The Conservative Group is proposing the following amendment to the Cheshire West & Chester Council Budget for Thursday 25th February 2016.
This amendment if adopted would allow for the main Council Tax precept to be frozen as opposed to Labour’s 1.99% increase, we support the additional 2% adult social care precept, so this would see a net 2% rise rather than Labour’s 3.99% proposal.
We are also proposing to reverse the proposed Labour cut of the 20% local element of New Homes Bonus currently goes to Town & Parish Councils and local communities, CWC already gets 80% of this funding which comes direct from central Government as a payment for new homes being built. Communities which have seen the most new housing and need to be able to use this New Homes Bonus on local projects will have it removed:
Huntington will lose £91,000 per annum, Rossmore will lose £75,000 pa, Chester City will lose £60,000 pa, Northwich will lose £60,000 pa, Ellesmere Port Town will lose £56,000 pa, Upton-by-Chester will lose £57,000 pa, Garden Quarter will lose £51,000 pa, Boughton will lose £45,000 pa, Winsford will lose £49,000 pa , Neston will lose £38,000 pa, Netherpool will lose £35,000 pa, Frodsham will lose £27,000 pa, Cuddington & Sandiway will lose £26,000 pa, Malpas will lose £25,000 pa, Hoole will lose £24,000 pa, Tarvin will lose £21,000 pa, Tarporley will lose £20,000 pa, Delamere will lose £16,000 pa, Lostock Gralam will lose £14,000 pa, Handbridge Park will lose £14,000 pa, Saughall & District will lose £13,000 pa, Ledsham & Manor will lose £13,000 pa, Helsby will lose £13,000 pa, Great Boughton will lose £13,000 pa, Hartford will lose £11,000 pa and Blacon will lose £11,000 pa.
Many other areas, both parished and unparished, will lose sums which could have gone towards local solutions to local issues.
We would also be able to retain Member Budgets at their present level of £10,000 per annum rather than cutting it to £5,000 as Labour propose. These monies, like New Homes Bonus, are spent locally on local issues. More information about Member Budgets and what they have been spent on in recent years click here.
We are also ensuring funding to prevent pay car parking being introduced to areas such as Northwich & Winsford, where the Labour administration have repeatedly refused to rule out its introduction.
In stark contrast to Labour when it was in opposition, the proposed amendment has been circulated in full to all members of the Council, a week before the meeting. Labour in opposition regularly produced their amendments on the night during the meeting, giving no time for any serious consideration or even part adoption by the then Conservative administration.
25 FEBRUARY 2016
AGENDA ITEM NO. 11
SUBJECT: Budget Report 2016-17
“This Council notes the budget package that has been put forward and that it has been developed based on an overall funding gap of £57.2m over the four years and a package of proposals leaving a balanced budget in 2016-17 and a residual shortfall of £4.3m over the period 2017-20.
This Council considers that there are reasonable changes that can be prudently made to the current financial assumptions that would improve the £57.2m funding gap and changes that can be made to the Savings Proposals, Locally Generated Income Strategy and Reserves Strategy that deliver an alternative balanced budget in 2016-17 and leave a residual shortfall of £10.2m over the period 2017-20. Plans would be put in place to develop a strategy to bridge the gap in future years.
This Council therefore moves that the following changes are incorporated into the budget for 2016-17 and indicative budget for 2017-20. A revised set of recommendations are set out at the bottom of this Amendment.
Reviewing the Funding Gap
It is proposed that the Gross Funding gap of £57.2m is updated in the following way:
|Alternative Assumptions for Funding Gap|
|2016-17 £m||2017-20 £m||Total £m|
|Gross Funding Gap as per Administration’s Council budget report||13.763||43.483||57.246|
|Council Taxbase Growth of 1,100 homes (=917 Band D) (compared to 700 in Admin budget)||–||(0.900)||(0.900)|
|Reduced cost of Council Tax Reduction Scheme||–||(0.250)||(0.250)|
|Business Rates physical growth of 1.5% p.a. (compared to 1% in Admin budget from 2017-18)||–||(1.100)||(1.100)|
|Implement National Living Wage only||(0.406)||(0.137)||(0.543)|
|Reduction to General Contingency||(0.500)||–||(0.500)|
|Remove Inequality Gap budget||(1.430)||1.430||–|
|No use of General Reserves to fund expenditure in 2017-18 & 2018-19||–||–||–|
|Alternative Gross Funding Gap||11.427||42.526||53.953|
Council Tax Growth
The Council’s growth strategy has been successful in attracting businesses to the borough and this has translated through to housing growth. The Local Plan sets out the addition of 1,100 homes to the area each year. Converting this to Band D equivalent properties for the purposes of a taxbase increase it is considered reasonable to include a forecast of 917 Band D equivalents each year from 2017-18 instead of the c700 currently assumed. This will generate an additional £0.9m in council tax income over the 4 years.
Council Tax Reduction Scheme
The success of the Council Tax Reduction Scheme in getting the long term unemployed into work and supporting them to stay in work is anticipated to continue. It is therefore considered prudent to assume a further reduction in the cost of this scheme by £0.250m in 2017-18, materialising through an improvement in the council taxbase.
Business Rates Growth
Cheshire has a level of prosperity that is c6% higher than the National average. It is therefore expected that the Borough will see a growth rate at least in line with the National average of 2-2.5%. Therefore, even taking into account the risk of lost business rates income through successful appeals, it is considered reasonable to increase the business rate growth by a further 0.5% to 1.5%. This improves the 4 year position by £1.1m.
The administration’s budget proposals include the forecast cost of implementing the Local Living Wage for Council employees and companies. This is above the rate set out by the National Living Wage set out by the Chancellor. It is proposed that the budget is amended to include only the forecast cost of the National Living Wage, reducing anticipated costs by £0.4m in 2016-17 and £0.5m by 2019-20.
The Council has an excellent track record of exercising very tight control on its budgets and as a result has regularly under used the General Contingency set aside for unexpected items. It is proposed to prudently further reduce this allocation permanently by a further £0.5m than the administration’s proposals from 2016-17.
The administration’s budget report includes a temporary budget of £1.430m in 2016-17 and £1m in each of 2017-18 and 2018-19 for resolving inequality. Noting that no plans exist for how this money will be used effectively, against the background of significant council investment already being made in to addressing inequality, it is proposed that this budget need not be created. This allows the £2m of General Reserves that would have been used in 2017-18 and 2018-19 to remain within the reserves balances, therefore leaving the level of General Reserves at £22.5m by March 2020, and the £1.430m in 2016-17 to contribute to reducing the Council’s funding gap in 2016-17.
Bridging the Gap
It is proposed that the funding gap of £54.0m over the four years and £11.4m in 2016-17 is bridged in the following way.
Firstly it is proposed that the policy options as included in Appendix E of the budget report are adopted, but with a number of exceptions / changes as set out in the table below:
|2016-17 £m||2017-20 £m||Total £m|
|Savings Proposals in Budget Report||(7.273)||(22.435)||(29.708)|
|With the following amendments:|
|Retain the New Homes Bonus Community Fund||1.544||0.299||1.843|
|Retain Members Budgets at current level||0.375||–||0.375|
|Mitigate any unacceptable consequences of parking review||–||0.500||0.500|
|Senior management restructure||(0.150)||(0.150)||(0.300)|
|Trade Union posts to be funded by Trade Unions||(0.068)||–||(0.068)|
|Utilising net receipt from potential HQ sale to reduce costs or generate income||–||(2.400)||(2.400)|
|Alternative Savings Proposals Total||(5.572)||(24.186)||(29.758)|
New Homes Bonus Community Fund (NHB)
The Council has been at the forefront in the Country in making localism a reality. This has been in the form of supporting community groups to produce neighbourhood plans, devolving money through the members budgets to solve issues raised with members quickly and without bureaucracy and by the devolving of 20% of the NHB to communities to enable them to control what actions they take to support the delivery of new housing in their communities. It is proposed that the existing policy to devolve this funding to communities continues. The continuation of the policy will cost £1.544m in 2016-17 and £1.843m by 2019-20.
It is proposed to maintain this budget at £10,000 per Member which enables Members to continue to solve local problems, support voluntary groups and attract match funding.
It is proposed that a new permanent fund is set up in 2017-18 to mitigate any unacceptable consequences that might arise from the development of the car parking strategy.
With the continuing reduction in staff levels across the council, it is considered that further opportunities exist to reduce the size of the senior management team. A saving of £0.3m is considered reasonable over the years 2016-17 and 2017-18.
Trade Union Officials
The Council currently pay for 2 full time Trade Union officers. It is proposed that these posts are instead paid for by their respective Trade Unions from 2016-17. This income would save £68,000 a year on the council budget.
HQ was purchased in 2010 for three reasons. Firstly to reduce costs (which it achieved), secondly to facilitate a significant change in culture of the organisation and thirdly, as an investment, purchased at a market low in commercial property prices.
It is proposed to sell the building, creating a significant benefit for the council tax payers of the Borough but also providing an opportunity to reduce the council’s debt and thereby reducing debt repayment and interest by a net figure of an estimated £2.4m per year after paying rent. The sale would be optimised to ensure it did not undermine any current regeneration activities and also to utilise any developments of the one public sector estate.
Locally Generated Income Strategy
The locally generated income is set out in the table below. This represents a reduction in locally generated income of £2.9m in 2016-17 and £9.2m over the four years:
|Locally Generated Income Strategy||2016-17 £m||2017-20 £m||Total £m|
|Greater Manchester Business Rates Pool||(0.632)||(0.603)||(1.235)|
|2% Social Care Precept p.a.||(2.935)||(9.812)||(12.747)|
|Alternative Locally Generated Income Strategy||(3.567)||(10.415)||(13.982)|
Social Care Precept
In its offer of the Social Care Precept on council tax Central Government has recognised Councils’ concerns for the increasing costs of supporting the most vulnerable in our communities and in particular the growth in the number of elderly people requiring care. It is therefore proposed to accept the Government’s offer of allowing an additional 2% increase to be raised on council tax to provide income for investment in adult social care.
Council Tax Strategy
It is proposed that the 1.99% council tax increase in 2016-17 through to 2018-19 as set out in the budget report is removed.
Greater Manchester Business Rates Pool
No changes are proposed in relation to joining the Greater Manchester Business Rates Pool.
Use of Reserves
The Administration’s budget proposes re-designating £3m of earmarked reserves for the creation of Priority Outcomes Reserve. It is proposed that this reserve is not required, therefore £2.288m of the monies identified for that purpose should be utilised to smooth the impact of the funding reductions in 2016-17. The remainder will be used to enhance the Invest to Save Reserve (see later).
The combination of the above changes results in a budget shortfall as follows:
|2016-17 £m||2017-20 £m||Total £m|
|Revised Gross Funding Gap||11.427||42.526||53.953|
|Locally Generated Income||(3.567)||(10.415)||(13.982)|
|Use of Reserves||(2.288)||2.288||–|
This delivers a balanced budget in 2016-17 and a shortfall of £10.2m over the period 2017-20. There is an acknowledgement this presents challenges to be addressed in future years but this compares favourably with previous years’ plans.
Impact on Reserves
It is noted that the Council will have made savings of over £150m in the 7 years since inception and that there is a forecast underspend of £2m against the 2015-16 budget. The administration’s budget proposes to utilise this underspend and make a further £4m available from reallocating earmarked reserves in order to create the following 3 reserves totalling £6m in 2016-17:
|Name of Reserve||£m|
|Invest to Save||2.000|
|New Ways of Working||1.000|
This amendment would seek to replace the current spending plans with a re-prioritised use of the reserves. It seeks to utilise £2.288m of the proposed Priority Outcomes reserve to balance the 2016-17 budget and the remainder (£0.712m) to enhance the ability of the Invest to Save reserve to help deliver future savings plans earlier:
It is proposed that the following reserves are therefore included in the 2016-17 budget:
|Name of Reserve||£m|
|Invest to Save||2.712|
|New Ways of Working||1.000|
General Reserves would remain at the level of £22.5m for the four years.
Impact on Decisions required by the Council
The above proposals will result in the following revised decisions for Council within the Budget Report:
2.1. Note the key changes to the level of funding available to the Council during 2016-17 to 2019-20 and the resulting financial targets for each year (section 4.14 – 4.23).
2.2. Approve the delegation of the approval of the final Better Care Fund plan to the Leader of the Council as Chair of the Health and Well-Being Board in consultation with the Cabinet Member for Finance and Legal, the Director of Finance and the Strategic Director of Adult Social Care (section 4.18);
2.3 Approve the policy proposals (changes to year on year expenditure) set out in the report (section 4.24 – 4.31);*
2.4 Approves the submission of a request to the Local Government Boundary Commission for England to commence a review of Cheshire West and Chester Borough Council in time for any new electoral arrangements to implemented by the 2019 borough council elections (section 4.30 – 4.31);
2.5 Note the intention to apply an additional 2% on council tax levels in 2016-17 for the Social Care Precept (section 4.36);
2.6 Note the calculations made in accordance with the Local Government Finance Act 1992 to arrive at the council tax requirement and a council tax at Band D of £1,300.73. The Council Tax Setting report following this paper on the agenda will include the necessary resolution to formally set the Council Tax (section 4.34 – 4.37);*
2.7 Approve the General Fund Revenue Budget for Cheshire West and Chester Council of £273.4m for 2016-17 (section 4.44 – 4.46)
2.8 Note the Section 151 Officers report on the adequacy of reserves and robustness of estimates and the resulting estimated level of general reserves of £22.5m as at 31 March 2017 (section 4.49);*
2.9 Approve the creation of two earmarked reserves totalling £3.7m that will be used for New Ways of Working and Invest to Save initiatives (section 4.52 – 4.53)
2.10 Approve capital programme allocations for 2016-17 (£136.5m) and the indicative programme for 2017-20 (£140.6m) and the associated use of Council Resources (section 4.58);
2.11 Approve the capital funding bid in relation to Commercial Property Reinvestment and subsequent expenditure as part of the Capital Programme if the application is successful (section 4.61-4.62);
2.12 Approve the changes to the Invest to Save policy contained within the Capital Strategy (section 4.63):
2.13 Approve the Provision for Repayment of Debt Policy Statement (section 4.64); and
2.14 Approve the Capital Investment Prudential Indicators; (section 4.64);*”
PROPOSED AMENDMENT IN THE NAMES OF COUNCILLORS EVELEIGH MOORE DUTTON AND MIKE JONES
*Note: As a consequence of this Amendment the Director of Finance will need to re-draft these technical annexes to reflect the changes. They will be available on the evening of the Council meeting.