Purpose
The purpose of this statement is to provide a summary of the Council's finances in a more accessible way than the official accountancy reports already in the public domain.
What is the Council Tax?
The council tax you pay is based upon the value of your house, which is put in one of eight bands. Each band pays a fixed proportion of the standard band D charge in its parish.
Only about 13% of your council tax is collected for the services provided by St Edmundsbury Borough Council.
For a band D property the total bill, without parish tax, is as follows:-
| For the financial year beginning 1st April 2002 | £ - p | %age |
|---|
| St Edmundsbury Borough Council | 128.43 | 13 |
| Suffolk County Council | 751.41 | 78 |
| Suffolk Police Authority | 82.08 | 9 |
| Total bill (exc. parish) | 961.92 | 100 |
Each parish has its own tax (if applicable) to add to this total.St Edmundsburys' Council Tax Increase
A five year forward projection of the consequences of the new budget and council tax is used to help with decision making. The Council's grant increase from the Government will be only £133,000 or 2.3%. In fact, because the number of households has increased, this only represents an increase of £1.89 for every Band D (or equivalent) household.
For the year 2002/2003, St Edmundsbury's own share of the tax bill will be going up by £16.65 for a band D property or 14.9% to the figure of £128.43 a year shown above. This is just £2.47 a week for all local services.
The council tax increase may be analysed as follows:-
| Increase (Decrease)
at Band D
£ . p | Total at Band D
£ . p |
|---|
| Last year's council tax | - | 111.78 |
| Increase in spending on services | 42.04 | - |
| Increased use of balances | (23.04) | - |
| Increased surplus on Collection Fund | |
| - Community Charge | (0.30) | - |
| - Council Tax | (0.16) | - |
| Increase in government grant | (1.89) | - |
| Increase in Council Tax | - | 16.65 |
| This year's Council Tax | - | £128.43 |
Have any saving been made?
Because of the structure of Local Government finance, only a small part of any increase in costs or new initiatives is met from government grant. In fact, for this year, the grant change represents an increase of £1.89 a household at taxpayer level. In addition, about £164,000 of extra costs will arise from new government legislation, £336,000 from reduced housing subsidy, £427,000 from the cost of stock transfer, and £500,000 from a reduction in interest earned because of lower interest rates. About half of these costs have been financed from reserves.
For 2002/2003 savings totalling £521,000 a year have been removed from the budget. If these savings had not been made, the council tax would have to have been increased by a further £14.93 at Band D or an additional 13%. The Government has set a target for all local authorities to achieve 2% efficiency savings each year. The savings target for 2002/03 was £208,000 in last years Best Value Performance Plan.
What if I am not living in a Band D property?
The council tax you pay is based upon the value of your home, which is placed in one of eight bands, from A to H. Each band pays a fixed proportion of the standard Band D charge in its parish or town area.
Most properties in St Edmundsbury are in band B and pay seven-ninths of the band D rate.
Looking at this table you see that band H pays twice band D and three times band A.
| Band | Property Value £ | Number of Homes | Taxable Proportion |
|---|
| A | 0-40,000 | 4,826 | 6/9 |
| B | 40-52,000 | 16,222 | 7/9 |
| C | 52-68,000 | 8,272 | 8/9 |
| D | 68-88,000 | 6,542 | 1 |
| E | 88-120,000 | 3,722 | 11/9 |
| F | 120-160,000 | 1,676 | 13/9 |
| G | 160-320,000 | 1,383 | 15/9 |
| H | Over 320,000 | 119 | 2 |
| Total Homes 2002/2003 | 42,762 | |
You can find a complete schedule of every tax in every band in every parish on the Council Tax Bands and Charges page.
The Taxbase of the Borough
From the real number of homes in the Borough listed above it is possible to calculate how much money a council tax of £1.00 at band D would raise in the Borough.
Taking the proportion of tax due in each band from the table above it can be calculated that 42,762 homes in various bands are equivalent to 39,242 homes of band D value.
Once all the single person discounts and empty periods and other losses are allowed for, the final number of band D equivalent properties in the Borough can be established.
This is called the Council's Taxbase and for 2002/2003 it is 34,904 band D equivalent properties.
So, in the Borough, a Band D council tax of £1.00 will raise £34,904 in cash income.
The Borough Council's Tax Income
The Borough's Council Tax for this year is £128.43 which will produce:-
Tax income for the year of £4,482,759.
Parish councils in the Borough levy their own council tax. However St Edmundsbury offers substantial grants to parish councils to enable them to provide more services at a lower cost. For the year 2002/2003, the total grant aid provided towards parish precepts will be £185,568, leaving them to raise £421,103 from parish tax payers.
What about Business Rates?
The business rate is set each year by the Government and all the income received from it is sent to the Government.
St Edmundsbury is the local billing authority charged with the responsibility of collecting this money on behalf of the Government.
In return, a share of this income is returned to the Borough Council on a per head basis, as part of the Government grants made to all local authorities.
The valuation of a business, in order to calculate its rateable value, is undertaken by a branch of the civil service known as the Valuation Office Agency and new values are produced every five years. The latest values came into operation on 1st April 2000, and are based on rental values as they stood in April 1998. Any business can check its rateable value by visiting the Valuation Office Agency website at www.voa.gov.uk.
Alternatively you can limit yourself to addresses in our area by going through the portal to the Valuation Office website on the St Edmundsbury Business Rates page.
What is the money spent on?
Looking first at the old year beginning on 1st April 2001, known as 2001/ 2002, a summary of expenditure and income would be as follows:-
| 2001/2002 Budget | Expenditure
£'000 | Income
£'000 | Net
£'000 |
|---|
| Waste Collection | 2,455 | 971 | 1,484 |
| Street Cleansing | 845 | 34 | 811 |
| Other Environmental Services | 1,820 | 227 | 1,593 |
| General Fund Housing | 6,901 | 5,220 | 1,681 |
| Recreation and Sport | 3,345 | 422 | 2,923 |
| Culture, Heritage and Tourism | 2,003 | 564 | 1,439 |
| Parking Services | 1,797 | 1,800 | (3) |
| Other Highways Roads and Transport | 2,223 | 1,648 | 575 |
| Planning and Development Services | 3,817 | 2,728 | 1,089 |
| Central Services to the Public | 2,269 | 767 | 1,502 |
| Corporate and Democratic Core | 1,800 | 164 | 1,636 |
| Unapportionable Central Overheads | 645 | 43 | 602 |
| Council Tax Benefit | 2,556 | 2,489 | 67 |
| Transfer from HRA Major Repairs Reserve | - | 1,605 | (1,605) |
| Other Income and Expenditure | 434 | 4,670 | (4,236) |
| Total General Fund | 32,910 | 23,352 | 9,558 |
| Housing Revenue Account | 26,830 | 26,830 | - |
| Total - All Council Services | 59,740 | 50,182 | 9,558 |
These costs, after allowing for the income generated by each service are met from the following sources:-
| 2001/2002 Budget Financing | £'000 |
|---|
| Income from Government Grants | 5,684 |
| Paid by the Council Tax Payer | 3,874 |
| Use of Balances and Reserves | NIL |
| 9,558 |
Now looking forward to next year, beginning on 1st April 2002, known as the year 2002/2003, a summary of income and expnditure would be as follows:-
| 2002/2003 Budget | Expenditure
£'000 | Income
£'000 | Net
£'000 |
|---|
| Waste Collection | 2,647 | 953 | 1,694 |
| Street Cleansing | 906 | 44 | 862 |
| Other Environmental Services | 1,917 | 214 | 1,703 |
| General Fund Housing | 13,353 | 11,349 | 2,004 |
| Recreation and Sport | 3,838 | 425 | 3,413 |
| Culture, Heritage and Tourism | 2,179 | 735 | 1,444 |
| Parking Services | 1,888 | 1,888 | - |
| Other Highways Roads and Transport | 2,814 | 2,241 | 573 |
| Planning and Development Services | 3,679 | 2,827 | 852 |
| Central Services to the Public | 2,321 | 691 | 1,630 |
| Corporate and Democratic Core | 2,123 | 186 | 1,937 |
| Unapportionable Central Overheads | 476 | - | 476 |
| Council Tax Benefit | 2,513 | 2,443 | 70 |
| Transfer from HRA Major Repairs Reserve | - | 195 | (195) |
| Other Income and Expenditure | 477 | 5,802 | (5,325) |
| Total General Fund | 41,131 | 29,993 | 11,138 |
| Housing Revenue Account | 5,050 | 5,050 | - |
| Total - All Council Services | 46,181 | 35,043 | 11,138 |
These costs, after allowing for the income shown for each service, are met from the following sources:-
| 2002/2003 Budget Financing | £'000 |
|---|
| Income from Government Grants | 5,817 |
| Paid by the Council Tax Payer | 4,517 |
| Use of Balances and Reserves | 804 |
| 11,138 |
It should be noted that for 2002/03 some £804,000 has been drawn from balances and reserves to avoid an even higher increase in the Council Tax. This amount is worth £23.04 to every Band D taxpayer.
Are Council Services Competitive?
The Council currently operates a number of trading organisations which carry out work that has been won in direct competition with private sector providers. These trading organisations are listed below, together with estimated trading results for the financial year 2000/2001.
| Income
£'000 | Expenditure
£'000 | Surplus/(Deficit)
£'000 |
|---|
| Building Maintenance | 3,591 | 3,589 | 2 |
| Highways | 677 | 667 | 10 |
| Refuse | 2,484 | 2,543 | (59) |
| Cleansing | 747 | 691 | 56 |
| Parks and Landscapes | 1,052 | 992 | 60 |
| Building Cleansing | 370 | 359 | 11 |
| Leisure Management | 1,674 | 1,609 | 65 |
| Catering | 505 | 555 | (50) |
| Revenues | 501 | 478 | 23 |
| Housing Management | 543 | 492 | 51 |
| TOTAL | 12,144 | 11,975 | 169 |
The services work to a target of "breaking-even" after allowing for a 6% rate of return, which is included in their expenditure shown above. This 6% is included as an "asset rental" and is credited to the council tax payer's General Fund.
What about Capital Expenditure?
Capital expenditure is the spending undertaken by the Council which will bring a benefit which should last for at least ten years. This spending is met locally from what are called capital receipts or capital contributions. Capital receipts are money received from the sale of a capital asset, such as a piece of land, or a building. This capital income cannot be spent on day-to-day running expense, but can only be used for capital expenditure. A capital contribution may be a specific sum paid by a developer towards a capital scheme, or could be a specific Government payment towards part of the costs of a project such as the making of improvement grants.
Any unspent capital receipts are invested in order to earn interest. The interest can be used to offset the annual council tax burden, and figures are provided below.
The Council's capital programme for 2002/2003 may be summarised as follows:-
| New Capital Projects for 2002/2003 | £'000 |
|---|
| HOUSING | |
Payments of Home Improvement Grants
Housing Association Schemes
Certain Rent Allowances | 610
3,500
315 |
| OTHER CAPITAL PROJECTS | |
Leisure Services
Traffic Management Schemes
Works on Public Buildings
Roads and Sewers
Other Services | 375
300
307
275
350 |
| Total Capital Programme | 6,032 |
Of this Capital Programme, £3,826,000 will be paid for by capital contributions from the Government, and £180,000 will be financed from Developers' contributions.
Who provides this Financial Information?
The financial budgeting and accounting systems of the Council are provided by the Accountancy Division of the Finance Department of St Edmundsbury Borough Council.
What Investments are there?
The Council always has certain money available to invest. This can be analysed as:-
- a) Money received from the sale of council houses, land and buildings;
- b) Income from council tax payers yet to be spent in the year;
- c) Business rates income not yet paid over to the Government;
- d) Certain reserves and provisions being held until required, such as replacement of vehicles and plant;
- e) A sum of reserves or working balances held against unforeseen contingencies.
At any one time these sums can vary in total from around £30 million to £40 million, and are available for investment to earn interest. As from June 10th 2002, it is expected that this sum will almost double, with the proceeds from the transfer of the Housing Stock to the Havebury Housing Partnership.
This money cannot be invested in stocks or shares and sufficient must be kept available to meet day-to-day requirements.
Therefore it is invested as follows, analysed by the institutions borrowing the money, and by the period of investment:-
Council Investments as at 31st March 2002
| Investment Institution | £'000 |
|---|
| a) UK banks and their wholly owned subsidiaries | 8,500 |
| b) Foreign banks and/or building societies | 950 |
| c) Top 18 UK building societies | 28,450 |
| d) Local Authorities | 300 |
| Total invested February 2002 | 38,200 |
| Investment Periods | £'000 |
|---|
| a) Under one year | 34,200 |
| b) One to two years | 4,000 |
| 38,200 |
What income is earned from investments?
A) 2001/2002
The expected income from investment for 2001/2002 was £1,466,000 which is worth £42.49 a year to every band D tax payer in the Borough.
Without this income, the council tax would either be £42.49 higher than at present, or the level of services would have to be reduced by £1,466,000.
The average rate of interest predicted for 2001/2002 was 5.5%, and the rate achieved was 5.09%.
B) 2002/2003
The expected income from investment for 2002/03 will be £2,438,000, which will be worth £69.85 to every Band D taxpayer in our Borough. The reason for this increase is because it includes an estimated income from the proceeds of the Transfer of the Housing Stock to the Havebury Housing Partnership
The average rate of interest predicted for 2002/03 is 4.25%.
Purchasing
The purchasing procedures of the Council are laid down in Financial Regulations and Standing Orders, copies of which are available from the Director of Finance and Head of Legal Services respectively. They are designed to enable the Council to achieve value for money in all its purchases whilst at the same time ensuring that probity in the purchasing process is maintained. These documents are reviewed each year and the requirements relating to purchasing arrangements have not changed during the last twelve months.
The Council has laid down financial limits for the obtaining of quotations or tenders. At the present time where any goods, services or works are estimated to exceed £2,000 but not £5000 then a minimum of two written quotations is required. Where the estimated purchase price exceeds £5,000 but not £25,000 then three written quotes are required and for instances in excess of £25,000 formal tenders must be sought.
The procedures set out the manner in which quotations or tenders are to be invited, received, opened and accepted. A register is maintained of all contracts placed by the Council.
