Lincolnshire County Council announces tax freeze despite budget pressures

Lincolnshire County Council has revealed that it will freeze its council tax precept for a fourth consecutive year and still make savings.

The 2014/15 budget proposal, which will be voted on by full council on February 21, has only set out a one year plan due to uncertainty associated with local government funding beyond 2015 - a three year plan would normally be proposed.

LCC will be forced to bridge a gap between funding available and council spending by the amount of £12 million. This will come from council reserves.

Alternatives to the recommendation made in the report, which will be considered by the council but are unlikely, include increasing spending and therefore council tax, or lowering levels of spending and cutting council tax.

The proposal stated: “The recommended option reduces the council’s spending 
to reflect reducing government grant income to the council.

“It allows for a freeze in council tax in 2014/15 and funding of the equivalent of a 1 per cent increase in council tax by way of Council Tax Freeze Grant.

“The savings identified from the council’s ‘Core Offer’, the additional savings added into 2013/14 and 2014/15 budgets, plus the one off use of reserves in these two financial years, have ensured the council is well placed to withstand the immediate pressures in local government funding.

“However, future challenges remain and significant further savings will need to be identified in future years to deliver a balanced budget.”

The ‘Core Offer’ referred to in the proposal relates to the final year of the council’s four year savings programme.

When initially approved it provided the council with a total of £125m in savings over the period of 2011/12 to 2014/15 to ‘reinvest in services to meet unavoidable cost pressures and expected reductions in government support’.

Additional savings have been added to the council’s target to reflect further reductions in local government financing, which have reduced the council’s budget for last year and this year.

Savings stand at £27.6m for 2013/14 and £39.752m for 2014/15.

For freezing council tax the council; will receive a Council Tax Freeze Grant amounting to £2.5m.

The facts and figures:

According to the proposals the council expects to spend £474.961m for the year 2014/15.

This relates to a base budget of £494.363m and cost pressures, including inflation, of £20.35m - cost pressures include a general increase in population, incorporating a general increase in the number of older people in the county and new costs associated with moving from sending waste to landfill to the Energy from Waste Plant.

The total expenditure of £474.961m will be reduced to a budget requirement of £461.991m.

The use of £12m from the council’s reserves will be a one-off contribution to the budget shortfall.

The proposal admitted: “The Council will therefore be required to find a base budget solution to this issue

A total of nine revenue budgets have been reduced. However, there will be increased spending in Adult Care, Public Health.

Environment, Planning and Customer Services sees a reduction in £2.247m.

The Council has also notified Central Government that it wishes to pool business rates with five of Lincolnshire’s District Councils - Boston Borough, City of Lincoln, East Lindsey, North Kesteven and South Kesteven.

The report said: “Initial calculations show the County Council could benefit by some £0.948m by entering into such an arrangement.”

The proposal matches the council’s budget requirement with its expected income for the year.

This is split between the County Precept at £223.829m, a Revenue Support Grant of £124.546, local retention of Business Rates at £100.218m and other grants of £13.398 - amounting to £461.991m.