Agenda item

            The Committee considered the undernoted report:

 

“1.0     Purpose of Report

 

1.1        The Strategic Policy and Resources Committee, at its meeting on the 20 January 2017, considered the proposed 2017/18 revenue budgets and cash limits for the Strategic Policy and Resources, People and Communities, City Growth and Regeneration and Planning Committees.

 

1.2            The Committee agreed that the revenue budgets and cash limits for the People and Communities Committee, City Growth and Regeneration Committee and the Planning Committee should be referred to special meetings of each Committee on 24 January 2017.

 

1.3            This report provides recommendations for the Committee Cash Limits and District Rate for 2017/18.

 

2.0       Recommendations

 

2.1       The Committee is asked to agree:

 

·        That this paper should not be subject to call-in (as indicated above) because it would cause an unreasonable delay which would be prejudicial to the Council’s and the public’s interests in striking the district rate by the legislative deadline of 15th February 2017.

·        A cash limit of £42,443,408 for the Strategic Policy and Resources Committee for 2017/18, including £3,270,000 relating to the Belfast Investment Fund.

·        A cash limit of £76,242,845 for the People and Communities Committee for 2017/18.

·        A cash limit of £15,841,354 for the City Growth and Regeneration Committee for 2017/18.

·        A cash limit of £1,520,440 for the Planning Committee for 2017/18.

·        The capital financing budget of £18,751,901 for 2017/18.

·        That the increase in the district rate for 2017/18 should be 1.89%, based on an estimated penny product of 5,875,174 meaning a non-domestic rate of 26.3481 and a domestic rate of 0.3199 and that the amount to be raised through the district rate in 2017/18 will be £149,511,770.

·        Note the Director of Finance and Resources statement on the adequacy of the Council’s reserves position and the robustness of the revenue estimates as required by the Local Government Finance Act (NI) 2011.

·        Note the Minimum Revenue Provision (MRP) Statement (Appendix 5) as required by the Local Government (Capital Finance and Accounting) Regulations (NI) 2011.

 

3.0       Main report

 

3.1       Table 1 below summarises the net cost of the Council for 2017/18 and shows that the amount to be raised through the district rate in 2017/18 is £149,511,770. This represents a 1.89% increase in the district rate.

 

 

                        Table 1 Cost of Running the Council in 2017/18

 

	Cost (£)
Strategic Policy and Resources Committee	39,173,408
People and Communities Committee	76,242,845
City Growth and Regeneration Committee	15,841,354
Planning Committee	1,520,440
Net Departmental Expenditure	132,778,048
Belfast Investment Fund	3,270,000
Capital Financing	18,751,901
Total Net Council Expenditure	154,799,949
Less Derating Grant	-5,288,179
Amount to be Raised from the District Rate	149,511,770

 

           

            Strategic Policy and Resources Committee Cash Limit

 

3.2       The recommended cash limit for the Strategic Policy and Resources Committee agreed by the Committee at its meeting on the 20 January 2017 is £42,443,408, which includes £3,270,000 relating to the Belfast Investment Fund and the additional £750,000 of funding for the Belfast Agenda Priorities.

 

3.3       The revenue estimates for the Strategic Policy and Resources Committee comprise the revenue budgets for the Chief Executive’s Department including City Centre Regeneration, Property and Projects Department and the Finance and Resources Department.

 

3.4       The budget for each main service area and corporate finance budgets are summarised in Appendix 1.

 

            People and Communities Committee Cash Limit

 

3.5       The People and Communities Committee, at its meeting on the 24 January 2017, noted the revenue budget and cash limit of £76,242,845 as recommended by the Strategic Policy and Resources Committee. Each main service area is summarised in Appendix 2.

 

            City Growth and Regeneration Committee Cash Limit

 

3.6       The City Growth and Regeneration Committee, at its meeting on the 24 January 2017, agreed the revenue budget and cash limit of £15,841,354 as recommended by the Strategic Policy and Resources Committee. Each main service area is summarised in Appendix 3.

 

            Planning Committee Cash Limit

 

3.7       The Planning Committee at its meeting on the 24 January 2017, agreed the revenue budget and cash limit of £1,520,440 as recommended by the Strategic Policy and Resources Committee. Each main service area is summarised in Appendix 4.

 

            Belfast Investment Fund

 

3.8       The annual contribution to the Belfast Investment Fund is £3,270,000 and this is included in the Strategic Policy and Resources Cash Limit above.

 

            Capital Financing Budget

 

3.9       The Council will have secured a capital financing budget of £18,751,901 in 2017/18 to support its capital investment programme. The only change from 2017/18 is the inclusion of £661,000 financing for the new office accommodation. This money has been financed through efficiency savings and not through an increase in the district rate. The savings come from the rationalisation of the accommodation estate with the opening of the new office block in Adelaide Street.

 

            The 2017/18 capital financing budget is summarised in Table 2 below.

 

            Table 2 – Capital Financing Budget 2017/18

 

Capital Financing	(£)
Capital Programme	10,312,676
Transferred LGR Loans	677,319
Leisure Investment Programme	7,100,906
Accommodation Efficiencies	661,000
Total	18,751,901

 

            Derating Grant

 

3.10     The grant received from central government (Derating Grant) which compensates the Council for de-rated properties will increase by £59,052 to £5,288,179 in 2017/18.

 

            Local Government Finance Act (NI) 2011

 

3.11     The Local Government Finance Act (NI) 2011 requires the Director of Finance and Resources, in his role as designated chief financial officer, to provide assurance to Members on the robustness of the revenue estimates. The Finance Act requires the Council to have regard to this statement when considering the estimates and the amount estimated to be required to be raised by means of rates. He is also required to report on the adequacy of the Council’s reserves position as part of the rate setting process.

 

            The development of the revenue estimates for 2017/18 commenced in June 2016 with the identification of uncontrollable costs arising from external influences, the development of the detailed budgets at cost centre and account code level across the organisation and the consideration and challenge of base budgets and growth proposals.

 

            Reports were presented to the Strategic Policy Resources Committee from November 2016 to January 2017 which detailed the additional financing requirement for the Council, based on uncontrollable costs (e.g. salary costs, apprentice levy, waste disposal) and additional investment to support the Belfast Agenda. These reports also provided updates to Committee on the efficiency programme which resulted in £2,876,970 of efficiencies being removed from based budgets as compared to the targeted savings of £2,000,000.

 

            As the result of this process the Director of Finance and Resources is satisfied that the estimates presented should provide adequate financial resources to support the running costs of the Council for 2017/18 and that reasonable consideration of the financial risks to the Council have been made in the preparation of the estimates.

 

            Alongside the development of the revenue estimates, work was undertaken with Land and Property Services (LPS), supported by the Institute of Revenues, Rating and Valuation (IRRV) to validate the Estimated Penny Product for 2017/18 including losses on collection.

 

            The decline in the rate base, mainly due to successful rating appeals and the removal of non-domestic properties from the valuation list resulted in the Estimated Penny Product (EPP) being reduced by £61,114 (1.03%) a loss of £1,511,561 annual rates income. This revised EPP has been included in the district rate calculations.

 

            The Council’s general reserves position is forecast to be £12.8m by the end of 2017/18. The Director of Finance and Resources believes that the level of reserves should be maintained at this level to safeguard the Council’s exposure to financial risk including any backdated element of non-domestic revaluation appeals. 

 

            The Director of Finance and Resources is therefore satisfied with the robustness of the revenue estimates and that the reserves position is adequate for the Council and does not require enhancement though the district rate in 2017/18.

 

            Regional Rate

 

3.12     The Regional Rate has not been set at this stage.

 

            Impact on Ratepayer

 

3.13     Table 3 below illustrates the impact of a 1.89% increase in the district rate on ratepayers by average property type.

 

            Table 3: Impact on Ratepayer by Property Type

 

Property Type	Annual Increase	Monthly Increase
Terraced House	£5.12	£0.43
3 Bed Semi-Detached	£7.83	£0.65
4 Bed Detached	£17.41	£1.45
Apartment	£4.94	£0.41
Average Office	£134.61	£11.22
Average Retail	£131.34	£10.95

 

            Communication

 

3.14     It is proposed to use the following key messages for the announcement of the agreed rate:

 

·        Belfast City Council has agreed a district rate increase of 1.89%.

·        To set this level of district rate, the Council has delivered £2.9m of cash savings without impacting on frontline service delivery.

·        The average impact on domestic ratepayers is less than £1 per month or less than £10 per year. Business and offices will pay on average an extra £11 per month or £130 per year. 

·        The Council has shown responsible leadership by achieving the balance between investing in the city to secure jobs and grow the economy during these difficult times while also providing value for money services.

·        The Council’s long term strategy is to improve the retail and hotel offering and office and business infrastructure to attract major investors and businesses to the city in order to increase its rate income, with the effect of further investment and keeping rates as low as possible.

·        The Council will continue to maintain and improve its services, to invest in local communities while at the same time delivering a further £6 million of efficiencies in the next two years.

·        The Council will invest:

 

o   £22.77m in city centre regeneration projects

o   £36m in local regeneration projects

o   £150m in providing new facilities and refurbishing existing ones

o   £105m in new leisure facilities.

 

3.15     In addition Corporate Communications will produce a press release for Members.  A pull out section on the district rate, services and capital investment will be provided in the next addition of City Matters. The My Rates Page on the website will be updated.

 

3.16     Financial & Resource Implications

 

            The report details the cash limits and level of district rate required to meet the additional financing requirement of the Council for 2017/18.

 

3.17     Equality or Good Relations Implications

 

            There are no equality or good relations implications associated with this report.”

 

 

 

					APPENDIX 1
STRATEGIC POLICY & RESOURCES COMMITTEE
ESTIMATE ANALYSIS 2017-18

 

 

 

SERVICE			BUDGET
			2017-18
Corporate Priorities.			2,423,750
City Centre Regeneration			1,035,662
Human Resources			3,009,237
Democratic Services			2,290,596
Corporate Communications			1,217,137
Central Support Unit			1,734,818
Legal Services			1,499,736
Strategic Policy			719,435
Corporate Management			1,663,474
Finance & Performance			2,532,874
Digital Services			5,188,661
Audit			1,018,576
Corporate Directorate			1,106,787
Property Mgmt.			1,775,426
Estates			-4,459,575
Facilities			15,241,136
Contracts			820,895
Good Relations			354,783
COMMITTEE TOTAL			39,173,408
Belfast Investment Fund			3,270,000
Capital Financing			18,751,901

 

 

					APPENDIX 2
PEOPLE & COMMUNITY COMMITTEE
ESTIMATE ANALYSIS 2017-18

 

 

			BUDGET
SERVICE			2017-18
Cleansing			18,063,073
Community Services			6,557,491
Directorate Support			2,701,136
Environmental Health			7,115,033
Leisure - GLL			7,247,371
Leisure - BCC			374,635
Neighbourhood & Development			4,248,166
Parks & Cemetery Services			9,485,141
Waste Management			20,450,799
COMMITTEE TOTAL			76,242,845

 

 

					APPENDIX 3
CITY GROWTH & REGENERATION COMMITTEE
ESTIMATE ANALYSIS 2017-18

 

SERVICE			BUDGET
			2017-18
Economic Initiatives & ID			7,956,603
Development Directorate			3,221,847
City Events & Venues			4,260,059
Carparking			-919,247
Estates			376,718
Zoo			930,374
North Foreshore			15,000
COMMITTEE TOTAL			15,841,354

 

					APPENDIX 4
PLANNING & LICENCING COMMITTEE
ESTIMATE ANALYSIS 2017-18

 

 

SERVICE				BUDGET
				2017-18
Planning				1,145,983
Building Control				374,457
COMMITTEE TOTAL				1,520,440

 

 

 

 

 

Appendix 5

 

 

 

 

Belfast City Council

Minimum Revenue Provision Annual Statement

January 2017

 

 

 

1.               Introduction

 

1.1       The Local Government (Capital Financing and Accounting) Regulations (NI) 2011 requires Councils to determine an amount of minimum revenue provision (MRP) which it considers to be prudent. This provision will be charged to the general fund each year and will be in respect of the financing of capital expenditure incurred in current or prior years.

 

2.               Minimum Revenue Provision (MRP)

 

2.1       The general MRP provision for capital expenditure financed by loan sanctions issued by the Department of the Environment up to and including 2011/12 and for borrowing incurred in 2012/13 and later years, will be charged to the general fund on a straight line basis in-line with the asset life determined for depreciation purposes either:-

 

·        In the financial year in which the expenditure was incurred, if the expenditure was incurred during the first six months of the financial year.

or

·        In the financial year following the one in which the expenditure was incurred, if the expenditure was incurred during the last six months of the financial year.

 

2.2       The MRP will not be made on the value of Long term Debtors outstanding, as these will be repaid by third parties and it is not therefore deemed necessary to make an additional revenue charge in relation to these amounts. However, if a third party is not making annual repayments of principal, the MRP payments will be made over the asset life.

 

2.3       If the Council enters into finance leases, the MRP will be calculated in accordance with the requirements of International Financial Reporting Standards (IFRS) and be equal to the principal elements of the lease payments.

 

 

            After discussion, it was

 

Moved by Councillor Reynolds,

Seconded by Councillor Craig,

 

      That the increase in the District Rate for 2017/18 be set at a maximum of 1.61%. 

 

On a vote by show of hands five Members voted for the proposal and ten against and it was declared lost.

 

            The Committee adopted the recommendations as set out in paragraph 2.1 of the report.