The purpose of the report was to consider the Draft General Fund Revenue Budget and Capital Estimates 2019/20.
The report set out the first revenue and capital budget proposals for the new Somerset West and Taunton Council. It combined the previous budgets of Taunton Deane and West Somerset Councils for the services they provide with updated assumptions in regard of the finance settlement for 2019/20 and other financial projections.
This report also set out the draft revenue and capital budget proposals for 2019/20 including an updated Medium Term Financial Plan (MTFP) and the proposed council tax for the first year of the new council.
The final funding settlement was issued by Government at the end of January, and included details regarding general revenue grant funding, New Homes Bonus, and business rates retention baseline and tariff. Overall the funding available to deliver services has increased in 2019/20:
a) General funding, Revenue Support Grant had reduced by £443,641 to only £6,340 whilst Rural Services Delivery Grant has been kept at the same level of £241,506.
b) New Home Bonus funding had reduced by £151,768 (4%).
c) Retained business rates had increased by £972,599 reflecting business rates pooling and the 75% Business Rates Retention pilot scheme (18%).
d) Share of National Levy Account Surplus of £59,037.
e) An announcement of additional funding of £35,000 for each district council (covering 2018/19 and 2019/20) towards Brexit preparations.
Shadow Executive was minded to set a uniform annual Band D council tax rate of £157.88 which together with an increased tax base provided additional council tax income of £405,662 compared to 2018/19.
Shadow Executive was also minded to retain the annual council tax rate at £3.02 for a Band D for the Unparished Area of Taunton which would raise an additional £1,449 due to the tax base increase.
The 2019/20 draft budget also included a prior year net Collection Fund surplus of £1,448,216 (£1,331,905 business rates surplus, £116,311 council tax surplus).
Shadow Executive was also minded to transfer £1,331,905 to the business rates smoothing reserve in 2019/20 in respect of the business rates collection fund surplus, reflecting the need to mitigate funding volatility and risk under the business rates funding system.
During the discussion of this item the following comments were made and questions asked:-
· The finance team were commended on the detailed and comprehensive report.
· Harmonisation of Council Tax was considered positive news, this would maximize efficiency.
· The area setting out CIL in the report would be updated in the Full Council report.
· Members were requested to note the intent that there would likely be a budget update with a request for funding to be provided for service delivery. A Councillor briefing would be held before Council papers were sent out.
· The robustness of the budget was positive news for the new financial year. There were still significant risks and uncertainty, from funding settlements and the fair funding review.
1) Shadow Executive noted the forecast Medium Term Financial Plan and Reserves position, and notes the S151 Officer’s Robustness Statement as set out in sections 21 to 23 of this report.
2) Shadow Executive recommends the 2019/20 Draft Budget to Shadow Council for approval.
3) Shadow Executive recommends to Shadow Council a basic band D council tax of £159.63, comprising £157.88 for services and £1.75 on behalf of the Somerset Rivers Authority.
4) Shadow Executive recommends Shadow Council approves the minimum reserves level at £2.4m.
5) Shadow Executive recommends to Shadow Council to approve the additions to the General Fund Capital Programme Budget of £10.274m for 2019/20, including the overall allocation of £13.864m in respect of the New Homes Bonus Growth Programme as set out in Table 10 and the £15.5m allocations for Community Infrastructure Projects as set out in Table 11, as amended with £1m moved from public transport to Education provision.