Agenda item

Consideration was given to a report that sought approval of the Council’s Medium Term Financial Strategy 2020/21 to 2024/25.

During discussion, particular reference was made to:-

(a)    Earmarked Reserves.  In reply to a request to review those Earmarked Reserves that had been unspent for at least two years, officers advised that this exercise would be part of the Member Budget Workshop on 7 November 2019;

(b)    income streams.  Some Members reiterated the importance of the Council maintaining its income levels.

It was then:

RESOLVED

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 enable the continued delivery of services.  (NB. the actual Council Tax for any given year will be decided by the Council in the preceding February;

2.      That the Council respond to any Government announcement / consultation on Business Rates Reform;

3.      That the Council 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 and for when the Business Rates Reform is introduced for 2021/22;

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

5.      That, for modelling purposes, £500,000 of New Homes Bonus funding be used for 2020/21 (or any alternative scheme) to fund the Revenue Base Budget, with this being reduced to £350,000 by 2021/22 and £250,000 by 2022/23;

6.      That the Council maintains a policy of a minimum level of Unearmarked Reserves of £1.5 million and that the annual level of contributions to Earmarked Reserves (£684,300) and the adequacy of the existing level of Unearmarked Reserves (£1.9 million) and Earmarked Reserves (£13.3 million) be reviewed by Members as part of the Budget Setting process.  (NB. this will assess the adequacy of Reserves levels in light of future plans and pressures);

7.      That the Council continues dialogue with the actuaries of the Devon Pension Fund and Devon County Council 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.  One option to be explored is whether or not some (or all) of the pension deficit should be paid off in a lump sum.  The Council supports this option being modelled, with a report being presented to Members by January 2020 that presents both the potential costs and the benefits once the results of the Triennial Pension Revaluation are known;

8.      That the Council maintains an Upper Limit on External Borrowing (for all Council services) as part of the Medium Term Financial Strategy of £75 million;

9.      That the forecast Budget Gap for 2020/21 of £0.49 million and the position for future years be noted; and

10.   That 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.