January 24 2023 - Budget and Precept for 2023-24
NOCTON PARISH COUNCIL
PROPOSED REVENUE BUDGET AND PRECEPT FOR 2023/24
1. Background
1.1 The Parish Council is required to set a budget and precept for 2023/24.
1.1.1 Details of the process to be followed and of the various Central Government and other changes to the process since last year’s exercise were set out in an email dated 12 December 2022 from NKDC to all Parish Clerks. The following budget has been prepared in the light of the guidance, etc contained in that email.
1.1.2 Against this background, suggested budgets for the Parish Council and Nocton Hub for the coming financial year are attached (Appendix A).
2. Matters for Consideration
2.1 Main Parish Council Budget
2.1.1 There are full Parish Council elections in May 2023. In the light of previous experience, it is extremely unlikely that there will be a contested election and a sum of £50 has been included (as recommended by NKDC) to meet the basic administrative costs involved. In the event of a contested election, the costs of approximately £2,500 would be met from the General Reserve
2.1.2 The budget for the Village Keeper has been increased to reflect the increase in the National Living Wage from 1 April, 2023.
2.1.3 20% of the budget for the Parish Clerk has been charged to the Hub budget to reflect the time/costs taken to deal with Hub issues e.g. invoicing, staff management and budgetary control.
2.1.4 An increase in the budget for Street Lighting (Power) to reflect increased energy costs.
2.1.5 An increase in the budget for Street Lighting (Maintenance) to begin to deal with the issues highlighted by E.ON in its recent survey of those lamp posts which are the responsibility of the Parish Council. Given, however, the significant costs involved in dealing with all of the recommendations which are considerably beyond the Parish Council’s financial ability meet in the short to medium term, it is proposed that discussions be held with the County Council and energy supplier to see how the situation might best be resolved.
2.1.6 The Peppercorn Rent of £100 for the right to use a part of the paddock behind the Hub as an overspill car park has been omitted from the budget as it is anticipated that agreement will shortly be reached with the owners AG Property Consultants which will remove the requirement to make this payment. Should, however, no agreement be forthcoming, or in the event of a delay, the rent will be paid from the General Reserve on the due date.
2.2 Nocton Hub
2.2 As a consequence of the careful monitoring of the Hub’s income and expenditure against the outline budget established at the time of setting last year’s budget and precept, it has proved possible to make a number of refinements to develop a more robust budget for the coming financial year. The main changes are set out below.
2.2.1 The budget for the salary of the Hub Manager and Cleaning Staff have been increased to reflect the new arrangements as previously reported to parish councillors.
2.2.2 A reduction in the budget for internet services as a consequence of the RFO securing a more advantageous deal with the current supplier.
2.2.3 An increase in the budget for electricity to reflect actual costs (even though the current contract has fixed the price per kWh until 2024).
2.2.4 A new budget for a PRS/PPL Licence in the event that the Hub is required to have its own licence (at the time of writing the Parish Council is in discussion with the PRS as to what, precisely, it is required to have in place given the nature of the Hub’s overall operation).
2.2.5 More realistic budgets in the light of experience for the cost of the servicing of equipment, waste disposal and cleaning materials, etc.
2.2.6 The establishment of a “ring-fenced” Hub Reserve to begin to build up a budget from which to meet the costs of future redecoration, etc and other improvements to the building.
2.2.7 A small increase in the Hub’s contribution to the mainstream Parish Council budget to help offset the cost of re-paying the Public Works Loan in accordance with the commitment given to residents at the time of re-building the former Village Hall.
4. Conclusion
4.1 The effect of the proposals in 2 above will result in total gross Parish Council expenditure in 2023/24 of £32,140, an increase of £2,030 over the current financial year. With a proposed contribution from (i) the General Reserve (£300) and Hub income (£3,000); (ii) an assumed Litter Grant from NKDC of £175; and (iii) Bank Interest of £325 to support the budget, this would result in a precept requirement of £28,340 – an increase of £1,230 (4.3%) over the previous year.
4.2 The effect of this budget on a Nocton Council Taxpayer (Band D equivalent) would be a small increase of £4.14 (34p per month) in the annual sum paid to fund the Parish Council (the “precept”) from £86.78 in 2022/23 to £90.92 in 2023/24 – an increase of 4.8% but which is considerably below the current level of inflation. This would continue to deliver on the Parish Council’s commitment to the village to minimise the financial impact on residents as a consequence of the decision to rebuild the former Village Hall as well as recognising the pressures on household budgets.
4.3 It is, of course, open to the Parish Council to agree other options, including keeping the precept at last year’s level. It would also be possible to consider a higher increase although in this case, the Parish Council would need to be very clear as to the reason(s) for the additional expenditure. However, consultation with members of the Parish Council prior to the finalisation of this report would appear to indicate that the proposed budget represents a reasonable way forward in these difficult and challenging times.
4.4 Nocton will continue to compare extremely favourably with the lowest precepts/expenditure of any similar-sized Parish Council in the area. Examples of Band D “Equivalents” for neighbouring parishes of a similar or smaller size (and used as comparators in previous years) are as follows:
Nocton £90.92 (assuming the proposed increase)
Digby £91.64 (current)*
Potterhanworth £85.67 (current)*
Dunston £85.47 (current)*
Welbourn £90.48 (current)
(* - figures exclude the additional levy for “Footpath Lighting” where payable)
5. Parish Council General Reserve
5.1 At the time of writing, the Parish Council’s total bank balance was £29,485. To this sum can be added expected VAT refunds of £2,025 giving a total of £31,510. However, from this sum must be deducted approximately £16,500 to cover net estimated expenditure for the remainder of the financial year covering both the Parish Council and Nocton Hub. This includes the significant costs of £8,395 for the March instalment of the PWLB repayment, the legal fees for removing the covenant restrictions on the Hub, the recently agreed works to Parish Council-owned trees and provision for a replacement bench on the Village Green.
5.2 In addition, the Parish Council needs to “ring-fence” provision in 2023/24 of (i) £2,748 (being the current balance of the sum held on behalf of the Nocton 200 Club pending the receipt of any future grant applications); and (ii) £300 as its contribution towards the 2023/24 Revenue Budget.
5.3 In light of the above, it is estimated that that the Parish Council will, therefore, be able to establish a General Reserve to meet any future unknown costs/emergencies, etc in 2023/24 of approximately £12,000, being an 8% increase over the previous year.
5.4 This is somewhat less than the recommended level of approximately £15,000 but is considered to be sufficient to meet any possible unforeseen calls on the Parish Council’s budget.
6. Recommendation
6.1 The Parish Council is asked to consider:
6.1.1 the issues raised above and to agree a Revenue Budget and corresponding precept for 2023/24 as set out in Appendix A attached to this report; and
6.1.2 entering into discussions with Lincolnshire County Council regarding future responsibility for the street lighting in the village.