Agenda item

DECISION

That the following be recommended for Public Consultation:

1. The Draft Budget and Medium-Term projections; and
2. A Council Tax increase of £4.95 (2.57%)

Portfolio Holders and Officer

JN

AS/TS

REASON FOR DECISION

The Portfolio Holder introduced a report, which presented a proposed draft budget, Medium-Term projections and a council tax increase of £4.95 (2.57%) for Cabinet’s approval to send out for public consultation. 

The draft summary set out the Council’s revenue position for the 2021/22 Budget and the 5-year Medium-Term Financial Strategy (MTFS) to 2025/26.  It showed a predicted surplus for 2021/22 of £98,000, followed by the need to make savings of approximately £700,000 in future years in order to maintain a balanced budget position without drawing down on reserves.  This was a healthy financial position in view of the current challenges currently being experienced throughout local government.

The budget assumed an increase in council tax of £4.95 (2.57%) for 2021/22 and 2% per annum thereafter, which was in line with current known referendum limits of £5 or 2%, whichever was the greater.

For future years, it was expected that the predicted deficit could be partially offset by further Strategic Alliance savings, PSPS transformation savings and other service reviews that would be undertaken during the following year.

It also noted that the Council was expected to have around £13m in reserves at the end of 2021/22.

As in 2020/21, in 2021/22 the Council would be part of a business rates pool across Lincolnshire, enabling it to retain additional resources.  The Government had announced plans to freeze the business rates multiplier for 2021/22 as part of its support package for businesses.  Both the ‘Fundamental Review of Business Rates’ and ‘Fairer Funding Review’ had been delayed.

In conclusion, the Portfolio Holder considered the overall financial position of the authority to be generally healthy in view of the current economic pressures and as compared to several other authorities across the country.  Whilst savings were likely to be required moving forward, depending on future government funding announcements, these were achievable with careful financial management.

During debate, Members’ comments included concern at the proposal to increase council tax again, particularly now that the Council was looking to be more commercial, and queries about the impact of the strategic alliance on the budget setting process and the effect of the Internal Drainage Board (IDB) levy.

The Portfolio Holder pointed out that, in the previous year, council tax had not been raised to the maximum possible and stressed that the Council had to be prudent and increase council tax in order to achieve a balanced budget.

The Portfolio Holder explained that the Council appeared to be in a more positive position than expected in relation to the strategic alliance, as it had cost a little less so far. They were looking to make continuous savings through the alliance, though the exact figures were not available yet. The impact of the IDB levy was significant, as was the County Council’s portion of the council tax bill and this needed to be made clear to residents.

The Deputy Leader commended the hard work of the economic development team to improve Boston’s economy for the future and said they would bring forward plans to put before Members as soon as possible. The Deputy Leader also agreed that, as the Council was the collection agent, it appeared to be the Council that increased council tax whereas, in reality, the Council’s portion of the total bill was small.

The Section 151 Officer confirmed that, for a band D property, the Lincolnshire Police’s portion of the council tax bill was £15, the County Council’s was £25 and the Council’s was £5. 

The Section 151 Officer also pointed out that savings of £400,000 were built in to the strategic alliance budget the following year and, if agreed, the PSPS proposal would generate further savings and, hopefully, bridge the Council’s future budgetary gap.

OTHER OPTIONS OR ALTERNATIVES CONSIDERED

No other options were considered as part of this report although Cabinet could decide to re-invest or re-direct the 2021/22 projected surplus of £98k into one off priority services, rather than contribute this amount to reserves. Members may also choose to vary the Council Tax increase (each 1% represents around £39k in income).

RECORD OF ANY CONFLICT OF INTEREST

None.

RECORD OF ANY DISPENSATION GRANTED

None.