Agenda item

Service and Financial Planning/Budget Proposal for 2019/20

To approve the 2019/20 provisional budget proposal for consultation with the Overview and Scrutiny Committee in accordance with the Policy Framework and Budget Procedure rules within the Constitution and with the Business Community to comply with statutory requirements.

Minutes:

Councillor T. Schofield introduced the report setting out service and financial planning proposals and the Council Tax Reduction Scheme for 2019/20. 

 

As set out in the report, the Executive Member for Finance highlighted proposals for 2019/20 had been based on a full and robust assessment. It was noted that this work had been carried out by Executive members, supported by the Management Team and a Budget Advisory Working Group.

 

Councillor Schofield explained the proposals set out in the report would allow for a continuation of high quality services. In recognition of this, it was proposed to move a number of long term established officer posts into the base budget. This would result in an increased budget requirement for 2019/20 but a more sustainable funding structure for future years, with more certainty for staff and service users.

 

The Executive Member for Finance explained that the budget savings proposed, and income generation forecasts, would more than cover the planned service improvements for 2019/20. However, it was noted that the Council was faced with a short term loss of income until some regeneration and income generation projects came on stream. Combined with the sharp reduction in business rates receipts it was explained that this would mean the Council would likely need to draw on reserves in order to present a balanced budget for 2019/20 to Full Council in February 2019.

 

In response to questions, it was explained that in recent years the Council had established ring-fenced reserves to respond to this challenge and it was noted that Table 2 of the report summarised the gap and the proposals to deliver a balanced budget. It was also highlighted that the Council had plans in place to replace the use of reserves with new income in the medium term to help ensure a sustainable budget position for the future.

 

In terms of Council Tax proposals, Councillor Schofield explained that it was always a difficult decision to increase Council Tax. It was highlighted that there would be some concerns about the proposed 2.99% rise and it was noted that the proposals would see the Reigate and Banstead element of a Band D charge increase by 13 pence per week. However, Councillor Schofield outlined that for less than £4.40 a week, residents would benefit from waste and recycling collections, clean streets and award winning open spaces. The Council would also provide leisure and community centres, health and wellbeing services, housing, community development and business support services. In addition, residents would benefit from various regeneration and place improvement activities across the borough, and from statutory services provided, such as planning and environmental health and licencing.

 

Councillor G.J. Knight, Deputy Leader and Executive Member for Housing and Benefits, went on to introduce the Council Tax Reduction Scheme recommendation.

 

The Executive was informed that since 2013 Council Tax billing authorities had been required to agree local Council Tax reduction schemes for working age households who were on low incomes, benefits or out of work. It was noted that in recent years the Council had implemented a scheme that:

-       Required residents receiving full Council Tax benefit to pay at least 10% of their bill. 

 

-       Protected residents who were either disabled or providing care for disabled people.

 

-       Had provisions so residents did not lose out on support when they entered work. It was noted that this was an important principle.

It was also highlighted that households who were genuinely unable to pay their Council Tax were able to receive further discretionary relief should they require it.

 

Councillor Knight went on to explain that the Council had an opportunity to review this approach annually. It was noted that the current scheme was working well and had not affected the Council’s overall collection rate, which remained one of the highest in the country. 

 

Councillor Knight informed the Executive that Council Tax collected from the 3,500 working age households receiving a reduction amounted to under 1% of the total Council Tax liability.  It was noted that arrears were only around 0.2% of the total Council Tax liability, which could be collected in subsequent years. With this in mind, Councillor Knight explained that the recommendation was to implement the current scheme, with increases to allowances and premiums applied to reflect cost of living increases.

 

During the discussion that followed, the Leader, Deputy Leader and Executive Member for Housing and Benefits, and Executive Member for Finance responded to questions on service and financial proposals and the Council Tax Reduction Scheme for 2019/20. It was also noted that the Chairman of the Overview and Scrutiny Committee had invited all non-executive Members to attend the Budget Scrutiny Review Panel meeting, chaired by Councillor N.D. Harrison, on Thursday 22 November 2018.     

 

RECOMMENDED that the local Council Tax Reduction Scheme for 2019/20, outlined in the Executive’s report, be adopted.

 

RESOLVED that:

(i)        The national and local service context, outlined in Annex 1 to the report, be noted.

 

(ii)       The service proposals, set out in the report and accompanying Annex 2, which seek to respond to the national and local service context and to deliver corporate priorities, be endorsed.

 

(iii)      The following be approved for consultation under the Council’s budget and policy framework:

            a) Medium Term Financial Plan (Annex 3)

            b) Savings and income totalling £1.229m (Annex 4)

            c) Growth totalling £2.620m (Annex 5)

 

(iv)      The Director of Finance and Organisation be authorised, in consultation with the Leader of the Council, to make any necessary changes to the Corporate Business Plan arising from the service and financial planning changes agreed for 2019/20.

Reason for decision: To ensure that the Council continued to plan and manage its resources well, deliver high standards of service and meet the aims and objectives of the Council’s adopted Five Year Plan (2015-2020). The initial local Council Tax Reduction Scheme was introduced from 2013/14 and had been effective in reducing the level of support awarded whilst ensuring vulnerable residents were not penalised unfairly. It was therefore appropriate that this scheme was continued with some changes to reflect increases in the cost of living in line with other benefits and allowances.

 

Alternative options: In terms of Service and Financial Planning, the following alternative options were available: (i) To only approve some of the proposed budget and financial planning changes set out within the report, for consultation under the terms of the Constitution; or (ii) To reject the proposed budget and financial planning changes set out within the report, and request that further work be undertaken to develop new proposals for consultation under the terms of the Constitution. In terms of the Council Tax Reduction Scheme, the following alternative options were available: (i) To reduce the level of support. This would reduce the cost to the Council but would likely lead to more households experiencing financial hardship and affect Council Tax recovery rates; or (ii) To increase the level of support payable. This would have a financial cost for the Council and could affect other services provided by the Council.

Supporting documents: