At the meeting of Full Council on 22 February 2024, Councillors approved a balanced budget for 2024-25 and a Medium Term Financial Plan (MTFP) for the period 2024-27.
Chief Executive Russell Ashman (in his role as Chief Finance Officer) advised that although the economic situation has begun to stabilise and is far less volatile than the last few years, it remains challenging and continues to create cost pressures on the Council.
As part of the budget, a 4.99% increase in Council Tax was approved. This uplift is the maximum increase permitted by government without holding a referendum and equates to an increase of £75.23 per annum on band D equivalent, or £1.45 per week. Council Tax is one of the primary sources of funding for local services and whilst this increase is significant, it remains one of the lowest levels of Council Tax in the country.
Although Councillors stated they would prefer not to increase Council Tax to this extent, they accepted the recommendation to do so on the basis that it would help to fulfil the Council’s statutory responsibility of setting a balanced budget, at a time when maintaining statutory services for residents is becoming increasingly costly. Councillors were also advised that if the Council chose not to increase Council Tax by the maximum amount permitted, government may be less likely to accept any future claims that the Council requires further funding.
Whilst the provisional settlement from government had initially been disappointing for the Council, an additional £150,000 was allocated to the Council of the Isles of Scilly in the final settlement in recognition of the unique pressures of being an island community. This gave rise to an overall 8% increase in the Council’s Core Spending Power as calculated by government and is slightly above the English Average.
Councillors were advised that the 2024-25 budget aims to: protect front line services, confirm the highest level of support possible for those struggling to pay Council Tax; confirm the principle that those who should pay, do pay; allocate additional funding to Children’s Services to assist with the improvement plan following the Ofsted report; and approve the introduction of premiums for empty homes and second homes over the next 2 years.
Fees and charges for 2024-25
The fees which are chargeable to users of Council services were also approved at Full Council on 22 February 2024. Though most of the service fees and charges were only increased by 3.5% to allow for inflation, there were some exceptions. For example, the charges for St Mary’s Airport were increased by 18%. This 18% increase equates to approximately £3 per journey or 2.3% of the ticket price. The fees and charges report explained that this level of increase had been recommended to ensure that the airport recovers its direct costs and does not increase the level of subsidy required at the detriment of other statutory Council services. The full rationale for the recommendation to increase by 18% was set out in the budget report.
The charges for waste services were also increased beyond the 3.5% applied to cover inflation. Councillors agreed to provisionally approve the waste fees for 2024-25, with full approval subject to a further report containing more detailed information to support the rationale for the recommendation. The more detailed report will be brought to the meeting of Full Council in March 2024.
Cllr Frances Grottick, Vice Chairman and Lead Member for Finance, Governance, Risk and Performance said: “I’m pleased to confirm that the Council has fulfilled its statutory responsibility to approve a balanced budget. For some time, there has been an expectation from government for Councils to do more, with less funding. As the smallest local authority with the widest remit, this Council continues to seek a longer-term funding settlement from government which both fairly reflects the extra costs involved in delivering services in an island community and enables us to plan more easily for the future. Unfortunately, this means making some difficult decisions at a time when we know things aren’t easy for the community. However, Council Tax and fees and charges must be levied to accurately reflect costs and service needs. The approval of this budget shows the Council’s intention to deliver the services our community relies on, whilst demonstrating to government that we have balanced our budget using the rules and protocols they have set.”