The district council’s non-housing activities are funded from three main sources:-
- council tax 37%
- income from fees and charges 35%
- the grant from the government 28%
Based on previous indications, it had been assumed that the grant would increase by at least 2%, compared to last year, and all preparations for the budget, which will be submitted to cabinet on 4th February had been based upon this increase.
Despite the fact that inflation (RPI) is running at 4.3%, the grant to the district council has only increased by only 1%, with an indication that in the next two years, the increase will be only half a percent per annum.
In addition to this challenge, other factors which will impact the district council’s budget are salary increases to staff, and the possible variances which may arise following the job evaluation process and an amount to top up pensions. Consequently £650K may need to be set aside to cover these increases. Staff represent 22% of the council’s spend. Also funding the costs of the Rail Freight planning inquiry (estimated at approximately £855,000) from financial balances in 2007/8, will mean that these balances will have to be replenished as soon as possible.
Cllr Robert Donald, Leader commented: “This is the most difficult budget setting year I can recall as a councillor, in terms of greatly reduced central government financial support and new restrictions. Potentially these would seriously affect all council tax payers and doubly hit council tenants if we just accepted them. This is putting a huge strain on us and we are still trying to assess the implications of the various government reductions, as we strive to prepare a balanced budget for next year.
However I am still determined to put forward a budget to council that will keep the district council tax rise down to no more than the RPI rate of inflation, as we have previously pledged and to maintain high quality services and meet the council’s aims. To achieve this will inevitably mean some further operational efficiencies and increases in our fees and charges. Fortunately we have already been working during the past year on several cost-saving measures, such as the new telephone contact centre to be run by local, experienced staff, and accommodating more of the pressure on the budget, through the natural turnover of staff. I sincerely hope that the county council will similarly work to keep their part of the council tax rise down.”