Question

What is your Parish/Town Councils Approach to the Precept for the upcoming Civic Year (2021-2022)?

With forecasted income (from facilities & services operated) and increased operating costs (from cleaning materials to signage etc related to current pandemic) combining looks likely locally rises in precept.  Some within council advocate cutting cloth and delivering 0% rise because they are increasingly concerned about muted significant increases elsewhere at higher tiers of local government.  People are clearly hurting and many are been pushed to the limit.  

1. Are you deferring projects to reduce request for the next civic year?
2. Are you been more ambitious with forecast income (noting you have large reserves) optimistic that the second half of the civic year might see income begun to return?
3. Are you reducing spend now hoping that the surplus from this current civic year can offset some of the savings proposed within next years program. 

Answer 1

We have no self generated income, so everything we get is from the precept, or planned reserves for projects

We all agreed any rise would be inappropriate, in our circumstances, so salary increases will come from reserves this year. All our other projects will be funded from our planned reserves, so overall it will be a 'holding year' with normal rises from next year - we run our finances such that all day to day spending comes from the precept, so salary costs would normally form the bulk of the increase in the precept.

Answer 2

An interesting question. Firstly, decisions of other tiers/authorities should have no bearing whatsoever on your precept planning. You should focus on your needs and plans and decide what is appropriate for your council.

Secondly, this is an opportunity for all those councils sitting on vast reserves for rainy days to loosen the purse strings. It's raining now, like no other time in living memory. A few years ago I inherited a council with a general reserve that equated to £150 per household and no spending plans. For some of those households, £150 would have been a life-changing sum. A year's expenditure is more than adequate, apart from specific reserves for projects.

Personally, I doubt whether things will look much better next Christmas than they do now. Whilst the vaccination programme should deal with the virus, Government interventions have merely delayed tens of thousands of job losses and evictions. For many, 2021 will be a worse year than 2020.

Comments

My Council has increased the precept by 10% for  the last two years to incorporate significant in budget projects. As  these projects have now been completed and paid for the precept should decrease. However, they have proudly announced that the precept has been held this year i.e not increased.  To be fair the extra project money will be used to offset  Covid Costs.    The culture seems to be make the additional project specific money a permanent feature ie to think up new projects for every new year.  Never is the possibility of a reduction seemingly considered .  Has anyone got any experience of participatory budgeting including the signing off of an agreed budget?

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Much to my amazement after the above announcement my PC has now advised that instead of increasing the precept it will launch an additional crowdfunding appeal to offset Covid  costs.
There has been no mention of reviewing reserves. This poses me an interesting question as it relates to general reserves. I realise that they can be set at a flexible level but is there any requirement to provide an end of year statement of how much has been used ? If one had to do this you could establish the likely range to be used each year instead of budgeting a  fixed  12 months each year

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I would agree with your observations and the need for those councils able to stepping up and acting accordingly.

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The Annual Return includes a schedule of reserves in its supporting documentation, so you can see from one year to the next how reserve balances have changed.

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So looking at the Agar return is it item 8 which highlights the profit for the preceding year?. By this I mean extra  cash and investments held?

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No, it's not on the AGAR. Amongst the supporting documentation is an Explanation of Variances form which compares each item in the current year column of the AGAR with the corresponding item from the previous year. If the difference is greater than plus or minus 15%, a detailed explanation is required. Alongside this, if the total of all reserves is greater than twice the precept, a full breakdown of reserves is required.