Agenda item

Report of the County Treasurer (CT/18/07) on the impact of the Provisional Local Government Settlement for forthcoming year on the preparation of the 2018/19 budget and re-affirmation of service expenditure targets, attached.

(Councillors Biederman, Brazil, Dewhirst and Hannaford attended in accordance with Standing Order 25(2) and spoke to this item).

The Cabinet considered the Report of the County Treasurer (CT/18/07) on the impact of the Provisional Local Government Settlement for the forthcoming year, on the preparation of the 2018/19 budget and re-affirmation of service expenditure targets.

On 19th December 2017, the Secretary of State for the Department for Communities and Local Government, Rt. Hon. Sajid Javid MP, had made a statement to Parliament on the Provisional Local Government Finance Settlement for 2018/19. The main items of note were:

·         that the Core Spending Power figures for the four year period of 2016/17 to 2019/20 were at the expected level of £115.2 millions for 2018/19;

·         that the proposal to reduce the Rural Services Delivery Grant in 2018/19 from £65 millions to £50 millions was not going ahead and the Grant would remain at the current level;

·         that in relation to the proposed changes to the New Homes Bonus Scheme, Government had decided not to go ahead and would keep the scheme unchanged from the current year (except for a reduction in the number of years benefit from 5 years currently to 4 years); and

·         that there was a change in the annual Business Rates inflationary increase from Retail Price Index (RPI) to Consumer Price Index (CPI), effective from 2018/19, meaning a reduction to Business Rates received by Local Authorities as part of Core Funding. 

The report further outlined the specific Grants, notified at the time of writing the report, with the omission of the Public Health Grant which had still to be received.

Cabinet further noted that the provisional settlement had set the Council Tax increase that would  trigger a referendum, excluding the Social Care Precept, at 3% for 2018/19; an increase of 1%.

The Report further outlined details on the 2018/19 100% Business Rate Retention Pilot. As the 13^th December 2017 Cabinet report outlined, the Department for Communities and Local Government invited Local Authorities to submit applications to become 100% Business Rates Retention Pilots in 2018/19 to help design future local government finance reforms.

The Devon application was one of the ten successful bids.  Whilst this would help inform future local government finance reforms, the pilot bid submitted estimated that for 2018/19 there could be a benefit of just under £17 millions to geographic Devon of which nearly £10 millions could come to the County Council.  This was only an estimate and the final sums would not be known until the end of the Pilot year. 

Cabinet finally noted that the revenue spending targets for 2018/19, agreed at the Cabinet meeting of 13th December 2017 could remain unchanged due to the provisional settlement being no worse than anticipated.

The matter having been debated and the options and/or alternatives and other relevant factors (e.g. financial, sustainability, carbon impact, risk management, equality and legal considerations and Public Health impact) set out in the County Treasurer’s Report and/or referred to above having been considered:

It was MOVED by Councillor Clatworthy, SECONDED by Councillor Hart, and

RESOLVED

(a) that the content of the Provisional Settlement be noted;

(b) that the success of the Devon wide Business Rates Pilot application be noted; and

(c) that the revenue spending targets for 2018/19, previously approved at the 13^th December 2017 Cabinet meeting, remain unchanged.