District Matters

Supporting the regeneration of local economy

January 2021

A belated Happy New Year, such as it is. 2021 has started with a mixture of trepidation, another lock down and rocketing infections and hope as the vaccines are rolled out. We have the added complication of the trade deal with the EC which has increased the pressure on businesses. Stratford District and Stratford Town in particular has been very hard hit by the impact on tourism.

So, against a background of uncertainty we are in the midst of the budget process. I have to stress that we do not have complete freedom in setting our budget. We can only increase our council tax by £5 on a Band D house. We have to keep a minimum £2.5 million in the general reserve over the Medium Term Financial Plan (MTFP) period up to 2025/26.

We have to set our budget and MTFP against the backcloth of tremendous uncertainty. We have estimated that the Covid-19 pandemic has cost us £7.5 million over the MTPF period, but that was before taking account of the latest lockdown, so it could end up costing us more. Central government has provided a one year financial settlement which means that we do not know what financial support we will get beyond 2021/22. This is really important because we get New Homes Bonus based on the number of houses built in the District. In 2021/22 we will get £5.3 million. As things stand by 2023/24 we will get zero. A very big hole in our budget appearing over 2 years. The government has also said they will review business rates; we have budgeted for an income of £3 million in 2021/22. The figures beyond that are our best estimates.

We have also lost income, we lost £2.6 million in 2020/21 and we have forecast to lose a further £5 million (approx.) over the MTPF period.

So, we have had to set a 2021/22 budget and an MTPF in extremely challenging circumstances.

Two items have saved us from having to make deeper cuts in services:

• We have reviewed earmarked reserves and have released £2.35 million to the general reserve. This enables us to balance the budget in 2021/22.
• Working with Warwick District Council will, we estimate, result in savings of £1.25 million over the MTFP period.

It should be unsurprising then that we have had to take some difficult decisions. Most will not need to be actioned until 2022/23 and beyond, but they demonstrate the impact of the savings we need to make. We hope the funding settlement in 2021 for the period beyond 2021/22 means that we will not have to implement all the projected savings. There is no guarantee that will be the case.

We are determined to take difficult decisions and not “kick the can down the road" and hope that something turns up. This we feel is responsible community leadership.

Even with all the actions that we have taken the MTFP shows a deficit of over £1 million in 2025/26. There may be yet more difficult decisions ahead.

Perhaps the most contentious decision we have taken is to withdraw the parking pass for pensioners. We are one of very few councils to provide this and there is a cost to providing the service. Where councils do provide the service there is a substantial charge. It may not be popular to say it, but many pensioners in our District are affluent and do not need a subsidy from the taxpayer.

Covid-19 has had a massive impact, the world has changed and we have to adapt to that changed world. There is no point pretending that we can keep supporting everything, which simply denies reality and stores up even more difficult decisions in future.

Our next challenge will be to support the regeneration of our local economy, and, in all honesty that is where I would commit any spare resources, effort and energy we have got. That will benefit all of us.