District Matters

Reduced budget from central government

December 2018

It's Christmas time, so naturally our thoughts move to setting the budget for 2019/20 and the five-year financial forecast for the council.

Funding for councils from central government has been reduced significantly. So, we have to take very challenging decisions to ensure that we remain financially sustainable. Other than New Homes Bonus, the council is not expecting any support from government in 2019/20, compared to the £3.9m that we received five years ago.

The New Homes Bonus scheme provides a financial incentive to provide new housing. However, it appears that this scheme will be coming to an end, although we do not know when and how. We currently get about £4 million in New Homes Bonus so this is a very significant issue. We have also benefited from the growth of businesses in the area through increased business rates receipts. Central government is being consistent in that this scheme is due to be overhauled next year without, at this stage, any indication of how this will affect us.

So, when we have been discussing the shape of the budget we have many unknowns to ponder and we realise that good news going forward is in short supply. The impact is not so much in 2019/20, but the impact in the medium term is very substantial. We do, however, have a strong starting point; our reserves are healthy, although there is a minimum level of reserves below which we cannot fall or our ‘Section 151 Officer' (accountant) gets cross with us.

We entered our budget process at the beginning of November well aware of the uncertainties. The entire process takes about six weeks because we scrutinise everything very thoroughly. We do expect the local government finance settlement for 2019 before Christmas. Unsurprisingly, it has been delayed by Brexit.

Budget proposals will be presented to Cabinet on 14 January 2019. We then consult with local businesses and residents. We will be listening to your views and therefore I urge you to take part, although there have been years when no one has turned up. Remember, it is your money we are spending.

In setting the budget we have to balance the level of Council Tax against the services we have to provide, and that our residents expect, coupled with investing in the future. In terms of the future we have some very exciting proposals which we are currently implementing, including helping businesses and upgrading our CCTV infrastructure.

Every time we make decisions about Council Tax, we think very hard about the impact upon our residents. If the council increases Council Tax by 1%, this generates around £75,000 of additional income, although this is small compared to the sums at risk from central government.

In relation to Council Tax the current average bill in our district is £1,765.61; of this the district only keeps £137.07, with the rest paid to Warwickshire County Council (£1,363.68), Warwickshire Police and Crime Commissioner (£203.98) and the individual town and parish councils (£60.88). We are well aware that there have been some large increases recently as the government allows increases for adult social care for the county council and provision of extra funding for the police.

So, with that, have a very Merry Christmas and a Happy New Year.