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Meeting of the Licensing and Regulatory Committee held on 13/01/2003
DRAFT GENERAL FUND REVENUE ESTIMATES 2003/2004



This report updates this Committee on developments regarding the General Fund Budget since the draft estimates were initially considered during the November cycle of meetings.

The Committee is requested to give final approval to its draft Revenue Estimates.
APPENDIX C

WAVERLEY BOROUGH COUNCIL

LICENSING AND REGULATORY COMMITTEE – 13TH JANUARY 2003


Title:
DRAFT GENERAL FUND REVENUE ESTIMATES 2003/2004

[Wards Affected: N/A]

Summary and Purpose

This report updates this Committee on developments regarding the General Fund Budget since the draft estimates were initially considered during the November cycle of meetings.

The Committee is requested to give final approval to its draft Revenue Estimates.

Introduction

1. The draft Estimates were compiled in October and circulated to the appropriate Overview and Scrutiny Committees and the Licensing Committee, together with a list of initial suggestions for reductions made by the Management Board, for comment during the November cycle.

2. The provisional Revenue Support Grant Settlement was announced in early December and on 10th December the Executive gave consideration to the 2003/2004 Budget in the context of this settlement.

3. A copy of the draft General Fund Revenue Estimates for 2003/2004, together with a position statement, proposed reductions and other shortfall measures was sent to all Members in December 2002. The Licensing Committee’s Estimates are also attached to this report.

The Revenue Support Grant Settlement

4. The provisional Revenue Support Grant Settlement was announced in early December, although full details were not received until Christmas Eve. The Settlement reflects a number of changes introduced by the Government following its review of Local Government Finance. The overall minimum increase in grant allocated to shire districts such as Waverley for 2003/2004 is 3%. Waverley’s increase in the new Formula Grant figure from the 2002/2003 grant figure is only 0.4%. However, the balance is accounted for in the increase in the specific grant for Housing Benefit and Council Tax Administration, which from 2003/2004 is being fully removed from the Formula Grant calculation.

5. The letter accompanying the Local Government Finance Settlement was received on 24th December and invited responses to the consultation paper. The Director of Finance has sent a brief response in which he welcomes certain aspects of the settlement but urges further improvements in line with Waverley’s interest.


6. For 2003/2004 Waverley has been awarded a BCA borrowing allocation of 1million, in part as a result of being awarded, for the second consecutive year, a ‘good’ rating for both its Asset Management Plan and Capital Strategy. Waverley will be unable to use this allocation for borrowing purposes because of its debt-free status. However, its provision for credit liabilities will be adjusted by this amount, with the effect that set-aside capital receipts may be used for approved purposes. Waverley’s Financial Strategy provides for such money to be used for buy-back of the superannuation back-funding deficits, with a net benefit of 60,000 estimated for 2003/2004 arising from an additional buy-back of 1million.

Budget Strategy

7. The overall Budget position has now been updated to reflect the Local Government Finance Settlement and is shown at Annexe X.

8. Since the initial list of potential reductions was compiled it has become apparent, in view of current market conditions, that it would be unrealistic to allow for an increase in interest rates of 0.5% to generate an additional 70,000. The Leisure Overview and Scrutiny Committee recommend that the reductions of 40,000 relating to Tourism be not proceeded with and in view of the IEG requirements the Executive accept this view. The Executive regard the remaining suggestions totalling 252,500 as acceptable and achievable. These are listed at Annexe Y.

9. On the basis that the above reductions are acceptable and new legislation is funded through an increase in Council Tax, the remaining known shortfall is in the region of 200,000. The Executive has given consideration to further measures that may be taken to address this shortfall and these are listed at Annexe Z and total 256,000. 10. It will be noted that the list includes the Partnership Funding Officer post and working budget totalling 38,000. The postholder has recently resigned to take up a management position elsewhere. The contribution that the postholder has made to the Borough in general and Waverley in particular is very significant and widely recognised. However, this is a very specialised area of work and it may well prove extremely difficult to recruit a suitable replacement to undertake the partnership work. Therefore, in view of the Budget situation, it is suggested that the post should not be provided for within the 2003/2004 Revenue Estimates, but should recruitment of a suitable replacement prove possible, a supplementary estimate be approved at that time.

New Legislation

11. The draft Revenue Estimates contain additional expenditure of 495,000 arising from new legislation. The Council has already agreed that expenditure of 88,000 on the Waste Recycling Initiative be met from the projected underspend in 2002/2003 carried forward. In 2002/2003 the Council agreed to fund new legislation through an increase in Council Tax. If this approach were to be repeated in 2003/2004, the remaining element of expenditure attributable to new legislation amounting to 407,000 would be funded through a higher level of Council Tax.

Environmental Cleaning Contract

12. The current Environmental Cleaning contract expires on 31st March 2003. The contract has been re-tendered on the basis of a 31-month period, so as to be co-terminus with the Waste Management contract in accordance with the previous Council decision. However, the tendering exercise did not produce an outcome that the Management Board were prepared to recommend for acceptance. This initial view has been confirmed by independent expert advice. Negotiations are currently in progress in an attempt to arrive at a position that can be recommended to the Council for acceptance. Other options are also being explored, including re-tendering to a wider base of companies and possibly for a longer period. At this stage, no specific allowance has been made in the Budget for increased costs.

2003/2004 Draft Revenue Estimates

13. Several figures have been updated since the Estimates were first compiled in October and submitted to the Overview and Scrutiny Committees. The most significant of these are Homelessness where it is considered necessary to allow for a further 100,000 expenditure arising from the Homelessness Bill; Car Park income, where an additional 30,000 has been allowed to reflect the improvement in the position indicated by the current year’s budget monitoring; and an additional 15,000 from Local Land Charge income. Other changes include additional property numbers on the Refuse Collection contract, revisions to figures on Compensatory Grants and minor adjustments to capital financing.

Sponsored Organisations

14. Applications for grants under the Sponsored Organisation Scheme for 2003/2004 have been received and the consideration of these is the subject of a separate report. At this stage, the detailed estimates for 2003/2004 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. Conclusion

15. The Government’s final Revenue Support Grant Settlement for 2003/2004 will be announced at the end of January. The amount of the required reduction will be dependent upon the detail of the Settlement and Council Policy regarding Council Tax levels. In addition, the issue of Environmental Cleaning costs beyond 31st March 2003 remains to be determined. The Executive on 4th February with the final decisions being made at Council on 18th February 2003.

Recommendation

It is recommended that final approval be given to the draft revenue estimates for 2003/2004.



Background Papers (DoF)

There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.


CONTACT OFFICER:

Name: Mr B Long Telephone: 01483 523253
E-mail: blong@waverley.gov.uk


Comms/licensing/2002-03/042