Budget and Precept for the year 2022 to 2023

Coffinswell Parish Council agreed to request a precept of £6155.00 for the year 2022 - 23.

Coffinswell Parish Council Chairman's Budget Report and Precept Recommendations 2022/2023

Background Information

The Parish Budget is set annually by Precept and is administered by Teignbridge Council, being levied as part of the Annual Council Tax.

The Parish Precept submission must be forwarded to Teignbridge Council no later than the January preceding the forthcoming Financial Year.

Financial years run from 1st April to 31st March.

This levy is applied to all properties within Coffinswell Parish and is the predominant part of the Parish’s total income.

Another source of limited income are grants such as the variable P3 Grant specifically provided for footpath maintenance.

Furthermore an exceptional source of additional income is that of a Community Infrastructure Levy.

This CIL (Community Infrastructure Levy) which came into force on 1st September 2019 is a charge which can be levied by Local Authorities on new developments in their area.

Most new developments which create net additional floor space of 100 square metres or more or create a new dwelling are potentially liable for the levy.

Where the development is within the area of a Parish Council, the charging Authority, Teignbridge, must pass a proportion to the Parish Council. This varies from 15% for a Parish without a Neighbourhood Development Plan to 25% for a Parish with such a plan.

Parish Councils can spend CIL monies on ‘the provision, improvement, replacement or maintenance of infrastructure or anything else that is concerned with addressing demands that development places on an area’.

This Levy must be spent within five years of its receipt.

Budget Setting Information

Setting a Budget in November/December to anticipate the needs and expenditure in forthcoming year can be a difficult process, having to rely on previous budget analysis, current trends in respect of price rises and the Government’s economic predictions.

Furthermore there are always varying degrees of economic uncertainty/unpredictability for the year ahead, with factors such as ongoing Brexit impacts and the Coronavirus pandemic being good examples.

Whilst any proposed Budget is intended to cover all day to day expenditure for the Financial Year, there are also Financial Regulations requiring Parish Councils to maintain reserve funds. The Chartered Institute of Public Finance and Accountancy describes the purpose of Reserve Funds as;

• a working balance to help cushion the impact of uneven cash flows and avoid unnecessary temporary

borrowing, and

• a contingency to cushion the impact of unexpected events or emergencies.

This reserve fund is known as the General Reserve or Contingency Reserve and the Parish Council is required to maintain a reserve of between 3 and 12 months expenditure.

Another Budgetary consideration should also be given to an Election Reserve.

Consideration should also be given to Specific Reserves or Earmarked Reserves. This reserve would cover items such as Emergency Planning, Grants etc. Funded projects which will run across financial years are another example. CIL income would also be able to be included within this category.

The Parish currently has a Specific Reserve as a result of a CIL grant received in 2020. Currently these funds have not been fully utilised, however as seen in the table below a proportion has been allocated/proposed for expenditure in 2021/2022 budget cycle.

Carried forward Specific Reserve Budget 2021- 2023

Considerations for the proposed Budget for 2022/2023

Inflationary impact

At the time of preparing this report the latest data available from the Office of National Statistics indicates that inflation has now increased to 5.1%.

The official Government target for this financial year being 2%.

The current Consumer Price Index is showing an increase of 4.6% for November 2021.

The Bank of England are currently predicting a rate of around 5% which will remain until the spring of 2022.

Furthermore the Office for Budgetary Responsibility recently upgraded its prediction of inflation levels in 2022 to around 5%.

Church Grant

The Parish has recently been advised by the Parish Clerk, that NALC have indicated that the legality of Parish Councils providing Church Grants is questionable and that this practice should cease.

It was agreed after lengthy discussions that the Parish Council would have to reluctantly comply with this guidance.

However the Council recognise that the Church has always played a very important role within the community and as such wishes to continue its support of the Church by encouraging greater community use.

Therefore it is proposed that the budgetary allocation for venue hire costs includes the previous Church grant and that this enhanced funding will enable the Parish Council, on behalf of the community, to hire the Church for the residents use. It is hoped that this will encourage greater use of the Church and reinforce its position in the heart of our community.

More information will be published on the Parish website in due course.

Statutory Reserves

As explained above the Parish have a statutory duty to ensure that sufficient funds are available for General Reserves and Election Reserves. The proposed budget has been set to guarantee that the Parish reserves are stabilised and that a gradual increase is achieved over the forthcoming years. This is a cautious approach which reflects the current financial situation we are confronting. However the Clerk was recently advised that small Parishes such as ourselves should be working towards a general reserve of twelve times monthly expenditure, which will need to be built into future budget planning.

Devon County Council Chairmans briefing on 1st December 2021

Following the attendance at the Chairman of Devon County Councils Annual Briefing it was emphasised that this years County budget was expected to be hardest in recent years with even more savings needed to be found. With this in mind he suggested that Parish Councils need to be more resilient in the coming years and to be prepared to be more self sufficient.

Teignbridge Councils budget planning information received 13th October 2021

Information from Teignbridge Councils Financial Officer indicates that the Council Tax base for to coming year has marginally increased, which is good news for our Budget and subsequent Precept request for 2022/2023.

Extract from Financial Officer report

However Parish’s were also advised that consideration should be given to ensuring that sufficient Election Reserves Funds are held to cover costs incurred in the event of a contested election within the Parish. These costs range from £1000 to £5000 dependent on the size of the Parish.

Teignbridge Councils Financial Officers briefing to Parish Councils on 16th December 2021

Martin Flitcroft Chief Finance Officer for Teignbridge Council briefed Parish Councillors as to the Government financial settlement figures for the financial year 2022/2023.

Unfortunately this settlement figure is again for one year only and as such does not allow Teignbridge to plan with any certainty its budget predictions/projections for subsequent years.

However the Government has indicated that a review and overhaul of Local authority settlement grants will be undertaken in 2022.

This year District Council budgets will continue to have increase caps applied by the Government (no more than 1.99% or £5, whichever the greater). Furthermore local people continue to have the right for a legally binding referendum if these constraints are not applied.

Parish Councils are currently not constrained by this cap.

Based on this information Teignbridge Councils is currently proposing a Budget/Precept which will see a Council Tax increase of £5 for Band D property. This represents an increase of 2.78% and will raise the Council tax levy by Teignbridge to £185.17. However it should be borne in mind that this proposed budget has yet to be scrutinised/approved by the full council and this process will not conclude until Jan/Feb 2022

It was also indicated that all Teignbridge Council Fees and charges will be increased by the rate of inflation.

A further TCFO briefing for Parish Councils will be held on 20th January 2022.

Parish Councils Budget/Precept conclusions

This years budget planning process has been very difficult this year with numerous discussion papers having been circulated prior to our detailed deliberations at the Parish Council meeting on 16th November 2021.

The main reason for these protracted discussions was that the Parish Council was acutely aware that whilst there is a need to address a number of forthcoming challenges which have been identified we felt duty bound to take into account the financial burden currently being experienced by our residents with high fuel costs inflation etc.

Therefore with this in mind the Parish Council felt that we should also set our Budget/Precept within the Government capping constraints applied to Teignbridge Council (1.99% or £5 whichever greater).

Last years Parish precept (2021/2022 ) was set at £43.65 based on a band D property.

Precept and Budget Proposal for 2022/2023

1. It is recommended that the precept for the financial year 2022/2023 be set at £45.83. This represents a modest increase of £2.18 over 2021/2022 or in purely financial terms an increase of 4.2p a week.

2. It is recommended that the budget for the financial year 2022/2023 be agreed at £6155 as detailed below.

3. It is recommended that if any contested election was to occur in 2022/2023 the costs should be underwritten by the General Reserve, and

4. It is recommended that the General Reserve be monitored throughout the year and maintained at a minimum of six times the average monthly expenditure. This being a total of approximately £3078.

Proposed 2022/2023 Budget

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Budget and Precept for the year 2021 to 2022

Coffinswell Parish Council agreed to request a precept of £5670.00 for the year 2021 – 22 which is an increase of 20% on the previous year.

Coffinswell Parish Council Chairman’s Budget Report 2021/2022

For a pdf version of this report click this link

Background Information

The Parish Budget is set annually by Precept and is administered by Teignbridge Council, being levied as part of the Annual Council Tax.
The Precept submission must be forwarded to Teignbridge Council no later than January 2021.
This levy is applied to all properties within Coffinswell Parish and is normally the Parish’s total income, with the exception of a variable P3 Grant specifically for footpath maintenance.
However on the 21 October 2020 the Parish received the very welcome news that it was awarded a CIL payment of £7756.64.
This CIL (Community Infrastructure Levy) which came into force on 1 September 2019 is a charge which can be levied by Local Authorities on new developments in their area.
Most new developments which create net additional floor space of 100 square metres or more, or create a new dwelling are potentially liable for the levy.
Where the development is within the area of a Parish Council, the charging Authority, Teignbridge, must pass a proportion to the Parish Council. This varies from 15% of a Parish without a Neighbourhood Development Plan to 25% for a Parish with such a plan.
Parish Councils can spend CIL monies on ‘the provision, improvement, replacement or maintenance of infrastructure or anything else that is concerned with addressing demands that development places on an area’.
This Levy must be spent within five years of its receipt.
It is proposed that we will be consulting residents as to community proposals/suggestions for the allocation of these CIL funds.
Budget Setting Process
Setting a Budget in November 2020, to anticipate the needs and expenditure in 2021/2022 can be a difficult process, having to rely on previous budget analysis, current trends in respect of price rises and the Government’s economic predictions.
The Government predictions for 2020 were for inflation in the region of 1% and for 2021 2%. However during this current year, price rises are exceeding this, being in the region of 2.75%.
Furthermore there is also a degree of economic uncertainty for the year ahead, with factors such as Brexit and the ongoing Coronavirus pandemic to consider.
Whilst the proposed Budget is intended to cover all day to day expenditure for the Financial Year, there are also Financial Regulations requiring Parish Councils to maintain reserve funds. The Chartered Institute of Public Finance and Accountancy describes the purpose of Reserve Funds as;
• a working balance to help cushion the impact of uneven cash flows and avoid unnecessary temporary borrowing, and
• a contingency to cushion the impact of unexpected events or emergencies.
This reserve fund is known as the General Reserve or Contingency Reserve and the Parish Council is required to maintain a reserve of between 3 and 12 months expenditure.
At year end financial year 2019/2020 the general reserve was approximately 7 months.
However at the end of financial year 2020/2021 the predicted general reserve will be approximately 5.5 months.
To stop the decline of the General/Contingency Reserve, to a minimum level of 6 months, which can be seen as being below 2019/20 levels, would require a increase of the Precept in the region of 11%.
It can therefore be seen that, for the 2021/2022 Budget to address the current/predicted price rises and the General Reserve decline it would require a minimum of increase of 13.75%.
Budgetary consideration should also be given to an Election Reserve.
Consideration should also be given to Specific Reserves or Earmarked Reserves. This reserve would cover items such as Emergency Planning, Grants etc. Funded projects which will run across financial years are another example. CIL income would also be able to be included within this category.
The Parish’s current Precept 2020/2021 is £4725, which equates to household levy of £35.05 (using a Band D property as the example) or just £2.92 per month.
Budget Recommendations
1. That the Parish Council undertake to stop the recent decline and agree to maintain a minimum
General/Contingency Reserve at a level of 6 months.
2. That this Budget ensures that this 6 month level is achieved within this financial year 2021/2022.
3. That the CIL payment of £7756.64 be identified within the Specific/Earmarked Reserve for allocation
starting in 2021/2022 Financial Year following parishioner consultation. Proposals/costs will be
identified within Parish Action Plan for 2021/2022 as they become available.
4. Options
a. That the Precept for 2021/2022 is set at £5560 (15%increase), which equates to a household
increase from £35.05 to £40.30 per year or £3.36 per month. (using Band D property as example)
b. That the Precept for 2021/2022 is set at £5625 (16% increase) which equates to a household
increase from £35.05 to £41.76 per year or £3.48 per month.
c. That the Precept for 2021/2022 is set at £5690 (17% increase) which equates to a household
increase from £35.05 to £ 42.20 per year or £ 3.51 per month.

Parish Precept and Budget for 2021 – 2022

for a pdf version of this report click this link

Having received the Chairmans Budget report for 2021/2022 the Parish Council met on 17 November 2020 to discuss and set the Parish Precept for 2021/2022. The key issue discussed was the need to stabilise the Parish’s general reserve which has been in decline for a number of years. This reserve is vital in ensuring that the Parish Council can meet its statutory financial obligations in the event of unexpected and unforeseen issues or emergencies which may arise. As a result of these discussions it was agreed that the level of Precept for 2021/2022 should be increased by 20% on the 2020/2021 Precept. This would mean that the individual property council tax would be £45.76 per household, an increase of £10.71 over last year (based on a Band D property). This increase would provide an approximate overall Parish budget for 2021/2022 of £5670. Whilst this headline percentage figure looks high upon an initial inspection, in financial terms this is a modest increase of just 90 pence per month. It should also be borne in mind that the Parish’s overall monetary income is exceptionally small given the services we provide. Resulting from the 17 November meeting it was also agreed that a detailed budget should be presented at the 19 January 2021 Parish meeting for agreement prior to advising Teignbridge of the Parish’s 2021/2022 Precept request. Attached is this proposed budget allocation for 2021/2022 and it can be clearly seen that this is a balanced budget with zero infrastructure development potential. See Appendix A However the Parish is very fortunate to be in a position to carry forward into 2021/2022 and beyond earmarked funds resulting from a CIL received in October 2020. This CIL money can only be allocated to the ‘provision, improvement, replacement, operation or maintenance of infrastructure or anything else that is concerned with addressing demands that development places on an area’. The Parish Council will be shortly be commencing a community consultation process in respect of Parish Infrastructure Projects for 2021/2022. Recently received correspondence from Teignbridge Councils Chief Finance Officer has indicated that due to the current unprecedented financial situation it is proposed to reduce the Parish’s Council Tax base code for 2021/2022 by approximately 2.6%. See Appendix B which is a worked example showing how this proposed change has been arrived at. This proposed change if approved at Teignbridge Councils Budget meeting in February 2021 would reduce our planned 2021/2022 Budget by approximately £148 and as such the budget proposal set out in Appendix A would have to be revisited to make the necessary cost savings. The Parish’s Strategic Plan with its incorporated Action Plan for 2021/2022 is available on the Parish Website. This document together with the following Parish annual budget account/spreadsheets is updated frequently throughout the year and will ensure that our financial transactions are available for public examination and scrutiny at all times.

Precept Budget P3 Budget CIL(infrastructure project) Budget