Budget and Financial Strategy 2023-24
Budget Setting and Associated Financial Strategies 2023/24 - 2027/28
Contents
- Introduction and Executive Summary
- Budget Assumptions
- Financial Resources
- 2023/24 Spending Plans
- Budget Requirement
- Reserves
- The Transformation Strategy and Efficiency Plan
- Risk and Sensitivity
- Capital Programme
- Treasury Management
- Options
- Appendices
1. Introduction and Executive Summary
1.1 Introduction
Following two difficult years through the Covid pandemic, the war in the Ukraine has further exacerbated the negative impact on the
economic environment which remains volatile and consequently has increased the cost of living globally. Inflation is at an
unprecedented high and is expected to remain elevated during the medium term, causing significant pressure on the Council’s budget.
The Council’s Medium Term Financial Strategy (MTFS) supports the delivery of the Council’s corporate strategy by firstly seeking to
ensure that the Council remains financially resilient and able to deliver the services it must by law; secondly to ensure the resilience
of the budget in a time of increased costs and reduced consumer activity; thirdly to ensure that the Council continues to develop and
grow the Borough and focus on supporting economic development; fourthly maintain discretionary services valued by the residents;
and finally support the Council’s environmental targets. For the fifth year, the Council has again received a one-year settlement
providing certainty for 2023/24 only. Financial planning becomes more difficult with less certainty and more risk.
There are a number of reforms in the pipeline such as Business Rates, New Homes Bonus (NHB) and Fairer Funding Reviews which
will now not materialise until 2025/26, at the earliest. The anticipated delay in the Business Rates Reset in the short term, provides
temporary support to the budget as the Council retains its Business Rates growth. The Council’s prudent approach to maintaining an
adequate level of reserves will help mitigate against such risks.
The Council is mostly self-sufficient however current budgetary pressures mean difficult decisions; balancing the funding position with
the impact that rising costs is having on residents. Inflation and national pay negotiations have had a significant impact on the Council’s
budget and, in balancing this, some charges for discretionary services must also been increased. Further prudence is also required
with regards to looking at efficiencies in relation to discretionary services.
Regarding Business Rates there is an impact specifically in 2023/24 and 2024/25 in relation to the power station which will reduce
rates in both years ultimately down to zero from 2024 when the facility will close in line with Government policy. A combination of
business growth in the borough and the delay to the rates reset does somewhat cushion the effect of the power station closure meaning
that the financial impact of lost rates is less challenging. The Development Corporation and the Freeport on the power station site
provide excellent opportunities for economic growth and promotes a key gateway for development within the Borough. The Council
remains sustainable due to its range of income streams, including Council Tax, commercial property income, and fees and charges,
with a proportionate approach to generating income. However, there is a risk to income generation with the current cost of living
challenges, as household incomes contract so may expenditure on Council services; therefore healthy reserves and revenue
contingency are essential to ensure temporary variations can be absorbed.
There remain significant risks going forward and therefore the Council has taken a prudent course of action with reserves (excluding
New Homes Bonus) to remain at £8.9m to £10.1m over the term of the MTFS at a period when the potential for adverse financial risk remains significant. NHB has been confirmed to continue for 2023/24 and is assumed, in this MTFS, to continue for 2024/25 (this being
assumed as the final year). Many of the reserves are to support ongoing maintenance of Council assets. Any scope to increase
reserves, for both opportunities to deliver the Council’s corporate priorities and to mitigate against adverse future financial risk, will be
taken. This budget proposes the creation of a new reserve - the Treasury Capital Depreciation Reserve of £1m and this has previously
been reported to Cabinet. This reserve will mitigate the potential impact of negative variations on the value of the Council’s treasury
capital investments potentially from April 2025. This is included as part of the Council’s Treasury Management Strategy (Appendix 4)
scrutinised by the Governance Scrutiny Group.
In recent years, the Council has recently been unsuccessful for two bids for Government funding to support capital projects (Levelling
Up Funding and Gypsy and Traveller site funding). Arguably the Borough has been a victim of its own success with government funding
directed to what are perceived as more deprived areas. The ability of the Council to leverage external funding is less likely and the
Council has to be prepared to fund future core service capital commitments. The Regeneration and Community Projects reserve is to
increase by a further £1m, given the likely lack of external funding and the Council’s imperative of not having external debt (and the
associated costs of such debt). The Council continues to focus on growth, significantly investing in capital and averting the need to
borrow.
The Council has, over the last few years, invested significantly in capital within the Borough. Two major projects will have been
completed by 2023/24: Bingham Leisure Hub and the Rushcliffe Oaks Crematorium. The Capital Programme remains vibrant with a
value of £23.4m to 2027/28. Going forwards, significant schemes remain focussing on Leisure Centre upgrades, Vehicle Replacement,
Support for Registered Housing Providers, Disabled Facility Grants, and the potential Compulsory Purchase Order to acquire Flintham
Mess for housing development. These, and other capital schemes in the programme, demonstrate the Council’s commitment to
economic growth, meeting challenging housing targets, supporting the vulnerable and improving both leisure facilities and the
environment. During 2022/23 the Council brought Streetwise back in-house and efficiencies from this project have been incorporated
into the Council’s Transformation Programme targets (along with a number of other efficiency measures) to ensure there are sufficient
resources to deliver core services and discretionary services can continue. This amounts to over £1.5m up to 2027/28.
The Council remains committed to ensuring properties are brought into use for residents. Four years ago the Council introduced a
scheme to levy a 100% premium on properties that have been empty and unfurnished for over 2 years. The Levelling Up and
Regeneration Bill allows Councils to reduce the time period the property has been empty and unfurnished from 24 months to 12 months
prior to levying the premium. This strategy proposes that this is supported for Rushcliffe residents (subject to legislation).
In response to the funding pressures facing many councils nationally, the Government have raised the referendum principles for
districts in 2023/24 to the higher of 2.99% or £5 (£5.05 at 2.99%). The Council’s budget for 2023/24 proposes an increase in Council
Tax of 2% to £153.95 with the recommended increase being £3.02. This will give an average Band D Council Tax increase of less
than 6p per week, ensuring Rushcliffe’s Council Tax remains amongst the lowest in the country (and the lowest in Nottinghamshire) and an increase well below inflation. Whilst this reduces the Council’s Core Spending Power (CSP) as assumed by Government (and
therefore anticipated funding need) it acknowledges the cost-of-living challenges that the Council’s residents are facing but also
balances Council resources to ensure they remain sufficient so we continue to deliver excellent services to Rushcliffe residents now
and in the future; and importantly projected funding levels and reserves are sufficient to protect the Council against unexpected financial shocks. This is essential given the risks and uncertainty that prevails in the current financial environment exemplified by recent
international events including Covid and the Russia -Ukraine conflict and resulting inflationary pressures.
The Government have announced a Council Tax Support Fund (£123k for Rushcliffe) to allow local authorities to support more
economically vulnerable households (those in receipt of Local Council Tax Support) with up to £25 reduction on their Council Tax bill.
The Council is also proposing a further £30k from its own resources to further discount Council Tax bills for properties in bands A to D
with the equivalent of the Council Tax increase for 2023/24 (£3.02 for a band D). This means that vulnerable households, and
households in bands A to D, will see no increase in their Council Tax bill in 2023/24. Details of the proposed scheme can be
found at Appendix 6. It should be noted that those households in bands E to H will pay an average of an additional £4.78 per annum
or around 9 pence per week.
The future uncertainty particularly in relation to pay and inflation, reduced funding and Government reforms makes setting a balanced
budget challenging. The associated financial strategies continue the progress made in recent years to ensure that the Council’s
financial plans are robust, affordable, and deliverable. Despite many councils reporting significant budget deficits, this MTFS is
balanced and designed to ensure we maintain high quality services for current and future generations, a budget that is both financially
and environmentally sustainable. Given the financial challenges, the net budget position over 5 years shows a manageable projected
deficit of £0.298m (a proportionately small 0.75% of annual gross expenditure).
1.2 Executive Summary
This report outlines the Council’s Medium Term Financial Strategy (MTFS) through to 2027/28 including the revenue and capital budgets, supported by a number of key associated financial policies alongside details of changes to fees and charges. Some of the key figures are as follows:
| Category |
2022/23 |
2023/24 |
|---|---|---|
| RBC Precept | £6.850m | £7.092m |
| Council Tax Band D | £150.93 | £153.95 |
| Council Tax Increase | 2.42% | 2.00% |
| Retained Business Rates | £3.958m | £4.905m |
| New Homes Bonus | £1.587m | £1.414m |
| Reserves (at 31 March) | £15.8m | £18.4m |
| Capital Programme | £14.611m | £9.6m |
| Special Expenses |
2022/23 | 2023/24 |
Increase / (Decrease) £ |
Increase / (Decrease) % |
|---|---|---|---|---|
| Total Special Expenses | £816,700 | £860,700 | 44,000 | 5.39 |
| West Bridgford | £53.91 | £55.95 | 2.04 | 3.78 |
| Keyworth | £3.30 | £4.38 | 1.08 | 32.73 |
| Ruddington | £3.82 | £3.68 | (0.14) | (3.66%) |
1.3 The Local Government Act 2003 introduced a requirement that the Chief Financial Officer reports on the robustness of the budget. The estimates have been prepared in a prudent manner, although it should be recognised that there are a number of elements outside of the Council’s control. A number of risks have been identified in Section 8 of this report and these will be mitigated through the budget monitoring and risk management processes of the Council.
2. Budget Assumptions
2.1 Statistical assumptions which influence the five-year financial strategy.
| Assumption |
Note |
2023/24 |
2024/25 |
2025/26 |
2026/27 |
2027/28 |
|---|---|---|---|---|---|---|
| Budgeted inflation | - | - | - | - | - | - |
| Gas | a | 250.00% | 5.00% | 5.00% | 5.00% | 5.00% |
| Electricity | a | 180.00% | 5.00% | 5.00% | 5.00% | 5.00% |
| Diesel | a | 25.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Contracts | a | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% |
| Pay costs increase | b | 4.00% | 2.00% | 2.00% | 2.00% | 2.00% |
| Employer's pension contribution rate | c | 18.50% | 18.50% | 18.50% | 18.50% | 18.50% |
| Return on cash investments | d | 4.50% | 4.90% | 3.00% | 2.50% | 2.50% |
| Tax base increase | e | 1.50% | 2.00% | 2.00% | 2.00% | 2.00% |
Notes to Assumptions
- Historically the expectation was that the Council’s managers deliver services within cash limited budgets which require them to absorb the cost of inflation (with the exception of contracts). However, with the level of inflation at a significant high, particularly on utilities and contracts linked to RPI/CPI, inflation has been included in the budget where necessary in line with inflation forecasts. A £0.3m contingency is in place to manage adverse budget variances. The diesel budget is, by its nature, volatile and no further increase to the budget is anticipated after 2023/24.
- Payroll projections have increased due to upward pressure on National Living Wage and pay negotiations which also include the
agreed pay award for 2022/23 of £1,925 per employee. The budget assumes a further 4% in 2023/24 and 2% thereafter. - The Council has received its triennial valuation of the pension fund for the period 2023/24 to 2025/26. This has resulted in an increase to the employer’s contribution rate to 18.5% (from 17.9%) but a reduction in the estimated annual deficit payment (to meet historical pension liabilities) from £0.976m per annum to £0.84m, £0.72m, £0.6m in 2023/24, 2024/25 and 2025/26 respectively. The Council has in the past chosen to prepay the deficit however for this triennial valuation the saving from prepaying the deficit is £125k over 3 years. As interest rates are currently high, the lost opportunity cost from investing the funds would balance out any saving from prepaying the deficit and therefore this option does not make financial sense.
- Cash investment returns are based on projections consistent with the Council’s Capital and Investment Strategy. The Bank of England Base rate has been steadily increasing and at the time of writing is at 4%. This is expected to continue to rise in 2023/24 and then reduce gradually from 2024/25 onwards.
- Due to the slow-down in build completions, the tax base has been recalculated for 2023/24. The projections include an increase of
1.5% with later years reflecting normal anticipated growth in housing within the Borough at 2%.
3. Financial Resources
3.1 The proposals for Local Government funding (i.e. Fairer Funding and Business Rates) delayed by Covid, have been further impacted
by the current economic climate and political uncertainty. It has not yet been announced when the review take place, but it is assumed
this will not be before 2025/26. Likewise, it is assumed that the earliest a business rates reset would take place is from 2025/26. The
results of the consultation on New Homes Bonus (undertaken in 2021) has not yet been announced, however, the 2023/24 settlement
confirmed that the Council will receive an additional £1.414m for a single new year payment. For the purposes of the MTFS this has
been assumed to continue for 2024/25 (a further announcement is due in 2023). The NHB for both 2023/24 and 2024/25 has been
reflected as an increase to reserves (to fund MRP) rather than used to balance the 2023/24 budget. Delays to the reforms continue to
add further uncertainty over funding within the period of this MTFS with only one year of funding currently certain and makes planning
for the medium term even more difficult.
3.2 This section of the report outlines the resources available to the Council: Business Rates, Council Tax (RBC and Special Expenses), Revenue Support Grant, New Homes Bonus, Fees, Charges and Rents, and Other Income.
3.3 Business Rates
The Business Rates receipts for 2022/23 stabilised following a period of uncertainty through Covid. Additional reliefs such as retail,
hospitality and leisure are now included in the estimated net rates and S31 grants which makes budgeting easier. The revaluation of
Business Rates will apply from April 2023 which affects the net rates received and retained by the Council. Government have made
compensating adjustments to the Council’s baseline funding and tariff which aims to ensure a net nil revenue impact for the Council
(although the actual impact may not be, for example some businesses will be appealing against their valuation).
The Council ordinarily makes assumptions reflecting national experience of successful ratings appeals and for this year will continue
to use the national average appeals percentage to calculate the provision required. The national average included in the settlement
is 3.3% (previously 4.7%) and this is reflected in the Council’s budget for retained Business Rates.
Covid had impacted the progress on the Government’s proposals for structural financial reform however due to political uncertainly in
the last year it now appears unlikely that any reforms will not be implemented until at least 2025/26.
Following a successful appeal last year and the revaluation 2023, the Ratcliffe-on-Soar Power Station now accounts for a much smaller
proportion of the tax base at 2.7% (£0.77m) with the Council’s exposure around £0.31m. The Power Station is expected to cease
production in 2024 and the Council has budgeted for the reduction in income in 2023/24 and to zero in 2024/25. Positively business
rates growth has continued within the Borough ensuring the impact of power station rates reductions have been more than mitigated.
The forecast for 2025/26 allows for a full reset of Business Rates (by central government) with the budget set at safety net (the minimum that the Council would receive in Business Rates receipts) plus 100% retained receipts from Renewable Energy properties. Hence in 2025/26 there is an anticipated reduction of £1.5m.
There remains a challenge in setting the Business Rates budget, notwithstanding the closure of the Power Station, the added
complication regarding the Freeport and retention of growth and regulations setting the baseline are expected to be released soon.
This will determine the growth that will be retained by the Freeport. The expectation is that there will be a ‘no detriment’ agreement
meaning that the Council will receive business rates growth as it ordinarily would without the Freeport, after business rates resets.
The Collection Fund is estimated to be in deficit by £0.822m (RBC share £0.329m) at the end of 2022/23 following repayment of the
majority of the deficit created as a result of additional Covid reliefs in 2020/21 and 2021/22. The recovery of the deficit is included in
the 2023/24 net budget position and is offset by a release from the Collection Fund Reserve which was created during 2020/21 and
further increased in 2021/22 from S31 grants received to compensate for the additional reliefs.
As in previous years, we show no surplus from the Nottinghamshire Business Rates Pool as a prudent assumption. From 2025/26
onwards, if a new system of Business Rates is in place, a new pooling agreement is likely to be required to determine, for example,
the relevant tier split between districts and Nottinghamshire County Council.
The forecast position on Business Rates is shown below.
| Category £'000 |
2022/23 |
2023/24 |
2024/25 |
2025/26 |
2026/27 |
2027/28 |
|---|---|---|---|---|---|---|
| Retained Business Rates | (3,958) | (4,905) | (4,941) | (3,371) | (3,438) | (3,507) |
| Increase / (Reduction) £ | 1,138 | 947 | 36 | (1,570) | 67 | 69 |
| Increase / (Reduction) % | 40% | 24% | 1% | (32%) | 2% | 2% |
| Forecast Business Rates (surplus) / deficit and central pool surplus | 4,317 | 329 | 0 | 0 | 0 | - |
Sensitivity Analysis
There is uncertainty surrounding Business Rates from 2025/26 and therefore the budget assumes full reset removing Business Rates
growth resulting in a drop in income (safety net plus Renewable Energy receipts). However, there is an upside risk that the reset will
see the baseline set at lower levels than expected meaning there would be the benefit of higher growth, the amount we could budget
for ranging from £3.8m to £4.1m. We have therefore assumed for the MTFS that the Council will receive the minimum income (safety
net plus renewable energy) for the remainder of the MTFS as a result of the Power Station closure and the reset. The Central and
Best-case scenarios allow for a small amount of retained growth dependent upon the level of baseline at a reset. The graph below
shows the potential variations in receipts (dependent upon estimated receipts from the Nottinghamshire pool surplus in 2023/24) over
the MTFS with the uncertainty in later years reflected in budgeted assumptions remaining equal for all scenarios.
Business Rates Sensitivity
| Category |
2023/24 Forecast £ |
2024/25 Forecast £ |
2025/26 Forecast £ |
2026/27 Forecast £ |
2027/28 Forecast £ |
|---|---|---|---|---|---|
| MTFS | |||||
| Central £350,00 surplus | |||||
| Best £700,000 surplus |
3.4 Council Tax
The Council no longer receives any Revenue Support Grant and is anticipating other income streams such as New Homes Bonus to
reduce to zero by 2025/26 and aside from the additional funding for 2023/24 and 2024/25 (see section 3.7 below), there has not yet
been any announcement on the results of the recent consultation regarding any future ongoing funding. The Government has
assumed in future funding projections that Councils will take up the offer of increasing their Council Tax by the higher of 2.99% or £5
for a Council Tax Band D (increased from 2%). The overriding Rushcliffe principle is that the Council aims to stay in the lower quartile
for Council Tax. The Council has also acknowledged the challenging financial environment being faced by its residents and has
therefore set its Council Tax increase at 2% £3.02 (for the borough proportion). The Council is required to take into account Special
Expenses when assessing increases against the referendum limit and together both the Special Expenses and Borough increase
totalling £3.71 or 2.2% rather than the maximum assumed increase of 2.99% or £5.05. We have assumed an increase in Council Tax
of £3.82 (2.2%) in 2024/25, and thereafter £4.99 each year. A Council Tax freeze would result in a reduction of £200k in revenue. The
2023/24 increase of 2% is significantly below 2022/23 inflation levels.
The Government have announced a Council Tax Support Fund to allow local authorities to support vulnerable households with up to
£25 reduction on their Council Tax bill. After applying the discounts in line with the government’s recommended scheme the Council
propose to use the remaining balance of funding, supported by an additional £30k of the Council’s own resources, to further discount
council tax bills for properties in bands A to D with the equivalent of the Council Tax increase for 2023/24 (£3.02 for a band D). This
means that vulnerable households, and households in bands A to D, will see no increase in their Council Tax bill in 2023/24. Details
of the proposed scheme can be found at Appendix 6.
The 2023/24 tax base has been set at 46,068.4 (an increase of 1.5%). The projections for 2023/24 have been based upon the current
Council Tax base. Anticipated growth during 2023/24 has been calculated and included in the projections and thereafter we have
assumed a 2% increase per annum. This will be reviewed as the Council looks to deliver its housing growth targets.
Due to Covid, the Government introduced regulations so that councils could ‘spread’ any Council tax deficit over 3 years. Overall, this
was £1.4m (the Council’s exposure approximately £0.15m) which was subsequently spread over the three years 2021/22 to 2023/24
(£51k per annum). This is the final year of the deficit spread and including in-year variances (actual against anticipated surpluses or
deficits) to be recovered in 2023/24 the overall net deficit is expected to be £0.177m.
The budget includes £24k grant income in 2023/24 (released from reserves) to offset 2020/21 losses which were subject to spreading
over 3 years.
The movement in Council Tax, the tax base, precept and the Council Tax Collection Fund deficit are shown in the table below.
| Category |
2022/23 |
2023/24 |
2024/25 |
2025/26 |
2026/27 |
2027/28 |
|---|---|---|---|---|---|---|
| Council Tax Base (a) | 45,387.60 | 46,068.40 | 46,989.60 | 47,929,60 | 48,888.20 | 49,865.90 |
| Council Tax £ (b) | £150.93 | £153.95 | £157.73 | £162.72 | £167.71 | £172.70 |
| £ Annual Increase (RBC element) | £3.57 | £3.02 | £3.78 | £4.99 | £4.99 | £4.99 |
| % Increase | 2.42% | 2.00% | 2.46% | 3.16% | 3.07% | 2.98% |
| Gross Council Tax collected (a multiplied by b) | (6,850,173) | (7,092,200) | (7,411,700) | (7,799,100) | (8,199,000) | (8,611,800) |
| Increase in Precept | £328,078 | £242,027 | £319,500 | £387,400 | £399,900 | £412,800 |
| Council Tax (surplus) / deficit | £47,600 | £177,000 | 0 | 0 | 0 | 0 |
The Council introduced a scheme to levy a 100% premium on properties that have been empty and unfurnished for over 2 years on
01/04/2019. This is part of the Council’s aim to incentivise housing use for residents. The Levelling Up and Regeneration Bill allows
Councils to reduce the time period the property has been empty and unfurnished to 12 months prior to levying a premium. It is proposed
to implement the revised rules from 01/04/2024 subject to levelling-up bill legislation being passed, meaning that all unoccupied and
unfurnished properties will attract a premium after one year. This will bring them in line with furnished properties that are not occupied
as a main home (called second homes) which also attract a premium after one year. A review of empty properties is planned for
scrutiny in 2023/24.
3.5 Special Expenses
The Council sets a special expense to cover any expenditure it incurs in a part of the Borough which elsewhere is undertaken by a town or parish council. These costs are then levied on the taxpayers of that area. As with 2022/23, special expenses will be levied in West Bridgford, Ruddington and Keyworth.
Appendix 1, summarised in the table below, details the Band D element of the precepts for the special expense areas. Special expense Band D tax amounts have decreased in Ruddington due to an increase in tax base whilst costs have remained broadly the same. The Band D amount for Ruddington has decreased by £0.14 (-3.7%). Expenditure in West Bridgford has increased due mainly to annuity charges for historical works in West Bridgford and increases in utilities. There is an overall net increase to West Bridgford of £41k and an increase in the Band D charge of £2.04 (3.78%). Costs in Keyworth have risen by £3.5k, mainly due to annuity charges for works to
the cemetery. This equates to a 32.8% increase (£1.08).
The budget for the West Bridgford Special Expense area have been discussed at the West Bridgford Special Expenses and
Community Infrastructure Levy group, given the more detailed nature of the budget.
| Special Expenses |
2022/23 Cost |
2022/23 Band D |
2023/24 Cost |
2023/24 Band D |
2023/24 % change |
|---|---|---|---|---|---|
| West Bridgford | £796,400 | £53.91 | £836,400 | £55.95 | 3.78 |
| Keyworth | £9,200 | £3.30 | £12,700 | £4.38 | 32.73 |
| Ruddington | £11,100 | £3.82 | £11,100 | £3.68 | -3.66 |
| Total | £816,700 | - | £860,700 | - | - |
3.6 Revenue Support Grant (RSG)
The Council no longer receives any RSG and this equates to £3.25m in lost income. The Council has mitigated the impact of this loss largely through its Transformation Strategy and Efficiency plan.
3.7 New Homes Bonus
The New Homes Bonus (NHB) scheme was intended to give clear incentive to local authorities to encourage housing growth in their areas. The Government will cease the New Homes Bonus (NHB) scheme anticipated to be 2023/24, however it has been announced that it will continue for at least one further year with the assumption in this MTFS now that 2024/25 will be the final year. The outcome of the 2021 consultation and any potential replacement for the scheme has not yet been announced therefore the Council has assumed zero from 2025/26 depicted in the table below.
| Description |
2022/23 £'000 |
2023/24 £'000 |
2024/25 £'000 |
2025/26 £'000 |
2026/27 £'000 |
2027/28 £'000 |
|---|---|---|---|---|---|---|
| New Homes Bonus Received in Year | (1,587) | (1,414) | (1,414) | 0 | 0 | 0 |
3.8 Fees, Charges and Rental Income
The Council is dependent on direct payment for many of its services. The income, from various fees, charges, and rents, is a key
element in recovering the costs of providing services which, in turn, assists in keeping the Council Tax at its current low level. Some
fees and charges have been increased to offset increased cost caused by higher-than-normal inflation and pay increases although
limiting these in areas for the more vulnerable.
The Fees, Charges and Rental Income budget is shown below.
| Category |
2022/23 £'000 |
2023/24 £'000 |
2024/25 £'000 |
2025/26 £'000 |
2026/27 £'000 |
2027/28 £'000 |
|---|---|---|---|---|---|---|
| Car Parks | (852) | (894) | (894) | (894) | (894) | (894) |
| Licences | (275) | (304) | (304) | (304) | (304) | (304) |
| Non-Sporting Facility Hire | (123) | (142) | (142) | (142) | (142) | (142) |
| Other Fees & Charges | (618) | (1,521) | (1,517) | (1,552) | (1,552) | (1,552) |
| Planning Fees | (1,317) | (1,497) | (1,497) | (1,497) | (1,497) | (1,497) |
| Rents | (1,922) | (2,052) | (2,114) | (2,145) | (2,182) | (2,182) |
| Service Charges | (353) | (353) | (354) | (354) | (354) | (354) |
| Sale of Waste Bins | (1,400) | (1,400) | (1,587) | (1,587) | (1,587) | (1,587) |
| Crematorium Income | (306) | (790) | (866) | (945) | (1,028) | (1,113) |
| Total | (7,166) | (9,147) | (9,470) | (9,616) | (9,738) | (9,823) |
Income assumptions are determined by a number of factors including current performance, decisions already taken and known risks and opportunities.
The budget for Other Fees and Charges increases in 2023/24 due to the re-integration of Streetwise (the Council’s trading company)
services back into the Council, along with its income from external customers. From 2024/25 onwards, estimated income increases
due to the new Crematorium which is expected to open in early 2023.
Garden Waste is normally increased on a cyclical basis every 3 years (last increased in 2020/21) and the next planned increase is
2024/25. This takes account of future inflation and potential pressures linked to the environmental agenda which is likely to further
increase costs such as vehicle purchases. Future increases will need to be considered and agreed by Members.
There have been no further increases assumed for car parking charges as the Council continues to support local businesses and their
recovery in a post Covid world and the impact of the cost-of-living challenge.
Except where current or previous decisions will affect future income yields, the MTFS does not make any provision for future inflationary
increases in fees and charges, although as the levels of inflation are significantly higher than normal, this will be kept under review for
future years’ budgets. We will continue to balance the cost of providing services, the local economy, service market position and the
ability of residents to pay. Anticipated income from commercial property investment forms part of the Council’s Transformation Strategy
and Efficiency Plan, these rents have been budgeted to increase in-line with contractual rent reviews.
3.9 Other Income
In addition to fees and charges the Council also receives a range of other forms of income, the majority of which relates to Housing Benefit Subsidy (£12.285m) which is used to meet the costs of the national housing benefit scheme. Over recent years the subsidy
has reduced due to the transfer of new claimants to Universal Credits and this is expected to continue to decline over the coming
years. Other Income is shown in Table 7 the majority of which is the Leisure Services contract. Interest on investments reflect
assumptions based on balances available to invest and expected interest rates (see Appendix 4).
‘Other Income’ below, shows an increase year on year which reflects the planned receipts from the Leisure Contract to include Bingham Hub which is scheduled to open in March 2023. Homelessness Prevention funding makes up a large proportion of the Other Government Grants line below (£173k).
| Category |
2022/23 £'000 |
2023/24 £'000 |
2024/25 £'000 |
2025/26 £'000 |
2027/28 £'000 |
2027/28 £'000 |
|---|---|---|---|---|---|---|
| Council Tax Costs Recovered | (163) | (230) | (230) | (230) | (230) | (230) |
| Council Tax / Housing Benefit Admin Grants | (233) | (145) | (141) | (136) | (132) | (132) |
| Interest on Investments | (673) | (1,359) | (902) | (672) | (607) | (602) |
| Other Income | (623) | (829) | (1,183) | (1,240) | (1,276) | (1,277) |
| Recycling Credits | (200) | (200) | (200) | (200) | (200) | (200) |
| Other Government Grants* | (302) | (364) | (351) | (351) | (351) | (351) |
| Sub Total | (2,194) | (3,127) | (3,007) | (2,829) | (2,796) | (2,792) |
| Housing Benefit Subsidy | (13,254) | (12,285) | (12,310) | (12,310) | (12,310) | (12,310) |
| Total Other Income | (15,448) | (15,412) | (15,317) | (15,139) | (15,106) | (15,102) |
3.10 Summary
| Category |
2022/23 £'000 |
2023/24 £'000 |
2024/25 £'000 |
2025/26 £'000 |
2026/27 £'000 |
2027/28 £'000 |
|---|---|---|---|---|---|---|
| Retained Business Rates | (3,958) | (4,905) | (4,941) | (3,371) | (3,438) | (3,507) |
| Other Grant Income* | (273) | (640) | (516) | (93) | (93) | (93) |
| New Homes Bonus | (1,587) | (1,414) | (1,414) | 0 | 0 | 0 |
| Council Tax (RBC) | (6,850) | (7,092) | (7,412) | (7,799) | (8,199) | (8,612) |
| Council Tax (Special Expenses) | (816) | (861) | (943) | (947) | (961) | (961) |
| Fees, Charges and Rental Income | (7,166) | (9,147) | (9,470) | (9,616) | (9,738) | (9,823) |
| Other Income | (15,448) | (15,412) | (15,317) | (15,139) | (15,106) | (15,102) |
| Transfers from Reserves | (2,619) | 0 | 0 | (485) | 0 | 0 |
| Total Income | (38,717) | (39,471) | (40,013) | (37,450) | (37,535) | (38,098) |
*Services Grant (£93k) is the third year of a new grant with the purpose of supporting services such as leisure services and looks to partially rebalance the impact of the loss of New Homes Bonus. The Lower Tier Services Grant has been replaced with Minimum
Funding Guarantee intended to ensure local authorities see an increase of at least 3% in their Core Spending Power - for Rushcliffe
this amounts to £0.33m for the next two years. Local Council Tax Support admin subsidy and Family Annex Discount have been ‘rolled
in’ (£83k) to the specific grant funding. The 2023/24 budget also includes £123k for the Council Tax Support Fund (see paragraph
3.4)
4. 2023/24 Spending Plans
4.1 The Council’s spending plans for the next five years are shown below and take into account the assumptions in Section 2. As Transformation Programme Savings/Growth projects are delivered (for example, Bingham Hub and the Crematorium) the spending profile will change.
| Category |
2022/23 £'000 |
2023/24 £'000 |
2024/25 £'000 |
2025/26 £'000 |
2026/27 £'000 |
2027/28 £'000 |
|---|---|---|---|---|---|---|
| Employees | 11,437 | 14,521 | 14,478 | 14,605 | 14,872 | 15,247 |
| Premises | 1,144 | 1,712 | 1,738 | 1,778 | 1,819 | 1,857 |
| Transport | 1,030 | 1,760 | 1,762 | 1,767 | 1,773 | 1,776 |
| Supplies and Services | 4,220 | 5,080 | 4,928 | 5,099 | 5,054 | 5,243 |
| Transfer Payments | 13,219 | 12,410 | 12,312 | 12,312 | 12,312 | 12,312 |
| Third Party | 2,915 | 1,289 | 1,275 | 1,295 | 1,309 | 1,309 |
| Depreciation | 1,895 | 1,895 | 1,895 | 1,895 | 1,895 | 1,895 |
| Capital Salaries Recharge | (60) | (200) | (50) | (50) | (50) | (50) |
| Gross Service Expenditure | 35,860 | 38,467 | 38,338 | 38,701 | 38,984 | 39,589 |
| Reversal of Capital Charges | (1,895) | (1,895) | (1,895) | (1,895) | (1,895) | (1,895) |
| Collection Fund Deficit | 4,365 | 506 | 0 | 0 | 0 | 0 |
| Net Contribution to Reserves | 0 | 1,352 | 953 | 0 | 38 | 408 |
| Minimum Revenue Provision | 1,293 | 1,311 | 1,320 | 1,269 | 835 | 269 |
| Overall Expenditure | 39,563 | 39,741 | 38,716 | 38,075 | 37,962 | 38,371 |
The contribution to reserves in 2023/24 includes the mitigation of the budgeted deficit in Business Rates referred to in section 3.3
above and also incorporates the £1.3m per annum payment for the Arena, Bingham Hub, and the Crematorium in relation to Minimum
Revenue Provision (MRP). The position on reserves is shown in Section 6.
4.2 Explanations for some of the main variances above are:
- Employee costs reflect both salaries increase (the cumulative impact of £1,925 per FTE in 2022/23 and 4% budgeted 2023/24
and 2% thereafter) and the re-integration of Streetwise employees back into the council. - Capital Salaries recharge increase in 2023/24 due to Property staff costs in relation to 3 major schemes; CLC, KLC, and West
Park, reducing down to £50k from 2024/25 onwards. - Premises costs include assumed inflation increases of 250% on Electricity and 180% on Gas in 2023/24 (5% thereafter), and
costs associated with the new crematorium building. - Transport costs include an increase of £100k for fuel due to general price increases and pressures in the current environment
and the re integration of Streetwise transport related costs (£571k). - Supplies and services most significant increases in 2023/24 are due to; increased budget provision internal drainage board
charges (£113k), Re-integration of Streetwise (£418k) and budget provision relating to the new Crematorium (£118k). - Transfer Payments were expected to reduce in 2023/24 due to expectations of reduced housing benefit claims as a result of
the move to Universal Credits (handled by the Department for Work and Pensions (DWP)). This reduction was not as
significant as expected and therefore estimates have been based on current caseload and the DWP handling working age
claims under Universal Credits. - Third Party Payments sees the removal of the Streetwise contract sum (£1.8m) 2023/24.
- Depreciation is net zero impact on the general fund (fully offset by the reversal of capital charges line) and is due to be
recalculated for the final report to Council. - The £0.506m Collection Fund deficit relates to Business Rates (£0.329m in the Business Rates forecast table); the deficit arising at outturn in 2022/23 and a Council tax deficit of £0.177k (Council Tax Collection Fund table). There is a corresponding release from the Collection Fund Reserve of £0.329m for the Business Rates deficit (appropriated from additional business support grants in 2021/22 and 2022/23) and £24k for Council Tax deficit for the final year of the income guarantee grant (spread over 3 years). These are included in the net transfer to reserves in Table 9 above.
- Minimum revenue Provision (MRP) increases in 2023/24 to reflect the internal borrowing requirement for The Crematorium, Bingham Hub and Cotgrave Masterplan.
4.3 The Council is due to receive £173k in Homelessness and Rough Sleeping funding from the Government in 2023/24. This grant will
continue to fund two posts supporting housing options and homelessness prevention and provides a prevention fund to assist with rent
deposits or advances to secure private rented accommodation for those at risk. It also includes provision for a Street Outreach initiative
to assist rough sleepers and grants to support homelessness provision, education, and advice. The net impact on the budget is zero.
4.4 The Homes 4 Ukraine scheme launched on 14 March 2022 in response to the war in Ukraine. The scheme allows people living in the
UK to sponsor a named Ukrainian national or family to come to live in the UK with them. The Council are responsible for pre and post
arrival checks on sponsor households. The Council currently has 215 Ukrainian refugees residing with sponsor households in the
borough and this puts a strain on Council resources. Central government funding has been allocated to support the Council with these
new duties and have so far received £247,000 (£64k Sponsor Checks & £183k to assist families to secure housing when sponsors
cease support), with further funding anticipated in 2023/24 to mitigate this budget pressure. Future budget reports will be updated to
reflect this. The funding meets the cost of providing this essential work and what is an additional service pressure.
5. Budget Requirement
5.1 The budget requirement is formed by combining the resource prediction and spending plans. Appendix 2 gives further detail on the Council’s five-year Medium Term Financial Strategy.
| Category |
2022/23 Estimate £'000 |
2023/24 Estimate £'000 |
2024/25 Estimate £'000 |
2025/26 Estimate £'000 |
2026/27 Estimate £'000 |
2027/28 Estimate £'000 |
|---|---|---|---|---|---|---|
| Total Income | (38,717) | (39,471) | (40,013) | (37,450) | (37,535) | (38,098) |
| Gross Expenditure | 39,563 | 39,741 | 38,716 | 38,075 | 37,962 | 38,371 |
| Net Budget Position (surplus) / deficit | 846 | 270 | (1,297) | 625 | 427 | 273 |
| Revised Transfer (From)/to Reserves | (3,465) | 1,082 | 2,250 | (1,110) | (389) | 135 |
5.2 The above shows a budget deficit of £0.270m in 2023/24, £1.297m surplus 2024/25, and deficits of £0.625m, £0.427m and £0.273m in 2025/26 and 2026/27 and 2027/28 respectively. A total deficit position of £0.298m over the 5-year period, the Organisation
Stabilisation Reserve will be utilised to smooth the effect of variation in funding levels. It is anticipated that from 2025/26 the budget
will move into a deficit position as a result of a Business Rates reset, this deficit is forecast to reduce in the following years through
growth and efficiency savings.
5.3 For 2023/24 and 2024/25 it is assumed that Business Rates will remain at current levels due to the delay in reset. For 2023/24 this
shows as a net transfer to reserves (the Regeneration and Community Projects Reserve) to support Capital projects. In 2024/25,
whilst still benefitting from the additional Business Rates and Council Tax growth, the planned transfers from reserves is lower and
there is no budgeted Collection Fund deficit. Consequently, there is an increase in the overall net transfer to reserves. From 2025/26
the budget assumes no growth due to the Business Rates reset and income is budgeted at Safety Net plus renewable energy receipts
resulting in an overall transfer from reserves as we look to support the budget deficit.
5.4 Section 7 covers the Transformation Programme - including the use of reserves, balancing the budget for 2023/24 and future financial pressures.
6. Reserves
6.1 In order to comply with the requirements of the Local Government Act 2003, a review has been undertaken of the Council’s reserves, taking into account current and future risks. This has included an assessment of risk registers, pressures upon services, inflation and interest rates.
6.2 The table in 11 details the estimated balances on each of the Council’s specific reserves over the 5-year MTFS. This also shows the General Fund Balance. Total Specific Reserves reduce from £18.4m to £16.5m (22/23 – 27/28). Appendix 5 details the movement in reserves for 2023/24 which also includes capital commitments. This shows a stable position at £18.4m (2022/23 to 2023/24) primarily reflecting the release of £2.3m NHB offset by the NHB new year allocation and the transfer to reserves of £1m to support capital projects (see section 6.7 below). Of this, £1.3m will offset the impact of the MRP charged in the year. A further £1m from New Homes Bonus is earmarked to be used to support the acquisition of a Traveller Site. The latter is necessary given a requirement of the Local Plan and if a site is not provided means the Council is susceptible to random traveller planning applications across the Borough.
6.3 The Climate Change Action Reserve remains despite the pressures of Covid. The reserve supports projects that contribute to the
Council’s ambitions to protect and enhance the environment including the reduction of its carbon footprint. A balance of £0.810m is
available and will be allocated as projects get approved. Existing capital schemes are assessed for any carbon reduction measures
and funding from the reserve allocated. The East Midlands Development Corporation will support partnership working to deliver
transformational infrastructure and economic development projects. £0.165m third year tranche of Rushcliffe’s Development
Corporation Reserve will be released in 2023/24, this will leave a balance of £0.2m for any other support, particularly in relation to the
Freeport. The Council continues to look at avenues of external funding to support carbon reduction initiatives (such as at its leisure
centres); and if successful these will be reported via Cabinet and Corporate Overview Group in their financial updates.
6.4 A Vehicle Replacement Reserve was established last year to support the acquisition of new vehicles, plant, and equipment arising
from SEL insourcing. This will now be actively used to support the capital programme.
6.5 A new reserve is proposed in this MTFS; The Treasury Capital Depreciation Reserve proposed at £1m to mitigate the potential losses
of reductions in the capital value of the Council’s multi-asset investments. These assets provide a significant proportion of the Council’s
total investment income but are however at-risk fluctuations on market value linked to adverse impacts on the economy of the Covid
pandemic and more recently the war in Ukraine. There is currently a statutory override in place until March 2025. The Council has
recently been unsuccessful in two bids for external Government funding (Levelling-up and Gypsy and Traveller site). It is apparent the
lack of social deprivation in Rushcliffe compared to other areas is limiting our ability to be successful with such initiatives. Being prudent, we need to ensure we do have future funds to deliver capital projects it is therefore proposed that £1m is appropriated to the
Regeneration and Community Projects Reserve to ensure key projects can continue to be supported and that the Council continues
to provide excellent services.
6.6 It is important that the level of reserves is regularly reviewed to manage future risks. All the reserves have specifically identified uses including some of which are held primarily for capital purposes namely the Council Assets and Service Delivery, Investments Reserve, Vehicle Replacement Reserve, and Regeneration and Community Projects Reserve (to meet special expense and other economic growth-related capital commitments). The release of reserves will be constantly reviewed in order to balance funding requirements and the potential need to externally borrow to support the Capital Programme.
6.7 It should be noted that in the professional opinion of the Council’s Section 151 Officer, the General Fund Reserve position of £2.6m is adequate given the financial and operational challenges (and opportunities) the Council faces.
| Category |
Balance 31.03.22 £'000 |
Balance 31.03.23 £'000 |
Balance 31.03.24 £'000 |
Balance 31.03.25 £'000 |
Balance 31.03.26 £'000 |
Balance 31.03.27 £'000 |
Balance 31.03.28 £'000 |
|---|---|---|---|---|---|---|---|
| Investment Reserves | - | - | - | - | - | - | - |
| Regeneration and Community Projects | 1,896 | 2,031 | 3,223 | 3,432 | 3,645 | 3,868 | 3,910 |
| Sinking Fund | 427 | 204 | 454 | 644 | 899 | 614 | 939 |
| Corporate Reserves | - | - | - | - | - | - | - |
| Organisation Stabilisation | 3,994 | 1,528 | 1,258 | 2,555 | 1,930 | 1,503 | 1,230 |
| Collection Fund S31 | 5,145 | 1,438 | 1,085 | 1,085 | 1,085 | 1,085 | 1,085 |
| Climate Change Action | 800 | 810 | 810 | 810 | 810 | 810 | 810 |
| Devco & Freeport Reserve | 330 | 365 | 200 | 200 | 200 | 200 | 200 |
| Vehicle Replacement Reserve | 1,000 | 865 | 770 | 655 | 435 | 405 | 370 |
| Risk and Insurance | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| Planning Appeals | 350 | 350 | 350 | 350 | 350 | 350 | 350 |
| Elections | 150 | 200 | 50 | 100 | 150 | 200 | 50 |
| Operating Reserves | - | - | - | - | - | - | - |
| Planning | 300 | 154 | 79 | 79 | 0 | 0 | 0 |
| Leisure Centre Maintenance | 104 | 22 | 37 | 52 | 67 | 82 | 97 |
| Total Excluding NHB Reserve | 14,596 | 8,887 | 9,416 | 11,062 | 10,671 | 10,217 | 10,141 |
| New Homes Bonus | 8,979 | 9,549 | 8,652 | 8,746 | 7,477 | 6,642 | 6,373 |
| Total Earmarked Reserves | 23,575 | 18,436 | 18,068 | 19,808 | 18,148 | 16,859 | 16,514 |
| General Fund Balance | 2,604 | 2,604 | 2,604 | 2,604 | 2,604 | 2,604 | 2,604 |
| Total | 26,179 | 21,040 | 20,672 | 22,412 | 20,752 | 19,463 | 19,118 |
7. The Transformation Strategy and Efficiency Strategy
7.1 For the past eight years the Council has successfully implemented a Transformation Strategy and supporting Transformation Programme (this is also the Council’s efficiency strategy). This drives change and efficiency activity and is a vehicle to deal with the scale of the financial challenges the Council faces particularly with the recent rise in inflation. An updated Transformation Strategy and Programme are provided in below. this also includes an Appendix on the Council’s approach to commercialism. The Executive Management Team, alongside budget managers, have undertaken a review of all Council budgets resulting in savings which have been fed into the MTFS. The Transformation Strategy focuses on the following themes:
- Service efficiencies and management challenge as an on-going quality assurance process;
- Areas of review arising from Member challenge, scrutiny etc; and
- Longer term reviews with further work being required and particularly impacting upon the Council’s asset base.
7.2 This Programme will form the basis of how the Council meets the financial challenge summarised below reducing the gross deficit
position.
Savings Targets
| Category |
2023/24 £'000 |
2024/25 £'000 |
2025/26 £'000 |
2026/27 £'000 |
2027/28 £'000 |
|---|---|---|---|---|---|
| Gross Budget Deficit excluding Transformation Plan | 5,458 | 4,603 | 6,680 | 6,532 | 6,378 |
| Cumulative Savings in Transformation Plan | (4,566) | (5,188) | (5,900) | (6,055) | (6,105) |
| Gross Budget Deficit / (Surplus) | 892 | (585) | 780 | 477 | 273 |
| Additional Transformation Plan Savings | (622) | (712) | (155) | (50) | 0 |
| Net Budget Deficit / (Surplus) | 270 | (1,297) | 625 | 427 | 273 |
| Cumulative Transformation Target | (622) | (1,334) | (1,489) | (1,539) | (1,539) |
7.3 The Council’s budget for 2023/24 and beyond includes the impact of inflationary increases and staff pay negotiations whilst also being restricted by Government policy on commercial activity to generate additional income, limiting borrowing for wider projects dependent upon capital spending proposals, and excluding borrowing from the PWLB where capital spend is solely for commercial gain. The Council has continued to review its services and processes and, where possible, identify efficiencies and increase income. The impact of the above pressures will result in a need to draw on reserves from 2025/26 onwards with 2024/25 temporarily supported by additional business rates due to the delay in the Business Rates reset. Completion of investment projects namely the Crematorium and the Bingham Leisure Hub help to support the budget going forward in addition to delivering socio-economic benefits.
7.4 The Council must continue to review its existing transformation projects on an on-going annual basis. In recent years the
Transformation plan has included two large projects (Bingham Hub and Crematorium) which are both due to open in 2023. Going
forward, the plan includes service efficiencies and income generation, and the challenge will be to continue to identify projects against
the backdrop of the cost-of-living challenge and higher levels of inflation. Officers continue to seek efficiencies wherever possible and
look for wider projects to improve value for money and both the officer and Members have worked together to identify £1.539m of
expected efficiencies over the 5-year period. The current transformation projects and efficiency proposals which will be worked upon
for delivery from 2023/24 are given in transformation targets below.
7.5 To elaborate on a couple of the efficiency proposals:
- To reduce the Councillors Community Grants budget from £40k to £20k. Historically this has been underspent. The £1000 per
councillor is available and contingency will be utilised If demand exceeds the budget; - To no longer continue with the Young scheme which no longer delivers value for money for the Rushcliffe taxpayer (£82k
saving). This will be phased-in over 2 years to enable Young to take appropriate operational decisions with regards to its future.
Transformation Targets 2023/24 to 2027/28.
| Category |
2023/24 £'000 |
2024/25 £'000 |
2025/26 £'000 |
2026/27 £'000 |
2027/28 £'000 |
|---|---|---|---|---|---|
| Transformation Savings to date | - | - | - | - | - |
| Service Efficiencies | 1,908 | 1,908 | 1,908 | 1,908 | 1,908 |
| Thematic Reviews | 1,334 | 1,334 | 1,334 | 1,334 | 1,334 |
| Additional income | 995 | 995 | 995 | 995 | 995 |
| Savings | 329 | 329 | 329 | 329 | 329 |
| Overall Total | 4,566 | 4,566 | 4,566 | 4,566 | 4,566 |
| Transformation Targets | - | - | - | - | - |
| Thematic Reviews | 364.4 | 427.8 | 118.8 | 44.6 | - |
| Leisure Management Contract* | 138.6 | 232.8 | 56.8 | 36.8 | - |
| Crematorium | 116 | 60 | 62 | - | - |
| Streetwise insourcing | 100 | 100 | - | - | - |
| Bingham Enterprise | 9.8 | 35 | 0 | 7.8 | - |
| Additional Income | - | - | - | - | - |
| Charges for Street Naming and Numbering | - | 10 | - | - | - |
| Cotgrave Phase 2 | 15.9 | 1.1 | 1.2 | 5.6 | - |
| External Advertising (screens and emails) | 10 | - | - | - | - |
| Green Bin Scheme – further income | - | 187 | - | - | - |
| Increase charges for legal work | 10 | - | - | - | - |
| Environmental Health Commercial Opportunities | 47.5 | 35 | 35 | - | - |
| Planning Performance Agreements | 75 | - | - | - | - |
| Communications Marketing Services | 5 | 10 | - | - | - |
| Prosecution fees (to meet increase costs) | 9 | - | - | - | - |
| WISE (Environment enforcement) | 8 | - | - | - | - |
| Savings | 77 | 41 | - | - | - |
| Councillors Community Grant Scheme | 20 | - | - | - | - |
| Rushcliffe Reports one edition electronic | 16 | - | - | - | - |
| Remove the Young Programme | 41 | 41 | - | - | - |
| Total | 621.8 | 711.9 | 155 | 50.2 | 0 |
| Cumulative Transformation savings | 5,188 | 5,900 | 6,055 | 6,105 | 6,105 |
8. Risk and Sensitivity
8.1 The following table shows the key risks and how we intend to treat them through our risk management practices. Further commentary on the higher-level risks is given below the table.
| Risk | Likelihood | Impact | Action |
|---|---|---|---|
| The Council is unable to balance its budget and the budget is not sustainable in the longer term as a result of increased inflation and government funding reductions with uncertainty due to one year settlement |
Low | High |
Going concern report presented to Governance |
| Fluctuation in Business Rates linked to changes in the local economy (e.g., Power station closure) and revaluation. | High | Medium |
Actively involved in Freeport working Groups. |
|
Central Government policy changes eg Fairer Funding, changes to NHB and Business Rates reset leading to reduced revenue. Environmental policy changes with regards |
High | Medium |
Engagement in consultation in policy creation and |
| Insufficient staff capacity – skills, knowledge, and availability etc |
Medium | Medium |
Ensuring market rates are being paid, internal staff |
| Increased costs due to adherence to the National Minimum Living Wage. Pay rises are linked to the outcome of national negotiations and whether they are adopted locally |
Medium | Low |
Budget reporting processes and use of budget |
| Rising leisure management contract costs: reduction in management fee as a result of increased costs (utility and wages) and reduced usage as a result of inflation on household spending; delays in the opening of Bingham Arena achieving the Leisure Strategy in accordance with planned timetable; and the continued costs of alternative provision at the Toothill site. |
Medium | Medium | Close working and monitoring of costs with the provider. Use of contingency if required to mitigate financial impact. Reporting through usual financial reporting arrangements and budget monitoring. |
| Environmental Agenda leading to rising or reducing revenue and capital budgets |
High | Medium | Creation of Climate Change Action Reserve £1m ongoing review of significant projects and outcome of scrutiny review. A vehicle replacement reserve which will help fund, for example, electric vehicles. Sourcing external funding to improve leisure energy usage. |
| Efficiency savings performance improvements from the Streetwise transfer in-house are not achieved |
Medium | Medium | Monitor and project manage. Update reports to Cabinet through usual financial reporting arrangements. Updated MTFS for 2023/24 incorporating targets. (To be monitored in the Transformation Plan) |
| Increased demand in relation to homelessness and migration issues |
High | Medium | Additional government funding and internal resources provided. |
| Reducing demand as a result of a contracting economy, higher inflation and reduced personal disposable incomes. For example less housing being built and bought, impacting on planning income. |
Medium | Medium | Performance indicators and current financial due diligence via quarterly reporting to Cabinet and COG. Adjusting cost base as necessary. |
| Traveller’s site located to accord with the Local Plan and avoid unplanned traveller pitches throughout the Borough |
Medium | High | Site identification, financial implications to be determined and reported in further Cabinet reports, £1m in Capital Programme. Further resource in capital reserves if required and approved. |
| Risk of increased capital programme costs due to either increased demand (e.g., DFGs) or inflation. |
High | High | Further capital reserve funding provided and engagement with Government at a national level. Working with Nott’s authorities on a more equitable distribution of resources. |
| Insufficient capital resources to fund the capital programme |
Low | High | Ongoing cashflow management. The Council has the ultimate recourse to borrow (which it is trying to avoid). We are dependent on the timing of capital receipts and issues like the Flintham CPO being a relatively seamless transaction. |
| Opportunity for additional business rates from the Freeport/DevCo or risk of liabilities if either does not progress |
Medium | Medium | Continue to monitor progress and inform business rate assumptions through Officer working Groups/Board. |
8.2 The inflationary increases over the last year has impacted on the economy and the households within the borough. The government
have put in measures to support the most vulnerable with caps on energy bills and additional funding for those already on government
support and of pension age. The Council is vigilant to as support is lifted whether there is a significant impact on the Council’s collection
rates and its main income streams. This is highlighted in the risks above and the resultant potential impact on the Council’s leisure
management contract where the impact of inflation on both salaries and on utilities will be significant. The Council has the Organisation
Stabilisation Reserve to mitigate any short term losses and has included estimated inflation in the budgets going forward. Other
reserves are in place to support the capital programme, as necessary, particularly from inflation risks.
8.3 The last few years have been challenging from a local authority finance perspective. Recent settlements have been limited to one
year which makes predicting resources difficult and delayed Government reforms brings further funding uncertainty. The last year has
seen the highest inflation in decades and the resulting impact on pay and expenditure, particularly contracts and utilities, has put
unprecedented pressure on Council budgets. The MTFS includes an assumption on the level of inflation going forward but there remains a risk in the uncertainty of both the impact on the Council’s expenditure and on that of the Council’s third party contracts,
particularly the Leisure Management contract, which could result in renegotiation. In the short term, reserves and general balances
will be used to mitigate these risks.
8.4 Risks are also about the Council maximising opportunities. Doing nothing is a risk. Transformational change in services, maximising assets, and growing the Borough (e.g. such as the crematorium, commercial property and economic development such as the Freeport) give upside risk and can mitigate the pressures alluded to above. Due to PWLB restrictions, the Council’s capital programme does not include any investments that are purely for financial return which means the Council has to be creative and maximise both income generating opportunities and efficiencies so it remains self-sufficient and continue to grow the Borough and provide excellent services.
9. Capital Programme
9.1 Officers submit schemes to be included in a draft Capital Programme, which also includes on-going provisions to support Disabled Facilities Grants and investment in Social Housing. This draft programme is discussed by EMT along with supporting information and business cases where appropriate with the big projects and the overall financial impact reported to Councillors in Budget update sessions. The draft Capital Programme continues to be further refined and supported by detailed appraisals as set out in the Council’s Financial Regulations. These detailed appraisals are included at Appendix 4 along with the proposed five-year capital programme which is summarised below. This remains an ambitious programme totalling £23.4m for 5 years.
9.2 The Council’s five-year capital programme shows the Council’s commitment to deliver more efficient services, improve its leisure facilities and enable economic development. Against a background of financial challenge as a result of Covid and inflation pressures, the strength of the Council’s financial position is such that it continues to support economic growth and recovery in the Borough. The Programme is approved for the five-year period and allows flexibility of investment to enhance service delivery, provide widened economic development to maximise business and employment opportunities. The programme is reviewed by Full Council as part of the budget setting process. A major focus of the Capital Programme is to improve services, be transformative and generate revenue income streams to help balance the Council’s MTFS. Significant projects in the Capital Programme include:
- A provision of £1m has been included to acquire/develop a Gypsy and Traveller Site(s) in the Borough. Based on the Gypsy
and Traveller needs assessment, Rushcliffe needs to provide 13 permanent pitches by 2038, with 7 required before 2025. - A new scheme for the Compulsory Purchase Order (CPO) of Flintham Mess appears in the programme in 2025/26. This is
estimated at £4m and will be financed by its subsequent sale. The Council is working alongside the potential for the CPO to
resolve the ongoing health and safety and amenity issues. - The on-going vehicle replacement programme totals £3m in the programme over 5 years. This will be subject to future review
as the acquisition/replacement of Streetwise vehicle, plant, and equipment becomes clearer. - The provision for Support to Registered Housing Providers has benefitted significantly from Planning Agreements monies arising
from Land North of Bingham £3.8m. This sum, together with the balances of other Planning Agreement monies and capital
receipts set aside for Affordable Housing gives a total sum available of £4.7m (including 22/23) of which £0.162m is committed.
The balance of £4.5m is available and options for commitment of these sums are being assessed. - £2.7m over the 5 years for investment in the upgrade of facilities at Keyworth and Cotgrave Leisure Centres, Community Halls,
and other Leisure Facility Sites. There are planned refurbishments to changing villages; floor replacement; roof enhancements;
and upgrades for plant and lighting. Schemes are considered in the light of the Leisure Strategy and are aimed at maintaining
excellent standards of leisure provision. A bid has been made to Salix for £1.2m carbon reduction work at Cotgrave Leisure
Centre and, if formally approved, will need reflecting in the future capital programme. - Disabled Facilities Grants (DFGs) provision of £3.7m has been provided in the 5-year programme. Funding has become
extremely tight to meet the statutory spending requirement and Rushcliffe had to take the unusual step of allocating £0.5m of
its own resources to support spending pressures, this is not sustainable. Cabinet and Senior Officers will continue to actively
lobby Central Government and Local Authorities across Nottinghamshire for additional and redistributed Better Care Fund (BCF)
grant allocations. Rushcliffe’s BCF spending plans are no longer able to support Discretionary DFGs, Assistive Technology
(Home Alarms) or the Warmer Homes on Prescription scheme. - Rolling provisions for the Information Systems Strategy (£1.1m across the 5 years) will ensure that the Council keeps pace with
new technologies, protects itself against cyber-attacks and continues to modernise services and deliver ‘channel shift’ in an
increasingly virtual world. - To facilitate the provision of a Community Facility in Edwalton, £0.5m has been included. Cabinet 08.11.22 set out the potential
options for delivery which could see the building and car park constructed by the Developer and then the freehold transferred
to Rushcliffe. Any resultant cost to Rushcliffe arising from this transaction will be subject to the West Bridgford Special Expense. - In year year provisions of £75k have been included to enhance Play Areas in West Bridgford on a rolling programme. These costs
are subject to the West Bridgford Special Expense. In addition, £100k has been included in 2023/24 to upgrade RCP Play Area
– this is a General Expense. - Some smaller sums have been included to enhance our land and buildings and investment property portfolios. Planned works
will ensure that the property remains fit for purpose and continues to deliver efficient services. - A Contingency sum of £0.15m has been included each year, to give flexibility to the delivery of the programme and to cover
unforeseen circumstances. - Given the projected level of the Council’s cash balances at March 2023 and future years, external borrowing is unlikely to be
needed in the medium term. The cash flow balances are strongly underpinned by the holding of Developer Contributions: S106s
and CIL monies. Expected new internal borrowing, including 2022/23, totals £10.2m. The projected Capital Financing
Requirement (CFR - the Council’s underlying need to borrow) is £12.6m at the end of 2023/24. The timing and incidence of
actual external borrowing will be affected by any slippage in the capital programme, delayed capital receipts, and cash balances
and this is reflected in the CFR shown at table 2 of the Capital and Investment Strategy (Appendix 4).
Capital Programme 2023/24 to 2027/28
| Category |
2022/23 Current Estimate £'000 |
2023/24 Indicative Estimate £'000 |
2024/25 Indicative Estimate £'000 |
2025/26 Indicative Estimate £'000 |
2026/27 Indicative Estimate £'000 |
2027/28 Indicative Estimate £'000 |
5 Year Total |
|---|---|---|---|---|---|---|---|
| Expenditure Summary | - | - | - | - | - | - | - |
| Development and Economic Growth | 13,207 | 1,470 | 325 | 4,180 | 610 | 0 | 6,585 |
| Neighbourhoods | 5,673 | 7,796 | 3,615 | 1,340 | 1,225 | 990 | 14,966 |
| Finance and Corporate | 699 | 310 | 400 | 415 | 430 | 380 | 1,935 |
| Total | 19,579 | 9,576 | 4,340 | 5,935 | 2,265 | 1,370 | 23,486 |
| Funded By | - | - | - | - | - | - | - |
| Usual Capital Receipts | (4,759) | (3,387) | (2,260) | (4,690) | (670) | (195) | (11,202) |
| Government Grants | (2,971) | (795) | (695) | (695) | (695) | (695) | (3,575) |
| Use of Reserves | (1,223) | (1,450) | (510) | (550) | (900) | (480) | (3,890) |
| Grants and Contributions | (2) | 0 | 0 | 0 | 0 | 0 | 0 |
| Section 106 Monies | (1,374) | (2,944) | (875) | 0 | 0 | 0 | (3,819) |
| Borrowing | (9,250) | (1,000) | 0 | 0 | 0 | 0 | (1,000) |
| Total | (19,579) | (9,576) | (4,340) | (5,935) | (2,265) | (1,370) | (23,486) |
| Resources Movement | - | - | - | - | - | - | - |
| Opening Balances | 8,623 | 8,768 | 6,941 | 6,003 | 5,745 | 5,171 | - |
| Projected Receipts | 10,474 | 9,349 | 5,302 | 5,677 | 1,691 | 1,678 | - |
| Use of Resources | (10,329) | (11,176) | (6,240) | (5,935) | (2,265) | (1,370) | - |
| Balance Carried Forward | 8,768 | 6,941 | 6,003 | 5,745 | 5,171 | 5,479 | - |
9.3 The Council previously allocated £20m to the Asset Investment Strategy within its Capital Programme. Just over £16m of this has been utilised for investment opportunities, asset acquisitions, and development of office/industrial/retail units which will secure strong future income streams to support the revenue budget. The remaining balance of £3.8m was taken out of the programme in direct response to the changes in access for PWLB borrowing whereby it is no longer allowable to borrow for yield (or financial return).
9.4 The Council’s capital resources are slowly being depleted to fund the Capital Programme. It is projected that capital resources will be in the region of £5.5m at the end of the five-year life of the Programme. This comprises: £5.3m Earmarked Capital Reserves and £0.2m Capital Receipts. The Earmarked Capital Reserves includes the transfer in 2023/24 of £1m to the Regeneration and Community
Projects Reserve to support capital projects (see section 1.1). The level of Capital Receipts will slowly be replenished but will only
significantly increase if major assets are identified for disposal in the future, given the extent of future capital commitments.
9.5 Projected capital receipts over the course of the MTFS include:
- A further £3m from the Sharphill Overage Agreement (£15m already received);
- Sale of land in Cotgrave: approximately £7m;
- £4m from the subsequent disposal of Flintham Mess following the Compulsory Purchase;
- £0.575m in repaid loan principal from Nottinghamshire County Cricket Club;
- An estimated £50k per year from the Right to Buy Clawback agreement which gives the Council a share of Preserved Right to Buy
arrangements following Large Scale Voluntary Stock Transfer in 2003.
9.6 The capital resources position should be viewed in the context of funding the completed redevelopment of the Arena. This scheme was part funded by use of the Council’s reserves and the remainder through internal borrowing. It is planned to repay this ‘internal debt’ from the future income stream provided by New Homes Bonus, subject to the risks highlighted in Section 3.7 and Section 8.1.
9.7 The following significant capital grants and contributions will be used to support the funding of the proposed capital programme:
- £4m from Planning Agreements for off-site affordable housing. £3.8m of this comes from a new S106 for Land North of Bingham;
- An estimated £0.695m per annum from the Better Care Fund to deliver Mandatory Disabled Facilities Grants;
- £0.333m from Planning Agreements to support enhancement work to KLC; and
- £0.100m Government Grant to provide Changing Places Toilets at Gresham and Cotgrave Leisure Centre.
9.8 In April 2022, Government launched the UK Shared Prosperity Fund (UKSPF). This is a £2.6bn fund for the next three years which
replaces the EU Structural funds which were previously allocated through Local Enterprise Partnerships. Rushcliffe’s approved annual
allocations are detailed in the table below
9.9 In September 2022 the Government also announced a Rural England Prosperity Fund (REPF). The REPF is a top-up to the UKSPF
and is available to eligible local authorities in England. It succeeds EU funding from LEADER and the Growth Programme which were
part of the Rural Development Programme for England. It supports activities that specifically address the particular challenges rural
areas face. The Council is currently awaiting final approval for the programme.
9.10 Rushcliffe’s UKSPF and anticipated REPF allocations over 3 years are detailed below:
| Year |
UKSPF (£) |
REPF (£) |
Total (£) |
|---|---|---|---|
| 2022/23 | 312,071 | 0 | 312,071 |
| 2023/24 | 624,141 | 149,048 | 773,189 |
| 2024/25 | 1,635,250 | 447,145 | 2,082,395 |
| Total | 2,571,462 | 596,193 | 3,167,655 |
Officers are currently working on potential schemes for year 2 and this will go to Cabinet in March 2023 for approval. As the programme
develops, capital and revenue updates will be provided to both Cabinet and COG through usual budget quarterly reporting.
10. Treasury Management
10.1 Attached at Appendix 4 is the Capital and Investment Strategy (CIS) which integrates capital investment decisions with cash flow information and revenue budgets. The key assumptions in the CIS are summarised in the following table:
| Category |
2023/24 Estimate |
2024/25 Estimate |
2025/26 Estimate |
2026/27 Estimate |
2026/27 Estimate |
|---|---|---|---|---|---|
| Anticipated Interest Rate | 4.50% | 4.00% | 3.00% | 2.50% | 2.50% |
| Expected Interest from Investments (£) | 1,292,308 | 839,420 | 613,045 | 547,570 | 542,995 |
| Other Interest (£) | 67,000 | 63,000 | 59,000 | 59,000 | 59,000 |
| Total Interest (£) | 1,359,308 | 902,420 | 672,045 | 606,570 | 601,995 |
10.2 In December 2021 CIPFA released new editions of the Treasury Management Code and Prudential Code. Key changes include the
need to consider existing commercial investments, reference to Environmental, Social and Governance (ESG) in the Capital Strategy,
quarterly monitoring of Prudential Indicators, the introduction of a knowledge and skills schedule, Investment Management Practices
(IMPs) and the Liability Benchmark.
10.3 The CIS covers the Council’s approach to treasury management activities including commercial assets. It documents the spreading of risk across the size of individual investments and diversification in totality across different sectors. As a result of recent changes to the code as detailed above, the Council now primarily focusses on maximising the returns from its existing portfolio with no new commercial investments included in the Capital Programme. The Council undertakes regular performance reviews on the assets with the next review due to be reported to Cabinet and Governance Scrutiny Group in December 2023
11. Options
11.1 As part of its consideration of the budget, the Council is encouraged to consider the strategic aims contained within the Corporate
Strategy and, in this context, to what extent they wish to maintain existing services, how services will be prioritised, and how future
budget shortfalls will be addressed. A review was undertaken in 2021/22 to assess the performance of the Council’s existing
commercial assets and their continued contribution to the Council’s strategic aims. This will continue to be monitored and reported to
scrutiny on a regular basis with the next review due in 2023/24.
11.2 Instead of increasing its Council Tax by 2% as per the proposals in section 3.4, the Council could choose to increase by the maximum permitted increase of the higher of 2.99% or £5 or the Council could freeze its Council Tax. Table 17 provides details of the impact on budgets of the recommended option of a £3.02 (2%) increase in 2023/24, £3.78 (2.46%) in 2024/25, and thereafter £4.99 increase against the 2 scenarios of a tax freeze or a 2.99% increase (2023/24 only thereafter reverting to the maximum permitted). If the Council chose to freeze its Council Tax, the income foregone in 2027/28 is £0.215m and over the 5-year period £1.032m when compared to the maximum permitted increase. The income foregone for the Council’s recommended option of 2% compared to the maximum of 2.99% is £0.307m over the 5-year period.
| Option |
2022/23 £'000 |
2023/24 £'000 |
2024/25 £'000 |
2025/26 £'000 |
2026/27 £'000 |
2027/28 £'000 |
|---|---|---|---|---|---|---|
|
Band D £153.95 in 2023/24 Increase at £3.78 in 2024/25, £4.99 in 2024/25 thereafter (maximum permitted) - the recommended option Total Council Tax Income |
(6,850) | (7,092) | (7,412) | (7,799) | (8,199) | (8,612) |
| Total for Freeze (Band D £150.93) | - | (6,953) | (7,270) | (7,654) | (8,051) | (8,461) |
| Total for 2.99% in 2023/24 and the maximum thereafter (Band D £155.23) | - | (7,151) | (7,472) | (7,860) | (8,262) | (8,676) |
| Difference (£'000) |
2022/23 |
2023/24 |
2024/25 |
2025/26 |
2026/27 |
Total |
|---|---|---|---|---|---|---|
| Freeze vs £5.00 | (198) | (202) | (206) | (211) | (215) | (1,032) |
| 2% vs £5.00 | (59) | (60) | (61) | (63) | (64) | (307) |
11.3 Other than the above options for Council Tax increases there are no alternate proposals concerning the Budget, Medium Term
Financial Strategy or Transformation Strategy
Accessible Documents
- Air Quality Action Plan 2021
- Air Quality Annual Status Report 2023
- Air Quality Annual Status Report 2022
- Air Quality Annual Status Report 2021
- Air Quality Strategy for Nottingham and Notts
- Auditor's Annual Report 2021
- Internal Audit Annual Report 2021/22
- Auditor's Annual Report 2021-22
- Annual Governance Statement 2021-22
- Annual Governance Statement 2020-21
- Asset Management Strategy
- Become a Councillor 2022
- Budget and Financial Strategy 2021-22
- Budget and Financial Strategy 2022-23
- Budget and Financial Strategy 2023-24
- Budget and Financial Strategy 2024-25
- Capital and Investment Strategy
- Climate Change Strategy 2021-2030
- Compulsory Purchase Order Procedure Protocol
- Confidential Reporting Code
- Corporate Enforcement Policy
- Corporate Strategy 2024-2027
- Council Constitution
- Council Tax Recovery and Enforcement Policy 2023
- Customer Access Strategy
- Discretionary Housing Payments Policy 2023-2024
- Disabled Facilities Grant Policy 2022
- Equalities Scheme 2021-25
- Empty Homes Strategy
- Environment Policy 2023
- External and Internal Communications Strategy
- Freedom Of Information Policy
- HB Recovery and Enforcement Policy
- Homelessness and Rough Sleeping Strategy
- Housing Allocations Policy
- ICT Strategy 2022 -25
- Information Management and Governance Strategy 2022-25
- Rushcliffe Borough Council Information Retention Schedule
- Leisure Strategy 2021-2027 review
- Local Code of Corporate Governance 2021/22
- Local Plan Part 1: Core Strategy
- Local Plan Part 2: Land and Planning Policies
- Local Scheme of Validation
- Off-street Car Parking Strategy
- Pay Policy Statement
- People Strategy 2021-26
- Planning Enforcement Policy
- Procurement Strategy
- Playing Pitch Strategy 2022
- 2021-22 Public Inspection Notice
- RIPA Policy and Guidance
- Risk Management Strategy 2023-26
- Rushcliffe Nature Conservation Strategy
- Statement of Gambling Licensing Principles
- Statement of Accounts 2019-20
- Statement of Accounts 2020-21
- Statement of Accounts 2021-22
- Statement of Accounts 2021-22 (unaudited)
- Statement of Accounts 2022-23 (unaudited)
- Statement of Accounts 2022-23 (audited)
- Statement of Licensing Policy
- Tenancy Strategy 2019
- Transformation Strategy and Efficiency Plan
- Tree Management and Protection Policy 2023
- WISE Agreement
- Neighbourhood Plans
- Conservation Areas
- Supplementary Planning Documents
- Local Plan Monitoring Report