To receive a report from the Deputy Chief Executive (S151) considering the initial draft 2019/20 budget and options available in order for the Council to set a balanced budget and agree a future strategy for further budget reductions for 2020/21 onwards.
The Group had before it, and NOTED, a report * from the Deputy Chief Executive (S151) considering the initial draft 2019/20 budget and options available in order for the Council to set a balanced budget and agree a future strategy.
Consideration was given to the following:
· The initial aggregation of all service budgets currently indicated a General Fund budget gap of £662k.
· 2019/20 would be the fourth and final year of a four year fixed funding settlement which would see a further reduction of £179k bringing the Revenue Support Grant to nil for 2019/20. The end of this four year settlement period would bring a number of uncertainties and risks.
· Pay estimates, which were linked to national pay scales, had been increased by an average of 3%.
· Council Tax had been modelled on a £5 increase.
· For 2018/19 the Council had been fortunate enough to be in the 100% Business Rate pilot which had given the Council an additional circa £200k. However, for 2019/20 this would be reduced to 75% and whilst the Devon Pool would be submitting an application to be a part of this, the chances of success were not predicted to be high. The Council would then revert back to a 50% position but still benefit from membership of the Devon Pool.
· Previously the New Homes Bonus had supported the Council’s capital programme but the methodology for the calculation of this may change and this was a significant risk..
· A provisional settlement was due to be issued by central Government by 6th December 2018. As soon as this was received a briefing note would be sent to all Members providing a summary on how this would impact on the budget for 2019/20.
· Using reserves to balance the budget in 2018/19 was a one off resolution. Using reserves does not address the underlying issues and the Council would be reluctant to rely on this again for 2019/20.
Brief discussion took place regarding:
· Increased premises costs in relation to Carlu Close.
· The removal of the Crediton Office budgets.
· Reduction of income/increased expenditure in relation to Market Walk.
· Additional weed spraying as a result of the County Council withdrawing its provision of this service across the District.
It was requested that the Group receive more information regarding the removal of ragwort and what the District Council was doing about this particularly dangerous weed.
Note: * Report previously circulated; copy attached to the signed minutes