New Fund to Support a Growing Borough
9 January 2019 Local News
Cabinet members have drawn up plans for a £304,000 ”Borough Growth Fund” to drive Newcastle-under-Lyme forward and bolster key council services.
The new pot of cash has been included in draft revenue and capital budgets for the Borough Council in the financial year ahead.
Money would be allocated towards areas identified as corporate priorities in the authority’s recently unveiled Council Plan and include:-
- £104,000 towards actions linked to a Car Parking Strategy; reinvigorating Newcastle market and a “Future High Streets Fund” bid.” (See attached notes)
- £100,000 to bolster the digital delivery of services so residents can “self-serve” more services online when and where they choose.
- £100,000 towards accelerating residential and commercial development to deliver capital receipts or revenue streams.
Cllr. Simon Tagg, the Leader of the Council, said: “When Cabinet met in September we agreed a vision for Newcastle-under-Lyme of a growing borough that is an attractive and welcoming place for all. The new Borough Growth Fund is about investing in priority areas so that we deliver on this promise to our residents.
“This is an innovative and ambitious proposal which we think will have a huge impact on our communities and our businesses.”
At its meeting on 16 January, Cabinet will consider the Borough Growth Fund as part of its budget proposals for 2019/20.
A “budget gap” of £2,200,000 faced the Council in the next 12 months due to a variety of factors including a reduction in direct Government funding (£526k); a revised New Homes Bonus Scheme (£519k); staff-related costs such as superannuation increases (£335k) as well as pay awards and NI contributions (£326k).
In addition it is facing a reduction in waste income and recycling credits and a reduction in Council Tax and Housing Benefit administration grants.
Savings and efficiencies totalling £2,468,000 put forward by Cabinet include:-
- £500,000 in additional sources of income generation and an increased demand for services that the Council charges for.
- £442,000 from good house-keeping efficiencies.
- £410,000 from staff-related savings. No redundancies are anticipated from these proposals.
- £1,116,000 from New Homes Bonus funding, savings from negotiated contribution rates and advanced payments of staff-related costs such as superannuation contributions etc.
The Council has been told that it will receive £56,000 additional funding from the distribution of the surplus on the national Business Rates Retention levy account. This will be added to the £248,000 in additional savings and efficiencies to make up the Borough Growth Fund.
Around £211,000 of the £1,116,000 outlined above will come from a 2.99 per cent proposed Council Tax increase.
More than 70 per cent of all homes in Newcastle-under-Lyme are in Council Tax Bands A, B and C and for these households the tax increase amounts to seven pence, nine pence and 10 pence a week respectively.
Cllr. Stephen Sweeney, Deputy Leader of the Council and the Cabinet member responsible for finance and resources, said: “We have carried out two consultations with the public in recent months to get a clearer understanding of what is important to them with our budgets.
“We have also spent many hours going over finances and spending plans to come up with these very detailed proposals which will enable the Council to meet its statutory responsibility of setting a balanced budget.
“We are working hard to be efficient and effective but despite this the Borough Council still needs a little bit extra from residents in the year ahead. We are also trying to be as innovative as possible and this was highlighted by our recent success in becoming a pilot area for the retention of business rates.”
In July 2018, the Government invited councils to bid for the opportunity to be involved in a pilot project for 75 per cent Business Rates Retention during 2019/20 only. An application was successful and as part of the Staffordshire and Stoke-on-Trent Business Rates pool, the Borough Council will receive an estimated £200,000 of additional resources in the year ahead.
Cllr. Tagg said: “We are proposing that all of this extra funding which has been secured will be used to accelerate changes to the recycling and waste services. The Council carried out one of its biggest ever consultation exercises recently on the service and there was an overwhelming demand from the public for changes to be made. We are proposing ring-fencing this money so we can get on with what the public has demanded of us.”
During the last decade the Borough Council has bridged budget “gaps” of £22, 456,000 via a combination of savings, efficiencies and additional income. Its Medium Term Financial Strategy suggests that over the coming four years a further £2,980,000 will have to be found.
In addition to revenue proposals, Cabinet members will also consider capital requirements for the next three financial years.
Just under £19 million will be spent on capital projects linked directly to corporate priorities such as housing improvements, vehicle replacement, enhancements to council buildings and properties such as the museum and Jubilee2 and also “modernisation of the Council.”
Once Cabinet members have consider the revenue and capital budget proposals next week, they will then go to the Council’s Finance, Assets and Performance Scrutiny for comment and final decisions will be taken at a meeting of Full Council on 20 February.