How Tunbridge Wells looks to balance its books amid government cuts

FINANCE chiefs at Tunbridge Wells Borough Council are working out ways to balance their books with a £703,000 shortfall initially predicted for 2019/20.

The authority has already seen its government grant cut to zero for this year, and has been told it would need to pay £606,000 of taxpayers’ cash the other way next year.

This scenario might now be avoided. But when the borough’s growing population is factored in, the authority, who are reluctant to dip into reserves, have needed to come up with other ways of breaking even.

Lee Colyer, the council’s Director of Finance, detailed their proposed budget strategy for 2019/20 for the first time to the Cabinet in a meeting last week.

Members unanimously reaffirmed their support for the strategy, which included:

1 Applying to enter a new pilot Business Rate Retention Scheme, alongside other Kent authorities, to receive an increased level of the income.

2 Making use of the government’s New Homes Bonus – which offers local authorities some funding for constructing properties. The council currently receives £1million in the New Home Bonus.

3 Increasing council tax from 48p to 49p on average per day. This is a 3% rise.

All these proposals are currently in their early stages and are liable to change. The final budget is likely to be voted on by the authority in spring next year.

Mr Colyer said: ‘Demand for council services continues to increase with the growth in population, which now stands at 117,400. The council is also facing inflationary pressures on its costs.

‘We are forecasting a deficit for 2019/20 of £703,000. However, the largest component of that deficit is the negative revenue support grant.

‘This would require this council to pay £606,000 of local taxpayers’ funds back to central government to be spent on providing services elsewhere.

‘We have been clear that this is unacceptable. I am pleased to say the government has listened, and last week they issued proposals to remove negative revenue support grants.

‘The cost of doing so will be met by central government’s share of business rates. This is tremendous news for taxpayers.’

The deadline for applying for the pilot for the business rate retention scheme is September 25.

Council Leader David Jukes said: ‘It is great news about the business rate retention. It has been tough, but along with Lee, William Benson [council Chief Executive] and others we have managed to get there. By 2020 the government has promised we will be getting 75%, and by 2022 it will be 100% business rate retention.’

Discretionary rate relief

Cabinet members of Tunbridge Wells Borough Council voted unanimously in favour of plans to award relief to businesses affected by the government’s 2017 change to rates.

The authority will allocate £130,000 on a percentage basis to businesses who were hit by the changes.

Central government has provided the funding to help ease the process.

This follows a backlash against Chancellor Philip Hammond’s change to business rates, which was designed to reflect shifts in the value of property.