Agenda and minutes

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To consider a report on the 2020-2024 Financial Planning and Budget Process: to seek approval for Cabinet’s Final Proposals for 2020/21 for the General Fund Revenue budget, Dedicated Schools Grant, Housing Revenue Account (HRA) Business Plan and Council Tax Requirement

The Cabinet considered a report on the 2020-2024 draft Budget and Council Tax proposals and final budget proposals for the Housing Revenue Account (HRA) Business Plan and Budget. The report presented proposals to cover a four-year planning period from 2020-2024 for the revenue Budget and a five-year planning horizon for the Investment Plan.

The Government had published the Provisional Local Government Finance Settlement for 2020/21 on 20 December 2019 via a written statement.  The content of the Provisional Settlement had largely been known in advance as it was based on a technical consultation paper published in October 2019 that had set out in more detail the Government’s plans for allocating the resources announced in the Spending Round 2019 (SR19).

In the SR19, the Chancellor had announced proposals for a £2.9 billion cash increase in local government’s ‘core spending power’, to come from an extra £1.2 billion in social care grant funding for local authorities.  The other £1.7 billion was expected to come from an increase in Council Tax (1.99% general Council Tax increase and a 2% precept for social care) and an increase in business rates baseline funding in line with inflation.  These proposals remained unchanged and formed the basis of the Provisional Settlement.

The Elected Mayor and Cabinet’s draft Budget proposals therefore included for consideration a 1.99% general Council Tax increase and a 2% Adult Social Care Precept.  The Medium-Term Financial Plan (MTFP) included the cumulative impact of these increases for the subsequent financial years 2021/22 to 2023/24.

The draft Budget proposals for the General Fund set out in the report had been developed in the context of a refreshed Our North Tyneside Plan 2020-2024, as set out in Appendix A of the report.  The Plan had been updated to reflect two key policy developments; the Council’s declaration of a climate emergency and the context in which the Authority now operated as part of the North of Tyne Combined Authority.

There was significant uncertainty in relation to the level of funding beyond 2021, due to the one-year settlement for 2020/21 and the anticipated changes in the local government finance system.  The impact of the move to 75% Business Rates Retention, alongside the Fair Funding Review and Business Rates Reset were unknown at this stage.  These increased the level of risk to financial planning, requiring current Budget forecasts to be closely monitored, and potentially refreshed more frequently than usual, as consequences became clear.  The current savings requirement was estimated to be £39.574m over the period 2020-2024, before any proposals around Council Tax increases or the Adult Social Care Precept were considered.

There were a number of assumptions and judgements built into the figures presented that were mainly outside the control of the Authority and needed to be finalised.  The estimates of amounts would therefore need to be subject to further review before they could be confirmed.

Cabinet, in its report of 25 November 2019, had set out the estimates for all aspects of the Elected Mayor and Cabinet’s proposed spending  ...  view the full minutes text for item CAB102/20

Monday, 10 February 2020 at 6.00pm

Monday 10 February 2020 at 6.00pm (Extraordinary meeting).

Minutes published on Thursday 6 February 2020.