Budget strategy report presents financial position for 2022-26
Thanet District Council will discuss its Budget and Medium Term Financial Strategy 2022-26 at a Cabinet meeting on Thursday 18 November 2021 to ensure it has a plan in place to deliver the key public services that matter most to local people.
The Budget and Medium Term Financial Strategy is the first part of an annual process which plans how the council will approach its finances for the year ahead and ensure it meets its statutory duty to deliver a balanced budget. It also includes projections for how the council’s financial position could look over the next four years and what measures can be put in place to mitigate them. Due to the significant uncertainty around the future of local government funding, inflationary pressures and the impact of the pandemic, a number of assumptions have had to be made in the report.
The report forecasts a budget gap of up to £691k in 2022-23. This is an improved picture compared to the projected £1.8m gap reported back in February.
Three proposed scenarios – optimistic, neutral and pessimistic – are set out in the report. In the medium term the Council does need to identify activities which enable savings and/or ways to improve and generate more income, however the report sets out the plans that are in place to manage cost pressures and deliver savings for the year ahead (2022-23).
- Savings from controllable council service budgets that can be implemented with relatively limited impact on the operation of our services. This is expected to generate savings of £573k (details given in paragraph 3.8 of the report), and includes a review of jobs that have been vacant for a substantial period of time.
- An increase in fees and charges of at least 2% (where regulations allow), which is expected to generate additional income of around £150k. This will not include an increase in on-street parking.
- An increase of the Thanet Council element of residents’ Council Tax is expected to be proposed – equivalent to 9.59p a week (£4.99 a year) on a Band D property, meaning households in a Band D Property would pay approximately 68p a day for Thanet District Council services.
With relatively low reserves and substantial reductions in Government funding, the report cites other financial pressures facing the council. These include: inflation, shortfalls in payments of council tax and business rates, and increases in national insurance contributions. There are also increasing demands on key council services including homeslessness and waste and recycling, as more domestic waste is being generated due to home-working and more homes in the district.
Cllr David Saunders, Cabinet Member for Finance at Thanet District Council, said:
“Much like many other local authorities across the country, we are faced with a delicate financial position as we try to plan for the year ahead. At this stage, we must make a number of assumptions to ensure we proactively respond to the financial pressures we are likely to face in the not so distant future.
“These financial pressures, which were evident even prior to the impact of the Covid-19 pandemic, coupled with significant uncertainty surrounding the amount of funding we will receive from central Government, means we are presenting a strategy which very much plans for the worst in a bid to achieve greater financial security for the council further down the line.”
Once agreed, the Budget and Medium Term Financial Strategy is used to set more specific details around how the council will allocate its future spending. This information is then included in a Budget Report which is published in January for Cabinet approval and then to Full Council the following month (February 2022).
The money that the council uses to fund public services is made up of Council Tax receipts, income generation including from fees and charges, retained Business Rates and any Government funding. However, Thanet District Council receives just 13p in every £1 of Council Tax. The remainder goes to Kent County Council; Kent Police and Crime Commissioner; Kent Fire and Rescue Service and Town/Parish Councils.
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