Agenda item

To set out the assumptions and challenges in preparing the upcoming Medium-Term Financial Plan.

The Strategic Director of Resources advised the report would give Members an impression of what they would be working with in terms of the budget setting process. He advised that there was still uncertainty around the Local Government funding settlement and the Chief Executive of CIPFA has advised councils to prepare for the worst in terms of a funding agreement. He continued to highlight the following key information:

• There was a risk that local authorities would not continue to be fully compensated for any Central Government measures to reduce rates payable by businesses.
• When Council Tax levels are set they make an assumption as to how much will be collected which is usually assumed at 99% however with the cost of living crisis this may decrease.
• They were having discussions regarding housing rents, the Government have recently consulted on capping rent increases, with a preference of 5%. If rent increases rose by less than the level of cost that would result in a significant loss of income.
• Price inflation was significant with a Consumer Price Index (CPI) of 9.9%.
• Energy costs will be at least £200k higher than they were last winter.
• The salary pay offer to Councils was for a pay increase of £1,925 for all staff, regardless of grade, the unions collectively had to reach agreement. Unison members had voted to accept the pay offer but they needed one further union to also accept the offer before it was agreed.
• If fees and charges were to increase less than inflation it would require further money to subsidise the costs.
• Ubico is subject to the same inflationary pressures and the Council would be following the same processes it has used previously to assist with budget setting.

Councillor Pearcy asked for clarification on business rates if more businesses were to close due to rising inflation and financial pressures. The Strategic Director of Resources advised that they make an assumption about how many business rates they would collect and they use many factors to put together an assumption. He also confirmed that the Revenue and Benefits Team were already working on ways to help businesses in the District.

In response to a question from Councillor Cornell the Strategic Director of Resources advised that the Business Rates Pool would be confirmed in the summer and they would be expecting around £0.5m.

Proposed by Councillor Brine and seconded by Councillor Bennett.

Councillor Hurst asked that they take into consideration any pressures that might arise from the Local Plan examination.

Councillor Braun advised that there was incredible economic uncertainty and it was going to be difficult for the budget setting process ahead of them.

Councillor Cornell stated that she was worried about the efficiencies that may need to be made and was concerned that the retrofit project could slip. She hoped that the Housing Committee would be able to find a way to continue with the project.

Councillor Bennett thanked Officers for the report and highlighted the difficult decisions ahead that may need to be made.

Councillor Brine appreciated the quality of the reports received by elected Members which was invaluable to them out in the Communities and that this report was easy to understand.

On being put to the vote, the Motion was carried unanimously.