Agenda item

Report of the Executive Director (Resources, Environment and Cultural Services) presenting the budget proposals for 2018/19.

(Note:  This report will be considered at the Resources Overview and Scrutiny Committee meeting on 18 January 2018.  Members of the Committee are asked to please bring their copies of the report with them to that meeting).

Report of the Executive Director (Resources, Environment and Cultural Services) presenting the budget proposals for 2018/19 and covering the General Fund, Housing Revenue Account, Capital, Medium Term Financial Strategy and the Treasury Management Strategy.

Within the General Fund the net cost of services would be reduced by 1.6% to £14.5M for 2018/19.  The budget reflected a range of efficiency savings such as the review of Campus West entertainment services and additional income from the estate property portfolio. This had enabled frontline services to be protected with the investment of an additional £600,000 in services to ensure the Council could respond to forthcoming legislative changes and improve a number of statutory functions.

A further 11% cut in core grant funding however had to be absorbed (a 63% cut since the start of the decade) as well as inflation at 3.1%, the highest rate for nearly six years. In order to protect services and ensure that the Council’s financial position remained sustainable, it was therefore necessary to propose a £5 increase in the Band D council tax rate.  At 2.48% this was less than inflation and less than the 3% maximum allowed before a referendum.

Although the business rates pilot application for Hertfordshire had not been accepted by the Government in 2018/19, the Council would nonetheless be entering into a business rates pooling arrangement with Hertfordshire County Council and Broxbourne, Hertsmere, North Hertfordshire and Three Rivers Councils and the predicted financial benefits of this arrangement had been reflected in the 2018/19 budget.

Overall, it had been possible to produce a budget for 2018/19 that required no drawdown of General Fund reserves for the year. 

Within the Housing Revenue Account (HRA), rent would continue to be reduced by 1% per annum as directed by national policy.  The 1% reduction was set to apply in 2019/20 as well but the Government had confirmed that rents could rise by the Consumer Price Index plus 1% for 5 years from 2020. 

The rollout of Universal Credit in the Borough from 6 December 2017 meant that the Council might face greater rent arrears and the provision for bad debts had therefore been increased by £725,000 in 2018/19. 

Overall, there would be a budgeted deficit of £3.4M for the HRA leaving a reserve of £2.7M at the end of 2018/19 which was about 5.2% of turnover and was within the range considered to be best practice.  The constraints of the HRA budget meant that it would no longer be possible to provide contributions from HRA revenue to the affordable housing capital programme which would have to be partly funded by new borrowing as a result.

The Council continued to have a sizeable capital programme going forward with a total of £45M of capital investment being made in 2018/19, including regeneration of Hatfield town centre, parking improvements, investment in play areas and a garage refurbishment programme. The Council would also be spending £16M to provide affordable housing in the Borough and a further £12M would be invested in the existing housing stock. 

The General Fund in the medium term was faced with a budget gap of nearly £700,000 in 2019/20 and a further £1.4M would need to be found in 2020/21 to balance the budget. 

(1)        The Decision Taken

RESOLVED:

(1)     That the Council's taxbase of 41,363.2 for the year 2018/19 be approved, incorporating an overall collection rate of 99.40% (the in-year target remained at 97.7%).  

(2)     That in accordance with the Local Authorities (Calculation of Council Tax Base) Regulations 2012, the amount calculated by the Borough Council as its taxbase for the year 2018/19 shall be 41,363.2 and its constituent elements shall be:

(3)     That the Cabinet approves the budget proposals for 2018/19 and notes that any comments from the Resources Overview and Scrutiny Committee would be returned to the Special Cabinet on 23 January 2018 for consideration before final recommendations were made to the Council.

(2)       Reasons for the Decision

The Council was required to calculate the Tax Base for its area each year in accordance with Regulations.

The requirements of the Council’s budget and policy framework rules for setting the Council’s annual budget had to be met.

These budget proposals would be submitted to the Resources Overview and Scrutiny Committee on 18 January for consideration and any suggested amendments would be reported to the special Cabinet meeting on 23 January, together with any other updates, prior to the budget being considered at the Council meeting on 5 February 2018.

(Note:  There were no declarations of interest by a Member(s) in respect of the matter decided).