Calculation of available resources to fund the revenue budget 2010/11

A crucial part of the budget strategy is to identify the level of resources available to fund our net revenue budget i.e. our net costs after allowing for service income from fees and charges and grants. These resources come from two main sources, (i) the government via its revenue support grant and the distribution of business rates income from the national pot and (ii) the council tax charge to our residents. For 2010/11 the amount of available resources was calculated as follows.

Projected council tax income

One of the priorities of the financial strategy is for the council to maintain a policy of low council tax increases. Council tax rises are to be no more than 3% per annum for the council's services. However, the council was determined to alleviate the financial burdens on council tax payers during the economic climate and therefore a council tax freeze was proposed. The 2009/10 council tax level was £1,326.31 and this charge when multiplied by the number of chargeable dwellings gives the following revenue:

Government formula grant

Government funding provides approximately 59% of the resources required to fund the council's budget. The government decides how much it can afford to allocate to local authorities and then distributes it based on an assessment of perceived needs using complex formula. This calculation takes into account information including population, social structure and other characteristics of each authority.

Under the above mentioned arrangements the government has calculated that the council should receive £131.2 million in grant. However, the government operates a ‘floor' to ensure that each local authority receives at least a guaranteed minimum increase in grant year on year (1.5% for authorities with responsibilities for education and social care services). The cost of implementing this guarantee is paid for by scaling back the grant increases to authorities that are above the ‘floor'. As a result of these rules the council's grant has been reduced by £0.9 million to £130.2 million.

The year on year increase in formula grant is summarised below:

Council tax collection in prior years

The council has forecast that it will have a break even position on the collection of council tax by 31 March 2010. This effectively means that the collection of the council tax will be in line with our budgeted forecasts. This means that it will not impact on our council tax requirement in 2010/11. 

Total available resources

Based on the above information the total resources available to the council are as follows:

Budget assumptions and key service issues

This page was last updated on 8 March 2010