General Fund Revenue and Capital Estimates 2022-23
- Meeting of Overview Scrutiny Committee, Thursday, 10 February 2022 7.30 pm (Item 26.)
- View the background to item 26.
The Assistant Director (Corporate Services) presented the Overview Scrutiny Committee with the draft revenue and capital estimates for General Fund services in 2022-23 together with the recommended level of council tax to be levied for 2022-23.
The report was presented in seven sections and the Assistant Director (Corporate Services) provided Members with a summary of each section: -
· Section One – Policy Context;
· Section Two – Government Funding;
· Section Three – Medium Term Financial Strategy and Planning for the Council and its community;
· 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 Assistant Director (Corporate Services) highlighted the following:
· On 16 December 2021 the Provisional Local Government Finance Settlement for 2022-23 was announced by The Department for Levelling Up, Housing and Communities (DLUHC). The Final Finance Settlement was announced on 8 February 2022, this was reviewed and there were no substantial changes.
· As like last year, the provisional settlement was for one year only, with the future funding of local government remaining uncertain in the coming years. Local government funding reforms that were planned for introduction from April 2021 (including the Fair Funding Review and reforms to the current Business Rates Retention System) had been put on hold. These reforms were likely to take place during 2022.
· The provisional settlement also confirmed that government would be eliminating
negative RSG amounts in 2022-23. For Gravesham, this was budgeted at £243,710
that the council was expecting to lose by way of a reduction to its business rates
retention baseline funding level.
· Lower Tier and Services Grants total £337,380
· The council has secured indicative New Homes Bonus funding for 2022-23 of £573,150. Allocations continue to be as un-ring-fenced grant, thus enabling the council to maintain its policy of taking NHB Funding directly into Working Balances
· As a result of the provisional settlement, the Council will experience an increase in its core spending power of 7.3% for 2022-23 and will have the seventh lowest level of assumed spending power per dwelling in Kent at £267. This is based on an assumption by Central Government that the Council will increase council tax by the maximum amount.
· The Council, this year, had prepared a five-year Medium Term Financial Strategy spanning 2022-23 to 2026-27 in response to an absence of further information on the future of funding for local government from Central Government and the need for the Council to consider initiatives to reduce the emerging budget gap of £3m in 2026-27 that the Council will now face on its General Fund Services.
· The COVID-19 Pandemic continues to impact on the financial position of the council,
particularly on income streams. The Budget Monitoring Report showing the projected
financial position at the end of Quarter Three (period to 31 December 2021) indicates a projected underspend for the year of £598,670 against the original budget indicating a contribution of £98,270 would be made to working balances, albeit income and
expenditure variances in the last quarter of the year will impact on this figure.
· In relation to the council tax to be levied, the Assistant Director (Corporate Services), advised that the provisional settlement confirmed the continued flexibility for district councils in setting council tax levels by permitting district councils to raise council tax by 2% or up to and including £5 (whichever is higher) without triggering the requirement for referendum. The budget proposals reflected the Council implementing a £4.95 increase in its council tax charge in 2022-23, equating to an increase of less than 10 pence per week for a Band D property. The total annual charge for the Gravesham element of the council tax bill will be £217.98; by way of comparison, the Band D equivalent council tax for 2021-22 is £213.03.
· A decision to freeze council tax in 2022-23 (i.e. 0% increase) would create a shortfall of £1.7million over the life of Medium Term Financial Plan
· Based on the assessed risks at the time of making the assessment of General Fund
Working Balances in relation to setting the budget for 2022-23, it is the view of the
Director (Corporate Services) that the minimum of £5.25m in General Fund working
balances should be retained during 2022-23.
- a minimum working balance of £2m to assist cash flow.
- £3.25m General Revenue Reserve to enable the Council to meet unforeseen challenges or pressures on its financial position.
· The General Fund Capital Programme totals £72,479,120 and includes; New Leisure Centre - £7,632,590, St George's Centre - £ 9,019,640 and Rosherville Loan (The Charter) - £45,439,010
· The Council voluntarily brings the General Fund Revenue and Capital Estimates and Housing Revenue Account Estimates and Housing Capital Programme to the Overview Scrutiny Committee for transparency; this has been in place for a number of years and if this practice is no longer helpful or needed, it can be reviewed.
· In response to a question regarding resources to provide advice and support on council tax, the Director (Corporate Services) advised that the structure of Revenues and Benefits team has been recently reviewed in order to ensure staff are able to best support the new Council Tax Reduction Scheme. The role of team will change and the intention will be for staff to become more proactive with account reviews and looking at discounts and exemptions customers are receiving and also what discounts and exemptions they could receive. The team will also be able to signpost customers to our partners when needed.
· The Council will use the Council Tax listings to identify households in band A-D to pass on the £150 Council Tax rebate announced by the Chancellor. Further guidance on this matter is due this week.
· The Council is still waiting for further information on the recently announced Discretionary Fund linked to energy prices. It is unlikely that officers will be in a position to provide an update report on this to the next Cabinet meeting as guidance on the Fund has yet to be released by Government.
Resolved that the Committee noted the General Fund Revenue and Capital Estimates 2022-23
- 1. GF Estimates Report 2022-23 - Summary, item 26. PDF 132 KB
- 2. Appendix 2 - Government Funding, item 26. PDF 115 KB
- 3. Appendix 3 MTFS 2022 to 2026, item 26. PDF 221 KB
- 4. Appendix 4 -General Fund Revenue Budget, item 26. PDF 73 KB
- 4a. Draft Budget Book GF, item 26. PDF 2 MB
- 5. Appendix 5 -Council Tax, item 26. PDF 95 KB
- 5a. Appendix 5a - Ctax Comparison, item 26. PDF 413 KB
- 5b. Appendix 5b. MTFP - V13 - 2021-22 - CTax £4.95 increase in 2022-23, item 26. PDF 77 KB
- 5c. Appendix 5c. MTFP - V13 - 2021-22 - CTax freeze in 2022-23, item 26. PDF 77 KB
- 6. Appendix 6 - GF Working Balances, item 26. PDF 142 KB
- 6a. Appendix 6a Reserves Policy Jan 2022, item 26. PDF 339 KB
- 6b. Appendix 6b Assessment of GF Working Balance Level 2022-23, item 26. PDF 28 KB
- 7. Appendix 7 Capital Programme 2022-23, item 26. PDF 71 KB