Agenda item

BUDGET PROPOSALS FOR 2015/2016 TO 2017/2018 AND OPTIONS FOR COUNCIL TAX

Meeting of Nottinghamshire & City of Nottingham Fire & Rescue Authority, Friday, 27th February, 2015 10.30 am (Item 55.)

Report of Chief Fire Officer (Amended version)

Minutes:

Councillor Malcolm Wood, Chair of the Finance and Resources Committee, and Neil Timms, Strategic Director of Finance and Resources, jointly presented the report which contains proposals for Revenue and Capital Budgets for 2015/16 to 2017/18 and proposes options for members to determine the level of Council Tax for 2015/ 2016.

An erratum was issued with regard to appendix B to the report, and a revision to page 57 has been issued. All amendments are included within a revised report within the online agenda.

The Finance and Resources Committee had considered 4 potential options relating to the funding of the Service through Council Tax, and have recommended two options to the Full Authority for consideration:

Option A - Council Tax increase of 0%

Option B - Council Tax increase of 1.95%

The following points were highlighted:

(a) it is necessary to plan ahead to ensure the Service can continue to operate smoothly by the gradual renewal and refurbishment of stations and equipment. The revenue budget has been significantly impacted by grant cuts from Central Government which have resulted in changes at many levels which are illustrated in paragraph 2.20 of the report;

(b) paragraph 2.35 illustrates a significant drop in the amount of grant funding from Central Government. This needs to be planned for within budgets and business planning to ensure continuation of a first class Service;

(c) changes to the Council Tax system were predicted to result in a shortfall of income but this was not the case and has contributed to a budget surplus of £401,106 in 2015/16, however this is not an on-going surplus;

(d) all planned reductions have been made during 2014/15 as part of the savings of £3.9 million to be made by the end of 2017/8.

Several scenarios of increasing and not increasing the council tax in some years and not others, and the financial implications attached, are included within the report.

For each option, Members arguments included the points below:

Option B - 1.95% rise in Council Tax

The value of the government grant is being eroded year-on-year so it is necessary to increase the Council Tax yield. This will have a financial impact on band D property Council Tax of an additional £1.39 per year which, when asked, residents considered to be good value. To not implement an increase of 1.95% will impact on service delivery and could result in further job losses in addition to more than 200 jobs which have been cut as a result in the reduction of Central Government funding, along with 6 appliances. This issue cannot be looked at in the context of one year’s funding as the Authority is responsible for future years’ funding.The freeze grant is essentially an incentive to reduce the budget base year-on-year but this will result in resources diminishing in real terms.An additional few pence per week from citizens can ensure the continuation of a first class service. We need to justify cuts to resources and services in light of cuts from Central Government, if people want to keep the current service they need to pay for it and when asked, they are willing to do so. Supporters of the ‘0% increase’ option may refer to a surplus budget and suggest that this be spent rather than seek an increase in Council Tax, but this sum is needed to take account of the ongoing reduction of Central Government revenue grants. It is possible that the freeze grant will reduce annually and may not exist by 2022 so this too needs to be taken into consideration. The organisation has handled recent cuts very well but funding cuts continue with further savings required so a long term view is necessary.

Option A - 0% rise in Council Tax

As illustrated in paragraph 2.37, there is a budget surplus in 2015/16 of £401,106. If the freeze grant of £244,066 is accepted, the surplus budget would result in a sum which is £168,904 less than the surplus budget total if the Council Tax were to be increased by 1.95%. However, as referred to previously in the agenda, the Authority is required to have a £4 million reserve but the projected level of balances by 31 March 2015 is of the order of £6.1 million which equates to 50% more than is realistically needed. Therefore by applying the 1.95% increase, the Authority would be taking £21,109,002 from the citizens of the City and County when it is possible not to increase the Council Tax and accept the freeze grant with the result of only a £168,904 deficit. The Council Tax yield should not be considered in isolation but as part of the total grant yield.If the freeze grant is not accepted this year it will be lost to the Authority forever. There have been changes to budgets during the past years and the Service has been maintained and citizens have not seen any difference. If the freeze grant is accepted and Council Tax is not increased then there is still a budget surplus to add to resources and a £0.25 million from Central Government year-on-year grant to be added to resources without taking funds from citizens. It clearly is not necessary to implement any increase and so there should not be an increase in Council Tax.

Councillor Wheeler, seconded Councillor Chris Barnfather’s proposal to approvea 0% increase in Council Tax.

Councillor Jon Collins supported Councillor Malcolm Wood’s proposal for a 1.95% increase in Council Tax.

It is noted that although speaking on the item, Councillor Jon Collins had left the meeting prior to voting.

Members voted for the authority’s precept for 2015/2016 as follows:

Members in favour of approving a 0% increase in Council Tax:

Councillor Chris Barnfather

Councillor Stephen Garner

Councillor Roger Jackson

Councillor Ken Rigby

Councillor Timothy Spencer

Councillor Gordon Wheeler

Councillor Liz Yates

Members voting against a 0% increase in Council Tax:

Councillor John Allin

Councillor Eunice Campbell

Councillor John Clark

Councillor Cybil Fielding

Councillor Brian Grocock,

Councillor Michael Payne

Councillor Darryl Pulk

Councillor David Smith

Councillor John Wilmott

Councillor Malcolm Wood

With the result of 7 votes for and 10 votes against, the recommendation was not carried.

Members then voted on the proposal to implement a 1.95% Council Tax increase, voting as follows:

Members voting to increase Council Tax by 1.95%: