Agenda item

(To receive a report from the Executive Director of Finance and Public Protection, which seeks approval of the budget proposals, as described in the report, as its preferred option for the purposes of further consultation)

(1)  That the budget proposals, as described in the report, be approved as the preferred option for the purposes of further consultation, subject to £1,018,571 being allocated to Heritage Services; and that Council Tax be increased by 4.95% in 2019/20.

(2)  That the Leader of the Council be delegated authority to confirm participation in a Business Rates Pool in 2019/20.

Consideration was given to a report which outlined the Council's budget proposals for the financial year 2019/20, based on the four-year funding deal announced by the Government, as part of the 2016/17 Local Government Finance Settlement. 

The Executive was asked to make proposals for the Council's budget for 2019/20 and to refer those proposals for internal and external consultation. 

Details of the Provisional Local Government Settlement for 2019/20 had not yet been issued at the time of writing the report.  However a briefing report, which was tabled at the meeting, provided detail of the Provisional Local Government Settlement for 2019/20 and covered the following:

·         The funding that the County Council would receive from the Government in 2019/20 was largely in line with the four-year deal which the County Council agreed to in October 2017, with exception to the Rural Services Delivery Grant which was expected to be over £1.3m higher next year than previously advised as part of the four-year deal.  This grant was now expected to be £6.935m in 2019/20 in recognition of the additional costs of providing services in rural areas;

·         It was also announced that there was a surplus amount in the national Business Rates Levy Account and this would be distributed to authorities for 2019/20. The indicative amount for Lincolnshire County Council was £1.683m;

·         The county-wide business rate pilot bid for 2019/20 submitted by all eight Lincolnshire authorities, together with North Lincolnshire Council, had not been approved.  The non-approval was in line with expectations, given the success in getting a bid approved for the current financial year 2018/19. The County Council would revert to a business rates pooling arrangement with all seven districts for 2019/20;

·         The provisional settlement had reaffirmed an announcement made by the Chancellor of the Exchequer in his Autumn Budget that further one-year funding would be available in 2019/20 for both adult care winter pressures (£3.368m for Lincolnshire) and for additional adult and children's social care pressures (£5.754m for Lincolnshire);

·         Also previously announced in the Chancellor of the Exchequer's Autumn Budget was an additional £13.7m capital funding for highways maintenance ('pothole funding') which, whilst available in the current year, was expected to be of some benefit next year in terms of improving the condition of the road network;

·         The core level of council tax, which could be levied prior to triggering a referendum, would be 3% for 2018/19 (plus 2% for the adult care precept).  The provisional budget approved for 2019/20 by Council in February 2018 was predicated on only a 2% maximum referendum threshold for core council tax 2019/20.  An additional 1% council tax income was worth approximately £2.8m per annum in the income base of the County Council;

·         Further consultation papers on the proposed 75% business rate localisation from April 2020 and the related national Fair Funding Review were also released along with the Provisional Settlement, which would be analysed over coming weeks. The consultation response deadline date for both was 21 February 2019.

The Chairman of the Overview and Scrutiny Management Board advised that the Board had considered the Council's Financial Risk Assessment for the year 2019/20 at its meeting on 25 October 2018.  The Board had supported the Council's Financial Risk Register and the assessment of the appropriate level of General Reserves.

It was also highlighted that at the beginning of December 2018, two budget briefings had been held for all County Councillors to attend.  Comments from the sessions were detailed at Appendix B to the Executive report. 

It was highlighted that as part of the comments from the briefing sessions, a Councillor had commented that the budget savings associated with the Heritage Service becoming financially self-sufficient ought not to be taken in advance of decisions being made about the service delivery model.  Although advice was given that earmarked reserves could be used to fund the service in 2019/20 until a decision on the service was implemented, there was a view that appropriate budget provision ought to be made rather than relying on reserves.  In response to this, the Executive advised that appropriate budget provision be allocated to Heritage Services for 2019/20, with an aim for the service becoming self-sufficient in future years.

Consideration was given to whether to utilise the additional 1% council tax income, which was worth approximately £2.8m per annum in the income base of the County Council.  It was agreed that to enable to make the County Council's budget sustainable, following significant reduction in its budget from central government, the Council should utilise the additional 1% council tax income.  It was highlighted that with the additional 1% council tax income being utilised, the County Council would remain in the lower quartile for council tax levels set by local authorities in England.  Furthermore, it was highlighted that 2019/20 was the last financial year that upper-tier authorities could apply an adult social care precept.  

RESOLVED

(1)  That the budget proposals, as described in the report, be approved as the preferred option for the purposes of further consultation, subject to £1,018,571 being allocated to Heritage Services; and that Council Tax be increased by 4.95% in 2019/20.

(2)  That the Leader of the Council be delegated authority to confirm participation in a Business Rates Pool in 2019/20.