Agenda item

Draft General Fund Revenue Budget and Capital Programme 2021/22


The report set out the draft budget estimates for 2021/22, Medium Term Financial Plan (MTFP) forecasts, and 2021/22 Capital Programme and the proposed sources of funding.


The Provisional Finance Settlement for 2021/22 was issued by Government on 17 December, and included details regarding general revenue grant funding, New Homes Bonus, COVID funding and business rates retention baseline and tariff. The information arising is better than the estimates previously included in the MTFP. The final Finance Settlement is expected to be published in late January/early February. Funding for later years is subject to future Spending Reviews by Government and anticipated funding reform.


Executive is minded to implement a council tax increase of 3.04% (£5 on a Band D) in 2021/22, making the annual Band D charge £169.63. The increase in the tax rate provides an additional £279,739 income, however a reduction in the tax base equating to £81,766 results in a net additional council tax income of £197,963 compared to 2020/21.


Executive is also minded to precept £29,093 in special expenses for the Unparished Area of Taunton. This results in an annual council tax rate at £1.91 for a Band D for the Unparished Area of Taunton.


The budget for 2021/22 has been prepared in the context of increased uncertainty. The Government’s Spending Review and Finance Settlement has again been for one year only. The effects of the COVID pandemic on both the local economy and public sector services is ongoing with the country currently in the third national lockdown and a range of restrictions in place as national policy has evolved. The Council has settled its organisation structure during 2020/21 with budgets reorganised into directorates. SMT and the directorate management teams have reviewed budgets in detail to ensure budgets align with up to date cost and income estimates, creating a stronger foundation for future resource planning and decision making.


SMT and the Executive present a balanced draft budget for 2021/22, which includes use of temporary funding from reserves to soften the budget gap in the face of current service demands and funding uncertainty. Longer term the Medium Term Financial Plan presents a significant structural challenge which needed to be addressed.



During the debate the following comments and questions were raised:-


·         Concerns were expressed in relation to asset disposals and the process around this.

·         Hinkley business case funding allocated was questioned.

·         75% of losses funded by the government was anticipated

·         Business rates income was not at the collection levels expected, levels were based on award of the valuation office.

·         Many Income streams carried risk as a result of the pandemic, New Homes Bonus and general grant funding predicted levels were lower than anticipated.

·         Predictable funding streams were set around council tax, reasonable assumptions had been made and significant reserves based on investment risk cover had been set aside.

·         Assets and sales of disposable assets were considered. Decisions relating to disposals would be an asset and treasury management consideration to draw down on when required.

·         Work would be undertaken to ensure appropriate assets could come forward.

·         Enhancing assets was an ongoing ambition by the leadership team.

·         The existing strategy formed the ambition of the disposal of assets to avoid borrowing in the short term.

·         It was estimated that overall asset value of the Council was worth around £400 million, however a portion of this was HRA assets.

·         Disposal of assets as liabilities were being prioritised.

·         Concerns were expressed around business investment income and shortfalls and the ultimate responsibilities on investment decisions on behalf of the council.

·         Disposal of assets which were a liability were sometimes challenging and largely done to mitigate losses to dispose of them.

·         Investment income projections were requested giving consideration of the advanced knowledge of expectations.

·         A net income of 1.1-1.2 million was anticipated next year, informed assumptions had been made with a return anticipated. A reasonable estimate had been made deepening on prudent estimates.

·         Revaluation of assets in 2020 were considered as part of the audit. The majority of assets were valued on a 5 year rolling programme, investment properties were valued on an annual basis.

·         The climate budget was welcomed and more information was welcomed on how this would be utilised. A report in relation to this was encouraged.

·         Risks around the report were not well presented, more information was requested in relation to how these were being addressed was questioned.

·         Clarification was requested on identifying asset sales to realise the figure required £2.5 million.

·         Engaging with Council and taxpayers before decisions made on capital funds was encouraged.

·         Concerns were expressed that the parameters of the investment strategy didn’t include housing.

·         Where the asset strategy sat in the asset management policy was questioned. The lack of transparency around this was considered.

·         Garden town ambitions bringing in public and private investment was set out.

·         Concerns were expressed that Pg 99 free car parking didn’t detail Wellington, this was acknowledged as an error and would be corrected in future versions of the report.

·         An amendment, requesting an additional 2.6d that included Wellington, was proposed. Reassurance was provided by officers all towns included in future bids. As a result of this the amendment was dropped.

·         The Committee requested that Executive took on board the request for all towns with paid car parks including Wellington to be included in future versions of the report to ensure specific towns were not omitted.

·         The Committee were reminded Car Parking policy was a full council decision.



Councillors Aldridge, Lisgo, Cavill, Buller, Mansell, Stone abstained from the vote.


The Scrutiny Committee:-


1. Reviewed and commented on the draft revenue and capital budget estimates and proposals and supports the following proposed recommendations to the Executive and Full Council.

2. Recommended Full Council approve the Draft Revenue Budget expenditure, savings and income targets, subject to any final adjustments as may be required for new information prior to Full Council (such as the NNDR1 final estimates and the Final Finance Settlement).

3. Recommended to Full Council a basic band D council tax of £169.63, comprising £167.88 for services and £1.75 on behalf of the Somerset Rivers Authority.

4. Recommended Full Council approve the new capital schemes of the General Fund Capital Programme Budget of £3,116,980 for 2021/22, £2,033,980 for 2022/23 and the asset for sale target of £2,472,720, as set out in Table 11.

5. Recommended Full Council delegate authority to the Chief Executive, in consultation with the S151 Officer, to allocate the £813,000 one-off grant funding to meet COVID-related exceptional service costs and income losses during 2021/22.

6. Recommended Full Council approve a continued policy of suspend parking charges as detailed below on the three Saturdays leading up to Christmas and on one Sunday in Dulverton in line with previous years, to support local economies.

(a) Free parking will apply all day; from 00:00 to 23:59 on the three Saturdays (subject to car park opening hours) in Minehead and West Somerset Car Parks.

(b) Free parking will apply from 15:00 to 23:59 on the three Saturdays (subject to car park opening hours) in Taunton Car Parks.

(c) Free parking will apply all day; from 00:00 to 23:59 on one Sunday (subject to carpark opening hours) in Dulverton Car Parks to support the Dulverton by Starlight events.

Supporting documents: