Agenda item

31/18              

The Council was presented with a report that outlined its Medium Term Financial Position to 2023/24.

In discussion, reference was made to:-

(a)   the Business Rates Pilot Scheme.  By way of an update regarding the unfairness that those local authorities that were located in London did not have to re-apply for Pilot status for 2019/20, the Deputy Leader informed that he had already spoken to one of the local MPs and he would also be contacting the other local MP to express his frustrations;

(b)   Negative Revenue Support Grant.  Whilst early indications were suggesting that the Government was intending to eliminate Negative Revenue Support Grant for 2019/20, it was noted that there were no guarantees beyond that year;

(c)    the use of New Homes Bonus funding to support the revenue base budget.  Although noting that it was purely for modelling purposes at this time, some Members still felt this proposal to be regrettable and were of the view that all of these monies should be re-invested to help those local communities that had received recent development.  In reply, other Members highlighted the financial pressures faced by the Council due to the loss of Revenue Support Grant to the Council and the fact that a proportion of these monies had been transferred to the New Homes Bonus funding source;

(d)   the Pension Fund.  In response to a question, it was noted that Devon County Council was the Administering Authority for the Fund and the District Council therefore had no control over investment decisions;

(e)   reviewing the Green Book.  The view was expressed that any proposed review would require careful management to ensure that staff morale was maintained.

       It was then:

RESOLVED

1.     That the forecast budget gap for 2019/20 of £0.638 million and the position for future years be noted;

2.     That the current options identified and timescales for closing the budget gap in 2019/20 and future years to achieve long-term financial sustainability be noted;

3.     That the Council set the strategic intention to raise Council Tax by the maximum allowed in any given year, without triggering a Council Tax Referendum, to enable continued delivery of services.  (NB. the actual Council Tax for any given year will be decided by the Council in the preceding February);

4.     That an application be submitted for Pilot status for 2019/20, with agreement being given to a 40% District / 34% Devon County Council / 1% Fire split for the 75% scheme.  In the event of the Bid not being successful, it was agreed that the Council should remain part of the Devon Business Rates Pool for 2019/20;

5.     That Central Government and Devon MPs be actively lobbied to support a 2019/20 Devon Pilot bid;

6.     That the Government, Devon MPs and other sector bodies (such as the District Councils Network and the Rural Services Network) be actively lobbied and engaged with for a realistic business rates baseline to be set for the Council for 2020 onwards;

7.     That the Council respond to the technical consultation in support of the Government eliminating Negative Revenue Support Grant and continue to lobby for Rural Services Delivery Grant allocations that adequately reflect the cost of rural service provision;

8.     That, for modelling purposes, £500,000 of New Homes Bonus funding be used to fund the revenue base budget, with this being reduced to £400,000 by 2020/21 and £250,000 by 2021/22;

9.     That the annual level of contributions to Earmarked Reserves (£722,300 as per Appendix E of the presented agenda report) and the adequacy of the existing level of Unearmarked Reserves (£1.8 million) and Earmarked Reserves (£8.3 million) be reviewed by Members as part of the Budget setting process.  (This will assess the adequacy of Reserves levels, in light of future plans and pressures);

10.  That the Council takes specialist pension advice on the options for the Council’s Pension position (informing the actuarial valuation), with the aim of reducing the current deficit contributions, increasing affordability, whilst best managing the pension deficit.  It is also recommended that the Council has early dialogue with Devon County Council and the actuaries with regards to the Council having an input into the actuarial assumptions used for the 2019 Actuarial Valuation.  (Options will be taken back to the Council’s Audit Committee in January 2019 to consider);

11.  That an Upper Limit on External Borrowing (for all Council services) be set as part of the Medium Term Financial Strategy of £75 million (as set out at Exempt Appendix G of the presented agenda report); and

12.  That the Council continue with the Local Government Terms and Conditions of Employment Green Book for at least 2019/20.  That officers review all options for reducing staff costs by varying terms from the Green Book from 2020/21, with an initial report back by the end of 2018/19.