Stratford-on-Avon District Council budget 2021/22

Following the continued COVID-19 pandemic, local government is facing a number of significant financial, economic and service delivery challenges.

Like many others across the country, the Council's budget has also been put under further pressure as a result of the COVID-19 pandemic with falling income and extra costs to provide support during this unprecedented time.

Cllr Tony Jefferson, Leader of Stratford-on-Avon District says: "Difficult decisions have to be made to set a balanced budget with limited Central Government funding, whilst maintaining general reserves of £2.5m.  The current loss of revenue combined with increased costs is substantial and is estimated to be in the region of £2.6million this year alone.

"Although we have a long history of strong financial management, having been able to benefit from reserves, this year we are having to make difficult decisions with reductions in funding and rising costs.  We are also fully committed to working closely with Warwick District Council to ensure we can continue to provide services in the future.

"This year's budget is not a growth budget as in previous years, but our budget proposals for the coming year ensure we are well placed to prepare for the District's future as we work alongside our partners to respond to the continuing COVID-19 pandemic.

"The future beyond next year is increasingly uncertain. The implications of the continuing pandemic on the demand for our services, on the prospects of businesses and attractions within the District, and on the well-being and livelihoods of residents are uncertain.  The proposed budget for this year is only the beginning of a journey that remains to be explored."

Following The Cabinet meeting on Monday 18 January, the draft budgets 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.

The Cabinet's final budget proposals and council tax levels will be considered at the Full Council meeting on Monday 22 February 2021.

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.
  
  
• Stratford-on-Avon 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%