Budget for 2022-23 recommended to Council

Ashford Borough Council’s proposed budget for the 2022-23 financial year, which is subject to Full Council approval on Thursday 3 March 2022, received backing from Cabinet members last week.

Key highlights include:

• The Council has a Medium Term Financial Plan (MTFP), which sets out how we will maintain a balanced budget over the next five years.
• It is proposed that the Council increases its element of Council Tax by £5 a year for the average band D property, increasing the amount payable from £172.50 to £177.50 per year.
• Ashford will still have the lowest council tax in Kent.

Presented to the public in December 2021 for consultation, the document contains a large amount of information, all of which comes up against the backdrop of rising inflation and the continued economic uncertainty as we recover from the Covid19 Pandemic.

The full impact of the EU exit is still to be fully understood with challenges, including Ashford’s own Port Health operation still to be commenced. There is continued uncertainty over the long term Government Funding of Local Authorities and although the Government departments received a multi-year settlement, this only transpired into a single year funding settlement for the Council as the Government’s fair funding and spending reviews continue to be delayed.

This budget has been built to support the Council’s new Corporate Plan which has been developed to deliver the borough’s growth, and supports the Government theme of build back stronger.

The budget has already received support from the council’s Overview and Scrutiny Committee Budget Task Group, which is chaired by the leader of the opposition group. While recognising the challenges presented in 2022/23 the group concluded the budget proposal to be ‘sound’.

Cllr Neil Shorter, Ashford Borough Council’s portfolio holder for Finance and IT, said: “As we enter the recovery phase of the Covid19 pandemic the budget should have been easier to set however, with the current economic climate inflating prices, pressure on historical income streams, no increase in core spending power, and savings still to be fully delivered, 2022/23 will be a challenging year for the Council.

“We do however have a proven track record of delivering, and through digital transformation and new projects that bring growth to the borough, and financial returns to the Council, I am comfortable that this budget is deliverable.

“We will however need to ensure that robust monitoring arrangements remain in place to report progress towards saving targets, and the general pressures coming through as a result of the economic climate so that appropriate and timely action can be taken to address any concerns, including the use of reserves specifically held for these circumstances.”

Outlined below are some of the main headlines from the 2022-23 proposed budget:

Local government funding 

• The Medium Term Financial Plan
  • The council has a Medium Term Financial Plan (MTFP) which was presented to Cabinet in October 2021 and is a rolling five yearly budget. The MTFP is reviewed regularly and updated to reflect changes in corporate priorities and incorporate new projects/information into the plan.
  • The MTFP demonstrated a balanced position over the five year period however, it also highlighted key risks to the plan. The MTFP relies on some reserve funding in the early years moving to a balanced income and expenditure position in later years. There is an Economic Growth and Risk reserve of £9m to manage the significant risks to the MTFP, but also short to medium term risks that may arise are a result of uncertain economic conditions, this position will be reviewed regularly.
  • Beyond 2022-23 the further budget pressures resulting from growth will be targeted through cost awareness, income generation through commercialisation, smarter working through digital transformation, and investment strategies which continue to support these themes.
  • This includes supporting the Council’s wholly owned subsidiary A Better Choice for Property Ltd. which was established in November 2014 and is continuing to expand its portfolio (including development through its wholly owned subsidiary A Better Choice for Development Ltd.) and generate income for the Council.
• Local Government Finance Settlement
  • The local government finance settlement is the annual determination of funding to local government from central government and was published on 16 December 2021, and was approved by the House of Commons on the 7 February 2022. The only adjustment between provisional and final settlement was to increase the “Compensation for under-indexing the business rates multiplier” grant by Circa £58,000 to reflect the forgone RPI rather than CPI increase, however this was subsequently funded by cutting the Lower Tiers Service Grant therefore meaning Ashford Borough Council funded it.
  • The council was 1 of 34 Councils that did not receive any increase in Core Spending Power, which is effectively a loss in real terms once inflation is taken into consideration, and new burdens funded such as employer contributions for the new NHS and Social Care Levy and freezing of the business rates multiplier.

Council Tax

• It is proposed that Ashford Borough Council increases its element of Council Tax by £5 a year for the average band D property, increasing the amount payable to Ashford Borough Council from £172.50 to £177.50 per year. This excludes changes to parish councils’ precepts, which vary from parish to parish. Please note this is based on the Ashford element of Council Tax only and will be adjusted to reflect your property band.
• The council is permitted to increase its element of Council Tax by the higher of 2% or £5, so the proposal to increase by £5 is within agreed parameters.
• This increase allows the council to have a balanced budget with a contingency for operational service risks in year, and is in accordance with the council’s adopted inflation management strategy and in line with the council’s Medium Term Financial Plan assumptions.
• Ashford will still set the lowest council tax in Kent.

 New Homes Bonus

• New Homes Bonus makes its final legacy payment in 2022/23 although a further year’s funding for property growth between October 2020 and October 2021 has been awarded, no legacy payment will apply to this payment.
• The Government still plans to reform the New Homes Bonus (NHB) scheme having consulted in February to April 2021, they are still analysing feedback according to the Government website. This continues to leave the future of NHB uncertain with no clear indication on what a replacement scheme will look like, and what it will try to incentivise.

 Housing Revenue Account (HRA)

• A surplus of £1,535,960 is identified in the HRA for 2022/23. This amount will be used to fund capital projects, thereby reducing the need for borrowing. The capital projects include, not only building and buying properties to increase social housing stock, but also the de-carbonisation of existing stock.
• The HRA Business Plan is ambitious, with its focus to increase housing provision, this requires a significant amount of investment, not only in new builds but also acquiring existing properties and block developments, for example former council houses that were sold through Right to Buy scheme, and the New Quarter acquisition.
• This increase in affordable housing supply is designed to not only reduce the waiting list but also to reduce the pressure on temporary accommodation by providing homeless families with a long-term, affordable housing solution as highlighted in the HRA Business Plan presented to Cabinet in December 2021.

Capital Expenditure

• Regeneration projects
  • Vicarage Lane Car Park Redevelopment - Following the acquisition of the Mecca bingo hall in March 2018, the Council is still developing plans to regenerate the lower high street and the wider town centre. Phase 1 to redevelop the former Odeon building and surrounding areas has been approved to spend £8m over the next two years.
  • Newtown Works - This development will be one of the most important economic drivers for the borough in the next few years and demonstrates the ongoing confidence that investors continue to have in Ashford. The project has been awarded £14,773,745 from the Government’s Levelling Up fund. The TV and film studios will bring significant benefits to Ashford in terms of investment and job creation and will play a key role in our economy’s future recovery as we come out from the pandemic.
  • Project Green - The Council is exploring the potential of working with a world leading manufacturer in supporting their relocation to Ashford. The facility is seeking to be as sustainable as possible through utilising heat from the ground, natural light, wind and solar power and be innovative in embracing sustainable travel plans – matching the ambitions of this Council as set out in our carbon pledge and Corporate Plan. This will see the development of a 60 acre wetland park as part of this development, providing a bio diversity net gain for the scheme, carbon sequestration, enhanced flood attenuation, and nutrient neutrality credits, which will help with the wider Stodmarsh mitigation challenges the Council faces.

Corporate Projects

• Carbon Neutrality
  • As part of the Council’s commitment to becoming carbon neutral by 2030, a provisional amount of £10.8m has been included for the installation of Solar photovoltaic systems (PV). This project underpins the Carbon Neutral Strategy in generating income from investing in carbon neutrality opportunities.
• Property Company – A Better Choice for Property
  • The Council’s wholly owned subsidiary, A Better Choice for Property Limited requires financing to purchase its assets. The company’s business plan is looking to develop a portfolio of 300 - 400 properties over the next 5 years. Currently the company has 105 units within the portfolio, made up of a mix of flats and houses of varying sizes. The company has been successful in acquiring land acquisitions and a subsidiary company has been formed, A Better Choice for Property Development, to develop out these acquisitions. This progression to developing its own schemes is now the preferred method of the company to achieve its overall property target and to ensure a quality product in the rental market.

General Fund Housing

• Henwood Temporary Accommodation
  • This project is to deliver 23 units manufactured by Zedpods and be used for temporary accommodation which will be owned and managed by the Council. This development will help reduce the cost of putting homeless residents in expensive short-term accommodation which is putting a pressure on the General Fund.
• Rough Sleepers Accommodation Programme
  • The Rough Sleepers Accommodation Programme (RSAP) is a scheme supported by Government Grant that will enable the Council to purchase 20 units of accommodation for supporting rough sleepers with a variety of complex needs. The scheme has the opportunity to purchase properties in the right location with good proximity to support services for individuals – to ensure the best outcomes for highly complex cases. It provides the intermediate supported accommodation within an existing rough sleeper framework to tackle levels of single homelessness and will effect real changes in the lives of individuals.

Culture and the Environment

• Victoria Park
  • The current budget includes funding of £3.049m National Lottery Heritage Fund (NLHF), and £1.369m from Council reserves (including Section 106 planning contributions). The project will see Victoria Park and Watercress Fields benefitting from improved toilet facilities, café, play areas, car parking, river corridor enhancements and other wildlife habitat improvements, volunteering opportunities and park events and activities. The park forms an integral part of the Council’s commitment to providing and supporting public open space within the borough.
• Conningbrook Country Park
  • Included in the plan is £2.055m of Section 106 funding to deliver key infrastructure elements of the country park. In July 2019 Cabinet endorsed the country park master plan, the park is designated as a Strategic Park in the Council’s Open Space Strategy (2017 – 2030). The funding for the proposed works in the Country Park are provided by the enabling housing development that is currently under construction on land immediately adjacent to the main lake. Based upon current occupation rates we are forecasting another 3 years to receive all the S106 funding from the Conningbrook Development.

Housing Revenue Account Capital Programme

There are a number of Housing Revenue Account projects currently underway as well as a number of projects due to commence during 2022/23, brief outlines are below.

• The Halstow Way development (to be known as Brickworks) will deliver 17 units of general needs accommodation by end of April 2022. This site has been awarded just over £1m in grant from Homes England (£60,000 per unit) enabling a social rent to be set and deliver genuinely affordable homes.
• 55 Mabledon Avenue (the former Piper Joinery site) is a site the Council acquired in 2019/20. It is proposed that 20 units of general need accommodation will form the development for the site which, subject to planning permission, is expected to complete in 2023/24. This development is being supported by 1-4-1 monies which are generated from right to buy receipts.
• The redevelopment of Oakleigh, subject to planning permission, involves demolishing the existing structure and delivering 67 units of independent living accommodation for older people and adults with learning disabilities. Expected completion is in 2024/25.
• Tile Kiln Road is the site of a derelict cottage and (now demolished) agricultural barn purchased by the Council in 2019/20. Pre-planning application is being sought for 14 units of general needs accommodation.