Issue - meetings

General Fund Revenue and Capital Estimates 2019-20

Meeting: 14/02/2019 - Overview Scrutiny Committee (Item 103)

103 General Fund Revenue and Capital Estimates 2019-20 pdf icon PDF 258 KB

Additional documents:

Minutes:

The Director (Corporate Services) and the Assistant Director (Corporate Services) presented the Committee with the draft revenue and capital estimates for General Fund services in 2019-20 together with the recommended level of council tax to be levied for 2019-20.

 

The Assistant Director (Corporate Services) highlighted the following:

 

·         On 13 December 2018, the provisional settlement for 2019-20 was announced. The provisional settlement would be the final year of the multi-year finance settlement announced in 2016-17 and completes the Government’s intended reduction in the total level of funding for local government over the next three-year period.

The Settlement Funding Assessment (SFA) for the Council was a slightly improved position than that expected due to the decision of Government to provide an additional £153m of funding to those authorities that were due to pay negative RSG for 2019/20. For Gravesham, this amounted to £243,710 that the Council was expecting to lose by way of a reduction to its business rates retention baseline funding level.

·         The council has secured indicative NHB funding for 2019-20 of £611,150 (the Council had budgeted £452,000) This is above the level of funding that was previously in the MTFP, with the increase principally due to there being 349 net additions to the housing stock of the borough between October 2017 and October 2018, above the 160 net additional homes needed to meet the 0.4% national baseline.

·         Kent & Medway were unsuccessful in retaining pilot status for Business Rates in 2019-20, so GBC will revert back to being part of the Kent Pool arrangement.

·         The budget reflects the second year of the pay offer made by National Employers for Local Government which represents a 2% pay rise for staff with some adjustments to the lower pay points to continue to close the gap with the national living wage and also to maintain the differentials between pay scales towards the lower end.

·         The vacancy allowance has been maintained for the General Fund at £350,000 and work continues with budget holders to develop proposal for services and address the Council’s financial position.

·         The funding gap, and therefore action required by the council, increased by £0.4m to £2.9m when setting the budget for 2017-18, primarily driven by the changes to the design of the New Homes Bonus Scheme. The funding gap was widened by at least a further £1m at budget setting 2018-19 due to the financial impact of low housebuilding rates in the borough, the higher than anticipated staff pay award and lower than expected interest rates.

·         An update on each workstream of Bridging the Gap activity was presented to Cabinet and Overview Scrutiny in Summer 2018. Further to this, in November 2018 both Cabinet and Overview Scrutiny were presented with further Balancing the Budget Initiatives amounting to just under £1.3m in response to the budget gap identified at budget setting 2018-19.

·         The council has undertaken a critical review of its council tax base to analyse movements in the tax base between 2018-19 and 2019-20. This has resulted in a slight reduction  ...  view the full minutes text for item 103


Meeting: 04/02/2019 - Cabinet (Item 156)

156 General Fund Revenue and Capital Estimates 2019-20 pdf icon PDF 258 KB

Additional documents:

Minutes:

The Cabinet was presented with the draft revenue and capital estimates for General Fund services in 2019-20 together with the recommended level of council tax to be levied for 2019-20.

 

The Assistant Director (Corporate Services) advised that the Provisional Local Government

Finance Settlement set out the level of funding assessed by Central Government for

Councils (the Settlement Funding Assessment – SFA) and was made up of two elements Revenue Support Grant (RSG) and Business Rates Retention. Since 2018-19, the Business Rates retention element of the assessment had increased each year in line with the Consumer Price Index (CPI), with the RSG element effectively used to bring the funding received by Councils to the level assessed by Central Government.

 

On 13 December 2018, the provisional settlement for 2019-20 was announced. The provisional settlement would be the final year of the multi-year finance settlement announced in 2016-17 and completes the Government’s intended reduction in the total level of funding for local government over the next three-year period.

 

The SFA for the Council was a slightly improved position than that expected due to the decision of Government to provide an additional £153m of funding to those authorities that were due to pay negative RSG for 2019/20. For Gravesham, this amounted to £243,710 that the Council was expecting to lose by way of a reduction to its business rates retention baseline funding level.

 

As part of the announcement, it was also confirmed that Kent & Medway had been unsuccessful in retaining pilot status for Business Rates in 2019-20. In response to this, a letter of representation had been sent on behalf of all Members of the Kent & Medway Pilot to the Ministry for Housing, Communities and Local Government (MHCLG) seeking reconsideration of the decision. The budget had therefore been prepared on the basis of being in a no pilot arrangement however the report included a recommendation allowing adjustment of the budget to reflect any change to the Pilot Status decision for Kent & Medway as time may allow.

 

The report was presented in seven sections and the Assistant Director (Corporate Services) provided Members with a detailed summary of each section:-

 

·         Section One – Policy Context;

·         Section Two – Government Funding;

·         Section Three – Medium Term Financial Strategy (MTFS);

·         Section Four - General Fund Revenue Budget;

·         Section Five – Council Tax;

·         Section Six - Robustness of Estimates and Adequacy of Reserves; and

·         Section Seven - Capital Programme.

 

The Cabinet was reminded that the MTFS for 2016-17 to 2019-20 identified a residual funding gap of £2.5m emerging in 2019-20 which increased by a further £0.4m to £2.9m in 2017-18. The funding gap was widened by at least a further £1m at budget setting 2018-19 due to the financial impact of low housebuilding rates in the borough, the higher than anticipated staff pay award and lower than expected interest rates.

 

The MTFS detailed the actions to be taken by the Council in order to bridge the funding gap. These actions commenced during 2016-17 and have continued. It had now  ...  view the full minutes text for item 156