Agenda item

To consider the attached report of the Director of Finance, Housing and Community.

 

Due to its size, the Budget and Medium Term Financial Plan are attached as a supplement to this agenda to assist Members.

The Director of Finance, Housing and Community introduced the report on the Council Budget for 2017/18 and the Medium Term Financial Plan 2017/18-2020/21.

 

Members were advised that the General Fund budget for 2017/18 was balanced and General Fund reserves of £2.69 million were set. The proposed Council Tax increase for Dover District Council was £4.95. 

 

In respect of the Housing Revenue Account for 2017/18 this was also balanced with significant reserves maintained for 2017/18. There were future budget pressures arising from the 1% reduction in rents imposed by Government and the impact on any requirement to sell high value housing was uncertain.

 

The current Capital Programme was funded subject to the borrowing arrangements for the Dover Leisure Centre and the Property Investment Strategy.

 

 

Q1. Can you explain why at full Council Members were advised that the Council would be in dire financial straits by 2019 when the budget for 2017/18 indicates differently?

 

Members were advised that if the Council did nothing to address its financial situation it would face significant difficulties in future years as Government funding streams were reducing and expectations for service delivery were increasing.

 

While the East Kent Councils merger solution was one solution to this the Committee was advised that there were pros and cons to it and that there were other possible solutions.      

 

Q2. What happens if a business cannot pay its business rates during the process of appealing?

 

Members were advised that when a bill for business rates was issued it was collectable by the Council.

 

The recent revaluation for business rates by the Valuation Office Agency (VOA) saw an average increase of 2%, although within that there were some significant variances. The Council was also dependent on a small number of businesses for a significant portion of its business rates with the Channel Tunnel accounting for 32%.

 

The Council had undertaken the best modelling it could on the business rate revaluation and taken the most reasonable cautious view on business rates. 

 

Q3. How does the Council monitor and manage financial risk (‘red flags’) should they happen?

 

The quarterly Performance Report contained a summary of the risks facing the Council and Corporate Management Team monitored these and where appropriate recommended action to the Cabinet. In addition, the Portfolio Holder for Corporate Resources and Performance, Councillor M D Conolly, had fortnightly meetings with the Director of Finance, Housing and Community to identify and discuss issues.

 

Members had also requested further supporting information on a number of points as followed:

 

S1. Please provide further information on the investment needed to generate a return of £500,000 and the likely split between borrowing and reserves.

 

Members were advised that investments were expected to yield c.6% gross and between 1.4 - 2% minimum net revenue provision. The biggest returns would be made from the use of reserves or cash balances as there were no loan repayment costs.

 

S2.    Please advise the number of FTE staff for 2016/17 and the projected number of FTE staff for 2017/18.

 

The average FTE staffing for 2016/17 (to end of third quarter) was 226 and it was projected to be similar for 2017/18 subject to an increase of 25 FTE for the in-house Grounds Maintenance Service.

 

S3.    Please provide the gross figure for business rate appeals for the period 2010 – 2016 (broken down by year)

 

The Council didn’t monitor appeals until 2014 and it was difficult to project the value of the appeal due to the fact that appellants were not required to specify which element of the valuation they were appealing against.

 

S4.    Please provide a list of corporate assets and the receipts that the Council makes from them. Also please provide details of any outstanding debts on those assets.

 

A list of the properties with a rental income of £1000 or more was circulated to Members. However, in the timeframe available it was not possible to provide Members with a detailed list of any outstanding debts.

 

There were also concerns over providing information that could lead to the identification of an individual without excluding the press and public.

 

RESOLVED:  That it be recommended to Cabinet and Council:

 

(a)       That the draft General Fund Revenue Budget, the Capital and Special Projects Programmes, the Housing Revenue Account budget, and the content of the Medium Term Financial Plan (MTFP) as proposed in Appendix 1 be approved.

 

(b)       That it be noted that the Council Tax Resolution and Treasury Management Strategy will be added to the MTFP and other minor adjustments will be made before being presented to Council in March.

 

(c)       That the various recommendations at the end of the sections within the Budget and MTFP report, as consolidated at Annex 14 of the report, be approved as follows:

 

(i)            Continue the practice of delegating authority to the Director of Finance, Housing and Community to approve the revenue budget carry forwards within the guidelines set out.

 

(ii)           Approve the grants to organisations detailed at Annex 11 of the report.

 

(iii)          Approve the General Fund Revenue Budget for 2017/18 and the projected outturn for 2016/17.

 

(iv)         Approve the policies and protocols regarding the General Fund balances and earmarked reserves, and transfers between reserves as set out at Annex 6 of the report.

 

(v)          Delegate to the Director of Finance, Housing and Community, in consultation with the Portfolio Holder for Corporate Resources and Performance, the setting of the level of the on-going HRA minimum balance, the transfer of balances to the Housing Initiatives Reserve (HIR), the use of prudential borrowing, and adjustment of the resources of the HIR accordingly.

 

(vi)         Delegate to the Director of Finance, Housing and Community, in consultation with the Portfolio Holder for Corporate Resources and Performance, the approval of offers, tenders or bids for the purchase of properties on the open market or at auction, in order to respond to market opportunities.

 

(vii)        Approve the 2016/17 Projected Outturn and the 2017/18 HRA budget at Annex 7 of the report.

 

(viii)       Delegate to Cabinet the approval of individual projects to be financed by the HIR.

 

 

(ix)         Continue the practice of delegating authority to the Director of Finance, Housing and Community, in consultation with the Portfolio Holder for Corporate Resources and Performance, to apply capital receipts, revenue resources, grants, Section 106 monies, etc. to finance the approved Capital and Special Revenue Projects Programmes.

 

(x)          Continue the practice of delegating authority to the Director of Finance, Housing and Community, in consultation with the Portfolio Holder for Corporate Resources and Performance, to authorise projects up to £50,000 that are included in the Capital and Special Revenue Programmes; authorise the allocation of funds to projects from the Capital and Special Revenue Contingencies; authorise virements between regeneration projects and apply Growth Point reserves to regeneration projects.

 

(xi)         Approve the Capital and Special Revenue Projects Programmes.

 

(xii)        Approve that capital resources required to finance new projects are secured before new projects commence.

 

(xiii)       Delegate to the Director of Finance, Housing and Community, in consultation with the Portfolio Holder for Corporate Resources and Performance, the amendment of the level and period of investment in property funds.

 

(xiv)       Approve the Treasury Management Strategy, including the Prudential Indicators and Minimum Revenue Provision Statement.