Agenda item

To consider the attached report of the Strategic Director (Corporate Resources).

The Strategic Director (Corporate Resources) presented the Council Budget 2020/21 and Medium-Term Financial Plan 2020/21–2023/24. It was his view as the Section 151 Officer that the budget had been prepared in an appropriate and prudent manner and that based upon the information available at the time of producing the report the estimates were robust and the resources were adequate for the Council’s spending plans in 2020/21.

However, current funding (in particular from Business Rates (BR), the Fair Funding Review and New Homes Bonus) was volatile, difficult to predict and generally outside of the Council’s control. In addition, the Revenue Support Grant had seen a 90% reduction in 2019/20 and was forecast to remain at this lower level (circa £57k) for 2020/21 and be nil thereafter.

The main ‘headlines’ of the budget were as follows:

•       General Fund budget surplus of £2k for 2020/21;

•       Prudent General Fund balances maintained at over £2.6m;

•       DDC Council Tax increase of £4.95 for a Band D property, maintained the lowest Council Tax in East Kent;

•       Overall net expenditure levels increased slightly, in line with inflation;

•       No significant reductions in funding for services and no major changes in staffing levels.

•       Additional income had been generated and used to protect services. The main sources were from:

o   Increased Business Rates (mainly relating to renewable energy including one-off);

o   Increased Council Tax base and charge;

o   Treasury management investments; and

o   Commercial property regeneration initiatives.

The main ‘headlines’ of the Housing Revenue Account (HRA) were as follows:

•       2020/21 budget funded;

•       HRA balances maintained for 2020/21;

•       Major variances for 2020/21:

o   Increase of rent by CPI +1% (2.7% in total);

o   Increased capital works;

•       Rents set by Government, and had been increased by CPI +1% in 2020/21;

•       Rents had been reduced by 1% per annum for the previous 4 years as required by Government;

•       The Council’s ability to service the £73m remaining debt, that the Government had required it to incur, needed to be protected, and that this should continue to be a priority.

The main ‘headlines’ of the Capital and Special Revenue Projects were as follows:

•       The current capital programme of £261m was fully funded (subject to the borrowing arrangements for the Dover District Leisure Centre and the Property Investment Strategy);

•       The major projects in the programme were;

o   Property Investment Strategy;

o   Development of a Bus Rapid Transit System (BRT);

o   Refurbishment of Dover Town Hall;

o   Refurbishment of Tides Leisure Centre; and

o   Dover Market Square Public Realm Improvements.

•       The resources for funding capital and revenue projects would be largely exhausted by the current programme;

•       Future capital receipts were expected to come mainly from one-off asset sales and ongoing housing right to buy sales which amount to circa £500k per annum at current sales levels. This would not replenish capital funds and would not be sufficient to maintain the current planned level of activity in the future;

•       Revenue project resources would also be largely depleted, and no significant new resources were expected other than from contributions from the revenue budget.

•       Borrowing for capital purposes could be undertaken but this would make business case proposals for projects more challenging.

Members discussed the Council’s property investments and were advised that the Council had made no significant new investments since 2017. The purchase of the former co-op building in Dover was not considered a traditional property investment due to its current usage.

The issue of cost centre budgets was raised with Members requesting the addition of trend indicators so the year-to-year changes in the budget could be clearly identified. The Strategic Director (Corporate Resources) agreed to investigate the feasibility of making this change.