PAPER
B1
Purpose
: for Decision
Committee: REPORT TO THE CABINET
Date : 22 FEBRUARY 2006
Title : REVENUE BUDGET
REPORT OF THE PORTFOLIO
HOLDER FOR RESOURCES, AUDIT, COUNCIL EFFICIENCY AND
CUSTOMER CHAMPION
IMPLEMENTATION
DATE: 22 February 2006
SUMMARY
1. This
report deals with the Council’s revenue budget and Council Tax for the
financial year commencing 1st April 2006. The Cabinet is asked to
make appropriate recommendations to this evening’s Council meeting.
BACKGROUND
2. The
Council’s Revenue Support Grant settlement for next year is better than might
have been expected, and the rigorous arguments put forward at consultation
stage in July appear have been heeded by the Government. Having said that, the
protection inherent in the system is now so high that this Council’s
contribution to the ‘safety net’ protecting less fortunate neighbours exceeds
the equivalent of a 5% tax increase.
3. As
might be expected from an incoming administration with a clear mandate for
change, the revenue budget sees a significant redirection of resources towards
priority areas, funded in the main by efficiency savings and income generation
and, to a lesser extent, redirection of resources away from areas which do not
contribute sufficiently strongly to the delivery of our key outcomes. Appendix
2 of the resolution shows an analysis of this by service area, and appendix 3
is a projection for planning purposes through to 2009-10.
4. Key
features of the resolution are:
· Lowest
Council Tax increase since the Council was formed
· Spending
up by £10.4 millions
· Inflation
and other pressures of £6.2 millions more than offset by £7.2 millions of
efficiency savings and income generation
· Leaving
£11.4 millions for improvements in service delivery
5. For the
first time, and in accordance with our manifesto commitment, the budget
recommendation will include a slightly higher tax increase in non-parished
areas to cover the costs of ‘special expenses’ incurred by the Council on
services provided elsewhere by parishes. This will continue until such time as
those areas become emparished, and will in the meantime mean a reduction in the
level of double taxation across other parts of the Island.
STRATEGIC CONTEXT
6. The revenue and capital budgets are a financial representation of the
Council’s service delivery plans for the coming year, and must be adequate for
this purpose. Council Tax will provide more than half of the funding required
for the net revenue budget next year.
CONSULTATION
7. Consultation on the budget this year has taken the form of facilitated
focus groups drawn from a range of stakeholders, and all members have been
provided with a report setting out the responses. This new approach has
produced far more helpful information than in the past, coupled with high
levels of approval of the process from those participating.
FINANCIAL/BUDGET IMPLICATIONS
8. The
annual budget sets the framework within which all spending decisions by the
Cabinet, Cabinet members and Directors must rest.
LEGAL IMPLICATIONS
9. The
Council is obliged to set its Council Tax by 11th March at the
latest, but in order to avoid billing delays a decision is needed today.
Differential
rating as mention in paragraph 5 is a common, but by no means universal
measure. The District Auditor has been consulted and his advice has been taken.
Procedures are in place to demonstrate that all income from this source will be
spent in each area in which it is raised.
10. OPTIONS
10.1. To
recommend the attached resolution to Full Council
10.2. To
recommend an alternative resolution to Full Council
EVALUATION/RISK MANAGEMENT
11. The
Chief Financial Officer is required by statute to advise the Council on the
robustness of the budget for the coming year, and the adequacy of the reserves.
His view is that provided sound financial performance management is maintained
then the budget is robust. Monitoring and management of in-year financial
performance and delivery of savings plans will be the subject of monthly
consideration by the Aim High Strategy Group. One issue requiring close
attention during the early months of the year will be the financial impact of
the parking order.
Reserves
projected through to the end of 2008-09 are shown at appendix 4, and in the
Chief Financial Officer’s view provide adequate cover for planned projects and
known and likely liabilities, with roughly 60% of uninsurable risks covered by
the end of the period.