Background
The Council agreed the following recommendations at the December 2023 Parish Council meeting:
- The 2024/25 budget for the Administration Cost Centre should be £71,000.
- The 2024/25 budget for the Services Cost Centre should be £11,000.
- The 2024/25 budget for the Projects Cost Centre should be £3,000.
- The 2024/25 budget for the Grants Cost Centre should be set at £12,000.
- The 2024/25 Precept should be set at £81,875.
- The 2024/25 budgets for Projects and Grants Cost Centres should be excluded from the 2024/25 Precept.
- The Parish Council should commit to a four-year financial plan as outlined in this paper.
- The Parish Council should agree the creation of a ring-fenced reserve fund of £30,000 specifically to cover the budgetary shortfall over the next four years.
- The Parish Council should agree not to use ring-fenced reserves to fund routine expenditure.
- If all other recommendations are agreed, the Parish Council should undertake a public consultation to explain the strategy.
The four-year financial plan referred to above is a combination of the following, which was also agreed by the Council:
- Reduce expenditure
The draft budget proposes a number of reductions in expenditure, which would need to be sustained throughout the year.
- Increase the precept by a fixed percentage for the next four years
Any expenditure that is routine or on an annualised basis should be included in the precept.
On its own, it would take an increase in the precept of 9.9% every year over 4 years to achieve a balanced budget. Increasing the precept by a fixed amount for a four year period allows for clearer financial planning on a multi-year basis.
- Increase income
The Parish Council may wish to adopt two broad principles:
- That grants should be sought for all future projects before they are undertaken.
- That opportunities to generate income should be explored.
- Stricter budgetary discipline
This process will require adherence to the Council’s Financial Regulations, in particular “Section 4. Budgetary control and authority to spend.”
- Creating a ring-fenced reserve fund specifically to cover the budgetary shortfall
The creation of a ring-fenced fund solely for the use of balancing the budget over the next four years will allow for the transition to be managed more effectively. This fund will be drawn from the following sources:
- £22,250 from the General (Operational) Reserve. This figure being £37,250 less £15,000 that should remain in this reserve fund under the Council’s Reserves Policy.
- £6,300 from the Ings’ View Reserve leaving £7,500 in this reserve fund.
- £1,450 from the Development of the Streetscene Team Reserve leaving £550 in this reserve fund.
2024/25 Precept and Budget
The net effect of the decisions made at the December 2023 meeting is:
- An increase in the precept of 9.9%, from £74,500 in 2023/24 to £81,875 in 2024/25 (although the change to the tax base means that this translates as a 7.9% increase to the Band D figure).
- A decrease in the budget of 12%, from £110,250 in 2023/24 to £97,000 in 2024/25.
The intended overall effect of the four-year financial plan is to equalise the precept (and any other income the Council receives) with the budget by the 2027/28 financial year. This assumes:
- Annual increases in the precept of 9.9%
- Annual increases in expenditure of 3%
- That each annual budget is not exceeded
It will be possible to achieve this target sooner by limiting the increase in the budget to below 3% annually, or increasing non-precept income, or a combination of the two.
Regular updates will be provided on the Parish Council website on the progress of the four-year financial plan, in addition to the minutes of Parish Council and Finance Committee meetings.
