Agenda item

Draft General Fund Revenue Budget and Capital Estimates 2022/23

This matter is the responsibility of Executive Councillor Henley, Corporate Resources  


Report Author:  Emily Collacott, Lead Finance Business Partner (Deputy S151 Officer)



The Portfolio Holder introduced the report: 

·                     Received details of the financial settlement from central government just before Christmas. The Settlement was not brilliant and resulted in a reduction in year-on-year funding of £1.5m, however, the Council had been prepared for receiving less funding.  

·                     There was a significant reduction in car park income, and this was anticipated to continue. This had been built into the budget.  

·                     There would be a decrease in business rates due to Hinkley Point B being decommissioned 

·                     The Commercial Investment Strategy had been successful and would provide income for the Council next year and help to counteract the impact of increased costs.  

·                     The budget provided for the additional costs of the implementation of a unitary council next year whilst minimising impact on services.  


During the debate the following points and questions were raised:  

·                     More information was requested on how internal borrowing worked as opposed to how external borrowing worked. Officers responded that internal borrowing was a treasury management tool to manage risk. The Council had cash balances, cash to invest and borrowing needs. These needs were balanced to minimise risk. As part of the treasury strategy, a certain amount of liquid cash was held at any given time but any funds above that could be used for internal borrowing. Internal borrowing could be better than investing as it could reduce risk and reduce the need for additional external borrowing. 

·                     It was asked who sets the interest rate if money was leant to an internal project and why external investment would not be done instead if a higher interest rate and investment return could be made. Officers responded that it was a way of managing risk and that there was a treasury management report coming to the committee in March which would address these issues in greater detail.  

·                     It was asked whether the reserves the Council was holding would be seen as being too great by the auditors. Officers responded that they did not foresee that being the case.  

·                     Support was given for providing public toilets in Taunton. It was asked about the need for a settlement if a new town council was set up in Taunton and concerns were raised that this did not appear to have been planned for in the budget. Any new town council would need a budget to be able to provide services such as public toilets. Officers responded that there was no capital provision for providing public toilets but there was revenue support built into the budget to provide public toilets. Regarding funding provision for a new town council for Taunton officersagreed to provide a full answer to the committee after the meeting and before the Full Council budget setting meeting 

·                     A set up payment to a town council in Taunton would be paid for by everyone across the district whereas in all parishes, parishioners have to pay for facilities that are provided in their area through the precept they pay. Providing a set up payment for a new Taunton town council was not favourable for this reason and instead it was suggested the new town council should pay for its services through a precept.  

·                     It was raised that Somerset County Council had a commercial investment budget of £100m but had so far spent none of it whereas Somerset West and Taunton Council benefitted from its commercial investments 

·                     It was asked why just over £1m was allocated for the contingency fund for Local Government Reform (LGR) in Somerset given that Somerset West and Taunton’s contribution based on population should be £815,000. Officers responded that it was agreed that Somerset County Council would pick up most of the cost, with the districts covering the remaining 20%. Somerset West and Taunton’s share of that was based on population and calculated at £912,000 in round numbers, it had been rounded to £1m in the budget to allow for contingency in the budget.  

·                     It was asked how many staff would be taken out of providing other services whilst local government organisation occurred and what would be the impact on current services.Officers responded that it was difficult to predict what resourcing would be needed for LGR, but resourcing was being tracked to try to keep the balance right. Some projects had been stopped to allow for staff time to be spent on LGR. Members would be regularly updated on the number of staff working on LGR.  

·                     The income is £460,000 currently from the commercial investment income and is predicted to be the same next year. It was raised that this continuation at the same level was unusual and asked why it was predicted. Officers responded that the prediction was based upon the same income continuing under the lease arrangements which were in place.  

·                     The fleet reduction cost was welcome, it was asked if that had been due to a change in provider. Officers responded that there was a new fleet provision contract in place and as a result there was a reduction in maintenance costs due to having fewer and newer vehicles.  

·                     It was questioned what the enabling innovation funding mentioned it the report was for. Officers responded that a response would be given after the meeting. 

·                     On page 37-38 there was reference to a grant from MHCLG of £1.450m. Last year this was referred to as a loan to East Quay, now it was recorded as a grant, can clarification be given. The figure shown in the report was the remaining amount of the £5m grant provided by MHCLG to East Quay. We were the body that held that and released it when the Onion Collective drew it down in compliance with MHCLGs rules and the figure in the report is the final amount which was paid to the Onion Collective. Officers responded that they were separate items, the loan and grant were separate, the loan was never required and drawn down. There was an error in last year’s report where an item was assigned to the wrong code.  

·                     It was asked what was being done to help provide gypsy sites and if a site had been found. Officers responded that a response would be given after the meeting. 

·                     An update on Taunton Bus Station was requested. Officers responded that a response would be given after the meeting. 

·                     It was asked what progress had been made on superfast broadband. Officers responded that a response would be given after the meeting. 

·                     It was questioned how realistic the estimates in the budget were. It was responded by officers that the budget was an estimate and that budgets did change during the year, however, there were mechanisms to ensure the budget was as accurate as possible.  

·                     It was raised that maintaining services was important but that there was a reduction in income from business rates.  

·                     It was requested that funds were found within the budget for public toilets in Taunton.  

·                     It was requested that in the coming year’s quarterly reports information on whether spending was on track or not compared to forecasts be included. Officers responded that the quarterly monitoring reports the committee received included forecasts for the given year against budget with explanations for variances. However, there had been changes to the structure of the organisation which had made providing a clear year on year review difficult.  

·                     It was raised that there were grants available for toilets at bus stations which could be looked into 

·                     It was requested that if there were grants given to other organisations where it was not the Council’s money but instead the Council was holding funds as the responsible authority that it be indicated in the finance spreadsheets more clearly.  

·                     Further information about the funds set aside for the Blue Anchor coastal scheme and for Cleeve Hill were requested. Officers responded that the Blue Anchor project had been funded by external bodies including the environment agency, but the Council had offered to lead on the project. Cleeve Hill the Council had also offered to lead on but as part of the Cleeve Hill scheme the road would need to be moved and so Somerset County Council, as the highwaysauthority, decided to lead the project themselves. The Cleeve Hill scheme was not only about moving the road but a coastal protection scheme which reached down into the town itself so was of a very significant scale.  

·                     It was asked if there was a safety net in place to help reduce the impact of a significant loss of business rates for a local authority. It was asked how much Hinkley Point B contributed in business rates to the Council. Officers responded that the decommission of Hinkley Point B would result in a £2m decrease in business rates. The Hinkley Point B rates made up around 18% of the Council’s business rates. The Council was currently in a pooling arrangement with the other authorities in Somerset but would be leaving it next year due to the risk. However, Somerset West and Taunton would continue to receive some funds from the pool even after leaving. Central government would top up business rates for the Council as there was a safety net level which if a local authority fell beneath the central government would provide the funding instead to reduce the impact.  

·                     It was asked if there would be an increase in business rates for the new unitary once Hinkley Point C went live. Officers responded that if nothing changed in terms of mechanics then the local authority in Somerset should benefit from Hinkley Point C going live.  

·                     It was asked if the pool extended beyond the geographical boundary of what would be the new Somerset Council. Officers responded that it did not extend beyond the boundaries of the new Somerset Council.  

·                     It was asked why the Shop Mobility contributions were no longer required and if this was the Taunton Shop Mobility. It was responded by officers that this was an overprovision of budget, and therefore it would not affect the core service delivery in the funding arrangements from the Council to Compass disability so there would be no impact on service delivery. 


The Chair summarised the comments made by the committee:  

·                     Clarity about the funding for Taunton Town Council and whether there was possibility for any provision for it in the budget setting given the rules and regulations was needed.  

·                     Progress reports for the bus station and the broadband were requested.  

·                     Consideration of funding for toilets in Taunton town centre.  


The Corporate Scrutiny Committee resolved to note the recommendations from the report;  


2.1 The Executive recommends Full Council approve the Revenue Budget, Council Tax Rate and Capital Programme for 2022/23 and Supplementary Budget in 2021/22 including:  


2.1.1 Draft Revenue Net Budget of £16.716m for 2022/23.  


2.1.2 The basic Somerset West and Taunton Band D Council Tax rate of £174.63 for 2022/23.  


2.1.3 General Fund 2022/23 Capital Programme additions totalling £1.158m and 2022/23 Capital Programme Revisions of -£0.181m for previously approved schemes for 2022/23, as set out in Table 18.  


2.1.4 A Supplementary Budget in 2021/22 of £1m for additional capital debt repayment funded from General Reserves.  


2.2 The Executive recommends delegating authority to the S151 Officer to approve the CIL capital grants budgets to reflect in-year CIL capital receipts passed to town and parishes in line with the CIL policy. 



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