East Devon District Council will be presenting a balanced budget for the financial year starting in April. The good news is that through careful financial management the Council goes into the next fiscal year in a fairly healthy position, with a small surplus of around £70,000 shown.
This will be used to help offset an expected deficit in 2015/16. Balancing the books will be even more difficult in years to come, as funding is squeezed further and demand for services continues to grow.
The Council is proposing to freeze Council Tax for the fourth consecutive year for 2014/15 and will in turn receive a reward from the Government in the form of a grant payment.
The Housing Revenue Account (HRA) Business Plan is on target and the HRA is in a healthy position to be able to meet housing service needs, planned improvements and to service £84.4m debt repayments. These arise from a loan taken out in 2012/13 to fund the purchase of its housing stock in a required payment to Government.
EDDC’s Cabinet Member for Finance, Councillor David Cox, said: “Staying solvent is getting more difficult every year, with cuts in funding from Central Government becoming a regular thing, plus continuing low investment income – whilst at the same time there is an increase in demand for some services.
“We are working hard to maintain our front-line services in the face of ongoing financial challenges. These are by no means peculiar to East Devon – they are happening all over the country. Local authorities are currently seeing a set of unusual and extreme circumstances affecting their future. In each local authority area there are different needs and so each council has to find its own way of meeting these needs whilst at the same time coping with reductions in funding”.
A key factor in these calculations is careful management of fees and charges. Car parking revenue is an important income stream and Councillors are keenly aware of the fine balance needed between maintaining this valued income and supporting local people and businesses. At its last meeting the Cabinet gave detailed consideration to a car park management review which aims to achieve this balance.
At its meeting on 3 April 2013, the Cabinet recognised the need to address the funding gap for 2014/15 (indicated in the Medium Term Financial Plan) at an early stage. Agreed actions included adopting a strategy for use of New Homes Bonus monies – additional grant received from Government based on housing growth – and setting up a Member Budget Working Party to deliver savings/increase income. The Budget Task And Finish Forum set up by the Overview and Scrutiny Committee had early involvement in considering proposals for savings and income potential.
Reducing costs is also an important element of prudent budgeting and the decision taken by Cabinet in 2013 to move from Knowle to more suitable accommodation that is cheaper to maintain is an example of this in practice. EDDC is continuing to seek out the best new location and funds invested in this search will start to be recouped once the move has been completed and the projected savings are being made.
Councillor Cox added: “A balanced draft budget has now been presented for 2014/15, following the work of the Budget Working Party. Good progress has also been made to balance the 2015/16 budget. Looking beyond this, the Council will continue to find it difficult to afford its spending plans due to continued Government funding cuts, inflation, low investment income, freezing the Council Tax and ever-increasing demand for its services. Further work will be needed to present balanced budgets in the future”.
Key dates in the budget-setting process
• The draft Housing Revenue Account and Housing Service Plan 2014-15 was agreed by the Housing Review Board at its meeting on 9 January.
• The budget estimates were considered in detail by EDDC’s Overview and Scrutiny Committee at its special meeting on 15 January.
• EDDC will meet with representatives of local businesses on Tuesday 21 January in response to an invitation from the East Devon Business Support Group*
• Recommendations will now be referred to Cabinet for consideration on 5 February.
• The final decision on the 2014/15 draft revenue and capital budgets will be made by Council at its meeting on 26 February 2014.
* The East Devon Business Support Group is made up of the Association of East Devon Chambers of Trade, the National Farmers’ Union, the Federation of Small Businesses and the Hospitality Business Support Organisation.