Decision details

1.    That the Cabinet endorse the following:

(a)   The recommendations to the Council set out below.

It is recommended that the Council approve the following:

(a)    The revised Revenue Budget for the financial year 2022/23 and the Revenue Budget for the financial year 2023/24 as set out in the General Fund Summary (Appendix 1) which includes:

(i)      Additional spending in Adult Social Care of £7.6m and Children's  Services of £4.3m

(ii)    No Revenue Contribution to Capital in 2022/23 or 2023/24

(iii)   The Covid Contingency estimated at £4.2m, to guard against continuing and legacy risks

(b)    Any variation arising from the Local Government Finance Settlement 2023/24 or any further savings made in 2022/23 arising at the year-end (after allowing for specific carry forward requests) be transferred to the Revenue Reserve for Capital, Covid Contingency, Transformation Reserve, and General Reserves with the level of each transfer to be determined by the S.151 Officer.

(c)    That the level of Council Tax be increased by 2.99% for general purposes in accordance with the referendum threshold^[1] for 2023/24 announced by Government (as calculated in Appendix 2)

(d)    That the level of Council Tax be increased by a further 2.0% beyond the referendum threshold (as calculated in Appendix 2) to take advantage of the flexibility offered by Government to implement a "Social Care Precept"; and that in accordance with the conditions of that flexibility, the full amount of the associated sum generated of £1,872,500 is passported direct to Adult Social Care

(e)    That the amounts set out in Appendix 2 be now calculated by the Council for the financial year 2023/24 in accordance with Section 31 and Sections 34 to 36 of the Local Government Finance Act 1992

(f)     The S.151 Officer be given delegated authority to implement any variation to the overall level of Council Tax arising from the final notification of the Hampshire Police & Crime Commissioner, Hampshire & Isle of Wight Fire & Rescue Authority and Parish and Town Council precepts, and amend the calculations set out in Appendix 2 accordingly

(g)    The savings proposals for each Portfolio amounting, in total, to £3.895m for 2023/24 and continuing into future years as set out on the next page:

(h)    Directors be instructed to start planning how the Council will achieve the savings requirements of £6.0m for the 3 year period 2024/25 to 2026/27 and that this be incorporated into Service Business Plans

(i)      The minimum level of Revenue Balances as at 31 March 2024, predicated on the approval of £3.895m savings in 2023/24 and the retention of the  Covid Contingency of £4.2m, be set at £8.0m to reflect the known and expected budget and financial risks to the Council

(j)      Members have regard for the "Statement of the Section 151 Officer in accordance with the Local Government Act 2003"

(k)    The Capital Programme 2022/23 to 2027/28 set out in Appendix 5 which includes all additions, deletions and amendments for slippage and re-phasing

(l)      The new Capital Investment Proposals ("New Starts") - 2023/24 set out in Appendix 4 be reflected within the recommended Capital Programme 2022/23 to 2027/28 and be funded from the available Capital Resources

(m)  The allocation of Disabled Facilities Grants be made to the Better Care Fund, and reflected within the recommended Capital Programme 2022/23 to 2027/28

(n)    The S.151 Officer be given delegated authority to determine how each source of finance is used to fund the overall Capital Programme and to alter the overall mix of financing, as necessary, to maximise the flexibility of capital resources used and minimise the ongoing costs of borrowing to the Council

(o)    That the S.151 Officer in consultation with the Leader of the Council be given delegated authority to release capital resources held back for any contingent items that might arise, and also for any match funding requirements that may be required of the Council in order to secure additional external capital funding (e.g. bids for funding from Government or any other external source).

2.     It is recommended that the Council note the following in respect of the Council's Budget: 

(a)    The Revenue Budget 2023/24 as set out in Appendix 1 has been prepared on the basis of a 4.99% increase in Council Tax, any reduction from the overall 4.99% Council Tax increase proposed will require additional savings of £936,300 for each 1% reduction in order for the Budget 2023/24 to be approved

(b)    The Revenue Forecasts for 2024/25 onwards as set out in the section entitled "Revenue Forecasts 2024/25 to 2026/27" and Appendix 1

(c)    The estimated Savings Requirement of £6.0m for the three year period 2024/25 to 2026/27, for financial and service planning purposes, be phased as follows:

(d)    The Transformation Reserve held to fund the upfront costs associated with Spend to Save Schemes and Invest to Save Schemes holds a very modest uncommitted balance of £3.2m and will only be replenished from contributions from the Revenue Budget and an approval to the transfer of any further savings at year end

(e)    Should the Council elect to reduce the level of savings below £3.895m in 2023/24 (and £2.0m p.a. thereafter), the Council's financial risk will increase and therefore the minimum level of General Reserves held will also need to increase in order to maintain the Council's financial resilience

(f)     The Council Tax base for the financial year 2023/24 will be 54,087.0 [item T in the formula in Section 31 B(1) of the Local Government Finance Act 1992, as amended (the “Act”)].

(g)    The Council Tax element of the Collection Fund for 2022/23 is estimated to be in deficit by £848,700* which is shared between the Isle of Wight Council (84.7%) and the Police & Crime Commissioner (11.6%) and the Hampshire & Isle of Wight Fire & Rescue Authority (3.7%)

(h)    The Business Rate element of the Collection Fund for 2022/23 is estimated to be in deficit by £334,500 of which is shared between the Isle of Wight Council (49%), the Hampshire & Isle of Wight Fire & Rescue Authority (1%) and the Government (50%)

(i)      The Retained Business Rate income^[2]for 2023/24 based on the estimated Business Rate element of the Collection Fund deficit as at March 2023, the Non Domestic Rates poundage for 2023/24 and estimated rateable values for 2023/24 has been set at £41,958,105.

*Includes a deficit of £578,900 which under regulation was allowed to be spread over 3 years and is shared on a different basis

^[1]Includes Retained Business Rates of £16,994,458, "Top Up" of £12,028,784, S.31 Grants of £13,098,779 a Collection Fund deficit of £163,916