Agenda item

HC27           

A report was considered that set out the Budget Strategy for the Council for the next five years and was the starting point for developing a meaningful strategy setting out the intention for all of the different strands of funding available to the Council.  The report stated that the Council would then be able to rely on the Strategy to inform future decisions.

The Leader introduced the report and invited the Section 151 Officer to provide an update to Members in light of the Chancellor having now announced the Spending Review for 2019.  In so doing, the Section 151 Officer advised that this update information had been included in full in the published agenda report that was to be considered by the Council at its meeting on 17 September 2019.

In the ensuing debate, reference was made to:-

(a)   the Medium Term Financial Strategy training session that had been held earlier in the day.  A number of Members thanked officers for delivering what had been a very informative session;

(b)   the work of the Financial Stability Review Group.  A Member expressed his surprise that a recommendation had not been included with regard to the Review Group being tasked with investigating options to close the forecasted £0.38 million budget gap for 2020/21.  In response, the Section 151 Officer informed that this task was included as part of the Group’s terms of reference and these would again be revisited by Members at the first Group meeting of this Municipal Year.

It was then RESOLVED that Hub Committee had considered the Medium Term Financial Strategy and RECOMMENDED to Council:

1.    that the strategic intention be set to raise Council Tax by the maximum allowed in any given year, without triggering a council tax referendum, to endeavour to continue to deliver services. (NOTE. the actual council tax for any given year will be decided by Council in the preceding February);

2.    to respond to any Government announcement/consultation in September 2019 on Business Rates Reform;

3.    to continue to actively lobby and engage with the Government, Devon MPs and other sector bodies such as the District Councils Network and the Rural Services Network, for a realistic business rates baseline to be set for the Council for 2020 onwards, if business rates reform is introduced for 2020-21 or a later timescale (NOTE. it is widely thought that it will be delayed until 2021-22);

4.    that the Council continues to lobby in support of the Government eliminating Negative Revenue Support Grant in 2020/21 (and thereafter) and continues to lobby for Rural Services Delivery Grant allocations which adequately reflect the cost of rural service provision;

5.    to use £200,000 of New Homes Bonus funding for 2020-21 (or any alternative scheme) to fund the revenue base budget and then reduce to £100,000 by 2021-22 and £50,000 by 2022-23 for modelling purposes;

6.    that the minimum level of Unearmarked Reserves to be retained is increased from £750,000 (2019/20 level) to £900,000 for 2020/21, to reflect the increase in financial risks which the Council faces;

7.    to transfer £200,000 of Unearmarked Reserves into the Financial Stability Earmarked Reserve;

8.    that the Council continues dialogue with the actuaries of the Devon Pension Fund and DCC on the options for the Council’s Pension position, with the aim of reducing the current contributions,  increasing affordability, whilst best managing the pension deficit. (NOTE: a report will be presented to Members by January 2020 of options, once the results of the Triennial Pension Revaluation are known);

9.    that the Council maintains an Upper Limit on External Borrowing (for all Council services) as part of the Medium Term Financial Strategy of £50 million;

10.  the forecast budget gap for 2020/21 of £0.38 million and the position for future years be noted; and

11.  the current options identified and timescales for closing the budget gap in 2020/21 and future years, to achieve long term financial sustainability be noted.