Agenda item

17 February 2015

City Fund 2015/16 Budget Reports and Medium Term Financial Strategy including Non Domestic Rates and Council Taxes for the Year 2015/16

We have considered as to the Non-Domestic Rates and Council Taxes to be levied to meet the City Fund budget requirement during the year ensuing including the proposal to levy:

 

·         an unchanged premium multiplier of 0.004 on the Non-Domestic Rate and Small Business Rate multipliers to enable the City to continue to support the City of London Police, security and contingency planning activity within the Square Mile at an enhanced level; and

·         an unchanged Council tax of £857.31 for a Band D property (excluding the GLA precept).

 

We submit a printed and circulated report thereon:  City Fund – 2015/16 Budget Report and Medium Term Financial Strategy.

 

We recommend that the report be agreed to and that the Court do pass a Resolution in the following terms:-

 

Overall Financial Framework - Revenue

 

1.         Approve the overall financial framework and the revised Medium Term Financial Strategy for the City Fund noting, in particular, that the forecasts include the Service Based Review savings/increased incomes agreed by the Policy and Resources Committee; and that the achievement of these savings/increased incomes are anticipated to offset the impact of assumed reductions in Government Grants, to leave the fund with small surpluses (effectively break-even) across the period.

2.         Approve the City Fund Revenue Budgets.

3.         Other major assumptions are:

•   an allowance of 2% has been included in 2015/16 for pay and prices which then reduces year on year until 2018/19 when a freeze is assumed, reflecting public sector finance constraints;

•   a neutral position with regard to the Government’s system of Business Rates Retention – i.e. no speculation as to growth or reduction; any changes will therefore be an addition or reduction to balances;

•   anticipated earnings from cash balances have been reduced to 0.5% for 2015/16 and 2016/17 after which a marginal increase to 0.75% is assumed; and

•   the annual provisions included for additional revenue works projects reflect detailed programmes for 2014/15 and 2015/16.  For the years 2016/17 to 2018/19 an assumption has been included of £2.5m a year. This is a reduction of 19% on the provisions included for 2015/16

 

City Police

 

4.         Note that continuing significant cuts in Government Grants for both core policing and dedicated capital city security responsibilities would, if left unchecked, result in deficits across the financial forecast period with the Police Reserve being exhausted early in 2017/18.  This position is not sustainable and options for balancing the budget with a minimum balance on the general reserve of £4m across the period are to be presented to the Police Committee before the summer recess in July.

 

Council Tax

5.         From April 2013, council tax reduction replaced council tax benefit and in accordance with Section 10 of the Local Government Finance Act 2012 which amended Section 13A of the Local Government Finance Act 1992, local authorities have to make their own local schemes if not applying the Government default scheme. The City adopted the default scheme for 2013/14 and amended the scheme for 2014/15 by applying the annual uprating of applicable amounts. There is no intention to amend the scheme for 2015/16 other than to apply the annual uprating of applicable amounts.

 

6.         The Common Council of the City of London hereby agrees, therefore, that the  annual uprating of applicable amounts, premiums, disregarded income, or capital in relation to the Local Council Tax Reduction Scheme 2015-2016 as it applies to working age claimants, be in accordance with the uprating to be applied under the Housing Benefit Regulations which take effect from 1 April each year and the Council Tax Reduction Schemes (Prescribed Requirements) (England) (Amendment) (No. 2) Regulations 2014; and the annual uprating of non-dependent income and deductions, and income levels relating to Alternative Council Tax Reduction, or any other uprating as it applies to working age claimants, shall be adjusted in line with inflation levels by reference to relevant annual uprating in the Housing Benefit Scheme or The Prescribed Council Tax Reduction Scheme for Pensioners.

 

7.         It be noted that in 2012 the Finance Committee delegated the calculation of the Council Tax Base to the Chamberlain and the Chamberlain has calculated the following amounts for the year 2015/16 in accordance with Section 31B of the Local Government Finance Act 1992:

 

(a)       6239.59beingtheamountcalculatedby the Chamberlain (as delegated by the Finance Committee),in accordancewith the Local Authorities (Calculation of Council Tax Base) (England)           Regulations 2012,as theCity’sCouncilTaxBasefor theyear; this amount includes a calculation of the amount of council tax reduction;and

 

(b)       Partsof CommonCouncil’sArea

 

InnerTemple	MiddleTemple	City excl. Temples (special expense area)
84.61	69.98	6085.00

 

being the amounts calculated by the Chamberlain, in accordance  with  the  Regulations,  as  the amounts  of  the  City's  Council  Tax  Base  for  the  year  for dwellings in those parts of its area to which the special items relate.

 

8.         For the year 2015/16 the Common Council determines, in accordance with Section 35(2) (d) of the Local Government Finance Act 1992, that any expenses incurred by the Common Council in performing in a part of its area a function performed elsewhere in its area by the Sub-Treasurer of the Inner Temple and the Under Treasurer of the Middle Temple shall not be treated as special expenses, apart from the amount of £13,238,000 being the expenses incurred by the Common Council in performing in the area of the Common Council of the City of London the City open spaces, highways, waste disposal, transportation planning and road safety, street lighting, drains and sewer functions.

 

9.         That the following amounts be now calculated by the Common Council for the year 2015/16 in accordance with Sections 31 to 36 of the Local Government Finance Act 1992:

 

(a) £372,800,000	Being the aggregate of the amounts which the  Common   Council estimates   for  the items set out in Section 31A(2) (a) to (f) of the Act, including the local precepts issued by the Inner and Middle Temples
(b) £367,450,737	Being the aggregate of the amounts which the  Common   Council  estimates   for  the items set out in Section 31A(3) (a) to (d) of the Act;
(c) £5,349,263	Being the amount by which the aggregate at 9(a)  above  exceeds  the aggregate  at 9(b) above, calculated by the Common Council, in accordance with Section 31A(4) of the Act, as its council tax requirement for the year;
(d) £857.31	Being the  amount of  9(c) above, divided  by the amount at 7(a) above, calculated by the Common Council, in accordance with Section   31B   of   the   Act,   as  the   basic amount of its Council Tax for the year;
(e) £13,574,312.09	Being the aggregate amount of all special items referred to in Section 34(1) of the Act, including the local precepts issued by the Inner and Middle Temples;
(f)   £1,318.20 CR	Being the amount at 9(d) above less the result given by dividing the amount at 9(e) above by the amount at 7(a) above, calculated by the Common Council, in accordance with Section 34(2) of the Act, as the basic amount of its Council Tax for the year for dwellings in those parts of its area to which no special item relates.

 

(g)  Parts of Common Council’s Area

 

InnerTemple	MiddleTemple	City excl. Temples (special expense area)
£	£	£
857.31	857.31	857.31

 

being the amounts given by adding to the amount at 9(f) above the amounts of the special item or items relating to dwellings in those parts of the Common Council’s area mentioned above divided in each case by the amount at 7(b) above, calculated by the Common Council, in accordance with Section 34(3) of the Act, as the basic amounts of its Council Tax for the year for dwellings in those parts of its area to which one of the special items relate; and

             

(h)  Council Tax Valuation Bands

 

 

being  the  amounts  given  by  multiplying  the  amounts  at  9(g) above by the number which, in the proportion set out in Section 5(1) of the Act, is applicable to dwellings listed in a particular valuation band divided by the number which, in that proportion, is applicable to dwellings listed in valuation band D, calculated by the Common Council, in accordance with Section 36(1) of the Act, as the amounts to be taken into account for the year in respect of categories of dwellings listed in different valuation bands.

 

10.       It be noted that for the year 2015/16 the Greater London Authority has proposed the following amounts in precepts issued to the Common Council, in accordance with Section 40 of the Local Government Finance Act 1992, for each of the categories of dwellings shown below:

 

ValuationBands	Precepting Authority
	GreaterLondonAuthority
	£
A	57.42
B	66.99
C	76.56
D	86.13
E	105.27
F	124.41
G	143.55
H	172.26

 

11.       Having calculated the aggregate in each case of the amounts at 9(h) and 10 above, the Common Council, in accordance with Section 30(2) of the Local Government Finance Act 1992, hereby proposes the following amounts as the amounts of Council Tax for the year 2015/16 for each of the categories of dwelling as shown below:

 

Council Tax Valuation Bands Inclusive of GLA Precept

 

 

12.       The Common Council of the City of London hereby determines that the following amounts of discount be awarded:

 

i.     to dwellings in Class B as defined in the Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003 prescribed by the Secretary of State under the provisions of Section 11A of the Local Government Finance Act 1992 (i.e. second homes) - Nil for the financial year beginning on 1st April 2015:

 

ii.    to dwellings in Class C as defined in the Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003 prescribed by the Secretary of State under the provisions of Section 11A of the Local Government Finance Act 1992:

 

(a)       in the case of a vacant dwelling that has been such for a continuous period of less than 6 months ending immediately before the day in question: 100% for the financial year beginning on 1st April 2015;

 

(b)       in the case of a vacant dwelling that has been such for a continuous period of 6 months or more: nil for the financial year beginning on 1st April 2015.(i.e. a dwelling that is unoccupied and substantially unfurnished will qualify for a discount from the date the dwelling became vacant of 100% for the first six months (less one day) and nil thereafter)

 

iii.   to dwellings in Class D as defined in the Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003 prescribed by the Secretary of State under the provisions of Section 11A of the Local Government Finance Act 1992 (i.e. vacant uninhabitable dwellings or vacant dwellings undergoing major works to make them habitable or vacant dwellings where major repair works have taken place): 100% for the financial year beginning on 1st April 2015.

 

13.       The Common Council of the City of London hereby determines that its relevant basic amount of council tax for 2015/16, calculated in accordance with Section 52ZX of the Local Government Finance Act 1992 is not excessive in accordance with the Referendums Relating to Council Tax Increases (Principles) (England) Report 2015/16.

 

Non Domestic Rates

14.       The Common Council of the City of London being a special authority in accordance with Section 144(6) of the Local Government Finance Act 1988 hereby sets for the chargeable financial year beginning with 1st April 2015, a Non-Domestic Rating Multiplier of 0.497 and a Small Business Non-Domestic Rating Multiplier of 0.484 in accordance with Part II of the Schedule 7 of the said Act.  (Both multipliers are inclusive of the City business rate premium of 0.004 which is unchanged from the current year.)

 

15.       In addition, the levying by the Greater London Authority of a Business Rate Supplement in 2015/16 of 0.020 (i.e. 2.0p in the £) on hereditaments with a rateable value greater than £55,000, to finance its contribution to Crossrail, be noted.

 

16.       A copy of the said Council Taxes and the Non-Domestic Rating Multipliers, signed by the Town Clerk, be deposited in the offices of the Town Clerk in the said City, and advertised within 21 days from the date of the Court’s decision, in at least one newspaper circulating in the area of the Common Council.

 

Capital Expenditure and Financing for the Year 2015/16

Having considered the circulated report, we further recommend that your Honourable Court do pass a resolution in the following terms:-

 

17.       The City Fund capital budget be approved and its final financing be determined by the Chamberlain, apart from in regard to any possible borrowing options.

 

18.       The continued pursuit of the approved financing methodology for the Corporation’s funding commitment towards the cost of Crossrail be noted, particularly that each future year’s budget report will give a detailed update on funding progress.

 

19.       For the purpose of Section 3(1) of the Local Government Act 2003, for the financial years 2015/16 to 2017/18, the Court of Common Council hereby determines that at this stage the amount of money (referred to as the “Affordable Borrowing Limit”), which is the maximum amount which the City may have outstanding by way of borrowing, shall be £0.

 

20.       For the purpose of Section 21(A) of the Local Government Act 2003, for the financial year 2015/16, the Court of Common Council hereby determines that the prudent amount of Minimum Revenue Provision is £0, apart from any specific requirement arising from any property leases which have to be treated as finance leases.

 

21.       Any potential borrowing requirement and associated implications will be subject to a further report to Finance Committee and the Court of Common Council.

 

22.       The Chamberlain be authorised to lend surplus monies on the basis set out in the Annual Investment Strategy, with an absolute limit of £200m for maturities in excess of 364 days.

 

23.       The following Prudential Indicators be set:

 

 

 

 

 

 

 

 

Prudential indicators for affordability, prudence, capital expenditure and external debt:

 

	2015/16	2016/17	2017/18
Estimates  ofthe  ratio  of financingcoststo netrevenue stream: HRA          Non-HRA                Total	0.50  (0.39)	0.25  (0.40)	0.25  (0.40)
	(0.30)	(0.33)	(0.33)
Estimateof the incremental impactof capitalinvestment decisionsontheCouncilTax - compared to 2014/15 estimates and expressed as a Band D equivalent	£ 19	£     (189)	£    (242)
Estimate of the incremental impact on average weekly rent of capital investment decisions on housing rents	£   2.84	£   4.04	£   4.10
Estimatesof Capital Expenditure HRA Non-HRA Total	£m   22.532 246.682	£m    5.056 32.204	£m   0.200 26.324
	269.214	37.260	26.524
Estimatesof CapitalFinancing Requirement – underlying need to borrow HRA Non-HRA Total	£m     10.492 (12.434)	£m      10.282 (12.224)	£m     10.076 (12.018)
	(1.942)	(1.942)	(1.942)
Net borrowing/(Net investments)   Capital financing requirement – underlying need to borrow	Period2014/15to2017/18 £m (75.658)    (1.942)

 

Prudential Indicators for Treasury Management:

 

	2015/16	2016/17		2017/18
OperationalBoundaryforExternalDebt   Borrowing   OtherLong TermLiabilities     Total	£m   0   0	£m   0   0		£m   0   0
	0	0		0
AuthorisedLimit   Borrowing   OtherLong TermLiabilities     Total	£m   0   0	£m   0   0		£m   0   0
	0	0		0
UpperLimit- FixedInterestRate Exposure	100%	100%		100%
UpperLimit-VariableInterestRate Exposure	100%	100%		100%
UpperlimitforPrincipalSums Investedfor> 364days	£200m	£200m		£200m
MaturityStructureof NewFixedRate BorrowingDuring2015/16	UpperLimit   %		LowerLimit   %
Under12months	0		0
12monthsand within24months	0		0
24monthsand within5 years	0		0
5 yearsand within10years	0		0
10yearsandabove	0		0

 

 

 

 

 

 

 

Local Indicator focusing on revenue reserves:

 

	2015/16   Estimate	2016/17   Estimate	2017/18   Estimate
Timescoverby dividing unencumberedrevenue reserves by annual revenue deficit/(surplus) - bracketed figuresdenoteannual surpluses	(30.2)	(16.2)	(5.5)

 

 

Other Recommendations

24.       The Treasury Management Strategy Statement and Annual Investment Strategy 2015/16 are endorsed.

 

25.       The Chamberlain’s assessment of the robustness of budgets and the adequacy of reserves be endorsed.

 

17 February 2015

City Fund 2015/16 Budget Reports and Medium Term Financial Strategy including Non Domestic Rates and Council Taxes for the Year 2015/16

We have considered as to the Non-Domestic Rates and Council Taxes to be levied to meet the City Fund budget requirement during the year ensuing including the proposal to levy:

·         an unchanged premium multiplier of 0.004 on the Non-Domestic Rate and Small Business Rate multipliers to enable the City to continue to support the City of London Police, security and contingency planning activity within the Square Mile at an enhanced level; and

·         an unchanged Council tax of £857.31 for a Band D property (excluding the GLA precept).

We submit a printed and circulated report thereon:  City Fund – 2015/16 Budget Report and Medium Term Financial Strategy.

 

We recommend that the report be agreed to and that the Court do pass a Resolution in the terms set out in the report.

 

Read.

 

Resolved – That that the report be agreed to and that the Court do pass a Resolution in the following terms:-

 

Overall Financial Framework - Revenue

 

1.         Approval be given to the overall financial framework and the revised Medium Term Financial Strategy for the City Fund noting, in particular, that the forecasts include the Service Based Review savings/increased incomes agreed by the Policy and Resources Committee; and that the achievement of these savings/increased incomes are anticipated to offset the impact of assumed reductions in Government Grants, to leave the fund with small surpluses (effectively break-even) across the period.

2.         Approval be given to the City Fund Revenue Budgets.

3.         Other major assumptions are:

•    an allowance of 2% has been included in 2015/16 for pay and prices which then reduces year on year until 2018/19 when a freeze is assumed, reflecting public sector finance constraints;

•    a neutral position with regard to the Government’s system of Business Rates Retention – i.e. no speculation as to growth or reduction; any changes will therefore be an addition or reduction to balances;

•    anticipated earnings from cash balances have been reduced to 0.5% for 2015/16 and 2016/17 after which a marginal increase to 0.75% is assumed; and

•    the annual provisions included for additional revenue works projects reflect detailed programmes for 2014/15 and 2015/16.  For the years 2016/17 to 2018/19 an assumption has been included of £2.5m a year. This is a reduction of 19% on the provisions included for 2015/16

 

City Police

4.         It be noted that continuing significant cuts in Government Grants for both core policing and dedicated capital city security responsibilities would, if left unchecked, result in deficits across the financial forecast period with the Police Reserve being exhausted early in 2017/18.  This position is not sustainable and options for balancing the budget with a minimum balance on the general reserve of £4m across the period are to be presented to the Police Committee before the summer recess in July.

 

Council Tax  

5.         From April 2013, council tax reduction replaced council tax benefit and in accordance with Section 10 of the Local Government Finance Act 2012 which amended Section 13A of the Local Government Finance Act 1992, local authorities have to make their own local schemes if not applying the Government default scheme. The City adopted the default scheme for 2013/14 and amended the scheme for 2014/15 by applying the annual uprating of applicable amounts. There is no intention to amend the scheme for 2015/16 other than to apply the annual uprating of applicable amounts.

 

6.         The Common Council of the City of London hereby agrees, therefore, that the  annual uprating of applicable amounts, premiums, disregarded income, or capital in relation to the Local Council Tax Reduction Scheme 2015-2016 as it applies to working age claimants, be in accordance with the uprating to be applied under the Housing Benefit Regulations which take effect from 1 April each year and the Council Tax Reduction Schemes (Prescribed Requirements) (England) (Amendment) (No. 2) Regulations 2014; and the annual uprating of non-dependent income and deductions, and income levels relating to Alternative Council Tax Reduction, or any other uprating as it applies to working age claimants, shall be adjusted in line with inflation levels by reference to relevant annual uprating in the Housing Benefit Scheme or The Prescribed Council Tax Reduction Scheme for Pensioners.

 

7.         It be noted that in 2012 the Finance Committee delegated the calculation of the Council Tax Base to the Chamberlain and the Chamberlain has calculated the following amounts for the year 2015/16 in accordance with Section 31B of the Local Government Finance Act 1992:

 

(a)       6239.59beingtheamountcalculatedby the Chamberlain (as delegated by the Finance Committee),in accordancewith the Local Authorities (Calculation of Council Tax Base) (England)         Regulations 2012,as theCity’sCouncilTaxBasefor theyear; this amount includes a calculation of the amount of council tax reduction;and

(b)       Partsof CommonCouncil’sArea

InnerTemple	MiddleTemple	City excl. Temples (special expense area)
84.61	69.98	6085.00

 

being the amounts calculated by the Chamberlain, in accordance  with  the  Regulations,  as  the amounts  of  the  City's  Council  Tax  Base  for  the  year  for dwellings in those parts of its area to which the special items relate.

 

8.         For the year 2015/16 the Common Council determines, in accordance with Section 35(2) (d) of the Local Government Finance Act 1992, that any expenses incurred by the Common Council in performing in a part of its area a function performed elsewhere in its area by the Sub-Treasurer of the Inner Temple and the Under Treasurer of the Middle Temple shall not be treated as special expenses, apart from the amount of £13,238,000 being the expenses incurred by the Common Council in performing in the area of the Common Council of the City of London the City open spaces, highways, waste disposal, transportation planning and road safety, street lighting, drains and sewer functions.

 

9.         That the following amounts be now calculated by the Common Council for the year 2015/16 in accordance with Sections 31 to 36 of the Local Government Finance Act 1992:

 

(a) £372,800,000	Being the aggregate of the amounts which the  Common   Council estimates   for  the items set out in Section 31A(2) (a) to (f) of the Act, including the local precepts issued by the Inner and Middle Temples
(b) £367,450,737	Being the aggregate of the amounts which the  Common   Council  estimates   for  the items set out in Section 31A(3) (a) to (d) of the Act;
(c) £5,349,263	Being the amount by which the aggregate at 9(a)  above  exceeds  the aggregate  at 9(b) above, calculated by the Common Council, in accordance with Section 31A(4) of the Act, as its council tax requirement for the year;
(d) £857.31	Being the  amount of  9(c) above, divided  by the amount at 7(a) above, calculated by the Common Council, in accordance with Section   31B   of   the   Act,   as  the   basic amount of its Council Tax for the year;
(e) £13,574,312.09	Being the aggregate amount of all special items referred to in Section 34(1) of the Act, including the local precepts issued by the Inner and Middle Temples;
(f)   £1,318.20 CR	Being the amount at 9(d) above less the result given by dividing the amount at 9(e) above by the amount at 7(a) above, calculated by the Common Council, in accordance with Section 34(2) of the Act, as the basic amount of its Council Tax for the year for dwellings in those parts of its area to which no special item relates.

 

(g)  Parts of Common Council’s Area

 

InnerTemple	MiddleTemple	City excl. Temples (special expense area)
£	£	£
857.31	857.31	857.31

 

being the amounts given by adding to the amount at 9(f) above the amounts of the special item or items relating to dwellings in those parts of the Common Council’s area mentioned above divided in each case by the amount at 7(b) above, calculated by the Common Council, in accordance with Section 34(3) of the Act, as the basic amounts of its Council Tax for the year for dwellings in those parts of its area to which one of the special items relate; and

             

(h)  Council Tax Valuation Bands

 

 

being  the  amounts  given  by  multiplying  the  amounts  at  9(g) above by the number which, in the proportion set out in Section 5(1) of the Act, is applicable to dwellings listed in a particular valuation band divided by the number which, in that proportion, is applicable to dwellings listed in valuation band D, calculated by the Common Council, in accordance with Section 36(1) of the Act, as the amounts to be taken into account for the year in respect of categories of dwellings listed in different valuation bands.

 

10.       It be noted that for the year 2015/16 the Greater London Authority has proposed the following amounts in precepts issued to the Common Council, in accordance with Section 40 of the Local Government Finance Act 1992, for each of the categories of dwellings shown below:

 

 

ValuationBands	PreceptingAuthority
	GreaterLondonAuthority
	£
A	57.42
B	66.99
C	76.56
D	86.13
E	105.27
F	124.41
G	143.55
H	172.26

 

11.       Having calculated the aggregate in each case of the amounts at 9(h) and 10 above, the Common Council, in accordance with Section 30(2) of the Local Government Finance Act 1992, hereby proposes the following amounts as the amounts of Council Tax for the year 2015/16 for each of the categories of dwelling as shown below:

 

Council Tax Valuation Bands Inclusive of GLA Precept

 

 

12.       The Common Council of the City of London hereby determines that the following amounts of discount be awarded:

 

i.      to dwellings in Class B as defined in the Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003 prescribed by the Secretary of State under the provisions of Section 11A of the Local Government Finance Act 1992 (i.e. second homes) - Nil for the financial year beginning on 1st April 2015:

 

ii.     to dwellings in Class C as defined in the Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003 prescribed by the Secretary of State under the provisions of Section 11A of the Local Government Finance Act 1992:

 

(a)       in the case of a vacant dwelling that has been such for a continuous period of less than 6 months ending immediately before the day in question: 100% for the financial year beginning on 1st April 2015;

 

(b)       in the case of a vacant dwelling that has been such for a continuous period of 6 months or more: nil for the financial year beginning on 1st April 2015.(i.e. a dwelling that is unoccupied and substantially unfurnished will qualify for a discount from the date the dwelling became vacant of 100% for the first six months (less one day) and nil thereafter)

 

iii.    to dwellings in Class D as defined in the Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003 prescribed by the Secretary of State under the provisions of Section 11A of the Local Government Finance Act 1992 (i.e. vacant uninhabitable dwellings or vacant dwellings undergoing major works to make them habitable or vacant dwellings where major repair works have taken place): 100% for the financial year beginning on 1st April 2015.

 

13.       The Common Council of the City of London hereby determines that its relevant basic amount of council tax for 2015/16, calculated in accordance with Section 52ZX of the Local Government Finance Act 1992 is not excessive in accordance with the Referendums Relating to Council Tax Increases (Principles) (England) Report 2015/16.

 

Non Domestic Rates

14.       The Common Council of the City of London being a special authority in accordance with Section 144(6) of the Local Government Finance Act 1988 hereby sets for the chargeable financial year beginning with 1st April 2015, a Non-Domestic Rating Multiplier of 0.497 and a Small Business Non-Domestic Rating Multiplier of 0.484 in accordance with Part II of the Schedule 7 of the said Act.  (Both multipliers are inclusive of the City business rate premium of 0.004 which is unchanged from the current year.)

 

15.       In addition, the levying by the Greater London Authority of a Business Rate Supplement in 2015/16 of 0.020 (i.e. 2.0p in the £) on hereditaments with a rateable value greater than £55,000, to finance its contribution to Crossrail, be noted.

 

16.       A copy of the said Council Taxes and the Non-Domestic Rating Multipliers, signed by the Town Clerk, be deposited in the offices of the Town Clerk in the said City, and advertised within 21 days from the date of the Court’s decision, in at least one newspaper circulating in the area of the Common Council.

 

Capital Expenditure and Financing for the Year 2015/16

17.       The City Fund capital budget be approved and its final financing be determined by the Chamberlain, apart from in regard to any possible borrowing options.

 

18.       The continued pursuit of the approved financing methodology for the Corporation’s funding commitment towards the cost of Crossrail be noted, particularly that each future year’s budget report will give a detailed update on funding progress.

 

19.       For the purpose of Section 3(1) of the Local Government Act 2003, for the financial years 2015/16 to 2017/18, the Court of Common Council hereby determines that at this stage the amount of money (referred to as the “Affordable Borrowing Limit”), which is the maximum amount which the City may have outstanding by way of borrowing, shall be £0.

 

20.       For the purpose of Section 21(A) of the Local Government Act 2003, for the financial year 2015/16, the Court of Common Council hereby determines that the prudent amount of Minimum Revenue Provision is £0, apart from any specific requirement arising from any property leases which have to be treated as finance leases.

 

21.       Any potential borrowing requirement and associated implications will be subject to a further report to Finance Committee and the Court of Common Council.

 

22.       The Chamberlain be authorised to lend surplus monies on the basis set out in the Annual Investment Strategy, with an absolute limit of £200m for maturities in excess of 364 days.

 

23.       The following Prudential Indicators be set:

 

Prudential indicators for affordability, prudence, capital expenditure and external debt:

 

	2015/16	2016/17	2017/18
Estimates  ofthe  ratio  of financingcoststo netrevenue stream: HRA          Non-HRA                Total	0.50  (0.39)	0.25  (0.40)	0.25  (0.40)
	(0.30)	(0.33)	(0.33)
Estimateof the incremental impactof capitalinvestment decisionsontheCouncilTax - compared to 2014/15 estimates and expressed as a Band D equivalent	£ 19	£     (189)	£    (242)
Estimate of the incremental impact on average weekly rent of capital investment decisions on housing rents	£   2.84	£   4.04	£   4.10
Estimatesof Capital Expenditure HRA Non-HRA Total	£m   22.532 246.682	£m    5.056 32.204	£m   0.200 26.324
	269.214	37.260	26.524
Estimatesof CapitalFinancing Requirement – underlying need to borrow HRA Non-HRA Total	£m     10.492 (12.434)	£m      10.282 (12.224)	£m     10.076 (12.018)
	(1.942)	(1.942)	(1.942)
Net borrowing/(Net investments)   Capital financing requirement – underlying need to borrow	Period2014/15to2017/18 £m (75.658)    (1.942)

 

Prudential Indicators for Treasury Management:

 

	2015/16	2016/17		2017/18
OperationalBoundaryforExternalDebt   Borrowing   OtherLong TermLiabilities     Total	£m   0   0	£m   0   0		£m   0   0
	0	0		0
AuthorisedLimit   Borrowing   OtherLong TermLiabilities     Total	£m   0   0	£m   0   0		£m   0   0
	0	0		0
UpperLimit- FixedInterestRate Exposure	100%	100%		100%
UpperLimit-VariableInterestRate Exposure	100%	100%		100%
UpperlimitforPrincipalSums Investedfor> 364days	£200m	£200m		£200m
MaturityStructureof NewFixedRate BorrowingDuring2015/16	UpperLimit   %		LowerLimit   %
Under12months	0		0
12monthsand within24months	0		0
24monthsand within5 years	0		0
5 yearsand within10years	0		0
10yearsandabove	0		0

 

Local Indicator focusing on revenue reserves:

 

	2015/16   Estimate	2016/17   Estimate	2017/18   Estimate
Timescoverby dividing unencumberedrevenue reserves by annual revenue deficit/(surplus) - bracketed figuresdenoteannual surpluses	(30.2)	(16.2)	(5.5)

 

Other Recommendations

24.       The Treasury Management Strategy Statement and Annual Investment Strategy 2015/16 are endorsed.

 

25.       The Chamberlain’s assessment of the robustness of budgets and the adequacy of reserves be endorsed.