Reporting Back on the Annual Budget Meeting of F&HDC 2021

At the Folkestone and Hythe District Council Meeting of Wednesday 24th February, the Lib Dem Group of Tim Prater and Gary Fuller were, as ever, doing their best to represent Sandgate and West Folkestone and the wider district to the best of their ability.

During the almost three hour meeting:

We both voted for the Labour motion calling on the Home Office to immediately close Napier Barracks as an Asylum Centre. The motion passed.

On the the Corporate Plan, which included specific reference to building new leisure facilities at Princes Parade in Hythe, Tim moved an amendment to remove the words "on Princes Parade". Despite support from ourselves, the Green and Labour groups, the amendment was lost, so both Tim and Gary voted against the Corporate Plan. It was, however, passed.

On the General Fund budget, there were no amendments put forward by any group. Gary and I, unusually, voted in favour of the budget "as the lesser of evils" - my speech explaining why is below. Gary also spoke outlining how hard the financial position currently is for Councils after 10 years of squeeze from central Government.

On the General Fund Medium Term Capital Programme, Tim moved an amendment (as he did last year on the same item) to remove the budget for Princes Parade development, and Gary also spoke in favour of the amendment. The amendment was lost 16-13, so Tim and Gary both voted against the programme. In the following vote, the Capital Strategy also included reference to Princes Parade funding. Tim voted against, Gary abstained.

On the Investment Strategy, the Green Party moved an amemdment inserting environmental sustainability as an investment evaluation criteria. Tim and Gary both voted for the amendment, and when it was passed narrowly, the amended strategy.

In speaking on the General Fund Budget, Tim sad:

"Last year I said that although I accepted the broad shape of the budget, I thought we need to look at the issues that lead this Council to having the highest Council Tax, band for band, in Kent.

"I still do. That was February 2020. And then Covid hit.

"For those that have been following the budget monitoring of this Council, and pretty much all Councils nationally, Covid has had a devastating impact.

"Income from things like parking crashed. There were big extra costs of things like supporting the Covid Hubs, supporting local people, a better deal for the homeless, dealing with the impact of lockdown and then opening up and more. There has been Government support, but it hasn't covered all lost income.

"Councils kept working throughout. No staff were furloughed: they were needed, and you simply weren't allowed to. They had to change from delivering services from an office to working from home, and did so instantly, while supporting people in a new way in extraordinary circumstances.

"Some councils have been devastated financially by Covid - you are seeing Councils in distress across the country, and I suspect there will be more. [https://www.localgov.co.uk/More-councils-will-be-forced-to-issue-Section-114-notices-MPs-warn/51737]

"The financial position of this Council meant when the budget process started in the Autumn initial projections showed using reserves at the rate of millions a year: reserves that would be used up pretty soon. Even now, the budget for this year - including the projected 1.99% Council Tax rise shows the use of reserves. It's not actually a balanced budget: its partially funded by reserves.

"There were options.

"Try to cut as much expenditure - by reducing services - as you can, to cut that loss. Vote through big increases to fees and charges, and big cuts to services. There were such proposals put forward. And I couldn't have supported them, and to be fair they have not been taken up.

"Or put forward a budget that does use some reserves and protects the key expenditure on frontline services. Its not perfect. There are areas I'm sure that could be better, but overall it is the lesser of the evils.

"There is still that question to be scrutinised on our comparative Band Council Tax across the County. And we should do it, but to be fair: I'm afraid the last 11 months just have not been the time for that.

"Sometimes, in unusual situations, you need to do unusual things. This has been an unusual year, and in recognition that the better of two routes has been picked, I'll vote for the revenue budget."

Council Tax (which is a bad tax, and should be replaced) is calculated by dividing the total amount the Council needs to "make" in terms of income from Council tax, and dividing it by the Council Tax base, which is essentially the number of properties paying full Council Tax, after taking into account all those with some form of discount. Although the total required income went up only 0.64% from 2020-21 (Appendix 3, Page 15) to 2021-22 (Appendix 3, Page 15), essenrtially by drawing £700k from reserves, the Council Tax base fell due to the large rise in households getting a discount on their Council Tax (mainly due to Covid).

The effect of the drop in Council Tax base was to increase to precept rise to 1.99%. You would hope the Council Tax base will increase again in coming years as households recover from Covid and therefore get less discounts, as well as the effect of housebuilding locally - we will see.