Agenda item

This report outlines the latest Medium Term Financial Plan and the draft General Fund Budget for 2020/21. The Financial Plan sets out the key work streams for the Council to focus on which, collectively, aim to address the significant shortfall in annual budget projected over the medium term which is estimated to grow to £5.4million per annum or 40% of the total net service cost by 2023/24.

Recommendation

It is recommended that the Executive, after considering comments from the Value for Money Overview & Scrutiny Committee, makes the following recommendations to Council, to:

1.    agree a 1.9% increase in Waverley’s element of the Council Tax Charge for 2020/21, equivalent to around 7p a week on a Band D property;

2.    agree to make no change to the Council’s existing Council Tax Support Scheme;

3.    agree the proposed Fees and Charges as shown at Annexe 4;

4.    approve the General Fund Budget for 2020/21 as described in this report, and in Annexes 2 and 3; and

5.    approve the General Fund Capital Programme as shown at Annexe 6. 

60.1     Cllr Mark Merryweather, Portfolio Holder for Finance, Assets and Commercial, introduced the report setting out the latest Medium Term Financial Plan (MTFP) and the draft General Fund Budget for 2020/21. The headlines in the MTFP were the significant shortfall in annual budget projected over the medium term which was estimated to grow to £5.4million cumulative shortfall over the Plan period; steps to mitigate the shortfall, addressing both costs and revenue; and a proposed increase in Council Tax of 1.9%. The proposed Council Tax increase was below the maximum allowed by the government, and recognised the increased Council Tax base due to increased development in the borough, and almost £700,000 of efficiency savings. Cllr Merryweather commended the MTFP and General Fund budget for 2020/21 to the Executive, for recommendation to Council to approve.

60.2     Cllr Stephen Mulliner spoke as Chairman of the Overview & Scrutiny Budget Strategy Working Group (BSWG), and reiterated the financial challenges facing the council and the constraints on raising additional income through fees and charges, and through commercial property investments. The BSWG had concluded that it was unlikely that any significant revenue could be generated from new revenue streams within the next four years, and also had reservations about the level and timing of savings achievable through the Customer Services Project. With regard to the 2020/21 budget proposals, Cllr Mulliner noted that the proposed 1.9% Council Tax increase would cause the Council to forego £83,000 per annum, or over £340,000 compounded over four years. The proposed budget also contained uncertainty around commercial property income, and planning and leisure centre income. Any shortfall in budgeted savings in 2020/21 would worsen the problem to be addressed in 2021/22. The severity of the financial challenge demanded a clear strategic approach, either to impose deep service cuts to bring costs into line with income; or, to maintain services at current levels by raising income and making efficiency savings. It was not clear what was the Executive’s strategic approach, and he asked that this be made clear at the forthcoming Council meeting.

60.3     Cllr Follows thanked Cllr Mulliner for his summary of the work of the BSWG, and for the hard work of the BSWG members. The recent residents’ survey had shown that there was a preference for efficiency savings over raising fees and charges, and the budget included £700,000 of cost savings.

60.4     In responding, Cllr Merryweather emphasised the role of central government in cutting income and constraining councils’ ability to generate additional income. Waverley’s residents’ survey showed that there was a preference for efficiency savings and raising commercial investment income ahead of increases to Council Tax and car parking charges. Waverley had a structural advantage in residential development for market rental through its ownership of land, but the lead-in time was long. Car parking charges had not been increased since April 2017, and they would be increased if necessary; however, the strategic review of car parking showed that there was a need for a smarter approach to car parking charges than a blanket increase. The Council Tax foregone by not increasing to the maximum allowed was more than off-set by the increase in the Council Tax base, and the Executive had listened to the feedback from residents in proposing the level of Council Tax increase.

60.5    After considering comments from the Value for Money Overview & Scrutiny Committee, the Executive RESOLVED to make the following recommendations to Council, to:

1.    agree a 1.9% increase in Waverley’s element of the Council Tax Charge for 2020/21, equivalent to around 7p a week on a Band D property;

2.    agree to make no change to the Council’s existing Council Tax Support Scheme;

3.    agree the proposed Fees and Charges as shown at Annexe 4 to the report;

4.    approve the General Fund Budget for 2020/21 as described in this report, and in Annexes 2 and 3 to the report; and

5.    approve the General Fund Capital Programme as shown at Annexe 6 to the report.   

Reason: The budget is a major decision for the Council and setting a balanced budget is a statutory requirement.