Budget – Honore Daumier, Comme Sisyphe.

Reading Borough Council (RBC) will present the budget for the coming financial year and a medium term financial strategy (MTFS) for the next three years until 2022 at the policy committee on 18 February.

The MTFS is subject to considerable uncertainty about finance for local authorities after 2020 which will be considered as part of the government’s forthcoming Local Government Spending Review.

In 2019/20 RBC is again able to participate in the business rate retention pilot scheme. This allows the council to retain 75% of business rates collected, half of which is transferred to Thames Valley Local Enterprise Partnership (LEP), which covers the whole of Berkshire. The funding is spent on infrastructure improvements which RBC say will “boost the local economy”.

The Brexit funding was announced at the end of January and Reading, like other unitary authorities, benefits from £105k for this financial year and the same amount for next year.

The biggest proportion of Reading’s income which is available to spend on services is £90.936 million from council tax. Council tax will rise by 2.99% this year, which is the maximum increase that is available unless RBC hold a referendum on the increase.

Last year council tax increased by 5.99% which was the maximum possible that year without a referendum; it included 3% for adult social care.

Leader of the council, Jo Lovelock said:

The council is now in a more stable budget position as a result of difficult decisions on savings and a huge amount of work.


Elsewhere on the agenda, and in a tempting appetiser to the main course of the budget and MTFS, there is a report from RBC director of resources, Jacqueline Yates. This meets the statutory requirement that the chief financial officer reports to the council on:

a. the robustness of the estimates made for the purposes of the calculations of the budget; and

b. the adequacy of the proposed level of financial reserves.

This is informative about the assumptions made in preparing the budget and also sets out that, because of the financial problems that some councils have had, the Chartered Institute of Public Finance and Accountancy (CIPFA) are considering the introduction of a ‘financial resilience index’ for councils. This will measure 15 indicators including:

  • the level of reserves held as a percentage of net revenue expenditure,
  • the average change in reserves over the last three years,
  • the reserve ‘burn rate’,
  • the cost of adult social care as a percentage of net revenue expenditure,
  • the average cost of children’s social care as a percentage of net revenue expenditure,
  • OFSTED rating,
  • auditors’ value for money conclusion.

Northamptonshire county council was a high profile case of financial difficulties when in February 2018 the chief financial officer issued a S114 notice which stopped all new spending at the council. This was followed by the appointment of an inspector by the Secretary of State for Communities and Local Government. The inspector reported in March 2018, and in May government commissioners took over the council’s functions associated with governance and scrutiny, appointment of statutory officers and strategic financial management. They are expected to be in place until March 2021.

Northamptonshire county council have been granted a dispensation to increase their council tax next year by 4.99% without a referendum.

Later in her report, the RBC director of resources reassures readers that the lack of signed off accounts for 2016/17 and 2017/18 does not affect the budget of MTFS.

Whilst positive progress is being made towards the completion of the Council’s 2016/17 and 2017/18 accounts the audits have not yet concluded. It is not anticipated that this work will have an impact on either the 2019/20 budget or the MTFS.

At this time last year a similar statement was made, when there was only one year’s incomplete accounts. The then strategic director of finance said:

To date no errors have been found that would lead to concerns about the amount of money spent or received in 2016/17, which in turn would undermine or alleviate the position in subsequent years.

On Monday evening councillors may be hoping that something truly scrumptious is coming round on the dessert trolley; maybe some Reading Town Crumble?

Dessert – ‘Reading town crumble’

If approved by policy committee, the proposals will go forward to the next full council meeting on 26 February for adoption.

The council planning committee meeting will take place at 6.30 pm on Monday 18 February at the Civic Offices, Bridge Street, Reading, RG1 2LU and is expected to be webcast.

  1. Policy committee 18 February 2019 papers & webcast
  2. Final local government finance settlement: England, 2019 to 2020
  3. Local Government Spending Review 2019
  4. Thames Valley Local Enterprise Partnership
  5. Council Budget Plans Announced Including Lowest Increase in Council Tax in the Last Three Years
  6. Inspection into the Governance of Northamptonshire County Council
  7. Commissioners – Northamptonshire county council website