MAIDSTONE BOROUGH COUNCIL
RECORD OF DECISION OF THE Cabinet
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Decision Made: |
19 December 2012 |
BUDGET STRATEGY 2013-14 ONWARDS - CORPORATE FEES & CHARGES REVIEW
Issue for Decision
To consider the appropriate level of fees and charges for 2013/14 for services where the Council raises income by charging the user of a service and where the setting of the fee to be charged is discretionary. The Council has adopted a policy on the setting of fees and charges to ensure that a rational approach is used that takes account of all factors and creates a result that supports the priorities set out in the strategic plan.
Decision Made
1. That the increases in fees and charges proposed and set out in detail in Appendix A to the report of Corporate Leadership Team be approved.
2. That the proposed changes to the budgets for fees and charges that occur as a consequence of the revision in fees and charges be approved and the approved sum, as set out in paragraph 1.3.8 of the report of Corporate Leadership Team, to then be a budget strategy saving for 2013/14.
3. That the Chief Executive, in consultation with the Leader of the Council, be given delegated authority to amend any part of the Budget Strategy arising from the annual announcement by the Department for Communities and Local Government regarding local government finance.
Reasons for Decision
The Council adopted a Corporate Fees and Charges Policy in
May 2009. The Policy sets out the approach that the Council requires in
setting fees and charges, promotes consistency across the authority and is
focused on the strategic aims of the authority.
The Policy covers fees and charges that are set at the
discretion of the Council. It does not relate to services where the Council is
prohibited from charging, e.g. collection of household waste or services where
the charge is currently determined by Central Government e.g. planning
application fees. Consideration of any known changes to such fees and charges
and any consequence to the budget strategy are included in the considerations
in the report of Corporate Leadership Team.
The headline objective of the Policy is that fees and
charges are set at the maximum level after taking into account conscious
decisions on the subsidy level for individual services, concessions, impact of
changes on users and any impact on the delivery of the Strategic Plan.
Therefore, there is a presumption that charges will be levied for a service
unless justified by strategic consideration or legal constraints.
The Policy also proposes that a review of all fees and
charges will occur annually in line with the development of the Medium Term
Financial Strategy. The review of fees and charges should consider the
following factors:
a) The Council’s vision,
objectives and values, and how they relate to the specific services involved;
b) The level of subsidy
currently involved and, hypothetically, the impact of eliminating that subsidy
on the level of fees and charges, users and social impact;
c) The actual or
potential impact of any competition in terms of price or quality;
d) Trends in user demand
including the forecasted effect of prices changes on customers;
e) Customer survey
results;
f) Impact on users
of proposals both directly and in terms of delivery of the Council’s
objectives;
g) Financial constraints
including inflationary pressure and service budget targets;
h) The implications
arising from developments such as an investment made in service;
i) The
corporate impact of Council wide pressures to increase fees and charges in
other service areas;
j) Alternative charging
structures that could be more effective;
k) Proposals for targeting promotions during the year and the evaluation of any that took place in previous periods.
During the work on the budget strategy for 2012/13 the Cabinet tasked officers with completing a corporate review of all fees and charges and this was completed in December 2011. The report of Corporate Leadership Team repeats that process for 2013/14 as requested by the Cabinet in July 2012.
The work completed last December created an average increase
of 2.05% in the budgeted income from fees and charges for the current year.
However, the Cabinet will be aware from the second quarter’s budget monitoring
report that income levels achieved in the first half of 2012/13 are below the
midyear target. At September 2012 the shortfall in income was £0.12m and the
predicted outturn was £0.2m as set out in the table at paragraph 1.3.8 below.
The detailed results of the review carried out this year are
set out in Appendix A to the report of Corporate Leadership Team and the
approval of Cabinet was sought to the amended fees and charges and the proposed
income budgets for 2013/14.
The table below shows the 2012/13 budget and predicted outturn for income from the different fees and charges, the proposed budget increase that can be achieved from each proposal and the percentage increase in budget and proposes a level of budgeted income for 2013/14. The table is sub-divided by the effect any increase can have on the budget strategy.
The level of increase in fees and charges budgets for
2013/14 set out in the table above reflects consideration of the effect of
increasing the charges, such as elasticity of demand and creating movement of
users to competitors or ceasing to use a service.
A number of services have either not proposed an increase
or, where they have, the increase has not resulted in an increased budget. The
reasoning behind these actions are all in line with the Council’s policy on
setting fees and charges that has been outlined earlier in this report.
Each service has been considered separately and in all cases the policy has been followed. A brief explanation of the consideration officers have given to significant issues are given in the following paragraphs.
Fees & Charges Supporting Budget Strategy (increase
available to count as a saving)
On average there was an increase of 2.98% in these fees in
2012/13. As mentioned previously, the current income expectations are not
being achieved at the mid point of the year and the year end prediction is a
2.6% shortfall across all fees and charges.
The fees and charges policy identifies current performance as a factor for consideration when setting future fees and charges. Officers have considered this factor in setting the proposed fees and the result is an average increase of 1.29%.
Specific issues that the Cabinet should note are:
a) Recycling & Refuse Collection is showing an increase in income generated in the current year. Longer term the consequences of this additional income will form part of the service changes following the commencement of the new service contract. At this time a separate income target of £50,000 has been set as part of the budget strategy without an increase in fee and it would be a duplication of the increase to include it in this report.
b) The Licensing Service
is influenced by a number of fees and charges that are either statutorily
controlled or set to break even. The service has considered increases where
appropriate and will report to the Licensing Committee to seek approval to
these fees. The expected increase is £1,320 but the service has generated
income slightly above target in the last two years. As these are minor
surpluses and the service is provided in partnership with other authorities in
Kent it is felt prudent not to increase these targets outside of the
partnership arrangement.
Statutory Charges
These charges are set in accordance with regulation. The
environmental enforcement penalty charge is already set at the maximum. The
Development Control charges have been increased by an average of 15% from
November 2012 by Central Government and the increase is reflected here as an
estimated increase in income of £0.11m
Obligation to Break Even
Both Building Control and Land Charges have a statutory
obligation to break even. Both services will consider any necessary increase
following budget setting and, if necessary, report this to the respective
Cabinet Member.
Any increase set will not benefit the budget strategy as it
will be set to maintain a break even cost of service.
Pre-Set Targets
These services have pre-set obligations and at this time no
increases are proposed that will have an additional effect on income budgets.
Current Budget Shortfall
These services are currently reporting difficulty in generating income and any increase in fees proposed is designed to support current targets. In all cases managers are developing or implementing action plans following the identification of the concerns through the normal budget and performance monitoring processes in 2012/13.
Alternatives considered and why rejected
The Cabinet could consider these proposals as individual
Cabinet Members, as has happened in the past. This was not thought appropriate
as the consideration of the full range of fees and charges in this way enables
the impact of all charges to be considered together. This gives the Cabinet
the ability to assess the impact of changes on individual customers. The
consideration of fees and charges in this way removes the need to set a generic
target for increases as part of the budget strategy. This is in line with the
approved policy on fees and charges.
The Cabinet could agree different increases to those proposed. Officers have considered all aspects of the policy in developing these proposals and they are in line with the factors set out earlier in the report of Corporate Leadership Team.
Background Papers
None
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Should you be concerned about this decision and wish to call it in, please submit a call in form signed by any two Non-Executive Members to the Head of Change and Scrutiny by: 3 January 2013 |