Thanet council Cabinet members are to consider the significant impact of COVID-19 on the authority’s finances – resulting in a £840,000 shortfall – when they meet on Thursday, January 14 to discuss the budget for the 2021-22 financial year.
The Budget report sets out how the council will allocate a pot of £17.165million to fund services from April 2021 – March 2022. The options set out to deal with the £840,000 fund shortfall are mainly internal management of budgets and the council says it will have minimal impact upon frontline public services for residents.
Cabinet will consider a £4.99 – or 2.1% – increase per year for Thanet District Council’s element of Council Tax for a Band D property. This equates to a weekly increase of around 10p per week.
They will also consider a 2% rise on fees and charges which will bring in an estimated £400,000. The fees hike will include areas of on and off street parking, crematorium fees, costs for bulky and green waste and higher port and harbour fees.
An overspend, substantially caused by Covid-related factors, of £1.7million for the current financial year (2020-21) will also be reviewed. This is proposed to be covered through the use of reserves and represents an improvement over the previous forecast of a £3million overspend.
It is being recommended that £400,000 of government Covid funding this year is set aside as a provision against Covid losses in income in 2021-22.
During 2021-22, council reserves will be supplemented by £100,000 in Revenue Support Grant and £215,000 Lower Tier Services grant which had not been planned, as well as further Covid funding.
Cabinet Member for Finance Cllr Rob Yates said: “Protecting the services that matter most to local people is a key part of our consideration when we meet to review the proposed budget next week. We’ve seen a substantial impact on our budget as a result of COVID-19 and our priority has rightly been on the immediate coordinated response to support our residents and businesses.
“Delivering a balanced budget is key and thanks to robust financial management we will be considering a range of options which ensure we can achieve this position whilst limiting the impact as far as possible on local services.
“These are unprecedented times and the level of challenge on the council’s finances is immense, not least considering the significant reduction in funding we’ve seen in recent years from the Government. We will continue to do all we can to protect critical public services and support the local community during this pandemic.”
Income losses
There are expected to be shortfalls in the collection of council tax and business rates due to the and increased unemployment from an economic downturn (resulting in more Council Tax Support (CTS) claimants and non-payment by those not in receipt of CTS).
Business Rates income could similarly be hit by business failures from an economic downturn with a non payment estimate of £600k. There is also the potential cliff-edge of Business Rates relief for small businesses and those in retail, leisure and hospitality, which has applied for this year but will end in 2021-22, with those businesses expected to start paying rates again
Income from fees, including parking, are also expected to be hit as Covid restrictions continue. This includes Dreamland car park is part of the Dreamland estate sale to amusement park operator SHL resulting in a forecast loss of £150k income for the year.
Your Leisure – The council’s leisure trust, Your Leisure, is facing a substantial shortfall in its income as a result of Covid, as are all leisure trusts.
The council has paid its management fee for the year up front, and has paid an additional £160k to the trust. This additional fee is equivalent to the previously agreed 2020-21 budget saving in the management fee that will not be achieved as a result of the pandemic.
Ongoing discussions are taking place with Your Leisure to establish their resourcing requirements, which could lead
to further demands on the council’s finances
Savings
The council says permanent savings must be made.
This will mean each Service Director has to find savings from their budgets. There will be reduced spending and bolstering council reserves will be delayed until 2022-23 to help meet the financial gap.
Council staff also face a ‘restrained’ cost of living pay award in 2021-22 “in order to protect services and minimise staffing reductions.”
A 1% increase in pay is proposed to be built into the budget, along with the cost of paying the National Living Wage and increments. Incremental increases through the grading structure are a contractual obligation to the council and a right for staff. In addition, the council is legally required to implement the increase in the National Living wage which is forecast to increase by 5.5% to £9.20 per hour on 1st April 2021. The combination of these pay pressures will cost the council an estimated £294k in 2021-22.
Asset management
The council’s property holdings total of £267 million net book value after depreciation has been applied.
Where assets are no longer viable or surplus to requirements they will need to be disposed of in order to reduce the council’s liabilities and to generate capital receipts to fund new developments or be transferred for community benefit.
The creation of new investment assets, such as new beach huts, will be explored to create additional income.
Rent Increases
Social rents have been set based on government rent guidance. Affordable Rents are linked to local market rents and to the Local Housing Allowance for the area. Rents are applied to individual properties at the lower of either 80% of the local market rent or the Local Housing Allowance.
Councillors have raised concerns about the impact of a rent increase on current tenants and, as a result, the budget suggests a CPI+1% increase for social rent tenants and a freeze for affordable rent tenants. Based on the proposed increase across the whole stock the average rent is £84.94, this is an average increase of £1.89p per property per week
Service Charge Increases
Tenant service charge increases continue to be capped at £3 a week.
Planned capital projects include:
Jet-Ski Berths at Ramsgate Marina.
Ramsgate Port – Berth 1 Refurbishment
Thanet District LED Lighting – convert council owned street/open spaces lighting to LED (also replacing lamp columns where necessary).
Replacement Crematorium Chapel Roof to make the roof watertight and reduce the need for repairs.
Royal Harbour Multi-Storey Car Park Lift Replacement.
Government funding includes:
A further tranche of emergency Covid funding in 2021-22 of £1.016m.
A promise of further support for quarter one of 2021-22 for losses in sales, fees and charges due to Covid.
A Local Income Tax Guarantee scheme to assist with irrecoverable losses of Council Tax and Business Rates in 2020-21, value currently unknown.
A Local Council Tax Support grant to assist with additional costs of Council Tax Support, worth approximately £300k in 2021-22.
Revenue Support Grant of £100k rolled over for one more year to 2021-22.
A Lower Tier Services grant, probably one-off, worth £215k in 2021-22.
Income schemes
Consideration of using the Minor Works team to generate income from selling handyperson services.
A review of printing services income and expenditure including scope to in-source more printing.
Growth in income generated from fees and charges.
Investigation of more shared services including leadership teams.
Expand the CCTV service to sell to other external organisations.
Increase the use of direct debits to improve income collection across all chargeable services.
The future picture
A report to Cabinet members says: “An optimistic view would be that vaccines are now being rolled out, the Spring will start to see a return to some semblance of normality, the wider economy will grow quickly, Thanet’s business sector will start to recover, unemployment will fall, and Thanet will become a popular destination in the summer of 2021 for visitors and staycations.
“Any remaining adverse impact on residents, businesses and the council’s finances will be covered by additional Government support and we will be well placed for economic growth, a stabilisation of the council’s finances and an ability to replenish reserves.
“A more pessimistic view would be that the vaccination programme is slow to roll out and take-up is limited, there continue to be local outbreaks of Covid, there are still restrictions on trading, unemployment remains high, Thanet’s business sector is found to have been badly damaged by the economic effect of Covid and slow to recover, Government support is inadequate and the council’s finances are in an even worse condition, with reserves being perilously low.
“The view of the S151 Officer is somewhere in the middle of these scenarios in economic terms, but the budget for next year still presents a challenge and reserves are very low.”
The budget pot
The money that is used to fund public services is made up of Council Tax, income including fees and charges, retained Business Rates and Government funding (including Revenue Support Grant and New Homes Bonus).
Thanet District Council receives just 12p in every £1 of Council Tax. The remainder goes to: Kent County Council, Kent Police and Crime Commissioner, Kent Fire and Rescue Service and Town/Parish Councils.
If approved, the budget will then be considered at a full Council meeting in February.
Much better than the proposed kent county council rise of 5 per cent
How on earth is it “much better” ? Both KCC and TDC have raised their Council Tax to the absolute maximum amount they can do by law without invoking the need for a referendum.
If TDC had the power to raise it by much more of course they would.
Now watch Ramsgate Town Council spring yet another huge inflation busting rise on local residents and the complete contempt and lack of any consideration for the taxpayer will be complete.
Another silly comment from Mr Lewis. This Labour led council no different from previous councils. Services less and less and cost up and up.
Agreed, loopy wine private party fuelled ideas , yet not maintaining what we have , preferring to not address the mess of the last lot of hobbyist councillors or those supplementing their pensions
very little difference councillor this council is no better than the Tory run KCC
Agreed at this low level why are they more concerned with international politics, therefore not attending their duty at local levels
God no! Not jetski berths at Ramsgate Marina! Jetskiers,like kite-surfers, do not mix with bathers , kayakers, paddling children, and other sea and beach users. A collision between powered craft and human bodies often proves lethal Confine jet-skiers to launching from Pegwell Bay and heading out to sea.
What the hell is TCC thinking of? Don’t they know how busy Ramsgate beaches are in summer? Don’t they go swimming there, don’t they take their children there? Even one jetski or kite-surfer is a risk to others inn the sea or on the beach nearby.
Agreed
Agreed
Ban jetski’s from Thanet waters
Jet skis by designated bathing areas
My god , what’s next a log flume to the Kersell in Southend
These bonkers councillors are departing from local level blocked gullies , broken up dangerous roads , perilous fir the elderly at Homefern house over 60’s apartments
Feet back on ground please
Some observations which don’t make the headlines TDC push out:
1. Buried in the report is the admittance that there is a perpetual annual overspend that has never been addressed and is nothing to do with COVID. Every year it gets raised and every year nothing gets done about it which means the budget is built on sand every single time.
2. The report gives details of huge shortfalls in income such as parking. The same report then talks about increasing the parking charges. As COVID continues to affect consumer behaviour during 21/22 this just means the budget gap will get even bigger. Genius.
3. Given the scary reductions in reserves and the structural deficits in the budget it is clear that the sorts of savings they are talking about aren’t sustainable. This is a Council heading for bankruptcy unless some fundamental changes happen like joining the entire Council with other local Councils. Saying that, TDCs reputation is such that no one in their right mind would ever consider joining any more services with them in the future.
4. A bunch of staff being made redundant whilst everyone else gets a pay rise ? I can’t believe for a second the Labour Councillors will sign that off as it goes against all their principles. Maybe they haven’t noticed it buried in the small print.
5. 66% of residents don’t think they get value for money from TDC. Huge priority raised is clean streets. Absolutely nothing in the budget about how they are going to address this. They haven’t even employed the extra street cleaners they identified and announced last year for heaven’s sake. This is why it is so filthy everywhere.
Agree with you
Its the Bin men who filth up the roads mostly! Mine was relatively clean until the Bin men came round in the New year, now its filthy again!
Took them 4 weeks to empty my food waste bin and they didn’t even bother turning up today to empty the recycling one that hasn’t been emptied since the 11th Dec.
The voice of reason finally , by the grace of god a voice of opposition to these amateurs never finding their feet other than under the table of elite power houses
It’s wrote as if a victory , yet a total shambles
Yet littered with disaster
Wasn’t TDC given money to train “volunteers” to clean up the highstreets?
Where did that money go?
TDC will not employ anyone extra all the time the residents of Thanet do litter picks the council are having their work done for them all the time this continues the council will see it as there being nothing wrong residents are paying to clean there own areas and for what?an increase in council tax.
Agreed, They aren’t exactly articulate, sort of glazed look at meetings
If brains arrived as a form of light many are clearly In a permanent darkness
What or who are councils going to blame when covid has passed?
Every one is suffering at the moment so just to make our lives even more miserable both councils decide to raise council taxes by as much as they can charming.
No jet skis in Ramsgate please!
The very last thing we need in Ramsgate’s historic Royal Harbour are jet skis.
They are already an out if control menace around our coast.
On one side of the harbour you have the Pegwell Bay SSSI, on the other, the Main Beach. Encouraging these irresponsible people to this location is a crazy idea.
IF i’ve read correctly and its correct, can we assume that the dreamland car park was sold for around 3 million if not then surely the loss of 150k a year in income represented a good return on a valuable asset. Kathy, has there beenany announcement on what The Dreamland freehold etc sold for? If not has TDC said when it will be announced.
Shocking, sold the car park ,
The usual formula is 10 x the annual income of the asset – £150k = £1.5m so the rest of Dreamland was £1.5m?
Watch the parking prices rocket.
Cheers, so the council MAY have sold an asset producing a 10% return, where are they going to get a similar return on investment or is the csah raised going to pay off debt that costs 10%. In any other case hardly a good decision.
Your leisure do a second rate job of everything in their TRUST ,
you can’t trust them to keep a swimming pool clean or proactive in running the winter gardens.
Beach huts popular vote politics ,
Try maintaining what is already deployed before the elites benefit
Immense pressure on budgets….
It may be a shock, but some of.us have lost jobs, had income reduced, not seen pay rises in years. We do not have the luxury of giving ourselves a pay increase to offset the constant denands of people like TDC give us all a break and join the real world.
Paul – you are so right – TDC councillors paid around £4000 each, for what I ask – KCC councillors paid £15491.32 + travel expenses + £15000 to give away to their pet projects. HOW ARE THESE PEOPLE WORTH THESE SUMS. Should be given £250 a month to cover telephone/communication/travel. A total joke given how so many Thanet people are struggling.
If we assume that councillors perform a function that needs doing , is it really likely that it could be done for 4k by any other means. The system we have relies on the goodwill of those that put themselves forward, useless as many of them may be in the absence of anyone better stepping forward they are what we get. As in many things society is what it has made itself.
Yates and his fellow councillor whitehead are most certainly idealistic tovthe extent they quite happily aid and abett the avoidance of legislation and normal procedure to get what they think is best, they’ll cost us all a fortune before they are finished.
It may not make you feel better that around £300k of their 21/22 budget is needed to fund pay rises for their staff.
Not explicit in the Committee report but buried in the Medium Term Financial Plan document on the same meeting agenda.
They should be giving us a discount after all things they haven’t paid for like events or opening toilets.
Didn’t they just get a grant and sold off Dreamland?
Are these the best revenue generation ideas TDC can offer?
Where is the tourism and visitor focus?
Where is the beach hut strategy? Miles of prom, mostly empty and years of waiting lists, many closed.
Where is the plan for the harbour?
Where is the innovation and business development thinking?
Nobody would mind increases if Ramsgate was properly cleansed, 7 days a week. Our town is, depressingly, strewn with litter. It has to be a priority. The list of income generating ideas is absurd, mainly non specific and those with detail would generate almost peanuts. How much profit and how many hours of handy services does TDC think it would need to sell to generate any viable impact? Come on! Even assuming a net profit of a couple of quid an hour would mean deploying an army of services to net very little. Is this really the best thinking our council can offer?
And jet skis? A blight on the main sands. How does this bring income to Ramsgate?