Budget & Precept

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

Proposed 2021-22 BudgetCouncil Tax Change

Skip to top