Annual Budget

Some of the key points to note in our 2023/24 budget are:

• The total cost of funding local services in Rutland in 2023/24 is £46.5million 
• Despite making savings in 2022, increased demand for services, rising energy prices and an inflation rate of 10% over the past 12 months mean it will cost the council £6.1million more to deliver the same local services in 2023/24, compared to last year
• The latest Local Government Finance Settlement has awarded Rutland County Council more money than it did in 2022/2023. However, this increase is not enough to cover the rising cost of services
• National government continues to give councils the flexibility to raise Council Tax by as much as 4.99% (half the 12-month rate of inflation for 2022) and expects local authorities to make full use of this to help fund local services
• Rutland’s budget therefore includes a Council Tax increase of 2.99%, together with 2% precept to help fund adult social care services
• If approved, the average Council Tax increase for a Band D equivalent property would be just under £8 per month
• The draft budget for 2023/24 is balanced using £589k of the Council’s General Fund reserves (savings)
• Rutland’s funding gap is projected to be £1.4m in 2024/25, assuming £1.485m savings are made in the next year and Council Tax is raised by a further 5%.
• The council will identify savings through a transformation programme that aims to make the organisation fitter, leaner and financially sustainable by fundamentally changing the way that services are delivered

We have a legal requirement to set a budget each year and to set the level of Council Tax. These decisions determine how much we can spend on frontline services for residents and businesses. The budget is based on the money we receive from direct Government funding and through Council Tax. We also apply for grants, if they are available.

No. We only set the precept and Council Tax level for the services that we provide. Parish and town councils set their own individual precepts.

The Police and Crime Commissioner for Leicestershire and Rutland is responsible for local policing and raises Council Tax for that reason. You can find details about the police budget by visiting the Police and Crime Commissioner website and searching for ‘Precept’.

The Leicestershire and Rutland Combined Fire Authority sets Council Tax for the Fire Service. You can find details about their budget by visiting the Leicestershire Fire and Rescue Service website and searching for ‘Budget'.

We are required by law to collect Council Tax for the Police and Fire Service, as well as town  and parish councils. We do not set their Council Tax rates.

Lots of people ask this question because they don’t realise the large number of services that we, as a council, must deliver. We don’t just collect bins and fix roads. We also have duties, as a Unitary Council, that District Councils like Melton or South Kesteven do not have. Our budget report explains where we spend your money.

Council Tax is made up of a general charge, that covers all services - not just the ones people use directly - and a specific charge called the Adult Social Care (ASC) precept. The ASC precept is only spent on adult social care services that help people in later life, as well as those who need extra support due to illness, disability or hardship.

We all benefit from council services, even though we might not realise it. For example:

• If you eat at a local restaurant it will have been given a license by the council and inspected to make sure the food is safe
• We maintain the roads and pavements that we all use every day
• When you or your neighbour wants to extend their house, we make sure they have the right planning permissions
• When a child on your street is living in unsafe conditions, we can take them into care to protect them
• If your elderly relative needs help to carry on living in their own home, we will pay for and provide support, including home visits

These are just a handful of the services we provide and which all taxpayers help to fund. We don’t think this is unfair. Even if we did, there is little we could do to change this because the Government has decided these are all legal duties which councils like ours must carry out.

Yes. Many Councils have reduced support for those unable to pay bills but we have not.

If you’re on a low income, you can apply for Local Council Tax Support. This scheme offers financial assistance (a Council Tax discount) and is means tested, so we look at your household income and savings to work out if we can help. If you qualify, we could reduce the amount of Council Tax you need to pay. If it sounds like we could help you, please complete an application form. We also run a discretionary scheme, which means that if you get Local Council Tax Support and need more help then you can apply for this as well.

We know how challenging the cost of living crisis is, so we've gathered together lots of information about all the support you can get – not just from us but from other organisations, as well.

Anyone who's struggling to pay their Council Tax should speak to us or get advice from Citizens Advice Rutland.

Yes and No. As it stands, we can balance our budget for 2023/24 by using less than £600k of reserves (our savings). We can afford to pay our bills for now, so we're not on the verge of bankruptcy. This means, for now, we are ok. However, the signs are worrying. With the cost of everything going up and inflation at around 10%, we are expecting our costs to keep rising.

One of our big challenges is that we don’t know how much income we will get in the future. With a General Election likely in 2025 and the economy in its current state, all we can do is make predictions. The truth is, no one really knows.

Our predictions tell us that, to be stable, we need to continue to get increases in Government funding, raise Council Tax, make significant savings, use our reserves and hope that costs stabilise. If all this happens, we might be stable.

Many Councils are in exactly the same position, so we're not alone. Some councils are reporting huge gaps in their budgets, which may be difficult to close.

Councillors recently approved a Financial Sustainability Strategy, which sets out our approach to solving our financial problems. There are three parts to this approach:

1. We will use our reserves to balance the budget while we make savings
2. We will raise Council Tax (the Government assumes we will do this in our funding calculations)
3. We will make savings through a council-wide Transformation Programme

We are proposing to make budget reductions (service savings) of more than £1.7m in 2023/24 to contribute towards balancing the books. However, we still have more to do in the future.

You only have to look at other councils who have been in financial trouble to see what the impact of savings might be. Typically, councils stop spending on non-essential and reduce statutory services. So, if you look at what other councils have done, libraries have been closed, youth services shut, bins collected less often and road maintenance restricted to emergency works only.

It’s virtually impossible to reduce net spending by £4m without stopping some services or reducing others. However, there are things we can do that won’t affect services. For example, the average Rutland household produces more waste than other areas, which costs us a lot of money. Residents can help the environment and our costs by reducing waste.

It's too early to be certain about how any savings we might make will impact residents. However, we can't pretend that we can change services without any impacts.

We consult on our budget every year, so there’s always a chance for people to talk to us, ask questions and share their views. Our 2023/24 budget consultation gets underway on Friday 13 January.

You can also email comments, feedback and suggestions to: letusknow@rutland.gov.uk.

Lastly, you can lobby our MP, Alicia Kearns, and help us as we try to get fairer funding for Rutland.

We raise money from Council Tax, Business Rates and receive some money direct from Central Government departments. We also charge for some services to help cover costs. However, most of our money comes from Council Taxpayers. How much money we get is decided by Government.

Yes. The Government uses something called Core Spending Power to show how much funding we are getting. This Spending Power figure includes Council Tax and Government funding.

In 2023/24,we are receiving £9m in Government funding, compared to £8.09m in 2022/23. This is big increase. However, the level of funding is much less than the £9.51m we received back in 2015/16. Over this same period, the amount we get from Council Tax has gone from £20.68m to £32.05m.

This means our Spending Power has gone from £30.19m in 2015/16 to £41.06m today. However, the Government’s approach has been to place greater emphasis on Council Tax to the point that their funding calculations assume will will increase Council Tax rates by the maximum each year.

The Government argues that councils now have more money in overall terms, not less. This is true because they expect councils to raise Council Tax by the maximum amount each year.

The Government makes the rules about how much Councils can raise Council Tax. This year, we can raise Council Tax by up to 2.99%, plus an extra 2% for adult social care. The Government assumes that Councils will do this. They argue that it’s a local choice. However, councils would go bankrupt very quickly if we did not choose to increase Council Tax.

We don’t know, but we don’t think it’s fair. The Government doesn’t want to raise tax nationally for core local government services and give more money to councils. However, it is happy to tell councils their funding assumes taxes will be raised. 

We have expressed our views in the strongest possible terms about the lack of fair funding for local government and for Rutland. We are pleased that the Government has given us £33k to give discounts of up to £25 for people in financial hardship. This will be given on top existing discounts a £20k discretionary fund we already have in place.

You can find more information about the support available for households on our Cost of Living support page.

We have asked the same question of civil servants.  At some point, the council raised its first Council Tax bill and we wanted to know how the rate was set. We know it was set my councillors at the time but we don’t think they would have set a high rate if, for example the level of Government funding they were expecting would be enough to meet local needs. We can only draw the conclusion that the rate was heavily influenced by the level of Government funding available.

Rutland receives £504 Government funding per household compared to the national council average of £1,019. The Government formula gives us less funding because our 'needs' are thought to be less (we are often characterised as an affluent county with low levels of deprivation) and our relative resources are greater. It’s largely because of this inequality that we are so dependent on Council Tax to fund services. Otherwise, we would not have to raise Council Tax to the extent we do.

It's fair to say that the funding formula is out of date and successive Governments have not addressed the issue. The current Government has promised to reform the funding arrangements for some time but nothing has happened.

Around 78% of Rutland’s £41.06million available resources for 2023/24 comes from your Council Tax contributions. On average, councils with our responsibilities receive around 43% of their funding from the Government, meaning the remaining 57% comes from their local taxpayers.

We continually lobby Government directly on various matters, including the disparity of funding between rural and urban authorities and the unfair burden placed on local taxpayers in respect of Council Tax. We also respond to Government consultation on funding matters. 

We believe the local government funding system is broken. It doesn’t work for any Council.  The Government doesn’t invest enough funding into local government and the amount it does invest isn’t fairly distributed.

Our MP, Alicia Kearns, is working with Ministers to get the best deal for Rutland. We are trying hard to make our concerns known and will keep trying.

We are an agency of Government. The role of local authorities is set out in legislation and regulations made by national government.  The services that consume most of our funding (adult social care, children's social care, waste management etc.) are all delivered within that legislative framework.

If councils are expected to deliver services, surely everyone would agree they should be adequately funded? Our view is that funding is inadequate. If the Government can’t contribute properly to the funding of local services then it should reduce the role of council’s and take services off our hands. Expecting us to deliver more or the same with less funding is untenable.

Having said all this, we are not simply waiting for more funding. We have approved a Financial Sustainability Strategy that sets out how we will aim to meet our funding gap and have built savings of  around £5m into our plans.

The Government haven’t told us this formally, yet. Various announcements mean we have a good idea for 2024/25. However, we are very worried about 2025/26 and beyond. There are important questions to be answered:

• What might happen after the General Election?
• Will the Government follow through with implementing the care cap in October 2025?
• Will the Government complete the Fair Funding review?
• What will the state of the economy be in the future?

It’s tricky to plan for the future without a clear view of how much funding we’re likely to get. To allow us to make appropriate decisions, we would like a five-year settlement, so we have certainty of funding. However, we know this is unlikely.

We have modelled different funding scenarios – increases of 3%, 7% and 10% for 2025/26. A 3% increase would leave the Council in serious financial difficulties. Even with a 7% increase, we still need to deliver savings of over £4m and raise Council tax by 5% each year. The cost of delivering the services we run is increasing so much that it feels like we have no choice.

The simple is answer is yes, we need to raise Council Tax because of what’s happening in our economy. The Government's approach to funding councils also expects us to raise Council Tax by the maximum.

You will know from your own experiences that the price of everything is going up. The cost of food, fuel, electricity and clothes is going up because of inflation and other issues. We are experiencing the same budget pressures as households. When we let or extend a contract, it’s costing us a lot more as suppliers are facing increased costs for raw materials, supplies and staffing. When we commission a care home bed, it used to cost us around £535 a week. Now, it’s costing us between £800 and £900 because care homes are facing their own cost increases.

Our detailed budget reports gives lots of examples of how inflation is impacting us. Of course, we have looked at whether freezing Council Tax as an option. We recognise the pressure households are under. However, if we did, we would be risking financial independence. The current Cabinet is not proposing any short-term election promises that buy votes. Instead, it wants to be responsible and ensure that the Council is fiscally fit and ready for a new administration in May 2023.

Securing the long-term future of the council for our residents is paramount. If we don’t raise Council Tax by the maximum then our funding would be £1.5m less in 2023/24 and every year thereafter. After five years, we would have foregone funding of more than £7m.

The Settlement for 2023/24 gives us some additional funding (£1m) but it is not enough to protect key services. We will have to raise Council Tax again. We are proposing to make savings, use our reserves and raise Council Tax, so we can continue to protect key services for now.

We know we need to spend much less but the answer isn’t simple:

There are lots of things we must do

We have statutory services that we must deliver, such as social care and road maintenance. Then, there are other services we must provide so other statutory duties to be met. The Local Government Association's guidance for new Councillors says that local authorities in England are subject to 1,300 different statutory duties and responsibilities, so we don’t have a free reign to pick and choose what services to provide.

In reality, this means we have to save £4m to £5m from a £25m budget, not a £46m budget as there are many areas and services we just can’t reduce.

Many of our services are demand-led

Many of the services we provide are what we call demand-led. This means the amount we spend depends on the number of customers we have and their individual needs. For example, if a child is at risk of harm and we have to take them into care, we must do it regardless of whether we have the money. It’s the law. The same applies if someone is homeless - we must help them get off the streets, even if we don’t have the money.

The demand for local services is increasing because of our growing and ageing population.

Cost of services is increasing

Rutland County Council is like any household in the UK which finds that the cost of its bills go up every year. Our services are delivered through a combination of council staff and external suppliers, or contractors. Like every household in the country, we're feeling the impact of higher prices across all our services.

We spend around £12m on staff salaries. We often get feedback saying that our staff earn too much, or that pay increases are too high and we should cut them. It sounds simple but the reality is somewhat different. 

Firstly, the pay rises given to staff are decided at a national level and agreed with the Unions. Council staff do not give themselves pay rises. The Unions ask for significant pay rises that cover the cost of living but rises have been kept minimal. The average pay rise has been at 2% or lower for the past eight years. There has been no increase at all in some years. In 2022/23, the pay rise was £2,000 per person, regardless of salary level.

Secondly, salary levels are decided by a Job Evaluation system. If we don’t apply the right salary for a job, we can end up paying more. In the past, we have pitched social worker salaries too low and struggled to fill social care vacancies as a result. Because we have a statutory duty to provide social care services, we had to pay higher rates for agency and interim workers while we continued trying to recruit full time staff. This issue has now been resolved by offering the right salary for social workers.

Cutting salaries may sound like a simple solution but can have a different impact in reality. We want to recruit and retain the best staff so that we can provide the best possible services.

This is something we are doing. We review all our fees and charges every year and look for areas where it would be appropriate to increase them to try and generate more income and cover costs. The 'cover costs' bit is very important. For the most part, we aren’t allowed to make profits. The best example of this is our charge for green waste collections, which was introduced in 2018/19. This has generated nearly £400k of extra income and allows us to cover our costs. We don’t make a profit. However, changing charges alone is not enough to fill the budget gap. We’ve also had to makes savings.

We have made £11m of savings since 2011/12, without cutting your frontline services. This year we are saving more than £1.5m. Despite these savings, we do need to save even more money and we have started what we call a Transformation Programme to do this.

The Transformation Programme will reshape Rutland County Council and change how local services are delivered. We are looking at the following areas as part of this important work:

Operating Framework

To design a new operating framework that makes decision-making lean and strips outs unnecessary bureaucracy, making it easier to deliver services for customers.

Customer

We will simplify access to customer services and look for opportunities to enhance customers lives and lived experience by reviewing how customer access works and our model for customer services.

Community Offer

To have an integrated all-age community offer, including the Voluntary Community Sector, that allows individuals and communities to help themselves, provides preventative support and targeted intervention to prevent escalation of needs.

Commissioning and Contracting

The Council manages fragile marketplaces, effectively supports services to source and secure commercially viable contracts and ensures there are skilled contract managers in place to maximise value from contract arrangements.

Digital, Data and Technology

Customers can self-serve through online services and integrated systems that create efficiencies and give better access to data and insight, meaning evidence-led decision making is easier.

Enabling Services

The Council’s support services function is reviewed, with clear consideration given to a centralised or decentralised model for each support function, which will maximise the value offered by service delivery units.

Public Realm

To reorganise public realm services, rescale our revenue commitment while maintaining a safe public realm and develop a standardised and affordable offer across the county - one that's clear on the role and remit of the Council and partner organisations, as well as who pays.

Cultural Services

To develop an enabling cultural offer that enhances the visitor economy for reduced financial impact to the Council.

Asset Management

To optimise our estate, reduce cost and maximise revenues.

Special Educational Needs          

To identify sustainable changes that can drive high quality outcomes for children and young people with SEND (within their locality) and secure a more efficient and cost-effective model.

Integrated Care Organisation

To redesign and integrate health and adult social care services, utilising shared resources to secure a more efficient and cost-effective model and one that improves the customer experience.

Transport

To design and implement a demand led public transport model which is sustainable and costs less and drives up passenger use and improves accessibility to services including health and education.

We will be coming up with proposals and options for our Councillors to consider after the May 2023 local elections.  We haven’t made any decisions about the future delivery of services yet.

Developers do pay to help fund the cost of capital that provides new buildings, roads and other infrastructure needed to serve our growing population. However, they don’t pay towards the cost of staffing and running schools, or other council services. This is where Council Tax from those new homes helps. We don’t have the power to change this.

We will and our financial projections already take account of this extra funding. However, this still falls short of the extra money we will need to pay for services to meet demand and make up for reduced government funding and inflationary costs.