Council prepares for difficult financial year
Published on 15th December 2017
Cheltenham Borough Council is preparing for another financially difficult year, against a background of reducing government funding for local councils.
At a cabinet meeting on 12 December 2017, the draft budget for 2018/19 was approved for consultation and the council is now asking for residents’ views on the proposals. This consultation will run until Friday 19 January 2018.
Cllr Rowena Hay, cabinet member for finance says: “In the ten years from 2009/10 to 2019/20 our core government funding will have been cut by some £6.4m from £8.8m to £2.4m. In 2018/19, this core funding will reduce by 11.3% when compared to 2017/18.
“In response to the difficult national funding situation, our overriding financial strategy has been, and is, to drive down the council’s costs. The aim is to hold down council tax as far as possible, now and in the longer term, while also protecting frontline services from cuts – an immensely challenging task in the present climate.
“The key mechanism for carrying out this strategy is the Bridging the Gap (BtG) programme, which seeks to bring service costs in line with available funding. To date, it has been very successful in managing funding gaps, with over £12m generated from BtG work streams.
“The starting point for the 2018/19 budget has been a projected medium term financial strategy funding gap of £1.643m. Closing a gap of this size is a huge challenge for the council, but the challenge is being met by a proactive approach to identifying budget savings, carried out by the cabinet and the executive management team. This work has already made significant progress towards bridging the gap, having identified at this early stage potential savings and additional income of £783k, leaving £860k to find, assuming a £5 council tax increase is approved.
“The outcome of this budget has been based on a number of substantive consultations throughout the year and we would like to know the public’s views on our strategy for closing the financial gap created by the significant cuts from central government.”
Hard copies of the background and survey will be available from reception at the Municipal Offices.
Following the consultation, the responses will be reviewed by the council’s cabinet, and a final budget will be prepared for consideration at council on 19 February 2018.
The full council will be meeting to set the budget, taking into account feedback from the budget consultation process, on Monday 19 February at 2.30pm in the Municipal Offices. At this meeting, council will also agree the level of council tax, taking into account the requirements of Gloucestershire County Council and the Gloucestershire Police and Crime Commissioner.
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The cabinet’s intends to meet the shortfall in funding in 2018/19 from the budget strategy (support) earmarked reserve in order to deliver a balanced budget. This will give the council more time to deliver its long-term strategy for delivering the substantial savings required:
- The draft budget has had to bridge a funding gap of gap of £1.643m;
- Our draft budget for 2018/19 identifies £783,000 of efficiency savings to be made in the coming year and there are plans to save a further £940k a year by reducing costs and increasing income;
- Our draft budget proposes to fund a gap of £860,000 from the budget strategy (support) earmarked reserve;
- The cabinet are also proposing to increase the council tax by £5 based on a band D property which equates to a 2.54% increase;
- The cabinet are proposing to increase fees and charges for the cemetery and crematorium by an average of 2%;
- All other fees and charges, including car park charges, will be subject to annual review to generate an additional £50,000 per annum.
Proposed savings and areas to generate additional income:
In order to protect front-line services while keeping the council tax rise to an acceptable level, £783,000 of savings and additional income have been identified as follows:
- £157,000 saving from transforming service delivery in the place and economic development division
- £80,000 saving from a restructure of the revenues and benefits service
- £100,000 saving on making a pre-payment into the local government pension scheme
Proposed areas to generate additional income:
- £50,000 from a review of fees and charges
- £150,000 from business rates pooling
- £170,500 from treasury management activity
- £25,000 from additional rent at the Household Recycling Centre
- £50,000 from taking a more commercial approach
Cabinet have also agreed to a capital programme for the period 2017/18 to 2020/21 which sets out how £53.5million of capital resources will be spent. The existing programme includes sums for infrastructure investment to be funded from capital receipts and the purchase of new vehicles through Ubico. It also includes the allocations agreed by the council in April 2015 to facilitate the redevelopment to the town hall and the crematorium, and an earmarked contribution to public realm works within the town centre.
In addition the capital programme sets aside an allocation for enhancing our property portfolio with the aims of delivering economic growth and regeneration.