General Fund Revenue and Capital Estimates 2023-24
That a resolution be placed before the meeting of the Council on Tuesday, 21 February 2023, specifying the Council Tax to be levied in the Borough of Gravesham.
The Cabinet was presented with the draft revenue and capital estimates for General Fund services in 2023/24 together with the recommended level of council tax to be levied for 2023/24.
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 Cabinet was informed that, due to the financial pressures of the Council, greater scrutiny had been applied to the estimates to ensure that the most up to date information and all upcoming decision had been taken into account.
The Assistant Director (Corporate Services) advised that on 19 December 2022 the Provisional Local Government Finance Settlement for 2023-24 was announced by The Department for Levelling Up, Housing and Communities (DLUHC). As like last year, the provisional settlement was for one year only, with the future funding of local government remaining unknown, albeit the principles for the 2024/25 local government finance settlement were outlined in the Local Government Finance Policy Statement published on 12 December 2022. Other 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) continued to be put on hold until after the next Comprehensive Spending Review due to take place in 2025. As a result of the provisional settlement, the Council will experience an increase in its core spending power of 4.9% for 2023-24 and will have the sixth lowest level of assumed spending power per dwelling in Kent at £282, an increase of £14 per dwelling on last year. This was based on an assumption by Central Government that the Council will increase council tax by the maximum amount permissible.
Last year, the Council approved a five-year Medium Term Financial Strategy (MTFS) spanning 2022-23 to 2026-27. This had been refreshed to consider the current economic climate that the Council now operated in and considered initiatives to reduce the budget gap that the Council will face on its General Fund Services. Progress had been made during the year in delivering the initiatives set out in the MTFS presented in February 2022. The report detailed the progress made to date which equated to a combination of budget reductions and increases in income of £776,450 for 2023/24.
Over the period to 2026/27, base budget reductions had been reflected in the MTFS equating to £1.4m. Analysis had indicated that despite taking proactive action to deliver £1.4m of base budget savings in the MTFP, external factors had continued to detrimentally affect the Council’s financial position over the short to medium term, leading to a residual budget gap of £4.3m and potential challenges in balancing the budget in the 2024-25 financial year should no further action be taken. The Council does, however, have a plan of activities to respond to this and further information will be presented to Members over the coming months.
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 3% or up to and including £5 (whichever is higher) without triggering the requirement for a referendum.
The budget proposals reflected the Council implementing an annual increase of £6.48 to its council tax charge in 2023-24. This was within the referendum principles and equated to an increase of less than 13 pence per week for a Band D property. 58.1% of residential properties within the borough fall within the bands of A-C and therefore the annual council tax increase will be less than £6.48 for those properties. The total annual charge for the Gravesham element of the council tax bill will be £224.46; by way of comparison, the Band D equivalent council tax for 2022-23 was £217.98.
The report showed in graphical form the consequential impact on the MTFP of increasing council tax by £6.48 and £0 (effectively freezing council tax).
The Cabinet expressed concern regarding the significant financial challenges that the Council will continue to face, with a declining level of financial support from Central Government. The Cabinet acknowledged the consequential impact of not increasing council tax by the maximum amount permissible and reiterated that the Council, as billing authority, issue the council tax bill on behalf of itself and the other preceptors such as Kent County Council, Kent Fire and Rescue etc. and that the proportion kept by the Council was significantly low.
The Leader stated that a key area of focus for the new administration, following the Borough Elections, will be the financial challenges facing the Council and that difficult decisions will need to be made in order to meet the budget reduction target.
1. a resolution to be placed before the meeting of the Council on 21 February 2023, specifying the council tax to be levied in the Borough of Gravesham for the year 2023-24;
Cabinet recommends to Council that:-
2. The updated Medium Term Financial Strategy for 2022-23 – 2026-27 be approved;
3. The draft revenue estimates for 2023-24 together with revised estimates for 2022-23, be approved, subject to any final amendments agreed by the Section 151 Officer in consultation with the Chief Executive and Leader of the Executive;
4. The provisional estimates for the following eight years be noted;
5. The draft capital estimates for 2023-24, together with the revised estimates for 2022- 23, be approved subject to detailed reports coming forward on new schemes where applicable;
6. Due consideration is given to the view of the Director (Corporate Services) (as S151 Officer) on the robustness of estimates for the coming year, the medium-term financial strategy and the adequacy of proposed reserves and balances, as required under Section 25 of the Local Government Finance Act 2003;
7. The threshold for Key Decisions to remain at £100,000;
8. Approval is given to the application of the 100% council tax premium on properties empty for at least 1 year but less than 5 years, applicable from 1 April 2024, should the Regeneration & Levelling-Up Bill receive Royal assent. Delegated authority be given to the Director (Corporate Services) (as S151 Officer) to take all necessary and timely action to implement this recommendation, taking into account any Secretary of State Guidance that may be issued; and
9. Approval is given to the application of a 100% council tax premium on ‘second homes’, applicable from 1 April 2024, should the Regeneration & Levelling-Up Bill receive Royal Assent. Delegated authority be given to the Director (Corporate Services) (as S151 Officer) to take all necessary and timely action to implement this recommendation, taking into account any Secretary of State Guidance that may be issued.
- 1. GF Estimates Report 2023-24 - Summary, item 65. PDF 484 KB
- 2. Appendix 1 - Government Funding 2023 24, item 65. PDF 488 KB
- 3. Appendix 2 MTFS, item 65. PDF 559 KB
- 4. Appendix 3 -General Fund Revenue Budget, item 65. PDF 200 KB
- 4. Appendix 3a Draft Budget Book, item 65. PDF 1 MB
- 4. Appendix 4 -Council Tax, item 65. PDF 417 KB
- 4a. Appendix 4a Council Tax Comparison, item 65. PDF 98 KB
- 4b. Appendix 4b MTFP - V11 - 2022-23 - CTax £6.48 increase in 2023-24, item 65. PDF 123 KB
- 4c. Appendix 4c MTFP - V11 - 2022-23 - CTax freeze in 2023-24, item 65. PDF 124 KB
- 5. Appendix 5 - Section 25 Report, item 65. PDF 464 KB
- 5a. Appendix 5a Reserves Policy Jan 2023, item 65. PDF 242 KB
- 5b. Appendix 5b Risk Assessment GF, item 65. PDF 223 KB
- 6. Appendix 6 Capital Programme 2022-23, item 65. PDF 313 KB