Stratford-on-Avon District Council Cabinet budget proposals out for consultation

On Monday 18 January Stratford-on-Avon District Council's Cabinet agreed the draft budget proposals for the next five years (2021/22 to 2025/26).

The draft budget will be used to consult with the public, local businesses and the Overview and Scrutiny Committee before final recommendations to be made to Council are considered at the meeting of The Cabinet on 8 February 2021.

Cllr Tony Jefferson, Leader of Stratford District Council says: "We have to set our budget and Medium Term Financial Strategy (MTFS) against the backcloth of tremendous uncertainty. We have estimated that the Covid-19 pandemic will cost us £7.5 million over the next five years, and that was before taking account of the latest lockdown. So it could end up costing us more. Central Government has provided a one year financial settlement which means that we do not know what financial support we will receive beyond 2021/22.

"We have been able to protect the provision of services to residents for next year. It is not surprising, however, that we have had to take some difficult decisions. The difficult decisions will not need to be actioned until 2022/23 and beyond, but they demonstrate the impact of the savings we need to make. The details of the Government's Spending Review later this year will be crucial.

"Covid-19 has had a massive impact. The world has changed and we have to adapt to that changed world. There is no point pretending that we can keep supporting everything beyond next year. That would simply deny reality and store up even more difficult decisions in future."

The proposals will now go out for consultation.

To view the proposals in more detail residents and businesses should visit www.stratford.gov.uk and make comment there.
*Please note the budget consultation will be available from Thursday 21 January.*

Deadline for comments is Thursday 4 February.

The proposed council tax increase this year is £5 per household, the maximum allowed by the Government - meaning a Band D property would increase in April this year from £144.12 to £149.12.

Although the collecting agent for Council Tax, the District Council only receives 7.5% of Council Tax paid by residents - Warwickshire County Council receives 77%, the Police 12.3% and Towns/Parishes 3.2%. This means the District Council only gets just under 8p of every £1 paid in Council Tax to provide services.

Budget background information

The estimated shortfall against last year's Revenue Budget is projected to be £4.166m, but this current estimate does not take account of the third lockdown that started in January 2021.

The shortfall is attributed to a variety of factors, predominantly a loss of income from fees and charges as a result of the impact of the COVID-19 pandemic.  The single largest shortfall is from Off-Street Parking which is projected to suffer a shortfall of £1.63m.

Part of this shortfall will be financed by the release of £2.355m from Earmarked Reserves to the General Fund Reserve.

The majority of the Earmarked Reserves released (£1.4m) relate to capital projects for which money will not now be allocated. The three largest of these projects are:

• The Studley Leisure Centre Gym (£511k)
• The Business Centre Workshop (£500k)
• The Empty Homes Loan Scheme (£253k)

In addition, £976k has been released from the Revenue Reserves to the General Fund Reserve. This includes a reserve of £750k that had been held to meet the cost of borrowed funds, were they to be needed.

However, £1m will still be retained, within the Earmarked Reserves for the pursuit of a CPO in relation to Wellesbourne Airfield.

Government Funding

Following the postponement of the Spending Review in 2018, 2019 and again in 2020, the Government announced a one year financial settlement for local authorities in 2021/22, which would be broadly similar to 2020/21. 

However, there were announcements of additional one-off funding relating to the COVID-19 pandemic to help mitigate the impact on local authorities. 

A full Spending Review is anticipated in 2021. 

The outcome of the Spending Review and its implications for 2022/23 to 2025/26 are currently unknown. 

In December the Council received the Provisional Local Government Settlement for 2021/22.  The final figures in relation to the Local Government Finance Settlement (LGFS) for 2021/22 are expected to be announced by Government soon. 

Increased Revenue and Reduced Costs

A council tax increase of £5 per household, the maximum allowed by the Government, will be proposed - meaning a Band D property would increase in April this year from £144.12 to £149.12.

The decision to introduce charges for the garden waste service will be implemented in April (with an estimated additional income of £714k) and increases to the level of off-street parking (generating an additional £230k) have been included in the budget. Numerous other potential sources of additional revenue have also been identified, for example additional rental income from Elizabeth House.

Next year's expenditure has already been reduced by £236k through decisions, for example, not to fill a number of vacant posts and through savings from joint appointments with Warwick District Council (WDC). So far joint working arrangements with WDC are currently estimated to represent a saving to the District Council over the next five years of £1.25m. Also, as the 'normal' Shakespeare Birthday Celebrations will not take place in April this year, £25K allocated for the security costs for the event have not been included in the proposed budget, although the District Council will continue to support the event.

Financial Impact - Despite financial support from Central Government, the net cost to the District Council's finances last year (2020/21), predominantly the loss of income, is estimated to be around £2.6m, rising in total over the next five years (2025/26) to an estimated £7.5m.