To consider the report of the Director (NE) (reference 17/254) attached
The Cabinet considered a report by the Director (NE) (Reference 17/254) in respect of the Budget Strategy 2018-2021 and a proposal to become part of a business rates pilot in 2018/19. Members were reminded that from 2010/11 to 2017/18 ongoing savings of circa £17m had to be made from the Council’s annual revenue budget, as Government core funding continued to reduce (by an estimated 66% from 2010/11 to 2019/20). Further, the Council had its own cost pressures to absorb. In order to accept the Government’s multi-year settlement offer in 2016/17 the Council had to approve an Efficiency Plan, which set out the high level plans to address future year budget deficits. As staffing resources reduced and savings became harder to identify it was becoming apparent that the length of time needed to deliver savings was increasing. The Council was also keen to pursue commercial opportunities, which could generate financial returns to support the revenue budget, rather than relying purely on cuts in service or expenditure. This was likely to require a longer planning period and lead in time to deliver the required financial returns. With that in mind it was proposed that the Council adopt a 3-year budget setting programme, covering the financial years from 2018/19 to 2020/21. As the Government moved towards a funding mechanism based principally on the 100% retention of business rates, it had instigated the Fair Funding Review which would establish the Council’s baseline level of retained business rates income under the new scheme. Under the current Rates Retention Scheme, each council was required to pay a 50% levy on their share of growth in business rates income. The major advantage of the North Yorkshire Business Rates pool of which the Council was a member, was that the overall pool levy was reduced to nil when all the authorities were treated collectively as a single authority. The Council, as part of a larger pool of local authorities, had now accepted the Government’s invitation to apply to pilot the 100% Business Rates Retention scheme, which was expected to come into effect in 2020/21. The Government had guaranteed that local authorities would not be financially worse off under the pilot, with the Council projected to receive in the region of an additional £240k through the pilot. Decisions on the pilot applications were expected in December. A draft three year budget was therefore under preparation which would be the subject of Member briefings in December, and then a public consultation exercise, before coming back to the Cabinet in the form of a draft Financial Strategy in February. The Chairman, Councillor Mallory encouraged all Members to attend the briefings and to have an input into the draft budget proposals.
RESOLVED that the Cabinet:
(i) Note the Council’s anticipated funding gap for the financial years 2018/19 to 2020/21 and the proposed strategy for addressing the funding gap;
(ii) Note that the Council has submitted a proposal to the Department for Communities and Local Government (DCLG) to become part of a 100% Business Rates Pool Pilot in 2018/19 alongside North Yorkshire County Council, East Riding of Yorkshire Council, Hambleton District Council, Craven District Council, Selby District Council, Richmondshire District Council and Ryedale District Council;
(iii) Delegate the authority for entering into the 100% Business Rates Pilot to the Strategic Director (NE) in conjunction with the Portfolio Holder for Finance, Procurement and Legal, should the pilot application be successful.
To approve the strategy for addressing the Council’s funding gap and put plans in place to address the budget shortfall in a planned and structured way; minimising unplanned cuts in service delivery.
To maximise the Council’s income from the Business Rates Retention scheme.