Waverley Borough Council Committee System - Committee Document
Meeting of the Executive held on 02/12/2003
FINANCIAL STRATEGY 2004/2005 – 2005/2006
DRAFT GENERAL FUND REVENUE ESTIMATES 2004/2005
Summary & Purpose
This report presents the 2004/2005 draft General Fund Revenue Estimates for consideration by the Executive. The Executive is informed of any comments made by the Overview and Scrutiny Committees during the November cycle of meetings.
The provisional Revenue Support Grant Settlement was announced on 19th November. The Executive is advised of the apparent Budget position following the announcement.
Quality of Life Implications
Natural
Resource Use
Pollution
Prevention and Control
Biodiversity
and Nature
Local
Environment
Social
Inclusion
Safe, Healthy
and Active
Communities
Local
Economy
Positive
Positive
Positive
Positive
Positive
Positive
Positive
E-Government implications
:
The Estimates contain budgets to enable the delivery of Waverley’s E-Government Strategy
.
Resource and legal implications
:
There are no specific legal implications as a result of this report. Resource implications are contained throughout the report.
Introduction
1. At the commencement of the 2004/2005 Budget process, Members were invited to attend a seminar that was held at the Cranleigh Arts Centre on 22nd September 2003. Items covered included an update of Waverley’s Financial Strategy, which showed that revenue reductions in excess of £900,000 were likely to be required for 2004/2005 after allowing for growth of £400,000 arising from new legislation
2. Subsequent to this meeting, the Executive has agreed to increase some car park charges with effect from 1st December 2003. The full-year effect is estimated to be approximately £300,000 and this is allowed for in the draft estimates. In addition, further variation items to those identified at the Finance Seminar have been put forward for consideration as part of the Budget process. As a result of these factors the position reported to the Overview and Scrutiny Committees was that the overall draft estimates indicated that reductions of some £800,000 would be required in order to restrict the increase in Council Tax.
3. The draft Estimates were compiled in October and circulated to the appropriate Overview and Scrutiny Committees for comment during the November cycle.
4. Since October, a number of additional items of expenditure have been identified as part of the service planning process. Two of these need to be included within the draft Revenue Estimates for consideration in January; the proposed new Communications post at a cost of £33,000 and two additional Environmental Health staff at a cost of £81,000.
The Revenue Support Grant Settlement
5. The provisional Revenue Support Grant Settlement for 2004/2005 was announced on 19th November. The Government states that the minimum increase for each shire district is 2.2% and that Waverley’s increase should be 2.4%. However, from 2004/2005 the Government reimbursement to cover Housing Benefits and Council Tax Rebates is being entirely removed from the Formula Grant calculation. Instead, the direct grant reimbursements to the services will be increased from 95% to 100%. The additional direct grant that may be anticipated based on full reimbursement is £494,000. Unfortunately, the Government’s corresponding reduction in grant is based on a formula rather than actual figures and is £630,000. Even after allowing for the additional direct grant and the 2.4% increase, total Government support for Waverley will be £19,000 less than in the current year. Further advice from the Department of Work and Pensions (DWP) is expected shortly.
6. The Budget position as reported in October assumed an overall increase in grant for 2004/5 of 3%. The provisional Settlement results in a deterioration of this position by £183,000. This would either increase the Budget shortfall or represent an additional 3% increase in Council Tax.
7. The Director of Finance has sent an initial letter to the Office of the Deputy Prime Minister and the DWP in which he complains about the effect the provisional Settlement will have on Waverley and demanding that the final settlement should provide the equivalent of the stated 2.4% increase. Waverley’s formal response will be sent during the consultation period.
2004/2005 draft Revenue Estimates
8. A copy of the draft General Fund Revenue Estimates for 2004/2005, including proposals for variations to the base-level Revenue Estimates, is attached at
Annexe 1
.
9. Growth items arising from service plans, in line with the Community Strategy and Council priorities, are identified as variations to the base estimates and are shown on pages 1a for each portfolio. A comprehensive list of these variations is included at
Annexe 2
to this report. The Executive is asked to give special consideration to these items, particularly in the context of the overall budget situation.
10. Applications for grants under the Sponsored Organisation Scheme for 2004/2005 have been received and the consideration of these will be the subject of a separate report to the January meeting of this Committee, when they will be considered against Community Strategy objectives. At this stage, the detailed estimates for 2004/2005 relating to each organisation have been left blank. However, a global figure based on existing amounts has been included within each portfolio summary in order to show the overall budget situation.
Fees and Charges
11. It is the Council’s practice to review its fees and charges each year with effect from the forthcoming 1st April. Planning and Building Control fees are largely determined by statutory Government guidelines. Increases in Car Park charges were agreed by the Executive on 30th September 2003 in line with the Council’s non-priority of keeping Car Park charges artificially low. In other areas, increases in charges in line with delegated authority have been allowed for within the draft Estimates. However, in some areas it may be necessary to recommend further increases and these will be subject to consideration by the Executive on 6th January and during the subsequent Committee cycle.
Potential Reductions
12. Officers have examined the draft Revenue Estimates in detail in order to identify opportunities where estimated expenditure may be reduced or where income may be increased. In some areas minor adjustments to the estimates have already been made. These are listed at
Annexe
3 and represent a transfer of resources away from the Council’s non-priority areas. Further proposals will be presented to the Executive on 6th January.
Observations from Overview and Scrutiny Committees
13. The following observations are those of the Overview and Scrutiny Committees:
Environment and Leisure
At the meeting on 10th November 2003, officers and Portfolio Holders responded to questions and observations from Members relating mainly to street-cleaning, tree-management , devolution of functions, tourism and retention of staff in the planning department. The Committee then wished to commend the draft Revenue Estimates to the Executive.
Community
The Committee at its meeting on 11th November acknowledged that the precise amount of any reductions would not be known until the Government’s provisional Revenue Support Grant settlement was announced at the end of the month. The opportunity to give further consideration to this matter would come in January.
Officers responded to questions and observations from Members relating to a number of matters including day centres, CCTV, insurance, housing benefit and compensatory grants. In particular, officers wished to make it clear that because applications for grant under the Sponsored Organisations Scheme would not be considered until the January meeting, only a partial picture could be shown: hence the absence of figures in the relevant annexe pages to the Committee’s report.
Corporate
At the meeting on 17th November 2003, officers responded to questions and observations from members relating primarily to Licensing, Borough Elections and the Register of Electors, Community Safety and the Local Government Pension Scheme. The Committee then wished to commend the draft Revenue Estimates to the Executive.
New Legislation
14. For 2002/2003 and 2003/4 the Council agreed to fund new legislation through a higher level of Council Tax where it could be demonstrated that the additional expenditure had not been covered by additional Government Grant. The Financial Strategy provides for this practice to continue for 2004/2005. The new legislation is detailed at
Annexe 4
, it totals £558,000 and includes £88,000 for waste recycling that in 2003/2004 was financed from a one-off use of balances carried forward from 2002/2003.
Council Priorities
15. The Council will continue to direct resources towards priority areas such as recycling and facilities for young people. The new sponsored organisation scheme three-year agreement will ensure that these resources are targeted in line with Council objective.
Budget Strategy
16. The overall Budget position following the provisional Local Government Finance Settlement is shown at Annexe 5. On the basis that new legislation and the effects of the Settlement are funded through an increase in Council Tax, the remaining shortfall would be in the region of £960,000. Officers are giving consideration to measures that may be taken to address this shortfall. These measures could include the generation of additional income, or the removal of growth items, as well as reducing existing expenditure and some further use of balances.
Conclusion
17. The Executive and Overview and Scrutiny Committees will give further consideration to the Budget in January and February with the final decisions being made at Council on 17th February 2003.
Recommendation
It is recommended that the Executive
gives further consideration to the General Fund Budget for 2004/5 at its meeting on 6th January 2004.
Background Papers
(DoF)
Provisional Local Government Finance Settlement 2004/5; Financial Strategy 2003/4 – 2006/7; Finance Seminar slides; draft Service Plans 2004/5; Community Strategy; Revenue Budget 2003/4.
CONTACT OFFICER
:
Name:
Mr B Long
Telephone:
01483 523253
E-mail:
blong@waverley.gov.uk
comms/exec/03-04/385