Agenda item

Budget Strategy and Draft General Fund Budget 2022/23

Report FH/21/01 sets out the Council’s Draft General Fund budget for 2022/23 as well as summarising the overall Budget Strategy for the same period.  The report seeks to outline the proposals being consulted upon. 


In accordance with the Local Government Finance Act 1992 full Council will consider and agree the budget and council tax for the coming financial year 2022/23, this meeting will be held on 23 February 2022.  Both the draft budget and the Budget Strategy will build into the final position, which is also affected by the Local Government Finance Settlement. 




Report FH/21/01 set out the Council’s Draft General Fund Budget for 2022/23 as well as summarising the overall Budget Strategy for the same period.  The report sought to outline the proposals being consulted upon. 


In accordance with the Local Government Finance Act 1992 full Council will consider and agree the budget and council tax for the coming financial year 2022/23, this meeting will be held on 23 February 2022.  Both the draft budget and budget strategy will build into the final position, which is also affected by the Local Government Finance Settlement. 


Mrs Charlotte Spendley, Director of Corporate Services, presented the report with the following comments: 


·         Process starts with the medium term financial strategy (MTFS) for the period 2022 – 2026. 

·         Initially there was an anticipated budget gap of £1.6mn.

·         Budget Managers were asked to look at services across all areas for possible savings as well as identifying necessary growth. 

·         Fees and Charges were reviewed. 

·         Cabinet then considered the Budget Strategy report in December 2021.

·         At present the budget gap stands at £1.1mn for 2022/23.  There will be no cuts to services however, there is a possibly reserves will be utilised to close the gap. 

·         The Budget Consultation is open at present, closing on 1 February 2022. 

·         One of the next stages is the setting of the Council Tax for 2022/23 which will be considered by Full Council in February 2022. 


Mrs Spendley advised she had received a number of questions on report FH/21/01 prior to the meeting and answered these in the meeting as follows: 


1. How is the Council ‘engaging with stakeholder groups and local residents’?

The Council has launched a public consultation exercise through its website.  This includes the relevant budget setting documents including those that focus over the medium term and those focused specifically on the coming financial year.  The consultation exercise has been promoted through the councils website (on the home page for two weeks), a press release on 23 December (which was shared with District Councillors and Town/Parish Councils), through social media both at the launch and more recently this week.  In addition, 100 posters promoting the consultation have been placed at key sites including with the community hubs, sports facilities and sent to residents groups, community groups, libraries and with Community Safety Unit colleagues.  Emails have also been sent to local business leaders through the Business Advisory Board.  As a new initiative this year the council has developed a short video explaining Council Tax, which has also been promoted online this week to encourage residents to have their say.   


2. Is there any prospect of focus groups meetings with chairs of F&A Committees of Town and Parish Councils or Is there any prospect of local public meeting?

The Council does have limited resources available so encourages all interested parties to engage through the questionnaire.  We don’t currently have any plans for focus groups or public meetings, but the budget proposed is considered at various stages by the Overview & Scrutiny Committee, Finance & Performance Sub-Committee and Cabinet, before being tabled to Full Council, so interested parties could provide their feedback to their relevant elected Councillor for the District Council if they did not feel the questionnaire could facilitate their points. 


3.  Please explain what the ‘Collection Fund balance’ and the ‘Finance Settlement’ at 1.2 are.

Folkestone & Hythe District Council is known as a billing authority, this means that it is the authority responsible for billing and collection the relevant Council and Business Rates within the district.  For billing authorities there is a statutory obligation to maintain a separate account to record these transactions and this is known as a Collection Fund. The balances relate to transactions in relation to collection from taxpayers and distribution to local authorities and the Government of Council Tax and Non-Domestic Rates.

The Finance Settlement is an announcement made by the relevant Government department for Local Government (currently Department for Levelling Up, Housing & Communities).  Annually they announce the funding to be made available to local authorities such as F&H and guidance on other funding, such as the level councils can raise their council tax by without the need for a referendum.   


4. Please explain the ‘unavoidable budget growth’ referred to in 1.3. 

Managers are tasked annually with identifying relevant growth and savings to the budget for the forthcoming year.  The unavoidable growth is usually driven by operational pressures, system improvements, policy changes or at times legislative changes.  The full list of growth (7 savings) items is tabled within the budget strategy paper and available here http://sdc-intranet/moderngov/documents/s39309/Budget%20Strategy%202022-23%20Appendix%202%20updated%20for%20publication.pdf


5. Please explain the implications of there being ‘no referendum limits’ referred to in 2.3 of the report. 

This means that Town and Parish Councils are free to set their council tax precept request at any level they feel is appropriate for their parish, and that no public referendum would be required by the government regardless of the resulting percentage increase to a Band D dwelling for council tax. 


 6. Does the New Homes Bonus apply to new dwellings created by conversion and/or Change of Use?

Yes NHB covers new build, conversions and long term empty homes brought back into use.


 7.  What is the ‘lower tier services grant’?

This was a new grant provided by the Government to lower tier councils (like F&H who operate in a two tier system with an upper tier authority KCC).  It is an un-ringfenced grant (can be used for any purpose), it was introduced to ensure no council had less funding available to it than the previous year.


8. General Fund Summary at 3.3 - Why is the expenditure on Planning so low? What provision is included for, say, Conservation services, Conservation Area, Designation/Appraisals, Creation of Local Lists, Neighbourhood planning, etc?

The Planning budget shown on the summary is a net position, therefore income of £1.39m is offsetting the costs of the service.  There is no specific budget provision for these items, however there is a professional advice budget which it utilised to seek relevant advice on heritage matters, and the planning policy team have a small budget available to address the wider policy matters.  In terms of Neighbourhood Planning, the council can reclaim the funds from the Government when certain milestones are reached, and this was done for St Mary in the Marsh Neighbourhood Plan. 


9.  Please explain the context of the General Reserve.

The forecast budget position for 2022/23 is a deficit.  The General Reserve is the Council’s un-earmarked reserve (not set aside for a specific purpose). This reserve is the result from events that have allowed monies to be set aside, surpluses or decisions causing anticipated expenditure to have been postponed or cancelled.  The Council’s reserves policy requires us to hold at least £1.5m by way of a general reserve


10.  General Reserve at 4.2 -  What is the £310k for ‘Community led Housing’?

This is an earmarked reserve that will be utilised to fund the Community Lead housing project.  This is an ongoing project where we work with local groups within the local community to help them provide affordable homes to meet their identified housing needs.  It is still in its early stages for us and we are actively working with 3 groups at this time.  The most advanced being a group from the Nepalese Community in Cheriton who are in the process of completing a housing needs assessment.  The project assists groups with their local needs assessments,  identification of sites, potential funding to enable the establishment of an entity to progress their initiative, work with the groups to assist in accessing funding streams through Homes England and signposting.  The groups can be community based or can also be led by a parish council looking to develop local needs housing. 


11. What is the £586k for ‘Homelessness Prevention’ spent on?This earmarked reserve is funded from Government Grant and is utilised for additional targeted staffing to prevent homelessness and associated third sector funding.


12. Will you address the Town and Parish precepts. ‘remaining subject to confirmation’?  

We have received a number of parish precepts now but as the deadline for return is not until 31 January we do not to date have all preceptors returns. 


Further comments and questions raised: 


·         Are there any funding lags?  This depends on the type of grant and how quickly it is processed.  Funding is normally paid within a month. 

·         Climate Change Reserve – could PCs utilise this?  Allocations at present have been LED lighting, resourcing and EV charging points.  Although the remainder is not earmarked to any specific project it would not be consider for use by PCs.  Although signposting would be available for any relevant grant applications. 

·         Referring to the second information video, would this include details on the ‘My Account’ service to increase sign-ups?  This could be considered for inclusion. 

·         General Reserve – a large decrease of  £9mn, reasons for this?  Earmarked reserves have seen a downward trend due to Business Rates, less Government Funding; COVID recovery costs.  Also significant draws, for example, Mountfield Road Business Hub completion.

Supporting documents: