Medium Term Financial Plan (MTFP)

April 2013

MTFP

The MTFP is a high-level forecasting model that enables the Council to assess the financial direction of travel, test “what if” scenarios and make annual budget decisions in the context of the bigger picture.

People Places Resources Support for LCTS Inflation Contingency Additional Recurring Savings Net Cost of Services Capital Financing Interest Receivable Net spending Resources Non ring fenced grants New Homes Bonus NHS Support for Social Care Council tax freeze grant Revenue Support Grant Retained Business Rates Council Tax Collection fund surplus Capital met from Direct Revenue Transfers from earmarked reserves Reversal of Depreciation (Surplus)/Deficit for year Balance brought forward Balance carried forward 2013/14 Proposed 15,362,100 10,950,600 5,189,100 100,000 103,300 (631,400) 31,073,700 2,197,000 (151,000) 33,119,700 2014/15 Proposed 15,651,400 10,754,600 5,120,800 100,000 300,600 (1,239,300) 30,688,100 2,083,000 (164,500) 32,606,600 2015/16 Proposed 16,302,500 10,891,700 5,255,300 100,000 499,800 (1,763,800) 31,285,500 1,937,000 (178,000) 33,044,500 2016/17 Proposed 16,814,500 11,029,300 5,300,800 100,000 701,000 (1,852,000) 32,093,600 1,912,000 (191,500) 33,814,100 2017/18 Proposed 17,287,700 11,204,900 5,435,000 100,000 904,200 (1,868,100) 33,063,700 1,892,000 (205,000) 34,750,700 2018/19 Proposed £ 17,670,400 11,384,500 5,531,300 100,000 1,109,500 (1,868,100) 33,927,600 1,865,000 (218,500) 35,574,100 (556,900) (383,500) (485,800) (208,500) (5,809,500) (4,076,500) (19,685,700) (125,500) 300,000 (234,200) (1,658,800) 194,800 (7,875,700) (7,680,900) (406,600) (579,800) (447,900) (208,500) (4,831,000) (4,143,300) (20,295,000) 0 0 (22,500) (1,658,800) 13,200 (7,680,900) (7,667,700) (300,600) (828,100) (415,200) 0 (3,994,000) (4,168,700) (20,934,800) 0 0 0 (1,658,800) 744,300 (7,667,700) (6,923,400) (278,900) (1,070,600) (388,600) 0 (3,289,000) (4,210,200) (21,587,900) 0 0 0 (1,658,800) 1,330,100 (6,923,400) (5,593,300) (274,600) (1,197,100) (385,900) 0 (3,056,000) (4,247,300) (22,233,800) 0 0 0 (1,658,800) 1,697,200 (5,593,300) (3,896,100) (260,900) (1,223,000) (366,600) 0 (2,903,200) (4,283,300) (22,807,400) 0 0 0 (1,658,800) 2,070,900 (3,896,100) (1,825,200)

Assumptions within Net Cost of Services

• Inflation - Pay - Energy - Contracts 1% for 2013/14; 2% each year after 8% each year 2% or 3% each year - Goods and Services 2% each year - Fees and Charges 2.5% in 2013/14; 1% in 2014/15; 2% each year after • Service pressures 2013/14 (Report 34/2013 Appendix 3) - People - Places £503,000 £21,000 • Only other specific provision in MTFP is for effect of implementing ‘Dilnot’ recommendations on social care - 2015/16 includes £300,000 - 2016/17 a further £100,000 - 2017/18 a further £100,000

Assumptions within Net Cost of Services

• • • • • • Savings (Report 34/2013 Appendix 4) To be achieved in 2013/14 within service budgets - People £167,000 - Places - Resources £399,700 £336,400 Plus further savings assumed but not yet allocated within service budgets - People £455,500 - Places - Resources MTFP assumes further savings - 2014/15 £ 70,200 £105,700 £607,900 - 2015/16 - 2016/17 £534,500 £ 88,200 Support for Local Council Tax Scheme - Discretionary Fund of £100,000 to assist in mitigating hardship Inflation contingency - Provides for 1% pay award in 2013/14

Capital

• Capital Financing - Interest on external borrowing  Fixed rate of interest on long term loans - Minimum Revenue Provision (MRP)  Represents amount to be set aside for debt repayment  Based on 4% of Capital Financing Requirement (CFR) • Interest Receivable - Short-term money market deposits in accordance with Treasury Management Strategy - Rates of interest influenced by Base Rate

Resources

• Grants (Report 47/2013 Appendix 6) - Non ring-fenced grants  Education Services (ex LACSEG)   Concessionary Fares LCTS Transitional Grant       Local Reform and Community Voices Community Right to Bid Community Right to Challenge Lead Local Flood Authorities Social Fund Efficiency Grant £322,000 £ 36,000 £ 24,729 £ 26,259 £ 7,855 £ 8,547 £ 8,706 £ 28,000 £ 94,829

• • • • • •

Resources

New Homes Bonus Planning approvals used to estimate future new homes Damping applied to allow for non-completions Allowance for bringing empty properties back into use Allowance for proportion of new homes that are ‘affordable’ Grant 2013/14 Brought forward from previous years Increase in stock (Oct 2011 to Oct 2012) Empty properties Rate per dwelling Affordable homes Premium per affordable home Grant for 2013/14 Total receivable in 2013/14 81 3 £1,273.09

26 £350.00

£258,500 £125,000 £383,500

Resources

• • •

NHS Support for Social Care

- Contribution from PCT for 2013/14

Council Tax Freeze Grant

- Based on 1% increase, payable for 2 years

Revenue Support Grant

- Formula funding - Council Tax Freeze £3,748,752 £312,803 - Council Tax Support - Early Intervention - Homelessness Prevention - Lead Local Flood Authorities - Learning Disability & Health Reform £860,799 £789,240 £30,025 £67,496 £40,235 - Less Parish Councils share - 2013/14 grant £485,800 £208,500 £5,849,350 £ 39,850 £5,809,500

Resources

• • • • • • • • Retained Business Rates Planning approvals used to estimate future business expansion Damping applied to allow for non-completions and appeals Government sets target for business rate income Council keeps 49% of target Deduction for tariff set by Government Levy of 16% on any growth above target 2013/14 Estimate - Total Business Rates Collected - Rutland County Council share - Less Tariff - Less Levy - Retained Business Rates £9,852,000 £ 760,000 £ 9,000 £4,827,500 £ 769,000 £4,076,500

Resources

• •

Council Tax

- Tax base (Report 6/2013) - Band D average (includes precepts) - Income for year

Collection Fund Surplus

- Estimate at 31/3/2013 - Gross collectable - Less reliefs and exemptions - Less Provision for Bad and Doubtful Debts - Net collectable - Less Precepts and demands payable - Estimated surplus at 31/3/2013 - Rutland County Council share 13761.31 (Band D equivalent) £1,430.51 (no increase from 2012/13) £19,685,700 £ 2,951,000 £ 35,000 £27,788,000 £ 2,986,000 £24,802,000 £24,657,000 £ 145,000 £ 125,500

Resources

• Capital met direct from revenue - Digital Rutland • Transfer from Earmarked Reserves - Planning Delivery Grant - Section 106 commuted sum - Anglian Water - Local Strategic Partnership - Total for 2013/14 £300,000 £ 96,500 £ 36,000 £ 73,200 £ 28,500 £234,200

Perspective

• Changes in assumptions have different impacts on MTFP - Inflation on pay 1% = £100k - Inflation on goods/services 1% = £200k - Interest rate 1% = £150k - Council Tax 1% = £200k - Each new home = £3k - Business RV 1% = £50k

Conclusion

• Strong position with sufficient reserves in hand to see through economic recession • Model enables good forward planning • Linked to annual budgets and monitoring to ensure decisions made in full knowledge of medium term effect • Enables changes in assumptions to be made to see what impact would be