Minutes Appendix A
Proposed Budget 2011/12
A few introductory comments
The report recommends the revenue and capital budgets for 2011/12 which were
considered by Cabinet and at the Special Overview and Scrutiny meeting.
The report includes detailed projections for the following 3 years, which I will come to
later.
As you are aware, we have had to face significant challenges this year in producing the
budget because of the considerable grant cuts imposed upon us by Government.
Detailed comments
Today’s presentation is the result of many months of intensive work by Officers and
Members.
Cabinet colleagues and I have lived this budget alongside members of the Corporate
Management Team through many meetings and discussions culminating today’s report.
Commencing our consideration last year as part of the financial strategy, we forecast a
reduction in grant. When the provisional announcement was made in December, the
cuts were drastically greater than anticipated, now confirmed as being an 14.2%
reduction in 2011/12.
In cash terms this equates to over £1.1 million (£1,167,504) less available to spend on
services.
We know that further cuts are coming - our provisional settlement for 2012/13 is a further
11.8% reduction, which in cash terms is £833,835.
Madam Chairman, you may recall that as part of the spending review announcements
last October, the coalition government announced that funding would be available over
the next four years for authorities which freeze their Council Tax in 2011/12 at the
current level.
We have taken advantage of this, therefore, the budget recommends a zero increase in
the District element, thus the average Band D council tax remains at £138.87.
The proposed budget will be delivered by a combination of savings and increased
income, whilst protecting services and still keeping car parking charges and season
tickets at their current level.
As is our normal practice, all budget items have been reviewed and the savings thus
identified have been factored in. These include savings of £210,000 from the contract
procurement exercise, reported to Members last December. It was known at an early
stage in the process that further savings would be required for the forthcoming year.
Managers and the Corporate Management Team put forward savings and income
proposals for consideration. The savings and income agreed with Cabinet are detailed
on page 23 of the report.
Minutes Appendix A
Income from the changes to the planning application fees and the New Homes Bonus
scheme have also been included.
To identify one-off funding, a thorough review of all earmarked reserves has been
carried out resulting in £829,477 being released. This will be allocated to the General
Reserve (£700,000) and to the Restructuring Reserve (£129,477). The Restructuring
Reserve was established last year from the recovery of VAT and has been earmarked to
fund one-off costs associated with delivering a number of the savings proposals and its
release will be subject to completion of detailed business cases.
Of the £700,000 allocated to the General Reserve, £200,000 will be used in 2011/12.
Reserves can only be used once and it is, therefore, important to remember that this
cannot provide a long term solution for balancing the budget. The forecast for the
following three years assumes the use of the remaining £500,000 to cushion the impact
of the Government grant cuts.
A reason for holding reserves is, of course, to see us through the hard times.
The capital programme for the coming year includes new capital bids totalling £823,000
which includes investments in a number of the Council’s assets.
This Council continues to invest in its communities and here is a flavour of the work that
is either continuing or planned for 2011/12.
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Redevelopment of the Maltings building and Sackhouse at Wells
The shellfishery handling facility at Wells
The extension to a factory unit at Fakenham
Installation of electricity at Holt Country Park
Refurbishment of existing toilets and provision of new facilities at Sheringham
Cromer pier and investment in the west promenade
North Walsham toilet and car park refurbishment including funding allocation in
support of new projects arising from the leadership of place exercise. (£200,000)
Provision of a new Multi-use games area at Stalham
A £3million investment in our coastal communities as part of the pathfinder
project.
This is just a sample of the investment that continues across the District with local
communities defining and shaping the projects needed in their localities. We are not
waiting for central government to tell us how to engage with our communities…we are
already doing it!
We also know from research that rural authorities have suffered for years in terms of
funding allocations from central government at the expense of urban areas. We are
working with SPARSE (an organization representing the most sparsely populated
councils in England) to make our concerns and views known for future settlements but
for 2011/12 and 2012/13 we have to work with the allocations given and as previously
explained this is nearly a £2million reduction, or 26%.
Minutes Appendix A
In my view, you can’t be in control of everything that you do unless you are in control of
your funding. Perhaps one of the benefits of the Localism agenda will be the localisation
of business rates allowing us greater control over our finances rather than waiting each
year to see what the government are going to give us, or not, as the case may be.
We are expecting a consultation paper on the localisation of business rates which
combined with the government’s intention to review the way in which the government
grant is allocated from 2013/14 onwards, adds greatly to the uncertainty of funding in
future years.
Localisation may give us the opportunity to plan over a longer period but we will need to
look very carefully at any proposal.
As we plan ahead the new Council will need to be alive to the changes coming out of
central government and whilst this budget has been prepared during a period of
uncertainty and change, we still believe it places the next Council in a good position to
continue to serve our residents and communities and take advantage of any real
opportunities that might come through the Localism Bill.
I said that I believe this Council is positioned well for the future. Here are the reasons
why;
1. We have no debt and the budget doesn’t require future borrowing.
2. We continue to plan our approach rather than react. Part of our planned
approach includes having a restructuring and invest to save reserve which
means we have funds available to adapt the organisation and make changes.
3. When we make capital spending decisions we are looking for future revenue
savings and/or increased income as well as the wider community benefits from
the project.
4. We have a future significant financial challenge but we have already made
provision in this budget to meet this challenge by reducing our base position by
over £0.5million. it is not just a budget that gets us through one year.
5. And most importantly this is a budget that protects those services that are
important to the people of North Norfolk.
Quality of life is not easily measurable but we listen to what people tell us and we know,
including from those present in this room, that a clean environment, a well managed
coast, good and accessible sports and leisure facilities, good quality public
conveniences, woodlands, country parks, protecting biodiversity, employment
opportunities, promotion of the arts and culture, community transport grants and many
other grants provided to vital and important local community and charitable organisations
are what is important . This budget protects all of these and more.
And let’s not forget that inflation over the last 12 months has been running at an average
of nearly 5% and the forecast inflation rate is still 2% so in real terms the £138.87 being
proposed is actually a reduction in Council Tax! And it is still one of the lowest council
taxes in the country.