals included a £5 increase in council tax next year and subsequent years and substantial capital investment over the next three years.

 

It was proposed and seconded that the Fees and Charges be included in the Initial Financial Plan Proposals for 2021/22 and future years to enable the Committee to review them as part of the budget process. This proposal was carried.

Concern was raised in regard to the introduction of a flat rate nominal charge for parking on Sunday in the Council’s car parks, particularly as the flat rate was more than the 30 minute charge in some areas. In addition, the charge may discourage Sunday shoppers to Newton Abbot. The Portfolio Holder referred to the challenge the Council was facing in balancing the budget. The proposal was a nominal charge. The Council had invested significantly in Newton Abbot town centre to attract visitors and increase footfall.

 

It was proposed and seconded that the Executive be requested to delete Sunday Parking Charges from the final budget proposals. This was lost by 7 votes for, 10 against and 2 abstentions.

 

It was noted that the terms of reference for the Car Park Review Group did not include reviewing car parks fees and charges. It was proposed and seconded that this be included in the Review Group’s terms of reference. This was carried by 10 votes for and 9 against. This would enable the fees and charges to be reviewed annually as part of the budget process, and to assess the effect of the introduction of the nominal Sunday parking charge.

 

In response to a question as to why the Council was investing in a new railway station at Marsh Barton for South West Exeter, and provision for education in SW Exeter and the wider Teignbridge area, the portfolio Holder advised that the was being funding from the Community Infrastructure Levy for the SW Exeter planning application, the land of which was in the Teignbridge boundary.

 

In response to a question for the Committee in regard to the membership of the Commercial Property Investment Board at appendix 8 to the agenda report, the Leader advised that further consideration would be given to this at the Executive. 

 

Members asked the following questions throughout discussion. Information was not available at the meeting to answer the questions, and it was agreed that written answers would be provided to Members before the Executive.

 

Note: Following the meeting the answers were provided and are set out below.

 

RECOMMENDED

 

1.  That the Executive be advised that the Overview and Scrutiny Committee recommend that the Final Financial Plan proposals 2020/21 to 2022/23 be considered together with any subsequent consultation comments for approval by Council as the final budget for 2020/21 and the outline plan for subsequent years 2021/22 and 2022/23.

 

2.  That Council approve the Commercial Strategy in appendix 8 and delegate authority to the Chief Finance Officer to approve the purchase of assets meeting the prescribed criteria in section 6 of the Strategy subject to prior consultation with the Commercial Property Investment Board.

 

The proposed budget includes:

 

·         An increase in council tax of £5 or 2.94% to £175.17.

·         Funding for a climate change officer and enhanced planning enforcement.

·         The continuing reduction in new homes bonus.

·         Other central funding reductions – in particular provisional assumptions for business rates for future years and reset of the baseline.

·         Reserves at 12.3% of the net revenue budget or just under £2.0 million.

·         Continuing support for housing whilst backing business and bringing people and organisations together for local neighbourhood planning.

·         Infrastructure delivery plan investment funded by community infrastructure levy and external sources where available.

·         Town centre investment in infrastructure and employment.

·         Use of long term borrowing where appropriate.

·         Assumptions of a 2% pay deal with higher increases for those on lower grades.

·         Reducing rural aid to £26,000 and reducing councillors’ community fund to £1,000 each.

·         £1 million payment to reduce the pension deficit and ongoing contributions.

 

 

RESOLVED

 

1.    That details of Fees and Charges be included in the Initial Financial Plan proposals for consideration by the Overview and Scrutiny Committee as part of the annual budget consultation process.

2.    That car parking fees and charges be included in the terms of reference for the Car Park Review Group, to enable the fees and charges to be reviewed annually as part of the budget process. 

 

 

Note:

The following questions were raised during debate. The answers have been provided since the meeting and are detailed below

 

1.     Paragraph 3.9 - How many employees do we have on the statutory National Living Wage?

 

Our starting grade is higher than the statutory National Living Wage so this doesn’t specifically effect any employees but it has a knock on effect to our lower grades. A flat rate increase for the majority of grades of 2% in each year and higher increases on lower pay points (affecting 218 employees which is approx. 30% of the workforce) of up to 9.2% in 2018/19 and a further 5.9% in 2019/20. A revised pay spine was also introduced in the deal with effect from 1 April 2019.

 

2.     Paragraph 4.3 - Why did the car parking income in 4.3 change from £161K to £185K?

 

This is because additional income was included to account for the Sherbourne Rd development.

 

3.     Paragraph 4.15 - What is the difference in New Homes Bonus between affordable and non-affordable housing?

 

NHB is paid on all of those homes including affordable at the national council tax rate and subject to further formula adjustments. There is then an additional sum paid for affordable homes of £350 per unit x 80%.

 

4.     Pg. 52 - Why did the Customer Service number of FTE’s increase from 12.5 to 22?

 

This was because the Customer Service team merged with part of Revenues and Benefits.  Customer Service FTE’s increased and the Revenue and Benefits number of FTE’s reduced.  See also No. 7.

 

5.     Pg. 52 - Why does the Democratic Services have an employee’s budget of £0.5m when there are only 3.5 FTE’s.

 

This is because the amount includes Members Allowances but the Members themselves are not included within the FTE figure.

 

6.     Pg. 54 - Why has the service cost for Development Management increased from £378K to £656K?

 

This is mainly due to the decrease in income.  Planning application income can vary considerably year on year, especially when large applications are received.  For example 14/15 £928k and 16/17 £621k.  Income variation has been reported in this year but as a temporary increase as it does not necessarily mean we will receive additional income next year.

 

7.     Pg. 68 Why did the Revenues and Benefits number of FTE’s decrease from 49 to 39?

 

This was because the Customer Service team merged with part of Revenues and Benefits.  Customer Service FTE’s increased and the Revenue and Benefits number of FTE’s reduced.  See also No. 4.

 

8.     Budget Forecast – Why do we use £0.6m from Revenue to put into Capital.

 

The current capital programme is estimated at £32.6m and is funded by the different income types detailed on the budget forecast sheet.  Borrowing only occurs where there is a business case to do so because the project provides returns to service the loan.

 

£0.6m is required from revenue in order to ensure the current programme is fully funded.

 

9.     Has Audit looked at the Commercial Strategy?

 

Audit and Legal were consulted as part of the process in drafting the Commercial Strategy.  It was also presented to CMT and SLT.