Agenda item

DECISION

That the following be recommended to Full Council:

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 budget, Medium-Term projections and a council tax increase of £4.95 (2.57%) for Cabinet to consider following the public consultation exercise in order to make a recommendation to Full Council, which would consider the report on 1^st March.

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.  The Council’s finances were currently in a healthy position and the draft budget showed a balanced position for 2021/22.   

The level of savings needed from 2022/23 had been reported as approximately £700,000.  However, following the decision by Full Council on 15^th February to accept the proposal to become a shareholder in Public Sector Partnership Services (PSPS) Limited, the savings required had reduced to £500,000.  This was a healthy financial position in view of the challenges currently being experienced throughout local government, but it was essential for the Council to continue to be prudent going forward. 

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. Set in context, the proposed increase was modest compared to the increase of £15 for Lincolnshire Police and £26 for the County Council. 

The increase in the council tax allowed for £36,000 growth for implementation of the Living Wage Foundation and £60,000 for Internal Drainage Board (IDB) levy increases to be absorbed.  There was also a £100,000 provision for potential sales and fees income shortfalls, following the additional risk to income collection levels.

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.

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.  The Portfolio Holder added thanks to the officers for their hard work and professional advice.

During debate, reference was made to the financial burden placed on the Council by the collection of the IDB levy.  The Portfolio Holder advised Members that, should Cabinet agree the budget, a press release would be issued to explain this to the public. 

The adverse effect on services should council tax not be increased by the amount proposed was recognised and accepted.  There was appreciation that the Council’s lowest paid staff would benefit by the implementation of the Living Wage. 

OTHER OPTIONS OR ALTERNATIVES CONSIDERED

No other options have been considered as part of this report although Cabinet could decide utilise reserves to fund one-off schemes or to approve a Council Tax freeze. This would however increase the level of savings required in future years by around £100k per annum.

RECORD OF ANY CONFLICT OF INTEREST

None.

RECORD OF ANY DISPENSATION GRANTED

None.