Executive Summary
The Local Government Finance Environment
Local Government in general, and District
Councils specifically, are facing the toughest financial outlook
for many years. In 2008/09 Thanet is to receive a mere £256k
extra General Government Grant, which is only 2.0% more than in
2007/08, with similar size increases planned for at least the
following two years.
With increases in general government grant
significantly below the current level of inflation the Council is
going to have to review the services that it provides and its
approach to value for money if it is to keep Council Tax increases
as low as possible.
Meeting the Community’s Needs
In 2007 the Council approved the Corporate
Plan 2007 – 2011, which set out our aims and ambitions for Thanet
across six key themes: Thanet’s Economy, Safe Neighbourhoods,
Beautiful Thanet, Quality Housing, Healthy Communities and Modern
Council.
Building on previous plans, this latest
offering has been shaped by numerous consultations with our
communities and partners from the public and private sectors.
As a result we are confident that in following this plan our
actions will meet the needs of the many communities within the
District and will contribute to making a Thanet a better place to
live, work and visit.
The Medium Term Financial Plans
The Council’s finances are captured within
three different plans. A separate one exists for the General
Fund Revenue Account; the Housing Revenue Account; and the Capital
Programme, which contains financial projections for both General
Fund and Housing Revenue Account capital expenditure.
The General Fund Revenue Account
The General Fund Revenue Account is where all
of the expenditure and income that relates to the day-to-day
running costs of the core services of the Council is
recorded. This net budget requirement (after taking into
account income from fees and charges and other specific grants) is
then met by a combination of Central Government Grant (59%) and
Council Tax (41%).
With more than half of the Council’s net
budget being funded from Government Grant, the low finance
settlement planned by Government for the next three years certainly
makes the task of continuing to improve and evolve whilst honouring
the commitment to keep Council Taxes as low as possible very
difficult to achieve.
Through the programme of value for money
improvements that began during 2007 it has already been possible to
identify over £2.8m savings, which has enabled the Council to
resource its expenditure plans for 2008/09. However, with the
financial outlook over the medium term not improving significantly,
more savings are needed in order to balance the Council’s needs,
with a further £1.76m needing to be found over the last two years
of this plan.
The Value for Money and Improvement Programme
will continue to be a key vehicle in delivering these savings and
will include a range of service reviews, which will look for
greater efficiencies and policy direction to determine its
non-priority services.
The budget estimates for the General Fund
Revenue Account over the next three years are summarised overleaf
in Table 1.
Table 1
Summary General Fund Revenue Proposals
2008 – 11
|
|
2008/09
|
2009/10
|
2010/11
|
|
|
£’000
|
£’000
|
£’000
|
|
Commercial Services
|
10,809
|
11,112
|
11,355
|
|
Community Services
|
2,994
|
3,272
|
3,432
|
|
Development Services
|
1,316
|
1,171
|
1,197
|
|
Maritime
|
518
|
490
|
499
|
|
Improvement & Performance
|
2,503
|
2,611
|
2,660
|
|
Customer Services
|
1,191
|
1,336
|
1,464
|
|
Financial Services
|
1,540
|
1,547
|
1,578
|
|
Corporate Management
|
1,267
|
1,230
|
1,261
|
|
Net Budget Requirement
|
22,138
|
22,769
|
23,446
|
|
Increase in Budget Requirement
|
3.67%
|
2.85%
|
2.97%
|
|
Increase in Council Tax Required
|
4.5%
|
4.5%
|
4.5%
|
The Housing Revenue Account
The Housing Revenue Account is used by the
Council to record expenditure and income that relates to the
operation of its council houses. These include costs of
maintaining the houses, expenses for running communal areas and the
overheads associated with council house services.
The Housing Revenue Account sits outside of
the Council’s own accounts and has to be budgeted for
separately. Strict rules govern what can be charged to this
account. Any money remaining in the budget at the end of the
financial year is carried forward in a special reserve for future
housing needs and can not be used by the Council for other
purposes.
The budget projections for the Housing Revenue
Account for the medium term are shown in the table below.
Table 2
Summary Housing Revenue Account
Revenue Proposals 2008 – 11
|
|
2008/09
|
2009/10
|
2010/11
|
|
|
£’000
|
£’000
|
£’000
|
|
Expenditure
|
9,875
|
10,208
|
10,798
|
|
Income
|
(10,990)
|
(11,366)
|
(11,756)
|
|
Net Cost of Services
|
(1,115)
|
(1,158)
|
(958)
|
|
Asset Interest Charge
|
1,454
|
1,477
|
1,289
|
|
HRA Investment Income
|
(339)
|
(319)
|
(331)
|
|
Net Operating Expenditure
|
0
|
0
|
0
|
|
Housing Revenue Account
Balance:
|
|
|
|
|
Surplus(-)/Deficit at the start of the
year
|
(3,328)
|
(3,328)
|
(3,328)
|
|
Surplus(-)/Deficit at the end of the year
|
(3,328)
|
(3,328)
|
(3,328)
|
The Capital Programme
The Council’s plans for investment are used to
develop the Capital Programme. This includes capital expenditure
associated with both General Fund and Housing Revenue
Account.
The programme is driven by the need to get
maximum value for money from the Council’s assets by making sure
that they are well maintained and remain fit for purpose, within
the limits of available funding.
Although the Council can borrow to fund its
capital expenditure, the cost of doing so often makes this option
unaffordable. The Council has already planned to maximise its use
of borrowings to meet the existing capital financing requirement
and so its future capital requirements in the medium term will
depend upon a well managed programme of asset disposals; using
assets that are no longer suitable or cost effective to fund the
acquisition and development of assets for improved service
delivery.
The Council’s Asset Management Strategy
provides the framework against which this process is managed to
ensure that the best decisions are taken at the right time.
The plans for asset investment over the next
three years are summarised below in Table 3.
Table 3
The Capital Programme 2008 –
11
|
|
2008/09
|
2009/10
|
2010/11
|
|
|
£’000
|
£’000
|
£’000
|
|
Premises
|
2,390
|
2,950
|
1,200
|
|
Information Systems & Technology
|
244
|
100
|
40
|
|
Vehicles and Equipment
|
570
|
170
|
195
|
|
Infrastructure
|
219
|
0
|
0
|
|
Improving Buildings to Assist Disabled
Persons
|
1,050
|
1,050
|
1,050
|
|
Allotments
|
617
|
0
|
0
|
|
Area Enhancement
|
536
|
300
|
325
|
|
Parks and Open Spaces
|
75
|
75
|
0
|
|
Private Sector Housing
|
1,400
|
1,400
|
1,761
|
|
Housing Revenue Account Schemes
|
4,523
|
3,490
|
3,254
|
|
Total Capital Expenditure
|
11,624
|
9,535
|
7,825
|
|
Funded From:
|
|
|
|
|
Capital Receipts
|
4,590
|
4,095
|
2,260
|
|
Capital Grants
|
4,267
|
4,190
|
4,565
|
|
Contributions from Revenue
|
589
|
0
|
0
|
|
Borrowing
|
2,178
|
1,250
|
1,000
|
|
Total Funding
|
11,624
|
9,535
|
7,825
|
The remainder of this Medium Term Financial
Plan provides a more detailed explanation of the factors that have
been used to arrive at this summary.