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Agenda item

Budget Strategy - Risk Assessment Update

Minutes:

The Director of Finance and Business Improvement introduced his report providing an update on the budget risks facing the Council.

 

The Director of Finance and Business Improvement explained that:

 

·  The two principal budget risks continued to be uncertainty about future local government funding arrangements and the potential financial consequences of a disorderly Brexit.

 

·  In terms of the local government funding regime, it was anticipated that the current arrangements would be rolled forward into 2020/21 as other priorities were likely to prevent the government from implementing a new funding regime as originally planned.  However, there were a number of variables that were still uncertain even within the existing arrangements, including the Council Tax referendum limit, the Business Rates baseline (which determines the level of Business Rates that the Council retains locally), future specific grants and the potential for the Council to suffer negative Revenue Support Grant.

 

·  The financial impact of a disorderly Brexit for the Council would be two-fold.  In the short term disruption to transport would have major implications for service delivery with staff not being able to travel to work and congestion hampering services like refuse collection.  Costs had already been incurred in contingency planning and further costs would be incurred in the run up to the likely revised Brexit date of 31 October 2019.  Although the government had notified the Council of a grant of £35,000 to cover Brexit costs in January 2019, this was much less than estimated likely costs.

 

·  In addition, there might be adverse longer term effects on the economy arising from a no-deal Brexit, with a knock-on impact for local authorities.  The prospect of a no-deal Brexit was depressing the exchange rate resulting in increases in key input costs such as fuel.  Revenues from fees and charges would be adversely affected by a downturn, the collection of business rates and Council Tax could be affected and there could be increasing pressure on homelessness budgets.

 

In response to questions, the Director of Finance and Business Improvement explained that the Council was working with other Councils in Kent as part of the Kent Resilience Forum to press central government for additional resources to mitigate the impact of a disorderly Brexit.  Contingency plans were being put in place based upon a range of scenarios (adverse, neutral and favourable) to ensure that the Council is prepared for the consequences of a disorderly Brexit.

 

Arising from the discussion, it was suggested and agreed that the Director of Finance and Business Improvement be requested to join with all District Councils in Kent, Kent County Council and other Kent based public sector bodies in lobbying for additional resources from central government to mitigate the effects of a disorderly Brexit.

 

RESOLVED:

 

1.  That the updated risk assessment of the Budget Strategy, attached as Appendix A to the report of the Director of Finance and Business Improvement, be noted.

 

2.  That the Director of Finance and Business Improvement be requested to join with all District Councils in Kent, Kent County Council and other Kent based public sector bodies in lobbying for additional resources from central government to mitigate the effects of a disorderly Brexit.

 

Supporting documents: