Agenda item

The Director of Finance presented a report in respect of the General Fund outline budget 2020-21.  The presentation set out the Borough-wide policies and strategies that were incorporated into the Corporate Plan and informed the Council’s business planning, described the service and financial planning process, and highlighted factors which shaped the General Fund Revenue budget.  The report outlined the current position relating to the 2020-21 outline budget and invited the Executive to note the position.  The Board’s comments would be circulated as an addendum to the report as it had already been published.  The Joint EAB Budget Task Group had also considered the outline budget at its meeting held on 8 November 2019.

Section four of the report set out the budget parameters which included the assumptions that had been utilised to prepare the outline budget for 2020-21 and projections for the following three years.

The report explained that the Council had included government funding at a level based on the information contained in the 2020-21 local government technical consultation document issued on 3 October 2019, however, the amount of grant would not be known for certain until the Government released the provisional local government finance settlement which the Ministry of Housing, Communities and Local Government had provisionally indicated would be in December 2019.  The Fair Funding Review and implementation of the 75% business rate retention scheme, which would result in major changes to the local government funding system, had also been delayed.  A £5 (3.0%) increase in Council Tax was assumed.  The draft Council Tax base was 57,645.76, which was 1.5% higher than in 2019-20 and had increased the resources available by approximately £146,100.  There would be changes to the New Homes Bonus (NHB) reserve.

Section 7 set out the proposed Council Tax reduction pilot scheme for Surrey County Council care leavers for 2020-21.

Section 10 covered the present position of the 2020-21 outline budget, which currently showed a shortfall between the likely resources and the proposed net expenditure of £820,760.  The use of reserves for specific projects, namely, Future Guildford, the Town Centre Masterplan, Midleton Industrial Estate redevelopment, works to car parks and investment property voids were proposed.

The growth bids and savings outlined in Section 11 featured growth bids totalling £828,000 and Future Guildford savings of £2.5 million which were both included in the 2020-21 budget.  Future Guildford savings were expected to increase to £5.5 million by 2023-24 and there was a further sum of £3.8 million of Future Guildford savings still to be assessed.

The outline budget was the base budget for services based on last year’s budget uplifted for inflation factors and other minor movements.  The base budget was reviewed for comparison to last year actuals and reduced where possible.  The major reasons for movements between 2019-20 and 2020-21 were set out in the report and the variances at service level were shown in Appendix 2.  Revenue growth bids received for 2020-21 were set out in section 10.11 and included in the outline budget, however, some capital bids may also have revenue implications attached to them.  These would be considered as part of the capital and investment strategy report in January 2020, together with a schedule of proposed fees and charges for 2020-21.

As it was early in the budget process, the report also identified the areas of uncertainty that may influence the final position.

The financial monitoring report for the first six months of 2019-20 was reported to the Corporate Governance and Standards Committee on 19 November 2019.  The projected net expenditure on the General Fund for the current financial year was estimated to be £0.57 million more than the original estimate.  One of the factors contributing to the forecasted position in 2019-20 was the costs incurred in respect of planning appeals.  The report requested the approval of a supplementary estimate to cover these costs and a supplementary estimate to cover the costs of enforcement action at Stoney Castle, Pirbright.

Although there was currently a budget deficit of £828,760 for 2020-21 and a medium term budget gap of £3.3 million, the £3.8 million of unassessed future Guildford savings would assist and it was expected that the budget could be balanced in the medium term.

The report recommended the Executive to approve the budget assumptions used in the preparation of the 2020-21 outline budget and three year forward projections, approve a supplementary estimate of £125,000 to cover the forecasted budget shortfall in respect of planning appeal fees, approve a supplementary estimate of £120,000 to cover enforcement costs at Stoney Castle, Pirbright, note the current position on the outline budget for 2020-21, support the proposal to use the Council’s various earmarked reserves for specific projects as set out in section 9 of the report and approve the pilot 100% Council Tax reduction for Surrey County Council care leavers for 2020-21 only.  The reason for the recommendations was to assist the Executive in the preparation of the General Fund estimates for 2020-21.

The following points arose from related questions and discussion:

·                  In response to a Councillor’s expressed wish for the NHB reserve to be directed primarily towards funding housing delivery, the Board was advised that the proposed Town Centre Masterplan included provision for housing delivery and that a policy agreed by the Council in 2016 specified the use of the NHB reserve for new housing and a range of other initiatives.

·                  A councillor suggested that the Democratic Services staffing resource should be increased in order to meet the support demands of the many new and inexperienced councillors.  Although this was unlikely at present given the current budget deficit and staff reductions as part of the Future Guildford programme, the matter could be discussed by relevant Lead Councillors.

·                  In response to a suggestion that planting schemes be included in the budget, the Board was advised that such initiatives may emerge from the Climate Change and Innovation Board and that higher level schemes would take priority.

·                  Options for the future use of an empty investment property would be considered by the Executive at its meeting on 26 November 2019.

·                  The Joint EAB Task Group had indicated its support for the proposed budget growth bids and related queries had been referred to service managers for clarification and response.  It was queried whether climate change proposals were sufficiently ambitious. 

·                  The Council was collaborating with neighbouring local authorities and the Forestry Commission with a view to minimising the risk from the Oak Processionary Moth.

In conclusion, the EAB noted the current 2020-21 outline budget position and indicated its support for the recommendations to the Executive contained within the report.