Issue - decisions

Scrutiny of the draft 2019-20 Budget Proposals

09/01/2019 - 2019-20 Budget - Context and Overview

The Chairman welcomed members and officers to the meeting and invited the Strategic Director (S151 Officer) to present her report.

 

Key points:

 

·       Business Rate Retention reform and Fair Funding Review –

o   proposed changes expected to be put in place for 2020/21 with no certainty at this stage on how changes will impact the Council.

o   the Council’s significant reliance on related income streams to Business Rate Retention and Fair Funding

 

·       Total Net Budget requirement for 2019-20  £12.3m  (2018-19 £11.3m)

 

·       2019-20 Budget gap  £166k

 

·       Council Tax - possible increase options:

 

o   For 2019/20 the threshold for Council Tax increases for “core” Band D Council Tax has remained unchanged with local authorities able to increase their Council Tax by up to 3% (2.99%). An additional amount of £158k would be generated with a 2.99% increase which equates to an increase of £4.73 per annum, £163.05 for a Band D equivalent property.

 

o   District Councils may however raise Council Tax by £5 without triggering a referendum. This is still an option that Blaby may look to adopt given it is  marginally larger (3.16%) than the 2.99% increase.  This option would generate an additional £167k, £163.32 for a Band D equivalent property.

 

·       New Homes Bonus

o   £2.851m will be utilised in 2019-20 to underpin budget requirements and fund services.

 

o   On current indications, if NHB funding was removed on a phased basis, £750k would be removed each year from 2020/21, with a  cumulative impact of removing £3m from the funding envelope by the 4th year (2023/24).

 

·       Business Rates

o   £400k expected in 2019-20 as  Blaby apportionment of 75% Business Rate Pilot scheme  to support invest to save expenditure and infrastructure to promote housing and business growth. 

 

o   The mechanism for the distribution of business rates is expected to be changed in 2020-21 and will not impact on the 2019-20 financial year.

 

·       Business Rate Retention Reform

o   Potential for Blaby to lose the benefit of growth it has generated since 2013-14 if the government takes forward a full baseline reset from 2020-21.

 

o   The new system is likely to reward growth more generously (75% retention rate rather than 50% with a limited levy).

 

o   The tier split of the increased retained rates is likely to alter. Currently Blaby retains 40% (but is subject to a further levy) with County Council at 9% and Fire at 1%.

 

o   There are still suggestions that some specific grants will be funded from Business Rate retention e.g. Public Health.

 

·       Fairer Funding Review

o   Continuing lack of clarity as to how the review will directly impact the Council.