Winkleigh Parish Council 2017-18 Budget Proposal

Budget and Precept Proposal 2017-18

Report and Recommendations

19th January 2017

SUMMARY RECOMMENDATION:

I predict that the WPC income will be £667 less during 2017/18 due to cessation of local council tax support grant, and areduced VAT reclaim.

I forecast that during 2017/18 the WPC expenditure will increase by £3295.00 primarily due to legal fees for the cemetery bungalow, increase in cemetery maintenance fees and the awarding of grants approved in October 2016.

A breakdown of all income and expenditure costings are shown below

Having considered all of the information that is available at present, I recommend that the Council sets a precept for 2017/18 of £20,552.

This is an increase over 2016/17 of £3,577, equating to a tax payer annual increase of £5.54 per year (20.63% increase)(46p per month) based on our 2017/18 tax base of 634.29 per Band D household

FOR DISCUSSION

If the Parish Council were to move to online banking, this would alleviate some costs with regards to clerk’s time and travel for banking as payments to the PC could be via BACS rather than cheque. Similarly, the Council could then make their payments via BACs which would alleviate some postage and stationary costs

CONSIDERATIONS

1. The budget should be prudent and safe, and should

• Provide for the necessary routine services and administration
• Enable the Council to make developments for community benefit.
• Mindful of the need to minimise costs and any increases with parishioners in mind

2. As government pressures to reduce Council Tax increase and more and more local services are being cascaded down to Parish Councils, setting a low precept now may give the Council greater difficulties in future years.

3. In making the budget and precept, we have looked at the management of reserves in order to:

• Cover the management of cash flow as the precept is paid in stages and other receipts are unpredictable (e.g. burial fees)
• Provide for a considered amount for unpredictable outgoings
• Provide for smoothing between years to avoid extreme variations between years
• Begin precepting so that funds are available for projects which are known in outline but not in detail, so that all the funds do not have to be raised in a single year (i.e. bus stop replacement and election fees)

Cash Balance.

The cash balance in the current bank account includes unspent allocated budget amounts and grants and monies held towards Shute Lane (£1980) and TAP Footpath Project (£676)

We have calculated the predicted cash balance at the end of this financial year will amount to approximately £20336.11of which £16579.66 is earmarked as indicated below.

Current Account£3756.45

Reserves Account£12571.66

Restricted funds for Election costs£1000.00

Restricted funds for bus shelter accrual£1000.00

Restricted funds for CPAG£2603.24

Earmarked 3 Months WPC contingency£7968.42

Bungalow A/c contingency£3508.00

Reserves

The level of reserves are sufficient to meet the needs of the current budget and amount to 3 months running costs, as modest contingencies. The legal guidance on unrestricted reserves is 3-6 months running costs as a maximum to be held as contingency.

Below are the detailed figures upon which the proposed budget is based.

INCOME

WPC income incorporates rent from the bungalow, cemetery fees, VAT reclaim, Local Council Tax Support Grant and Precept. The predicted income for 2017/18 will be in the figure of £1167 less than budgeted this financial year.

Cemetery fees

It is inherently impossible to predict how much income we will receive from interments and memorials. The average income over the previous 2 years has been £2000 which was £500 below budgeted, therefore this current financial year we budgeted £2000 to reflect the average.

The cemetery fees for this financial year were increased. At present the cemetery income is below budget but there are 4 months remaining in the current financial year. There is no planned increase in the cemetery fees for 2017/18

I recommend the cemetery income budget is unchanged for 2017/18

Bungalow rental.

I recommend a 10% increase with effect of 1st April 2017 to£109.56 per week, (£5697.12 per annum), an annual increase of £517.92, which would reflect the improvements made to the bungalow and assist in the accrual for future repairs.The last rent increase was October 2014

Any decision on whether or not to increase the rental income for 2017/18 ispending legal clarification on whether the council is permitted to continue to let the bungalow as a tenancy, and accrue expenditure as a landlord.

I have based the 2017/18 budget on the basis that the tenancy remains with a rent increase of 10% from 1st April 2017 to allow for the necessary annual maintenance and general repairs and maintenance

The rent, which is below the rent for comparable properties, has been further held down in making allowance for the worst effects of the buildings condition. In 2013-14 the council were of the view that the rent should continue to be increased to reflect much more closely to the market value.

The 2013-14 budget showed indicative figures for average rent for similar properties and the 80% norm for ‘affordable’ rent. It was proposed that a 20% increase in each year beginning 2013-14, until the rental reaches 80% of the average value for comparable properties in the area, was far from unreasonable. The tenants who have been granted a de facto significantly-reduced rent, for the period that defects have been present, have made savings.

The planned rent increase for October 2015 was not instigated due to a new council and subsequent preparation of a revised bungalow business plan. The current weekly rent is £99.60 (£5179.20 per annum).

Local Council Tax Support Grant

This has been phased out completely from April 2017.WPC income will bereduced by £385 overthe current budget year which and will raise the precept next year to reflect this.

VAT Reclaim

Calculated to bereduced by £800 in 2017/18 due to reduced VAT incurred expenditure

OUTGOINGS

STAFF COSTS – I recommend aBudget of £12,435.50. This is an Increase of £1345.50 for 2017/18

Clerks Salary

The clerk is contracted to 12 hours per week, on Local Government scale of LC2 SCP27 of £12.564 per hour.

The mandatory cost of living increase comes into effect 1/4/2017 of 1%, the clerk’s appraisal is due by 20th April 2017 and a pay scale increment may be awarded in line with current contract subject to satisfactory performance from SCP27 to SCP 28, to £12.975 per hour (41p per hour increase incorporating the 1% cost of living increase)

Budget based on:

52 hour month (12 hours per week equivalent) £674.70 per month, £8096.40 per annum

Contingency of 3 hours per week overtime flat rate, £168.67 per month, £2024.10 per annum

Clerks’ salary proposed £10,120.50

This is an increase of £536.50 for 2017/18

Clerk working from home allowance

The current budget complies withthe current HMRC set allowance in relation to working from home to cover electricity, heating, lighting, which is £18.99 per month, plus £17.99 broadband and £15.00 telephone per month. £623.76 per annum.

This is unchanged for 2017/18

Clerk mileage

Included in Clerks contract is unpaid mileage to 10 ordinary parish council meetings per year and 10 agenda meetings per year. Any travel over and above, the clerk is to be reimbursed at government rate of £0.45p per mile because the clerks place of work is their home address.

During 2016/17 the notice boards were updated by Cllr Pearce to alleviate additional Clerk travel expenses, however, this duty has since returned to the clerk. Cllr Pearce has offered to resume the notice boards when he is able, and this will alleviate some travel costs, however, it is the clerk’s responsibility and allowance should be included in the budget in the eventuality that the clerk has to carry out this function. We have therefore allowed 22 return journeys (16 miles) (2 journeys a month to place the agenda and the minutes in the notice boards for the 10 pcm’s and the Annual Parish Meeting), an additional 352 miles at £0.45p per mile. This is an increase in expenditure of £158.40 for 2017/18

The Clerk is required to bank at least once per month, 20 mile round trip to Okehampton, plus contingency of further trip per month equates to 40 miles per month, £216 per annum.

This is unchanged for 2017/18

I recommend a budget increase from £216 to £375, a rise of £159 for 2017/18

Chairman’s/Cllr Expenses

Chair and any other Cllr is entitled to claim mileage and reasonable subsistence expenses incurred on attending previously agreed Parish business. Current budget 40 miles per month, £216 per annum.

This is unchanged for 2017/18.

Training

With possible vacancies on the Council, election of chair and vice-chair in May 2017, there is every likelihood members may request to attend the following courses: effective councillor course, Chairmanship course, budget & precept course, internal audit course, planning course, in the new financial year. Current budget for training is £450.

This isunchanged for 2017-18

HMRC employer NI contributions

This was not budgeted for at all in previous years. It is forecast that during the current financial year the employer National Insurance contributions will amount to £600.00.

I recommend a budget of £650 for 2017/18. This is an increase of £650.00 for 2017/18

ADMINISTRATION I recommend a budget of £2160. This is a reduction of £59.00 for 2017/18

Election

The cost of a bye-election is approximately £2000. With the next government elections in 2019, we propose £500 per year is set aside to cover future election costs rather than try to request monies in one go in 2019-2020

This remains unchanged for 2017/18

Insurance

The current budget is £600 to include the landlords insurance on the bungalow.

On 12 August 2016, the Insurance Act 2015 came into effect; replacing law that has been in place since 1906 which rebalances and places more ‘duty of fair presentation ‘on the insured party. This new duty will require WPC to change how information is provided to Insurers, and is explicit regarding who needs to be consulted when gathering such information. It is not known at this point in time how this will affect the policy renewal fee, if at all. In addition, WPC are currently awaiting legal clarification with regards to the type of insurance they are lawfully entitled to ‘buy’ for the bungalow and what effect this may have on premiums. The cemetery bungalow insurance is included in this figure as the bungalow is an asset and will be required to be insured by WPC regardless of whether or not we continue to let it as a residence.

I recommend a £200 increase in light of the uncertainty and environmental factors for 2017/18.

Website

The budget is currently £154 for fees to run the parish website. The website has been increased by an additional 2 pages to allow compliance with the freedom of information act. We have allowed 3.9% increase on fees for any annual increase, to £160

I recommend a £6 increase for 2017/18.

Room hire

The current budget is £200 to allow for 11 meetings and an Extra-ordinary parish meeting contingency. For 2017/18 We have accounted for an increase in room hire rate, anticipated 11 public meetings plus more contingency for extraordinary meetings.

I recommend a £50 increase for 2017/18

Stationary

The current budget is £345.

I recommend the budget is reduced to £200 for 2017/18 based on current expenditure.

Postage

The current budget is £220. Postage of monthly cheques and correspondence.

I recommend the budget is reduced to £50 for 2017/18 based on current expenditure.

Contingency

10% of total admin costs

This remains unchanged for 2017/18

RUNNING COSTS I recommend a budget of £3960. This is a reduction of £26.00 for 2017/18

Electricity to square

The Budget for the current year is £306. The electricity bill has since reduced to £12 per month, allow 10% price increase for market fluctuations.

I recommend the budget is reduced to £160 for 2017/18

Street Cleaning

Budget for current year is £2680 with actual expenditure predicted to be £2830.28 due to surplus price increase

I recommend the budget is increased to £3000 for 2017/18 to allow for price increase

Grass Cutting

Budget for current year £1000. Actual expenditure predicted to be £700.

I recommend the budget is reduced to £800 (to allow for extra cuts/contingencies)

PROFESSIONAL FEES I recommend a budget of £1140. This is a reduction of £10.00 for 2017/18

Internal Audit

The fee this year was £480 (incl VAT), the internal auditor for 2017-18 has not yet been contracted therefore fee unknown/unapproved.

I recommend the Budget is unchanged for 2017/18

External audit

The budget this financial year was £160. The fee this year was £150,(incl VAT), no price increase anticipated

I recommend the Budget isreducedto £150 for 2017/18

Data Protection

Current budget £35 annual fee

I recommend the Budget is unchanged for 2017/18

Subscriptions

NALC, DALC, SLCC

Current Budget £475.

I recommend the Budget is unchanged for 2017/18

ASSETS I recommend the Budget is unchanged for 2017/18

Current budget is £1,000 divided between Maintenance - £500, and Purchases - £500

GRANTS/DONATIONS I recommend a budget of £1125. This is an increase of £1050.00 for 2017/18

Current budget allows £75 to RBL for Remembrance wreath, no other grants were included in the budget for the current financial year.

On 26/10/2016 WPC resolved to award the following grants with effect April 2017, Winkleigh Football Club £500, ODCTG £300, CAB £250. In addition the annual remembrance wreath donation of £75. An increase of £1050

BUNGALOW I recommend the budget is increased to £2650 for 2017/18to allow Provision for anticipated legal expenditure for the bungalow.This is an increase of £675.00

SUBJECT to the pending decision on the future of the cemetery bungalow following legal clarification. Until a decision is made on the future of the bungalow the PC should budget for the annual maintenance and contingency only and any long term maintenance accrual funds should be considered when the legal status is ascertained with effect form 2018/19.

The tenancy and future considerations of the maintenance of the cemetery bungalow will be reviewed throughout 2017/18 based on legal advice as it is received

ANNUAL FINANCIAL COMMITMENTS

• Bungalow Contingency@ £1,000.00 pa
• Boiler annual service@ £ 100.00 pa
• Electric periodic inspection accrual@ £ 50.00 pa
• Legal Fees/Tenancy Agreement@ £ 1500.00 pa

Insurance

This has been included under PC administration costs as the building is required to be insured as an asset whether occupied or not.

Legal Fees

Notwithstanding the £3508 in the bungalow contingency, allowance is made for obtaining legal advice on the lawful use of the cemetery bungalow and if lawful, obtaining a new formal tenancy agreement through a solicitor and/or letting agencies , as stipulated by NALC (on average charge approx. £100 initial fee followed by a monthly fee of 10% of the monthly rent).

CEMETERY I recommend a budget of £3974. This is an increase of £909.00 for 2017/18

Rates

Current budget £415. The 2017 rateable value has increased to £2375.00, and new business rates calculated as £424.

This is a £9 increase in budget for 2017/18

Grounds Keeper

Current budget £1850 for grounds maintenance. New contract awarded for 2017 at £2500.

This is a £650 increase in the budget for 2017/18

Maintenance (Other)

The current budget is £650, which has been spent on the soil pit, and moles. A pest controller was required twice during the current financial year to exterminate moles at a cost of £250. The maintenance (other) budget is likely to be in the area of £850 for 2016/17.

I recommend the budget is increased to £900 for 2017/18

Contingency

5% of Cemetery budget, currently £150.

I recommend this is unchanged for 2017/18