Agenda item - REVENUE BUDGET 2019/20

REPORT OF THE SERVICE DIRECTOR – RESOURCES

To consider the draft budget for 2019/20 and the main factors which contribute to the determination of the North Hertfordshire District Council (NHDC) Council Tax level. To consider the appropriate level of Council Tax that will be recommended to the meeting of the Council on the 7 February 2019.

RECOMMENDED TO CABINTET:

(1) That Cabinet notes the expected Central Government funding levels.

(2) That Cabinet notes the estimated position on the Collection Fund and how this will be funded.

(3) That Cabinet confirms that Council Tax increases for 2019/20 should be in line with the Medium Term Financial Strategy.

(4) That Cabinet notes the position relating to the General Fund balance and that due to the risks identified a minimum balance of £1.96 million is recommended.

(5) That Cabinet approves the increase in the 2018/19 working budget of £116k, and to note the expected impact in 2019/20 of a £164k reduction in budget.

(6) That Cabinet notes and comments on the requests for the carry-forward of budget of £41k from 2018/19 to 2019/20.

(7) That Cabinet approves the inclusion of the efficiencies and investment proposals at Appendix B in the General Fund budget estimates for 2019/20.

(8) That Cabinet notes the savings target in future years.

(9) That Cabinet notes the estimated 2019/20 net expenditure of £15.1 million, as detailed in Appendix A, and recommends this budget to Council.

REASON FOR DECISIONS:

(1) To ensure that all relevant factors are taken into consideration when arriving at the proposed Council Tax precept for 2019/20.

(2) To ensure that the Cabinet recommends a balanced budget to Council on 7 February 2019.

Audio Recording – Start time of Item – 20 minutes and 11 seconds

The Service Director - Resources explained the main points of the Revenue Budget for 2019/20.

Section 8.1 – page 73

· Draft Settlement was positive in terms of where it could have landed compared to previous forecasts especially negative revenue support grants.

Section 8.1.7

· Summary of funding over the next few years in terms of Central Government Grants;

· New homes bonus – educated guess.

Section 8.1.9

· Benefit administration for initiative grant from NHCLG was going down by £44,000 from £474 in 2018/19 to £430 in 2019/20. Additional pressure in the budget estimates and general funding to reflect this. Same amount of work just that grant cut.

Section 8.2

· There was a small surplus on Council Tax collection funds and deficit on business rate collection funds; funded from Section 31 grant to receive from central government for the mandatory reliefs less business rates required.

Section 8.26 – 8.27

· Pilot status had been awarded for next year.

Section 8.28 – 8.29

· Council tax and limits regarding maximum increases without the need for a referendum.

Section 8.3

· Reserve balances for specific projects and events.

Section 8.3.3

· Looked at balances on provisions which are known liabilities so estimates can be made. There was enough to recommend to Full Council that the minimum balance be made up of two elements. There was a table on page 82.

Section 8.3.7

· Budget review was at the end of November. There were two significant variances with ongoing impact shown on page 83.

Section 8.5

· Savings and investment proposals were virtually the same as last time. Some changes were made by Cabinet as shown on Page 91, Appendix B. There was a change to E2 and initially a saving in one year only; in relation to area wide parking reviews and was now extended across the full four years with £65,000 saving;

· Page 92 – there was a series of single year investments starting with R9 – R13.

Page 85 gave an overall summary for 2019/20.

Questions were received from Members following Ian Couper’s presentation:

· There were no significant areas in terms of the HR proposals put forward; There were some previous efficiencies with ongoing impacts: PE1 on page 92 had HR implications. There had been a series of staffing savings in previous years around the senior management restructure and there had been follow-on from that in terms of savings and those had been dealt with over the past year, delivering savings put forward in previous budgets. It was standard practice to put this in;

· The reason for the Housing Benefit Administration Grant going down was unknown and Ian Couper would look into it and find out why;

· As part of the quarterly revenue monitoring review where the incidence of risk occurred, a running total against the notional total was kept aside and significant numbers came through as a result of this and the service director would use this in assessing the risk for future years;

· It should be possible to pick out the amount which actually materialised from the quarterly monitoring and to provide a summary across the year to show the number;

· Page 93 and PE4 – Both risks would disappear, assuming approved by Full Council in February, they would disappear next year. It approved by Full Council last year as a saving hence PE4. The administration was proposing to remove that efficiency. R4 requires Full Council approval to approve R4 to get rid of PE4;

· There were no amounts in budget forecasts for income as budgets tended to be a prudent estimate and therefore expenditure was taken before the income as a reliable estimate when the income starts to come through this would be included in budget forecasts, both with the revenue monitor and 2020/21 income targets around budget changes;

· The inconsistent stance on income and expenditure would be asked when the matter was next reviewed;

· The financial risks were related to 2020/21 as they would be given at least a year to try to generate income. Risks would be assessed if income was not generated and they would review the risks of potential redundancies at that point;

· Calculations would need to be robust;

· Significant comments had been made.