Agenda item

To set out for cabinet consideration and recommendation to council the proposed 2020/21 budget and council tax.

The budget as presented;

a)  has been drafted on a base 3.99 per cent increase in council tax as adjusted in each of the predecessor areas by the application of the policy to achieve harmonisation from 1 April 2021 onwards.

b)  Includes provision to mitigate the deficit that is accumulating in the high needs budget of the Dedicated Schools Grant (DSG).

The Portfolio Holder for Finance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book.

Cabinet were requested to consider and recommend to Council the proposed 2020/21 budget and council tax.

Cabinet were advised that the budget as presented had been drafted on a base 3.99 per cent increase in council tax as adjusted in each of the predecessor areas by the application of the policy to achieve harmonisation from 1 April 2021 onwards. It included provision to mitigate the deficit in the high needs budget of the Dedicated Schools Grant (DSG).

The Leader outlined an amendment to recommendation ‘d’ and an additional recommendation at ‘gi’. The revision to recommendation ‘d’ was to reduce the transfer from early years funding to the high needs block to nil. The reduction would increase the predicted accumulated deficit on the Dedicated Schools Grant as at 31 March 2021 to £8.5 million. With the in-year deficit assessed at £3million based on a £4million transfer from the schools block. The additional recommendation at ‘gi’ proposed a further £0.2million one-off contribution to the Financial Liability Reserve to bring the balance to £8.5million as at the 31 March 2021. This had been identified as £0.2million of principle repayments on assumed acquisitions were not due to commence until the 2021/22 financial year.

The Chairman of the Overview and Scrutiny Board outlined its recommendation to request that the Leader write to the Minister of Education to express Councillors concerns over the funding formula applied to BCP giving rise to the pressure on the Dedicated Schools Grant and the growing deficit to the High Needs Block. The Leader confirmed that the local MPs had already been written to on this subject and she confirmed she would also write to the Secretary of State for Education. The Chairman and Leader of the Conservative Group advised that they would like to co-sign the letter and this was welcomed.

Cabinet members welcomed the work in each of their portfolio areas that had been undertaken to produce a balanced budget which also delivered on the Council’s priorities and harmonised Council Tax in the authority more quickly than that proposed by the Shadow Authority. The Leader and Portfolio Holder for Finance thanked the Chief Financial Officer and all of the finance staff for their support in production of the budget, a process which had been underway since July 2019 and noted that the process for setting the following year’s budget would be starting soon. 

RECOMMENDED that Council:-

1)         a recorded vote be undertaken in relation to the following items as required by the Local Authorities (Standing Orders) (England) (Amendments) Regulations 2014 which came into force on the 25 February 2014;

a)         A net budget of £283m, resulting in a total Council Tax Requirement of £217.1m, is set for 2020/21 based on the settlement figures published by Government in December 2019. This is based upon:

i.       an increase in council tax in 2020/21 which means that the BCP Unitary Charge will not increase above 3.99 per cent for any residents and individual resident charges are determined in line with the approved council tax harmonisation strategy as set out in Appendix 1a and summarised as;

1.      Bournemouth’s BCP Unitary charge council tax being an increase of 3.84 per cent over that levied in 2019/20.

2.      Christchurch’s BCP Unitary charge Council Tax being a reduction of 3.55 per cent over that levied in 2019/20.

3.      Poole’s BCP Unitary charge Council Tax being an increase of 3.83 per cent over that levied in 2019/20.

These increases can be compared to the 3.99 per cent maximum permitted increase for 2020/21 and recognises that the Government continue to promote council tax increases via the social care precept as a funding mechanism for Social Care.

ii.      the key assumptions and provisions made in the budget as proposed, set out in paragraph 39 to 55 of the associated report;

iii.    the allocations to service areas in the budget as proposed and as set out in Appendix 2a of the associated report;

iv.    the Capital Investment Programme (CIP) as set out in paragraphs 93 to 109 and Appendix 4 of the associated report;

v.      the use and level of all reserves to be held by the Council further to the advice of the Chief Finance Officer as set out in paragraphs 109 to 121 and Appendix 3 to this report;

vi.    Treasury Management Strategy (TMS) and prudential indicators as set out in paragraphs 122 to 126 and Appendix 5;

vii.   the Chief Officers’ Pay Policy Statement for consideration and approval by the council in accordance with the provisions of the Localism Act 2011 as set out in paragraphs 128 to 129 and Appendix 7 of the associated report;

viii.  that councillor allowances for 2020/21 will be increased in line with the national salary award as discussed in paragraphs 130 to 132 of the associated report;

b)         the flexible use of capital receipts strategy to deliver significant resources towards the BCP Council transformation programme as set out in paragraphs 62 to 73 of the report be approved;

c)         a £2 million 2020/21 Revenue Contribution to Capital Outlay (RCCO) to provide a minimum level of annual investment in the capital programme be approved;

d)         it approves to support the high needs block of the DSG by a £4 million (1.9 per cent) transfer from the schools block, and a nil transfer of early years funding;

e)         a £1.2 million contribution to a Financial Liability Earmarked Reserve to be approved to provide a sustainable funding source to help mitigate the estimated 2020/21 deficit on the High Needs Block of the DSG;

f)          the allocation of reserves received from the disaggregation of the balance sheet of Dorset County Council with the residual Financial Planning Earmarked Reserve be approved to further support the Financial Liability Reserve;

g)         it notes the intention, that should the Government agree to provide a specific grant to cover the accumulated deficit on the High Needs Block of the DSG, to redirect the Financial Liability Reserve to further support the Councils corporate priorities including transformation;

gi)     a further £0.2m contribution to a Financial Liability Earmarked Reserve by a further one-off contribution to the reserve in 2020/21 be approved; and

h)       that the Chief Finance Officer provides council with a schedule setting out the rate of council tax for each category of dwelling further to councillors consideration of the decision required in respect of (a) above and after taking account of the precepts to be levied by the local Police and Fire Authorities, Neighbourhood, Town and Parish Councils, and Chartered Trustees once these have been determined prior to the Authority meeting on the 18 February 2020.

Voting: Unanimous

Portfolio Holder: Finance