The General Fund Revenue Account
Overview
The General Fund Revenue Account is charged
with any expenditure incurred on delivering the Council’s services
or meeting its day to day expenses that are not covered by
legislation relating to the Housing Revenue Account, or can not be
treated as capital expenditure. The majority of
Thanet’s expenditure (86%) is charged here.
This expenditure is funded from income that
the Council raises through charging for goods and services (except
if it relates to council houses or is capital) plus grants and
Council Tax.
Developing the Three-Year General Fund Revenue Budget
The General Fund Budget Strategy
Fundamental to the development of the budget
and three year Medium Term Financial Plan is an overarching Budget
Strategy, the objective of which is a safe and sustainable budget
that will deliver the policies and aspirations of the Council over
the medium term. The strategy, which underpins the General
Fund financial plan, is set out below:
The Council’s Revenue Budget Strategy
is:
- To adequately resource the Council’s
statutory services and the corporate priorities as set out within
the 2007-11 Corporate Plan.
- To maintain a balanced General Fund such that
income from fees and charges, Council Tax and Government and other
grants is sufficient to meet all expenditure.
- To maintain Council Tax increases as low as
possible (preferably below 4.5%) to avoid the Government’s capping
regime, subject to a satisfactory level of Government Grant.
- To maintain the General Fund balances at a
level that is sufficient to cover its financial risks and provide
an adequate working capital.
- To maximise the Council’s income by promptly
raising all monies due and minimising the level of arrears and debt
write offs, so as to optimise its treasury management
potential.
- To actively engage local residents in the
financial choices facing the Council.
These principles will enable the development
of a budget that is sufficient to meet the Council’s ongoing day to
day business activities as well as progress its priorities as
contained within the Corporate Plan. Such clear linkages
between financial and business planning are the cornerstone of
robust budget management practices.
The budget for 2008/09 and the two years that
follow is developed by building onto the existing budget provision
the anticipated increases for inflationary increases and budgetary
growth that is needed for service developments plus Corporate Plan
commitments; after which planned savings, growth in income and the
use of reserves are reflected. This all has to be done so as to
keep the resulting increase in income from Council Tax to a
minimum.
Making the Most of Existing Resources
Realign and Recycle – As a
result of undertaking a proactive approach to the 2007/08 General
Fund Revenue Budget underspends were able to be taken as they arose
and set aside in earmarked reserves for future expenditure.
These will be used to fund costs that arise from programmes of work
or initiatives that do not have a regular or predictable
expenditure year on year. It was also possible to identify
budgets that for a variety of reasons were no longer needed at the
level that they were set at, which allowed them to be redirected to
new, emerging expenditure pressures. By realigning existing
budgets in this way it is possible to recycle resources and
minimise future pressure on the Council Tax.
Budgetary Growth
Employee Costs – A large
proportion of the Council’s expenditure is on staff related costs
(including salaries, national insurance and pension contributions),
the majority of which relates directly to service delivery.
The largest increase on pay headings relates to the annual pay
award. In 2007 the Council negotiated a move away from costly
formula-driven pay rises which has enabled pay settlements to be
agreed at more affordable and realistic levels. The Council
has negotiated a pay deal for its staff of 2.75% for 2008/09; 2.5%
of which will be funded as growth and 0.25% which will be offset by
withdrawing the staff benefit of the Benenden Health Scheme.
Although the pay settlement is below current inflation rates (as
measured by the Retail Price Increase) it does represent an
extremely good settlement compared to other public sector pay deals
that have been struck for the same period. The budget and
MTFP also provides for other increases in employee related headings
which have been estimated for: incremental increases for staff who
have not yet reached the top of the grade, as their experience in
the job grows; additional costs of employer pension contributions
which are calculated as a percentage of salary and therefore
increase as a result of the pay award; and other staff related
costs such as employee liability insurance cover which has to be
increased in accordance with the terms of the contract.
Although the pay settlement is for one year only, the same level of
budgetary growth (at 2.5%) has been assumed across the medium
term.
Other Inflationary Increases
– As a general rule the Council does not provide for price
increases on goods and services, having instead to find ways to
contain the increasing costs within existing budgets or negotiate a
better price with its suppliers. Although it does reflect
these in its growth figures, it later removes growth on
discretionary price increases as part of its efficiency savings
figure. The only budgetary growth for price increases that
ends up being built into the budget is where it is unavoidable,
such as where it is part of the terms of an existing contract or
for supplies such as energy and fuel. Although the Retail
Price Increase (RPI) increase to December 2007 was 4% this is only
one measure of inflation, with the actual increases being dependent
on market forces specific to different industries, this combined
with the commitment given by the Treasury to driving inflation down
over the medium term means that for the purposes of this medium
term plan inflation has been assumed to be 3%.
Service Improvements
and New Demands - As the Council
and its services evolve to respond to the demands of Government
policies, new statute and public demand, so must the budget
change. Service pressures arise which require funding, some
of which are needed to enable change that will later deliver
savings. Over the course of the medium term, budgetary growth
is needed to deal to fund new posts as a result of emerging
workloads and capacity issues. In some cases this relates to where
grants have been used to fund new posts which have then ended, but
where the post has proven too valuable to lose. However it
should be noted that later on, in the section on savings, as soon
as it is realised that a workload has diminished or ended, posts
are also removed and the saving taken. As a result of this
need to continue to reshape the organisation to meet the changing
demands, redundancy costs have also been factored into the budget
and medium term plan. Additional budget is also needed to
meet the costs of supporting the Local Development Framework and
for the Council’s contribution to the new Local Strategic
Partnership that is due to be inaugurated in April 2008.
Spend to Save – Invest to
save funding is that which is needed for service improvements which
will later give rise to future savings. It is fundamental to being
able to deliver continually improving services within a cash
constrained environment. The budget for 2008/09 includes a
level of growth that relates to efficiency improvements within the
Council’s mail room and print facilities.
Reduction in Income – The
Council gets income in relation to fees and charges for services
plus grants and contributions received from wide range of
sources. When it becomes known that a particular income
source will not be available in the future, budgetary growth is
needed to be able to reduce the income budget down to the level
achievable. In the budget for 2008/09 this has been the case
for the level of income from the Council’s crematoriums, as a
result of the fall in mortality rates; a reduction in the
Government grant for administering the housing benefit system; the
inclusion of the waste performance efficiency grant within the
general Government Grant requires the removal of the income target
for the specific grant that was previously budgeted for; the ending
of an arrangement with Kent County Council for maintaining the
verges on the side of the road; plus other much smaller income
streams that are expected to reduce.
Other Growth – Occasionally
changes in accounting rules or to the method of grant distribution
give rise to revenue budget pressures. In 2008/09 and beyond
just over £300k is needed as a result of changes in accounting
rules which means that premises maintenance costs are treated as
revenue costs rather than capital. Growth has also been
provided for the costs of the next district elections where, by
putting a quarter of the costs of the elections aside every year
into a reserve, the Council can avoid having to pay the whole
amount in one large one-off hit on the budget in a later year.
Where future budgetary pressures are known of,
these have been factored into the three-year budget
projections. However, given the pace of change it is likely
that there will be pressures that arise between now and the next
two years which can not currently be foreseen. As a result
this Medium Term Financial Plan assumes at least £500k growth will
be needed in future for day to day business developments.
Corporate Plan Growth
As the Corporate Plan represents the Council’s
aims and aspirations for the continual improvement of its services
and its commitments to community priorities, ensuring that
sufficient resources are available to deliver the Corporate Plan is
a fundamental requirement of this Medium Term Financial Plan.
Costs have been provided for future years based on draft plans and
spending projections for a range of services and initiatives, which
fall within three broad categories.
Base Funding for New and Improved
Services – The Corporate Plan gives a commitment to a
number of priority services that are to be delivered on an ongoing
basis. They include: improvements to beaches, town centres
and parks and open spaces so that the Council achieves
accreditation for these for the benefit of the local community and
the tourist industry; extending cover from the community wardens
and CCTV; development of youth diversionary activities;
improvements to recycling and waste collection; and additional
service provision to Ramsgate through mobile gateway facilities.
The costs of these mainly relate to additional staff and therefore
it is important that where possible they are funded from ongoing
revenue base growth.
Supported Programmes and New
Initiatives – Some items within the Corporate Plan relate
to specific projects and initiatives that will run for the full
period of the Medium Term Financial Plan and then be reviewed as
part of the development of the next Corporate Plan for the years
beyond 2010/11. Included within this category are: the annual
Thanet Festival; the preparations for the 2012 Olympics; new
out-of-school activities for children; and a range of measures
intended to improve the general health and well being of Thanet
residents. In the latter years of the Plan, investment is
also intended to take forward opportunities for collaborative
working and in improving the Council’s offering to current and
future employees to ensure that it continues to attract high
calibre staff needed to deliver top quality services.
One-off or short term
initiatives – A number of the aspirations of the Corporate
Plan can be achieved through the delivery of an individual
initiative or event, or the provision of short term funding.
These can make a significant difference and often relate to area
regeneration. Money set aside within this MTFP will pay for
improvements to the way the Council manages its assets, including
investing in a large number of listed buildings; costs arising from
progressing new opportunities presented by the Port of Ramsgate in
the light of wind-farm development and the development of the
Dreamland and Arlington Square site; investment in improvements to
the play areas in Margate and Ramsgate; and preparing for a bid for
the Heritage Lottery Fund to support the Theatre Royal. Also
included in here are costs relating to the set up of Ramsgate
Parish Council and a range of back-office improvements to improve
customer satisfaction.
All of the different sources of budgetary
growth that are anticipated over the course of this medium term
plan are summarised below in Table 4.
Table 4
Budgetary Growth 2008 -
2011
|
|
2008/09
|
2009/10
|
2010/11
|
|
|
£’000
|
£’000
|
£’000
|
|
Pay increases
|
748.1
|
771.1
|
794.9
|
|
Price inflation
|
717.6
|
708.3
|
733.1
|
|
Service Improvements/ New Demands
|
385.8
|
193.5
|
(40.0)
|
|
Spend to Save
|
540.8
|
(493.0)
|
0.0
|
|
Reduction in Income
|
243.0
|
126.5
|
0.0
|
|
Other Growth
|
305.0
|
295.0
|
500.0
|
|
Corporate Plan – new / improved services
|
213.0
|
360.0
|
0.0
|
|
Corporate Plan – supported programmes
|
119.0
|
114.0
|
114.0
|
|
Corporate Plan – one off / short term
items
|
330.0
|
160.0
|
25.0
|
|
Total Budgetary Growth
|
3602.3
|
2235.4
|
2127.0
|
|
Increase in Budget Requirement
|
15.9 %
|
9.7%
|
9.2%
|
Budget Reductions
The Council’s last Medium Term Financial Plan,
which was published in February 2007, highlighted the need for
savings of £2.7m over the three years 2007/08 to 2010/11 even
before the costs of the new Corporate Plan had been
reflected. The figure for the savings required was later
increased to £6.4m based on delivering all of the aspirations of
the Corporate Plan in as short a timeframe as possible. With
the Council facing such a stark financial future, work began in
early 2007 to prepare a strategy for taking the Council
forward. This strategy became known as ‘Bridging the Gap’,
which included a programme of work which was presented across a
number of key strategic themes:
Efficiency, Effectiveness and Economy
As outlined in the Value for Money Strategy
Officers are already doing much to improve value for money for the
Council. Budgets and procurement options are continuously
being scrutinised in order to keep costs to a minimum, whilst
maintaining or improving service standards. Every year the
Council manages to deliver a significant level of efficiency
savings by careful re-negotiation of contracts and purchasing
assets, rather than using more expensive leasing options.
This category of savings also includes those that are able to be
made through revising business processes, such as bringing in-house
further services into the waste and recycling service and the
implementation of electronic processes within the benefits.
In many cases these efficiencies are able to save staff time and
often require different skill sets, this gives the Council an
opportunity to review the staffing structures that relate to the
processes where efficiencies have been delivered and deliver
further savings.
Staff and Staffing Related Costs
With staffing costs making up a large
proportion of the Council’s expenditure this is obviously an area
which must feature strongly in any review of costs and budgetary
provision. Measures have been put in place to minimise
resource loss due to sickness and we are driving forward technology
developments to increase productivity that will, in some cases,
lead to structure reviews and post reductions. All of this
will be need to be achieved without any detriment to service
delivery, through the use of flexible working and working to keep
staff morale as high as possible.
Priorities and Non-Priorities
Members and Officers alike have high
aspirations for the Council. There is much that has been
achieved, but there still remains more to do. The constraints
on the budget mean that services and future developments need to be
prioritised and the Council is currently working with its External
auditors on a prioritisation tool that has been used successfully
by other councils. This will allow for selective service
reduction and re-phasing of developments which will support, rather
than detract from, the Council’s stated policies and
priorities.
Although these improvement areas will continue to be driven
forward, moving forward it is now clear that the Council will need
to consider its priorities and non-priorities, with particular
regard to discretionary spending. The new challenges
presented in the medium term will require the Council to look to
areas that have previously not featured as part of any savings
programmes, areas where difficult decisions around service
priorities will need to be taken if an affordable budget is to be
set over the course of this Medium Term Financial Plan.
Key Proposals for Budget Reductions
The principles from the Bridging the Gap
programme were taken forward as part of the Thanet Spending Review,
which was undertaken as part of the budget developments for
2008/09. This identified eight key areas where savings could
be found that could be used to help ‘Bridge the Gap’. These
have now all been adopted, and an additional two added and have
been factored into the financial projections which feature as part
of this Medium Term Financial Plan. They are explained in
detail below:
TSR11 Staffing and staff related costs
The budget proposals reflect the financial
benefits of careful management of vacant posts. The Council
has factored into its staffing budgets an amount which it expects
to save during the time between when an employee leaves and their
replacement starts, a vacancy abatement figure in excess of £500k
has been built into the budget for 2008/09, the equivalent of 20
full time posts over the course of the year (which is equivalent to
3% of its total salary budget).
This will require a rigorous approach to
staffing costs through active vacancy management in order to
achieve this level of saving. In addition to this are savings
resulting from the deletion of posts that are no longer
required. We will continue to review our systems, processes
and staffing levels in comparison to other councils in order to
make sure that we are able to take on best practice and demonstrate
Value for Money. It is likely that these reviews will lead to
changes being made to staffing structures which will deliver vacant
post savings, although it is impossible to say what the outcome of
such reviews will be for years two and three of this medium term
plan.
TSR12 Cutting the cost of council
accommodation
The Council expects to cut its overheads
significantly over the next two years by reviewing and reorganising
its office accommodation. This will also generate valuable
receipts for reinvestment in services to residents. It also
plans to rationalise and improve the use of civic accommodation in
Margate and Ramsgate – retaining its use by Charter Trustees (or
their successor bodies), but sharing the use of these ‘civic
spaces’ and ensuring that they are well used and take Council and
Cabinet meetings and other forums out into the community for better
public engagement.
TSR13 Better Asset Management
In line with the approaches proposed by the
Department of Communities and Local Government, the Council we will
be pursuing better use of its assets. We will be seeking to
identify some assets for disposal in order to fund much needed
improvements in other services – particularly the quality of
swimming and sports facilities.
Where assets remain in civic and community
use, we will seek to maximise their value by shared use, better
marketing and income generation; and will look to achieve
additional rental income for 2008/09 and future years from
commercial lettings.
TSR14 Green Garden Waste Collections
Many Thanet residents love their gardens, but
they produce a great amount of recyclable green waste. Many
councils now charge for their service to collect green garden waste
and we propose to do likewise. This will require considerable
capital investment and set up costs by the Council but will lead to
a cost effective and environmentally-friendly service used by an
increasing number of households in the years to come.
Residents who wish to use this service will be
asked to make an initial purchase of a green garden waste bin and
an annual green bin licence, which will bring in additional income
for the Council. The amount to a householder for one bin for
a year is considerably less than the cost of a tank of petrol.
TSR15 Car Park charges
Car parking charges continue to be an
important source of income in Thanet, as in most coastal
areas. A package of changes to parking income is planned in
2008/09 which represents a 16% increase overall but results in new
charges for parking which are still comparable, if not lower than,
many of our neighbouring councils.
The Council is hopeful that it will not need
to increase fees further over the two later years of this medium
term plan and will also seek to agree additional and regulated
areas of on-street parking, which will help improve on-street
parking space in busy areas, help residents and ensure that
visitors make a reasonable contribution during their time in
Thanet.
TSR16 Public Toilet charges
Thanet has a significantly higher number of
toilets than neighbours districts. Public toilets are costly
to operate and prone to vandalism and we want Thanet to have good,
clean toilets which reflect well on the Council and the area.
To achieve this, we intend to invest in toilet upgrades and
refurbishment and incorporate daily repairs and maintenance works
within the overall contract price, as well as levy a small charge
for use of some toilets in the summer in our high-footfall areas to
pay for an attendant, which will improve service to customers and
reduce the potential for vandalism.
We also plan on closing two or three toilets
which are prone to vandalism or are within close proximity to other
services and explore options for more local management by Town or
Parish Councils.
TSR17 Moorings within the Royal Harbour
The Royal Harbour in Ramsgate is home to
around 600 active yachts. Around 43% of yacht owners are not
Thanet residents. We propose to increase the cost of yacht
moorings by around 5.1%.
TSR18 Museums and grant to the East Kent Maritime
Trust
The Council currently grant aids the East Kent
Maritime Trust, who provide museum services and supervise
collections at Margate and Ramsgate. Sadly the council grant
of around £80,000 a year supports services that are used by only
around 10,000 visitors each year – equating to a subsidy of around
£10 per visitor. This is not sustainable in the current
financial climate and as a result it is planned to terminate this
grant with effect from 2008/09.
TSR19 Levels of Council Subsidies
The Council makes voluntary payments to a
range of charities and other not-for-profit organisations, as well
as assisting with statutory charges through the provision of
discretionary rates relief. It is appropriate, during these
tight financial times to review the levels of grants paid to ensure
that they remain consistent with the aims of the Council and
reflect the benefits that they bring to the wider community,
against other demands on the Council’s budget. Where
appropriate, the Council will work together with officers of the
organisations affected to try to keep any adverse impact of such
action to a minimum. Discussions have already been initiated
with Thanet Leisure Force, the providers of a leisure and
entertainment services on behalf of the Council, to work together
in reducing costs in a way that is acceptable to both parties.
TSR20 Efficiency Improvements
The Council has been able to make a number of
budget reductions as a result of further efficiency improvements;
securing better contract prices; obtaining better returns on its
investments; and generally tightening up on discretionary
spending.
Future Savings Targets
The tight financial environment and the need
for continued investment and improvement in Council services means
that the identification and delivery of savings is an ongoing
task. This Council has given a commitment as part of
its Budget Strategy to keep Council Tax increases to a minimum,
below 4.5% where possible, in this respect an amount has been
reflected within this Medium Term Financial Plan for savings
targets which will deliver this strategy.
Detailed plans exist to deliver all of the
targeted savings for the first year of this plan; and although
plans are not at such an advanced stage for the last two years of
this plan the processes that have been put in place to take forward
the principles of the Value for Money Strategy and to continue the
work started by the Bridging the Gap Programme mean that the
Council is confident that it will be able to achieve these savings
targets in the timescale available.
Presented below in Table 5 are the budget
reductions that have been estimated for the medium term.
Table 5
Budgetary Reductions 2008 -
2011
|
|
2008/09
|
2009/10
|
2010/11
|
|
|
£’000
|
£’000
|
£’000
|
|
Staffing Related Savings
|
267.7
|
5.4
|
5.8
|
|
Accommodation Savings
|
12.0
|
70.0
|
80.0
|
|
Efficiency Savings
|
1477.7
|
492.6
|
357.5
|
|
Reduced Grants and Subsidies
|
205.0
|
20.0
|
0
|
|
Increased Fees and Charges
|
864.6
|
433.1
|
110.6
|
|
Future Savings Targets (as yet
unidentified)
|
0
|
902.3
|
857.1
|
|
Total Budgetary
Reductions
|
2827.0
|
1923.4
|
1411.0
|
|
As a percentage of opening net budget
|
12.5 %
|
8.4%
|
6.1%
|
The Impact of the Proposals on Staffing Numbers
The changes to the General Fund Revenue
Account planned for in the medium term that are described earlier
in this report reflect a number of changes to the Council’s
permanent staffing establishment. These have been carefully
considered, and have been, or are yet to be consulted on, to ensure
that the staffing structures are able to support the service
delivery plans for the next three years.
The result of the changes to the permanent
staffing establishment by service that is anticipated over the
course of the medium term is shown below in Table 6.
Table 6 - Planned Changes to the Permanent Staffing
Establishment
|
|
Number of Full Time Equivalent Posts
as at…
|
|
|
31/03/08
|
31/03/09
|
31/03/10
|
31/03/11
|
|
Commercial Services
|
255.61
|
255.61
|
255.61
|
255.61
|
|
Development Services
|
61.81
|
64.81
|
64.81
|
64.81
|
|
Community Services
|
79.43
|
79.43
|
79.43
|
79.43
|
|
Maritime
|
34.49
|
34.49
|
34.49
|
34.49
|
|
Chief Executive & Executive Support
|
9.54
|
9.54
|
9.54
|
9.54
|
|
Customer Services
|
141.76
|
146.76
|
146.76
|
146.76
|
|
Financial Services
|
50.98
|
52.98
|
52.98
|
52.98
|
|
Improvement & Performance
|
54.84
|
55.34
|
55.34
|
55.34
|
|
Total
|
688.46
|
698.96
|
698.96
|
698.96
|
The table above does not reflect those posts
that are grant funded, or seasonal, as the numbers of these are not
easily known in advance as it is determined by the amount of
funding available.
Grant funded posts are regularly reviewed, and
where a robust business case exists for the permanent provision of
the service they provide the post is added to the permanent
establishment through the additional base budget as part of the
annual budget report.
The funding for seasonal staff is treated as
cash limited and its deployment will depend upon the particular
need which may vary on a year to year basis depending upon the
weather and other seasonal influences.
General Fund Reserves
The Local Government Finance Act 1992
specifies that precepting authorities, such as Thanet District
Council, must have regard to the level of reserves needed for
estimated future expenditure when calculating the budget
requirement. In order to comply with this requirement each
year the Council reviews its level of reserves, taking account of
the financial risks that could pose a threat to the Authority over
the medium term.
As a result of this exercise the Council has
set its optimal level of general reserves at 10% of the net revenue
budget, which is felt to be a sufficient level of
contingency. The balances that are forecast to be available
at the end of 2007/08 are in excess of this level, and so the
budget proposals over the medium term are to reduce this down until
a level of 10% is obtained.
Earmarked Reserves in 2008 – 2011
In addition to the general reserve, a number
of earmarked reserves exist, which are sums set aside for specific
purposes. Essentially these allow funds to be saved
over a number of years for large and often one-off items of
expenditure, thereby smoothing the impact on Council Tax.
The earmarked reserves over the medium term
are shown below. Where the exact demand on the reserve is not
known sufficiently far enough in advance over the medium term no
estimates are allowed for within the MTFP. This does not
affect the ‘bottom line’ of the budget requirement, as neither the
expenditure or the equivalent amount of funding from the earmarked
reserves are reflected.
The Earmarked Reserves that are being used in
the medium term are:
- Information Technology Fund
– This will be used to continue the developments in workflow that
have been underway for some years. It is likely to be used in
2008/09.
- Environmental Action Plan
Fund – This holds funds that have been set aside to meet
future expenditure on improvements to the appearance of Thanet and
the general environment.
- Local Authority Business Growth
Initiative (LABGI) Reserve – All LABGI grant that is not
used in the year that it is received is rolled forward in this
reserve so as to be available in future.
- Planning Delivery Grant (PDG)
Reserve – All PDG that is not used in the year received is
rolled forward in this reserve for future years.
- Cremator Works Fund – Each
year an amount is set aside in this reserve which is being saved to
fund the replacement burners which are estimated to cost in excess
of £900k.
- Decriminalisation Account –
The Council administers on-road parking service but has to account
for the income and expenditure separately. This reserve holds
any unutilised revenues from parking charges. These are used to
fund future costs of replacement meters.
- Priority Improvement Fund –
This holds money set aside to fund initiatives that require one-off
funding that will deliver service improvements or act as an invest
to save reserve, providing initial start-up funds for projects that
will ultimately save money.
- Council Elections Fund –
This is a saving account for the elections which occur every four
years.
- Corporate Plan Fund – This
is used to roll-forward budget that was originally set aside to
progress projects within the Corporate Plan that remains unspent
due to delays.
- Youth Work Fund – This is
money set aside for projects and initiatives for youth work, which
do not need a regular source of funding.
- Best Value Survey Fund -
This is a saving account for the production costs of the best value
survey which occurs every four years.
Local Authority Business Growth
Incentive (LABGI) Grant - The LABGI grant scheme was
introduced to encourage Local Authorities to increase business
growth in their areas. It ran for three years from 2005/06 to
2007/08 and to date the Council has received £2.22 million, with a
further grant due at the end of 2007/08; although the exact amount
receivable will not be known for some time. Money not spent
by the end of the financial year will be carried forward within an
earmarked reserve for use in future years.
The budget proposals over the medium term
provide for the use of the LABGI grant for one-off or fixed term
initiatives that are likely to bring socio-economic improvements to
the area, which in the main part are captured within the Corporate
Plan, where a total £832k is planned to be used over the three
years.
The General Fund Revenue Budget Requirements
All of the stages in developing the General
Fund Revenue Budget that have been described above have been used
to calculate the estimated budget requirement for 2008 – 2011,
which are presented in summary in Table 7 overleaf. The
figures for 2008/09 have formed the basis of the approved budget
for 2008/09 and are indicative for the following two years.
Table 7
The Medium Term General Fund Revenue
Budget 2008 - 2011
|
|
2008/09
|
2009/10
|
2010/11
|
|
|
£’000
|
£’000
|
£’000
|
|
Opening Revenue Budget
|
22,654.7
|
22,981.0
|
23,019.0
|
|
Inflationary Increases
|
1513.5
|
1479.4
|
1528.0
|
|
Service Growth
|
1426.8
|
122.0
|
460.0
|
|
Corporate Plan Growth
|
662.0
|
634.0
|
139.0
|
|
Identified Savings
|
(1962.4)
|
(588.0)
|
(443.3)
|
|
Increased Income
|
(864.6)
|
(433.1)
|
(110.6)
|
|
Savings Targets
|
0.0
|
(902.3)
|
(857.1)
|
|
Transfer from the General Reserve
|
(793.0)
|
(200.0)
|
(150.0)
|
|
Transfer from Earmarked Reserves
|
(499.0)
|
(324.0)
|
(139.0)
|
|
Net General Fund Revenue Budget
Requirement
|
22,138.0
|
22,769.0
|
23,446.0
|
|
Increase in Budget Requirement
|
3.67%
|
2.85%
|
2.97%
|
Funding the Medium Term General Fund Revenue Budget
Local Government Finance Settlement
2008/09 - 2010/11
Formula Grant – In January
2008, the Government announced the first ever three-year settlement
for Thanet District Council for its General Fund expenditure
requirements. The settlement included amounts for activities
that had previously been funded by way of a specific grant, and as
a result appeared at first to be more generous than was actually
the case. After taking account of this change in funding
treatment, the actual growth in cash for this Council equated to an
increase of 1.1% for each year of the three years.
The introduction of three-year settlements
means that the Council can plan on a sensible timescale and be able
to look further to the future than has been possible previously,
however with a grant that is so significantly below the current
level of inflation it means that the pressure to identify and make
savings is even greater in the last two years of this Medium Term
Financial Plan.
Area Based Grants – In
addition to the Formula Grant, the Finance Settlement announced
additional amounts that will be paid as Area Based Grants, which
will be provided to further the goals that are set out in the Local
Area Agreement (LAA). This amount has been reflected within
this medium term plan, shown as offset against an equivalent amount
of expenditure, which will be used to deliver Thanet’s contribution
to the financial plans of the LAA.
Specific Grants – Although
the Government has stated its commitment to reduce the use of
specific grants, preferring to either provide funding through the
Formula Grant or on an area basis, for technical reasons a number
of specific grants remain. Thanet is due to receive a new
specific grant in 2008/09 which will provide funds to meet
increased costs arising from the introduction of the national free
bus scheme (The Concessionary Fares Scheme). It is likely
that all of this grant will be required to meet the costs of
delivering this new service. Specific Grants will also be
received for services for the homeless and for administering the
housing benefit and council tax payment and collection systems on
behalf of Government. Where the level of grant has not yet
been announced, it has been assumed to remain at the same level as
2007/08.
Grant Funded Revenue Projects
Aside from the grants from Central Government
the Council receives a significant level of grant funding from
other sources for a range of projects and initiatives. Some
of the grants are ring-fenced, others are provided without
limitation, although the Council always aims to ensure that the
grant is used in the spirit in which it is provided, each of the
main grant funding streams which are expected to be received in the
medium term are discussed below.
Building Safer Communities
Grants – funding provided by Kent County Council for
initiatives intended to improve local community safety and reduce
the impact of anti-social behaviour on the lives of Thanet
residents.
Parent Practitioner - Home
Office funds have been obtained to cover the costs of a Parent
Practitioner to assist with people who have difficulty in their
role as parents.
Planning Delivery Grant – A
Central Government Grant to assist in covering costs incurred by
processing planning applications.
Conservation Grant - Heritage
Lottery Funding for the costs of staff working on the Thanet
Heritage Initiative.
Sports Disability Officer –
Funding from Sports England for a dedicated staff resource to
develop initiatives and programmes to assist disabled Thanet
residents gain access to different sporting activities.
Children's Play - The BIG
Lottery Fund is helping to develop two Multi-Use Games Areas in
areas in need of play provision and engage young people in an
eight-week, school holiday period Beach Play initiative.
MargateRenewal
Partnership – The Council is to receive a European
Regional Development Funding grant to contribute towards the salary
costs of the Renewal Partnership team, with additional funding also
being made available by the South East England Development
Agency.
The main funding sources for the Council in
the Medium Term are summarised below in Table 8.
Table 8
Thanet’s Finance Settlement for
2007/08 to 2010/11
|
|
2007/08
|
2008/09
|
2009/10
|
2010/11
|
|
|
£’000
|
£’000
|
£’000
|
£’000
|
|
Formula Grant (FG)
|
12,765
|
13,021
|
13,164
|
13,310
|
|
2007/08 Specific Grants now included in FG
|
110
|
n/a
|
n/a
|
n/a
|
|
Total Adjusted Formula
Grant
|
12,875
|
13,021
|
13,164
|
13,310
|
|
Increase in Adjusted Formula Grant
|
|
145
|
143
|
146
|
|
% Increase in Adjusted Formula Grant
|
|
1.1%
|
1.1%
|
1.1%
|
|
|
|
|
|
|
|
Area Based Grant Allocated to Thanet DC
|
n/a
|
1,488
|
1,862
|
1,789
|
|
|
|
|
|
|
|
Specific Grant for Concessionary Fares
|
n/a
|
2,360
|
2,330
|
2,345
|
Council Tax
The Council sets its net budget requirement
(after having taken account of increased income from charges and
the use of reserves) which is then part funded from Government
Grant and part from Council Taxes. The total amount that is needed
to be raised by Council Taxes is known as the Precept. This is
divided by the total number of equivalent Band D properties (the
tax base) in order to calculate the individual Council Tax band
amounts. For medium term planning purposes, the level of
growth in the tax base has been assumed to be 1.0%, based on
experience in the last 3 years.
The Council’s budget plans, grant predictions
and the assumed Council Tax base give the projected levels of
Council Tax increases which are shown below in Table 9. This
shows that with the Council’s planned efforts to keep expenditure
levels down, and optimise revenue receipts, despite the low level
of financial support from Central Government, Council Tax increases
are able to be held at a steady 4.5% over the medium
term.
Table 9 - The Medium Term Revenue
Funding Summary 2008 - 2011
|
|
2007/08
|
2008/09
|
2009/10
|
2010/11
|
|
|
£’000
|
£’000
|
£’000
|
£’000
|
|
Net Service Budget
|
22654.7
|
23430.0
|
23293.0
|
23735.0
|
|
Transfer from General Reserves
|
300.0
|
793.0
|
200.0
|
150.0
|
|
Transfer from Earmarked Reserves
|
1000.0
|
499.0
|
324.0
|
139.0
|
|
Net Budget Requirement
|
21354.7
|
22138.0
|
22769.0
|
23446.0
|
|
Funded From:
|
|
|
|
|
|
Formula Grant
|
12765.0
|
13021.0
|
13163.0
|
13310.0
|
|
Precept
|
8589.7
|
9117.0
|
9606.0
|
10136.0
|
|
Council Tax Base
|
45,601
|
46,179
|
46,641
|
47,107
|
|
Band D Council Tax
|
£188.64
|
£197.10
|
£205.92
|
£215.19
|
|
Increase in Band D Council Tax
|
-
|
£8.46
|
£8.82
|
£9.27
|
|
Percentage Increase in Band D Council
Tax
|
-
|
4.5%
|
4.5%
|
4.5%
|