The Director of Resources submitted a report outlining the draft revenue budget for approval by committee and then consideration at Special Policy and Finance committee.
The Council’s three-year budget forecast had been presented to Policy and Finance committee in September 2021 when it predicted that there would be the following budget gaps: £82k in 2022/23, £139k in 2023/24 and £230k in 2024/25, after allowing for use of general fund balances.
Since that time there had been a number of significant changes affecting the budget. These included significant rises in inflation, an increase in national insurance contributions and implementation of a new pay line. Therefore, the budget gap for 2022/23 was estimated to increase to around £497k.
The provisional local government finance settlement announced in December 2021 was for just one year, with a national increase of 6.9% in Council’s core spending power in cash terms between 2021/22 and next year. This is the fourth one-year settlement in a row.
Headlines for Ribble Valley include:
· Core spending power set to increase by only 0.2% (£11,000) next year from £6.849m to £6.860m.
· Business Rate Baseline funding level is £1.354m which is the same as the current year, however £111k compensation will be received due to the loss of income received by freezing the business rate multiplier.
· An allocation of Revenue Support Grant (RSG) of £215 despite RSG increasing nationally by 3.1% for inflation.
· Rural Services Delivery Grant of £113,250 – same as the current year.
· Lower Tier Services Grant of £60,754 up from £57,696.
· A new one off 2022/23 Services Grant has been announced worth £822m in recognition of services and includes costs of the increase in NI contributions. Ribble Valley will receive £93,368.
· New Homes Bonus (NHB) – the Government have allowed a new round of NHB allocations for 2022/23 which will not attract any legacy payments. They have also allowed the one remaining legacy payment of £464k which has been allowed for. Next year there will be a payment of £741k for 2022/23 along with the legacy payment of £464k = £1.2m.
· The Lancashire Business Rate Pool has received designation to continue.
· The Council Tax can be increased by £5.
Taking these things into account reduces the budget gap from £497k to £233k.
Members were reminded that the fees and charges for this committee had been approved at their last meeting, and the consequential impact had been incorporated into the service budgets.
Once all committees had approved their detailed estimates, the overall position would be considered by the Budget Working Group and recommendations in order to produce a balanced budget would be made to Special Policy and Finance committee, before being presented to Full Council, at which point the Council Tax for 2022/23 would also be approved.
The draft proposed budget for 2022/23 was set out for each service area, built up over a number of stages including inflation, movements in expenditure, income, support services and capital, culminating in a draft original estimate.
In the original estimate for 2021/22 it was planned that this committee add £42,320 to earmarked reserves to support its expenditure in future years. It was now proposed to take £500 in 2022/23. The reason for this was outlined.
The net expenditure for this committee has increased from £1,095,450 by £50,230 to £1,145,680 after allowing for associated movements on earmarked reserves. The main reasons were summarised for committee’s information.
There had also been two requests for growth items totalling £273,190. Committee were asked which they supported to be put forward for further consideration by Policy and Finance committee.
RESOLVED THAT COMMITTEE:
1. Approve the revenue original estimate for 2022/23 as set out in the report to be submitted to Special Policy and Finance committee, and
2. Support the following growth items
· Alternative System for Dog Waste/Litter Bin Emptying – staff costs, fuel costs and vehicle maintenance costs - £258,190.
· Joiners Arms Standard Fittings for Hostel Flats – furniture and fitting costs and lost rent income - £15,000.