1. Budget Update Rural Forum 3 rd November 2011

2. Agenda  Context and Background  Understanding the current budget position  Five Year Financial Strategy  Zone of Unpredictability

3. Golden Rules  Financial Strategy Guiding Principles  Modelling for Recovery Principles  Budget Containment Strategy

4. Golden Rules  Revenue balances should not fall below £1m and overall revenue reserves should not fall below 10% of net revenue expenditure;  In setting the Council Tax, members should consider the medium term to ensure that a sustainable budgetary position is preserved (with due regard being given to any penalties that might apply);  The level of household Council Tax to increase each year in line with inflation at least, where the budget is in deficit, to ensure resources remain consistent with budgeted costs;  When setting the Capital Programme, consideration is given to allocating capital resources to schemes that are beneficial to the Council’s overall revenue budget position;  To maximise the resources available to the Authority, the Council will actively lobby the Government on relevant issues (e.g., grant distribution/ planning fees). Financial Strategy Guiding Principles

5. Golden Rules Modelling for Recovery Principles  Wherever possible, continue with all planned investments and programmes, to protect the local economy and lever in other investments;  Given that we currently have no long-term debt, we should be prepared to consider debt-funding as a means of programme delivery or stimulus – if this can be shown to be sustainable and have a wider economic benefit;  Organise our fiscal structures and business models to attract and retain the maximum amount of revenue within the local economy;  To ensure all possible avenues are used within procurement rules to source locally;  Protect the performance of Council services which come under particular strain;  Work closely with partners in the voluntary, public and private sectors, to ensure optimum efficiency.

6. Golden Rules Budget Containment Strategy  Where a specific grant which funds a specific service is withdrawn, the service stops;  Where grant funding reduces, which Kettering Borough Council passports through to another organisation, the reduced sum continues to be passported, providing the end recipient organisation feels it can still provide a value-added service at that funding point.  Where a function is transferred to another provider, the Council leaves all service-provision discussions, including any top-up funding, with the new provider;  The Council would ordinarily neither seek to buffer nor profit from tax changes;  The Council should not substitute itself as the provider / funder of services when another public provider cuts such a service.

7. Capital Review Service Plans Fees and Charges Review Prioritisation Innovation Group Staff Suggestions Partnership Working Lobbying Budget Delivery Framework

8. Budget Delivery Framework  A unique approach  Engages all staff in savings agenda  Keep morale and motivation high  Delivering significant year on year savings

9. Budget Monitoring 2011/12

10. Budget Monitoring 2012/13

11. Medium Term Forecast

12. Zone of Unpredictability Council Tax Benefit £5.8m HRA Finance £70m Housing Tenancy Changes Housing Benefit Caps Business Rates Reform £4.7m New Homes Bonus £0.35m Universal Credit

14. 1. Establishing the Baseline 2. Measuring Business Rates 3. Non Billing Authorities 4. Business Rates Administration 5. Tariff, top up and levy options 6. Volatility7. Revaluation and transition 8. Renewable Energy

15. Local Government Resource Review Proposals for Business Rates Retention ♦ The consultation (and the detail of it) are broadly welcomed ♦ Clarifies the future funding of the New Homes Bonus Scheme ♦ Growth should be proportioned to those who have had the most to do with stimulating it ♦ Special treatment for Green Energy proposals is welcome, however a case study shows supermarket distribution centre being worth 40 times more in business rates per acre than an adjacent wind farm, green energy would be better rewarded per megawatt generated ♦ Issues not raised within the consultation ♦ Losses in Collection ♦ Impact of the Multiplier – ‘Real Growth’ no reward due to reduction in the multiplier

17. Council Tax Benefits - Facts  Approx annual bill £5.8m  Increase in caseload 2008-2011 = 15% (assessed claims)  Overall ‘workload’ (i.e. all claims) up by over 25%  National Policy = 10% Funding Reduction (out of the 17% group therefore £580,000 needs to come from £986,000 a reduction of nearly 60%)

18. Localising Support for Council Tax Benefit in England ♦ Whilst Kettering Borough Council can support the policy direction for the localisation of Council Tax Benefits, unfortunately we cannot support the specific proposals that are laid out in the consultation document. ♦ Whilst the council accepts reform may well be needed, we have serious doubts that the Government will be able to deliver its high level policy objectives through the proposals as they currently stand. ♦ The proposals for localisation of Council Tax benefit has the potential to result in hardship for a large number of working age customers and the proposals could result in local authorities taking on additional financial risks and costs. ♦ The Council is also very concerned about the intention to implement the scheme by April 2013 – this appears to be very ambitious and thought needs to be given to whether this is realistic and whether it will allow all the legalities to be completed properly.

19. Summary  2011/12 – On target to deliver £1,906,000 efficiency savings  2012/13 – Budget savings of £700,000 ‘locked in’ further savings of £568,000 required  2013/14 and beyond – Zone of Unpredictability