Meeting documents

THE DRAFT BUDGET PLANNING PROPOSAL OF THE CABINET

Executive Summary

In this document the Cabinet sets out the following.

1) Its draft Financial Strategy (appendix 1) and capital strategy (appendix 3). This sets the context and framework for the draft budget proposal for 2008/09.

2) Its draft budget proposal for 2008/09 (appendix 2). This fills in the detail of the first year of the Financial Strategy proposal contained within the Corporate & Financial Strategy, recommends revenue and capital budgets for 2008/09 and recommends a level of Council Tax for that year.

Our budget proposals include:

•  A £8.7m or 4.6% increase in the total revenue budget including Dedicated Schools Grant after allowing for transfers into formula grant.
•  A £5.4m or 5.3% increase in the non-schools budget after allowing for transfers into formula grant.
•  A £3.3m or 3.7% increase in the schools budget in line with the increase in Dedicated Schools Grant (Government Grant).
•  A 3.95% Council Tax rise that is below the limit set by central Government.
•  A capital budget for 2008/09 of £61.631m
•  A reserves strategy to increase reserves to c£11.5m by 2010/11 in accordance with the recommendations of the S151 Officer and previous Council decisions, last confirmed in June 2007.
•  Doing this within the context of a tough financial position and current significant exceptional and everyday risks.
•  The recommendations are conditional upon the Council, the Cabinet, Strategic Directors and Assistant Directors:

• - Implementing the difficult decisions contained in the draft revenue and capital budgets.

  - Continuing to limit the capital programme such that additional capital investment needs are fully funded from either external or internal sources of capital funding, but without creating additional strain on the revenue budget

  - Not approving any calls on reserves beyond those risks identified that cannot be contained by management or policy actions and ensuring any use of reserves includes their reinstatement over a 3 year period.

  - Remaining within service cash limits for 2008/09 and future years.

  - Quickly making gains from the service transformation process, by implementing its recommendations

APPENDIX 2

Structure of the Budget proposal

Section 1 sets out the context and our approach to the revenue and capital budget and the high level build-up of the recommended revenue budget for 2008/09. Annex 1 provides more detail on 2008/09 and attachment 6 to Appendix 1 contains figures for 2009/10 & 2010/11.

Section 2 sets out the capital budget and the build-up of the recommended capital budget for 2008/09. It also includes indicative capital budgets for 2009/10 - 2012/13. Annex 5 provides more detail.

Section 3 sets out the current position on revenue balances and makes recommendations on earmarking of balances. Annexes 3 and 4 provide more detail.

Section 4 sets out the implications of the revenue budget for Council Tax levels for 2008/09.

Section 1 - The Revenue Budget for 2008/09

A) Introduction

The proposed Budget for 2008/09 has been prepared as an integral part of the Council's Corporate and Financial Strategy and the proposals should be viewed within the framework set by the Corporate Plan.

The purpose of the Budget is to allocate financial resources to Council services to deliver services to the community to required standards and performance targets. The detail of what is spent must therefore be seen within a service's overall plans.

In September the Cabinet considered a Financial Plan Update report which included financial estimates of the financial pressures and risks facing the council in the context of the expected 3 year financial settlement from central government under the Comprehensive Spending Review.

The Cabinet agreed a series of guidelines as parameters for Service & Resource Planning. The process included both review of the overall position and that of each portfolio of services by the relevant Overview and Scrutiny Panels through the Autumn. In addition all members were invited to a budget briefing in October.

The Cabinet have now had the opportunity to consider proposals from Officers, in the context of the actual financial settlement and the comments from Overview & Scrutiny. In that context we have developed revised proposals for consideration by Overview and Scrutiny during January. The Cabinet will also consider feedback from consultation with the Trade Unions, the local business community and other partners.

B) The Context to the Budget Proposals

The draft revenue budget for 2008/09 is proposed within a difficult context putting severe pressure on both revenue and capital budgets. These risks and pressures were set out in the Financial Plan Update report to the Cabinet in September and formed part of the all member Budget Briefing on 29th October. These have now been updated and reviewed, particularly in light of the 3 year financial settlement.

The context now includes:

•  Increased pension costs arising from the triennial actuarial review of the Avon Pension Fund; a 1.1% increase from 16.4% to 17.5% has been included in full in the first year 2008/09 at a cost of £654k;
•  Inflation rises above the normal measure of price increases, particularly energy, and residential and nursing placement fees and the ongoing effects of single status implementation;
•  An unknown outcome of the current national employer's negotiations which need to agree a new pay deal for 2008/09. 2.5% has been allowed in this budget;
•  Increasing demand for services and improving standards;
•  New responsibilities which are not always fully funded at a local level, for example, free bus travel for the over 60s, and loss of government grants;
•  Significant unfunded pressures arising from national policies, for example continued increases in landfill tax rates;
•  Significant pressures already being experienced within services, and reflected in 2007/08 budget monitoring;
•  A current capital programme that relies on substantial unsupported borrowing;
•  A grant settlement that has clawed back £2.0m of grant increase in 2008/09;
•  An assumption that the Council will not receive a LABGI allocation for 2008/09
•  The Government's expectation that Council Tax rises will be on average 93substantially less94 than 5%.
•  That future years will be more challenging than 2008/09 as a result of the implications 3 year financial settlement arising from the Comprehensive Spending Review which sets out a lower rate of increase in government grant in future years. This is combined with continued pressures to spend and the fact the delivery of significant efficiency savings year on year becomes increasingly difficult.
•  That the council will need to continue to maintain a sustainable balance between capital and revenue, in this more difficult financial context, and that in the context of its ambitious `place-shaping' agenda, there is a need to generate significant additional capital resources, but recognising that economic conditions are likely to make this source of funding more difficult in the near term.

In addition, our proposals for the budget, the future Financial Strategy and the level of reserves need to reflect the exceptional pressures and risks facing the Council (see section 3A for further information).

These include:

•  The continuing uncertainty over the timing and outcomes of the Bath Spa claims management process and hence on the likely financial effects;
•  The continuing uncertainty over the potential costs of the introduction of single status in 2007/08;

C) Approach

The revenue and capital budget proposals recognise that:

•  The Council cannot afford all it would wish to do both in terms of its services and the development of the area, and that the national financial context from 2008/09 following the Comprehensive Spending Review is more challenging than in recent years;
•  The Council needs to address and recognise the major risks within the revenue and capital budgets;
•  The Council needs to strike a difficult balance between the interests of service users, visitors, those who work in the area, residents and the Council Tax payer.

The budget and Financial Strategy reflect the Council objectives, issues and constraints by:

•  Redirecting priorities between and within services, in the more difficult national context, in line with the Corporate Plan and Medium Term Financial Strategy (see the Corporate Plan elsewhere on the agenda and Appendix 1).
•  Adjusting the current capital programme and adding only schemes that are in line with Council objectives (such as new major transport schemes) or that and will provide the minimum level of development activity until additional capital resources are available. Allocation of any additional resources that are obtained will be subject to a Council decision.
•  Continuing to maintain an exceptional risk reserve to enable the council to manage the major risks associated the implementation of single status and Bath Spa Claims
•  Continuing to increase reserves to help deal with the risk during the next 2-3 years, and to replace the amounts already drawn down (subject to the revised risk assessments that are to be made throughout the plan period).

The proposals move the indicative Financial targets for 2008/09 set by the Council in February 2007. Indications for 2009/10 and 2010/11 are given in overall terms and are expanded in the Medium Term Financial Strategy (appendix 1, attachment 6), as the Council will need to close the budget gap for future years, by shifting resources to priority areas, seeking efficiencies, continuing careful monitoring and review of the capital programme, and by active management of both the capital programme level and the Council's property assets costs and receipt generation.

The budget also contains an allowance for 93headroom94 of £167k to cover any other items. For instance in the final settlement there was a increased charge for initiating care proceedings imposed upon the Council with no corresponding increase in grant funding. The government assumed 93cost94 for this 93transfer94 was £73k, although the service estimates a cost of around £100k a year.

D) Local Area Agreement (LAA) & Area Based Grant

2008/09 is the second year of the Council's Local Area Agreement, and the first year of the new Area Based Grant (ABG), which has been introduced to facilitate area based working. Further Information about how the implications of these new arrangements is contained in Annex 2.

E) Capital

A review of the current capital programme and its financing costs has reduced year on year revenue growth to around £1m less than expected in February 2007. The active management of the Council's property assets should enable some of this cost to be offset by reducing the level of unsupported borrowing relative to Financial Strategy assumptions in future years or to finance additional capital on specific priority areas. This is covered in more depth in Appendix 3. This budget proposal aims:

•  To limit new commitments to the absolute essential items until significant additional resources become available, or where limited council resources are necessary to lever in significant external funding which will enable schemes which meet council priorities
•  Careful consideration has been made by officers and members regarding future commitments and direction of this programme. The plan does not build in any additional cost supported by Council resources in the three year period. This will need monitoring in the light of any planned additional commitments, receipts and new pressures on the programme and as projects are expanded into more detail. Revisions to the programme ensure that use of capital receipts are not planned to be use to finance unsupported borrowing. Hence proceeds from the sale of assets are being used to finance new assets, and then a full account is taken of the revenue consequences, if any, of such disposals.

Given the likelihood that pressures on the revenue budget will increase over time, the council is now developing a more fundamental and medium term approach to revenue resource planning and is developing other funding sources, such as its ability to generate capital receipts without significant loss of income, grants and further Section 106 monies. The paragraphs on Future Years in Section 2 develop this theme. At this stage the receipts targets for 2008/09 onwards are to be shaped by the Property Review, but this will be subject to a further analysis and a report to Council when more firm proposals for spending and forecasts for receipt generation are available.

The new Capital Review arrangements approved by the Executive in July 2006 are now operating. One of the outcomes is greater clarity about the financial implications of the capital programme. All new capital schemes proposed for 2008/09 were subject to this review. The Capital forecasts now are more accurately phased and subject to greater cash flow planning than previously. Evidence of this is the £18m slippage already forecast from 2007/08 to 2008/09 that has been built into these estimates. Slippage has also been built in for 2008/09 to 2009/10 where known. This should be reflected in better forecasts for financing of the capital programme.

F) Efficiency & Service Transformation

Recognising that the Council is considered by the Audit Commission to be providing `good' value for money, and the £2.8m of further efficiency savings planned in this budget (£11m already achieved in period 2004/05 to 2007/08), we are progressing the integration of the change programmes and developing a corporate approach to service transformation. Recognising the emphasis given to potential procurement savings by DCLG, the budget includes additional resources to pump-prime this function, potentially in partnership with another authority. The Cabinet are also planning to consider further how to take forward the integration of management arrangements with the Primary Care Trust which will better enable joint consideration of transformation and efficiency in relation to these services. The financial and governance arrangements which will underpin these arrangements will form part of that consideration.

G) Summary of Revenue Budget Proposal

The proposed revenue budget for 2008/09 represents:

•  An £8.7m or 4.6% increase in the total revenue budget after allowing for transfers into formula grant.
•  A £5.4m or 5.3% increase in the non-schools budget after allowing for transfers into formula grant.
•  A £3.3m or 3.7% increase in the schools budget in line with the Dedicated Schools Grant increase (Government Grant).
•  A 3.95% Council Tax increases of £43.05 p.a. for a Band D property (or 83 pence per week) which excludes Police, Fire and Parish precepts.

Section 2 part D sets out the 2009/10 and future years challenge for the council. While the achievement of the 2008/09 budget will be challenging, the underlying requirement for efficiency savings is set to increase in future years.

We are recommending a net revenue budget for 2008/09 of £110.720m. Table 1 and Annex 1 to this Appendix show the build-up of the recommended 2008/09 revenue budget, compared to the current year.

Table 1: High Level Build-up of the 2008/09 Budget (detail in Annex 1)

Note: In addition to the Council's net revenue budget the provisional increase in Dedicated School Grant is£3.334m (3.74%) to £92.451m.

In recommending the overall revenue budget, we are also asking Council to approve the individual service cash limits for 2008/09. These are shown in Annex 1 to this Appendix.

Section 2 - The Capital Budget for 2008/09

A) Introduction

The Council Cabinet's proposals for the capital programme are formulated in the context of:

•  An already ambitious capital programme over a short period of time.
•  The inclusion of indications of significant government funding streams in relation to transport and schools, which while supporting the Council's strategic priorities add further to the council's delivery risk, and require match funding and/or pre funding in some cases.
•  A trend towards government funding for large projects being awarded on a partnership basis (e.g. West of England) which further increases the complexity and hence potential risk of delivery arrangements.
•  Developing work on the visions for Bath, Norton Radstock and Keynsham
•  The planned development of the western part of Bath Western Riverside
•  The Council's Prudential Indicators, and pressures on the revenue budget

The principles governing our approach to the capital programme have been covered in Appendix 3 and section 1 (in particular in part E).

The proposed new additions to the capital programme and funding sources are as follows:

Table 2: Proposed Changes to Capital Programme (included service funded schemes*)

These changes are outlined in detail in annex 5. Some changes in the annex relate to slippage from 2007/08 to 2008/09 (and also to future years), others arise from changes in government grant.

We are recommending that these items be added to and removed from the Capital Programme subject to confirmation of the service funding where applicable being available as indicated above.

Although the capital provision for certain activities is not provided for corporately this does not mean the activity will not continue if the relevant service can sustainably fund the revenue effects of the borrowing. This has been tested and monitored with programmes being reduced in some areas in 2007/08 and this discipline will continue. All service funded schemes are still subject to review by PIDG/PPB. Some of the schemes above have been passed by this review and others are still subject to an ongoing review. The Cabinet/Council is asked to agree the list subject to review where required and in particular the budgets for the waste project and Bath package will be subject to a review of the cost base (noting resolution 2.9 and 2.10).

B) Recommended Programme for 2008/09

On this basis the Cabinet is recommending the Capital Programme as attached at Annex 5 and summarised in the table below.

The proposed programme assumes total capital payments and funding of £61.631m in 2008/09 as shown in Table 3. Table 3 also shows the indicative capital programme and funding at summary level for 2009/10 to 2011/12. Annex 5 shows the total capital programme for 2008/09 to 2011/12 in more detail.

Table 3: Summary Capital Programme and Financing 2008/09-2012/13.

C) Funding

The revenue budget for 2008/09 and the Financial Strategy for 2009/10 and 2010/11 provide fully for the revenue consequences of the Council-supported expenditure. The level of unsupported borrowing required over the period is still high, and could continue to put serious pressure on the revenue budget in future years if not restricted or controlled. The level of unsupported borrowing (cumulative) is forecast to increase by £12m in 2008/09 and £19m in 09/10. This is in line with existing plans and will still keep financing charges below funding via Formula Spending Share. Overall though, Council financed supported borrowing is planned to reduce over this 5 year period on last year's plans.

It should also be noted that no growth is built into capital financing charges from 2007/08 to 2008/09.

The revenue budget for 2008/09 assumes the following achievement of capital receipts:

•  £1m of Housing Receipts and £2.3m of service specific receipts (excluding any not achieved and slipped from 2007/08 to 2008/09). Receipts of £5m a year that are part of the c£100m potential receipts from the property review were recognised in the draft programme set by Council for 2007/08, but are not included in this programme, nor in its financing. Future financing assumptions also assume this stance. The phasing of the expenditure to be financed from the c£100m will help to finance the costs of disposal of the c£100m. These costs must be revenue financed.

2008/09 is the fifth year of the new Prudential Code for Capital, introduced as part of the Local Government Act 2003. The Code gives considerable freedom to Councils to set their own capital spending programmes subject to the responsibility to demonstrate that plans are affordable over the planning period. Prudential Indicators are reported separately to the Cabinet for approval and recommendation to Council in the report on the Council's Treasury Management strategy. In addition this strategy includes recommendations on a policy for the repayment of principal on loans for unsupported borrowing (also known as Minimum Revenue Provision). Our recommendations are conditional upon these factors.

Revenue & Capital Budgets Ongoing

D) Future Years (2009/10 onwards) - towards a new Financial Strategy

The new Council has been undertaking work on a new Corporate Plan which has set the overall framework for future resource prioritisation which is reflected in the Medium Term Financial Strategy (Appendix 1) and Capital Strategy (Appendix 3). The first year of the current Corporate Plan is 2008/09. Further work is required in relation to future year's budgets, in the context of the grant settlement and expected spending pressures, and the Corporate Plan priorities. In the mean time the current Financial Strategy has been rolled forward to future years on an indicative basis, the council will want to determine in more detail, during 2008, the overall allocation of resources for the remaining plan period.

The introduction of the Dedicated Schools Grant (DSG) and the loss of control over a large section of the budget has made this more challenging as it significantly limits the scope for the council to use local tax income to fund local priorities. A key issue that has now been looked at in more detail is the balance between capital and revenue. Given the likelihood that pressures on the revenue budget will increase over time, the council is developing a more fundamental medium term approach to revenue resource planning as well as the short term cost reduction programme already required or else it will continue to find that basic fundamental service delivery is jeopardised.

Having developed proposals to achieve financial balance for 2008/09, the Strategic Directors Groups will be leading a process to develop medium term change proposals which will enable significant cashable efficiency savings while enhancing / maintaining priority services, through `service transformation'. This will build on and develop the council's existing change programmes, and integrate them more effectively as recommended by the Peer Review. It will be a key element in the council's future Corporate & Financial Strategy, in the context of the LAA requirements.

We are asking the Strategic Directors Group to report back to the Cabinet in July 2008 on proposals which will assist in meeting forecast future year financial pressures.

Section 3 - Revenue & Capital Reserves and Contingencies

A) Exceptional Risk Reserve

In February 2007 the Council created an Exceptional Risk Reserve of £4.588M as at 31 March 2007, to which was added £1.4m within the 2007/08 revenue budget. The potential uses of the reserve were in relation to the following risk areas:

o Bath Spa Claims Management Costs

o Single Status

o Revenue consequences of not achieving the assumed further capital receipts

o Non-delivery of the Corporate Efficiency Savings target

Full detail of the purposes and parameters for the use of the Exceptional Risk Reserve is as set out in Annex 2 of the February 2007 Council Budget Report.

Subsequent to the agreement of the Council's Budget, DCLG allowed the Council to capitalise £2m of Back pay costs in relation to Single Status in the 2006/07 accounts. The assumed further capital receipts in 2006/07 were achieved while the shortfall in the delivery of the corporate efficiency savings target has been offset in 2007/08 by savings in interest and capital financing costs and built into the base budget for 2008/09 and future years as one of the pressures for growth. Withdrawals from the Exceptional Risk Reserve have been authorised through the procedure agreed by Council of £1.5m in relation to Bath Spa Claims Management costs and £0.6m in relation to Single Status.

Taking account of the above developments over the last year and even after allowing for further Bath Spa Claims Management costs up to the authorisation limit of £2.2m agreed for 2007/08 (which is not currently envisaged), and provided also that Single Status Back pay costs can be fully met from the capitalised provision; it is expected that the Exceptional Risk Reserve would have £3.1M uncommitted at 31 March 2008.

The status of these risks has been reviewed in the context of the overall review of the Robustness of the Budget and it is considered that the remaining risks in relation to Bath Spa Claims Management and Single Status do not require any further allocation to the Exceptional Risk Reserve.

There is however a need to review and update the parameters set last year.

Firstly, in relation to Single Status, the Exceptional Risk Reserve was not intended to cover any costs related to school-based staff. The Cabinet is now recommending that this limitation be removed to provide for the possibility of some financial assistance to Schools from the Exceptional Risk Reserve in the event of significant unexpected back pay costs. The on-going non schools costs are not yet finalised and it would be prudent to allow for the possibility that these costs are greater than envisaged at the time of the last budget. The Cabinet are recommending that the should that prove to be the case in 2007/08 and/or 2008/09 then the Exceptional Risk Reserve be a potential source of funding, with the effect for 2009/10 being recognised in the 2009/10 budget.

Secondly the Cabinet is recommending that the Exceptional Risk Reserve continue to be a source of funding for the Council in relation to defending itself against claims for additional costs in relation to the Bath Spa project and for enabling the council to pursue its claims in relation to design and/or workmanship. The use of the reserve was limited to £2.2M in 2007/08 and this has not all been committed.

It is difficult at this stage to quantify the future potential requirements separately in relation to these two risk issues and so it is proposed that the risk reserve be managed as a whole, within the total sum set aside, based on a value for money assessment of the benefits to be obtained from any drawdown.

It is proposed that the authorisation mechanism for drawdown from the Exceptional Risk Reserve remain as agreed in February 2007.

B) Unearmarked Revenue Reserves

The Local Government Act 2003 contains a duty on the statutory finance officer (s151 Officer) to report to the Council, at the time the budget is considered and the council tax set, on the robustness of the budget estimates and the adequacy of financial reserves. The report of the s151 Officer on this subject is included as Annex 4 to this report and is recommended to the Council. We have drawn upon the report in putting our budget proposals to the Council. The conditions of the report by the Support Services Director are an integral part of our recommendations.

Table 4 below (and Annex 3) includes an estimated £100k in respect of overspends in 2007/08, which is based on financial monitoring information for the year to December 2007. This figure depends on what the actual out-turn is, on future decisions by the Cabinet about any overspends (which may be required to be carried forward at individual service level) and about whether the Cabinet approves any carry forward of underspends in relation to service which have not overspent. The figure is therefore only an estimate at this stage and is without prejudice to future Cabinet decisions.

In recognition that the proposed revenue and capital budget for development and major projects is drawn tightly, the Cabinet wish to propose to full Council that £350k of the Council's General Reserves be earmarked for the purpose of responding rapidly to regional and sub-regional issues that directly help progress and/or deliver the Council's objectives. Use of the Reserve will be authorised by the Council's Section 151 officer in consultation with the Chief Executive and Cabinet Member for Resources. The reserve will be recommended to Council only if General Reserves are adequate.

C) Adequacy of reserves

We recommend the s151 officer's report on the adequacy of reserves which provides a reserves strategy to increase non-earmarked General Fund reserves from an expected £8.629m at the end of 2008/09 to c£11.5m by the end of 2010/11 as shown in Table 4 below.

Table 4: Projected Non-Earmarked Revenue Reserves

This recommendation is made on condition that the Council and the Cabinet:

•  Take every opportunity to maximise reserves.
•  Reject any further calls on reserves other than for those risks that have been identified or are unforeseen.
•  That where there is a draw down on reserves this is paid back within 3 years recognising that this will put further pressure on the revenue budget.

A reconciliation of reserves is contained in Annex 3.

The Reserves forecast includes the effect of the £1.1M of Local Authority Business Growth Incentives Scheme Grant which was awarded in March 07 in respect of 2006/07. it should be noted that no allowance is made for any receipt of further grant in year 3 (2007/08 of the LABGI scheme) because it has been expected that the temporary reduction in the local business rate tax base arising from the Southgate Development makes an allocation unlikely. However, a statement has been placed on the Communities and Local Government website on Year 3 (2007/08) payments of the Local Authority Business Growth Incentives Scheme. The statement indicates that, in the light of the need to consider new legal challenges, the Government is re-considering all aspects of the approach used to distribute the remaining resources available for Year 3 of the LABGI scheme. No conclusions have yet been reached, but this may result in a new methodology for the calculation of grants and have an impact on the timing of any payments that are made. It is unlikely that at the time of writing this report we will be in a position to report on any amounts due or not due to this Council.

D) Capital Risk Contingency

Having reviewed the position, the S 151 officer is advising the Council that a capital contingency of around£20m is still a prudent over the plan period of which £13m does not need to be cash backed at this stage. The plan currently allows for some£7m to be included in the capital programme over the period 2008/09-2012/13. In addition the major projects programme includes contingencies of£4.5m for general schemes and £25.3m for the Combe Down Stone Mines. The latter contingency is within English Partnerships funding for the scheme and as such is not a Council resource.

A further addition has been recommended for 2008/09. This will be to allow cover for regeneration schemes, such as the Bath Package where costs are not yet clear and are subject to a rigorous review. To cover this, a provision of an additional £1.5m has been made in capital budgets.

A review is being carried out of costs not only on the Bath Package but also Midland Road Waste relocation. In addition discussions have been taking place on the sub regional waste strategy. Council representatives are considering our position and the implications for the Council's future capital and revenue budgets.

Section 4 - Council Tax

This section shows the implications of the recommended revenue budget for Council Tax levels for 2008/09.

In the Financial Strategy we recognise that our plans must be affordable to local people. In preparing the revenue budget we have sought to minimise the impact on Council Tax payers.

Our proposal is for an increase in Council Tax of 3.95%. This should be seen in the context of below average Council Tax rises in the past, an overall Council Tax that is slightly below the unitary average, and the Government's clear warnings about capping. Table 5 explains the calculation of this figure:

Table 5: Council Tax 2008/09 for Bath & North East Somerset Council Services

The figures above exclude parish, fire and police precepts.

This Council collects Council Tax on the behalf of the parishes, Fire and Police Authorities and the final bills issued will include the Council Tax they have requested this Council to collect. These will form part of the Council's overall budget-setting resolution.

At the time of writing only an indication was available from Avon and Somerset Police Authority about its proposed rises in its precept and Council Tax. The proposals will be discussed at its Finance Committee meeting on 29^th January 2008 with a final decision made by the Police Authority on 13th February 2008.

At its meeting on 11^th January 2008 Avon Fire Authority approved, for consultation purposes, a budget of£44.835m which would require a 4.72% increase in Council Tax. The Fire Authority will meet again on 15^th February 2008 to finalise its budget and set its Council Tax and precepts for 2008/09.

The headline increase will be affected by the final decisions of the parishes, Fire and Police Authorities, and any decision made concerning special expenses (see below).

Given this Council's history of lower than average Council tax rises it is considered very unlikely that the Government will seek to use capping powers in respect of Bath and North East Somerset Council if the Council approves a Council Tax rise of 3.95% in 2008/09.

Table 6 sets out the composite Council Tax likely to be charged:

Table 6: Potential Total Council Tax 2008/09 (Band D)

The precepts required by Parishes, Fire and Police will form part of the Council Tax setting resolution at Council on 19th February, and so the necessary updated information will be set out in the report.

Special Expenses

As part of the 2007/08 Budget preparation process the Council approved that no special expenses be declared (with the exception of Parish and Town Council precepts). It is proposed that this policy continues.