REPORT OF THE TREASURER ON THE BUDGET 2021/22
The financial background to this report is that the Council’s current financial position is sound. However, the factors significantly affecting the Council’s overall financial position include:
- the ‘localism’ agenda under which the Town Council has already taken over the full annual cost (approx £12,000) of running the Paddling Pool and is being pressed by the District Council to meet the cost of a variety of hitherto-WFDC services that are provided within Stourport’s boundaries – latest position will be explained at meeting;
- the level of ‘balances’ that the Council should aim to retain to deal with unbudgeted in-year spending or loss of income.
More detail on all of the background to the budget will be provided to the meeting of Finance Committee on 25th January 2021.
The purpose of this report is to help the Committee to formulate budget recommendations to the Finance Committee and to the Council. The Parks Committee section of the Council’s draft budget is attached to this report. Members will note that it provides details as follows:
- Actual income and expenditure to 31st December 2020
- Revised estimates for 2020/21
- Draft budget for 2021/22
- Budget projection for 2022/23; and
- Vehicles, mowers, buildings, equipment and computing programme.
These items are considered in the paragraphs below.
2. ACTUAL INCOME AND EXPENDITURE TO 31 DECEMBER 2020
Accepted good accounting practice requires that budgetary control be carried out during each financial year. An important element of that process is to compare actual income and expenditure for the 9 months ended 31st December 2020 with the approved budget for the current financial year 2019/20 to identify any significant additional costs or savings and take any appropriate action. However, as variances have been included in the full year revised estimate for 2019/20, and are dealt with in the next paragraph, there is nothing else to bring to Members attention.
3. REVISED ESTIMATE 2020/21, DRAFT BUDGET 2021/22 AND PROJECTION 2022/23
The revised estimate for 2020/21 is detailed in the attached paper and is just £6,320 below the original budget (£153,483 compared with £160,803). Nevertheless there were variances as follows:
|Costs greater than or income less than budgeted||£000|
|Parks equipment - play areas Mem Park + Areley Kings||6.6|
|Minor variations (net figure)||3.6|
|Costs less than, or income greater than, budgeted|
|Paddling pool – not opened so reduced costs||-7.0|
|Burial fee income greater than budgeted||-5.0|
|Parks – improved service provision – budget not used||-4.5|
4. DRAFT BUDGET 2021/22 and PROJECTION 2022/23
The draft budget is detailed in the attached annex and shows total net expenditure for 2021/22 as £194,310 and for 2022/23 as £195,077. The figures are based on near-zero pay inflation and minimal price inflation. In relation to income it is suggested that:
- cemetery fees – ‘headline’ fees were increased from £720 to £800 with effect from 1st April 2020 and other cemetery fees by around the same percentage – this was a substantial increase and it is suggested that there be no increase this time;
- rents for allotments are normally increased every two years and were increased 2 years ago from £40 to £44 (large plots) and from £20 to £22 (small plots). It is suggested that they now be increased to £46 (large plots) and £23 (small plots). This will also be considered by Finance Committee.
The biggest issue this year relates to the proposal that responsibility for looking after the Riverside toilets should transfer from Wyre Forest District Council to Stourport Town Council under the localism strategy. If members do want to proceed with this proposal they need to do in the knowledge of the full implications, financial as well as operational. The estimated annual cost comprises the following:
An increase of £31,000 per year in the Council’s budget requires, all else being equal, an increase in the precept of £4.50. This will, of course, be considered by Finance Committee at its meeting on 25th January 2021.
The projection for 2022/23 has been provided to assist with future Budget Strategy.
Members are invited to put forward other ‘bids’ for service improvements or savings which the Committee may decide to recommend to Finance Committee, and to the Council, for inclusion in the Council’s final 2021/22 budget.
4. VEHICLES, MOWERS, BUILDINGS, EQUIPMENT AND COMPUTING PROGRAMME
It is envisaged that the works van (now 15 years old) will be replaced during 2021/22 using the Vehicles Fund which has been built up by annual contributions.
It is RECOMMENDED that:
- Actual income and expenditure for the 9 months ended 31st December 2020 be noted; and
- The Committee approve, for referral to the Finance Committee and to the Council:
- the Parks Committee section of the revised estimate for 2020/21, the draft budget for 2021/22 and the Vehicle and Plant Programme;
- its decisions in relation to cemetery fees and allotment rents from 1st April 2021;
- its recommendations in relation to service options.
This Report has been prepared by Graham Shaw, Treasurer who will be pleased to respond to any questions arising.