Agenda item

LIST OF BACKGROUND PAPERS AS REQUIRED BY LAW

(Papers relied on to write the report, which do not contain exempt information and which are not published elsewhere)

Decision

RESOLVED

To agree and where necessary recommend to Full Council:

1)            The 2023/24 revenue budget as outlined at appendix A;

2)            The demand on the Collection Fund for 2023/24, subject to any amendments as a result of final precepts still to be received be:

a.    £6,879,503 for District purposes

b.    £2,800,000 (exact figure not yet available and subject to confirmation of the final precepts) for Parish/Town Precepts;

3)            The statement of and movement on the reserves as detailed at appendix D;

4)            The updated Capital Programme and financing for 2022/23 to 2026/27 as detailed at Appendix C;

5)            The capital bids contained within Appendix C1, with delegated authority given to the Section 151 Officer in conjunction with the Portfolio Holder for Finance to decide on the most appropriate means of funding;

6)            That Members note the current financial projections for the period to 2026/27 as shown in Appendix A;

7)            That Members note the results of the consultation as shown in Appendix F.

Reason for the recommendation:

To recommend a balanced budget for 2023/24 for approval by Full Council.

The Portfolio Holder for Finance & Assets, Cllr Seward, introduced this item. It had been considered by the Overview & Scrutiny Committee and he thanked them for their comments and recommendations.

He went onto say that when he spoke at the Overview & Scrutiny Committee meeting, he reminded members of his prediction a year ago about ‘gathering storm clouds’, adding that there had been a huge change in the financial situation between the setting of the Budget last February and now. At the time of setting the Budget last year, inflation was predicted to be between 2-3%. It was currently above 10%. This had led to an increase in capital costs, with most materials now costing more than double than a year ago. Consequently, there was often only one expression of interest when the Council went out to tender for projects.

Cllr Seward referred members to section 3.10 of the report which set out in more detail the impact of inflationary pressures on certain areas of expenditure, totalling £2.947m (13.7%)

He said that the Council had limited options to raise income. In terms of council tax, any increase was limited to 1.99%. In addition, there had been no increase in the amount of business rates retention and in fact, due to the way that grants had been provided during Covid, the Council was having to take money from reserves in order just to maintain income. Regarding Government support, although the Council welcomed the 3% guarantee for inflation but legacy payments on the New Homes Bonus had been lost, so the result was an overall increase £135k. Consequently, the rate of inflation and the impact on the Council’s costs were not being compensated for. This meant that the Council had to start making some savings and these were set out at sections 3.8 and 3.9 of the report. There was some additional income that could be generated on commercial waste charges and on planning advice fees. There was also anticipated growth in car parking income.

Cllr Seward said in spite of all the financial challenges, the Council was able to maintain its services and there were currently no proposed cuts.

Regarding any increase to council tax, Cllr Seward made reference to the request made at Full Council in October, to consider a freeze. He said that regardless of the approach taken by NNDC, the County Council was proposing an increase of 4.99% (between £50 and £150 depending in the band) and the Police Authority had already agreed an increase of £14.94 for Band D council tax payers. He explained that the maximum increase that NNDC could make was £5, making it one of the lowest council tax precepts amongst District Councils in the country. Almost 70% of properties in North Norfolk were below Band D, so it would be less than £5.00.

Cllr Seward then spoke about the Medium Term Financial Strategy and forecasts for future years. He said that the Council had a balance budget for 2023/2024 and reserves of over £15m which was higher than the minimum required. In addition, there were a number of financial property investments which were not at risk. However, as stated earlier, it was imperative that the Council began to make contingency plans in terms of further savings to address future gaps. He said that the general fund summary (Appendix A) sets out the presumption that the level of Government support remained at the current level. In terms of the wider economy, whilst it was expected that inflation would fall in the next year, it was difficult to forecast what would happen. He referenced any possible increase in staff salaries which could equate to £450k. Regarding Business Rates, under the current formula, they were forecast to go back to £7.2m but could then reduce again. He said all of this was important as it highlighted the uncertainty and the considerations that needed to be factored in when looking at council tax increases. He concluded by reminding members that the Council had still not received the final local government financial settlement, although it was anticipated that it would not change.

Cllr Seward said that he wanted to propose recommendations 1 – 4 and 6 – 7 but that recommendation 5, which related to capital bids, still needed additional work to ascertain the most appropriate means of funding. He therefore proposed that this was amended to state:

‘To note the capital bids contained within Appendix C’

RESOLVED

To agree and where necessary recommend to Full Council:

1)            The 2023/24 revenue budget as outlined at appendix A;

2)            The demand on the Collection Fund for 2023/24, subject to any amendments as a result of final precepts still to be received be:

a.    £6,879,503 for District purposes

b.    £2,800,000 (exact figure not yet available and subject to confirmation of the final precepts) for Parish/Town Precepts;

3)            The statement of and movement on the reserves as detailed at appendix D;

4)            The updated Capital Programme and financing for 2022/23 to 2026/27 as detailed at Appendix C;

5)            To note the Capital Bids contained within Appendix C1.

6)            That Members note the current financial projections for the period to 2026/27 as shown in Appendix A;

7)            That Members note the results of the consultation as shown in Appendix F.

Reason for the recommendation:

To recommend a balanced budget for 2023/24 for approval by Full Council.